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					                                                     22174                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     ENVIRONMENTAL PROTECTION                                   • http:www.regulations.gov: Follow                  encryption, and be free of any defects or
                                                     AGENCY                                                  the on-line instructions for submitting                viruses.
                                                                                                             comments.                                                 Docket: All documents in the docket
                                                     40 CFR Parts 122 and 125                                   • E-mail: OW-Docket@epa.gov,                        are listed in the http://
                                                                                                             Attention Docket ID No. EPA–HQ–OW–                     www.regulations.gov index. Although
                                                     [EPA–HQ–OW–2008–0667, FRL–9289–2]                       2008–0667.                                             listed in the index, some information is
                                                                                                                • Mail: Water Docket, U.S.                          not publicly available, e.g., CBI or other
                                                     RIN 2040–AE95                                                                                                  information whose disclosure is
                                                                                                             Environmental Protection Agency, Mail
                                                     National Pollutant Discharge                            Code: 4203M, 1200 Pennsylvania Ave.,                   restricted by statute. Certain other
                                                     Elimination System—Cooling Water                        NW., Washington, DC 20460. Attention                   material, such as copyrighted material,
                                                     Intake Structures at Existing Facilities                Docket ID No. EPA–HQ–OW–2008–                          will be publicly available only in hard
                                                     and Phase I Facilities                                  0667. Please include a total of 3 copies.              copy. Publicly available docket
                                                                                                             In addition, please mail a copy of your                materials are available either
                                                     AGENCY:  Environmental Protection                       comments on information collection                     electronically in http://
                                                     Agency (EPA).                                           provisions to the Office of Information                www.regulations.gov or in hard copy at
                                                     ACTION: Proposed rule.                                  and Regulatory Affairs, Office of                      the Water Docket in the EPA Docket
                                                                                                             Management and Budget (OMB), Attn:                     Center, EPA/DC, EPA West, Room 3334,
                                                     SUMMARY:   This proposed rule would                     Desk Officer for EPA, 725 17th St., NW.,               1301 Constitution Ave., NW.,
                                                     establish requirements under section                    Washington, DC 20503.                                  Washington, DC. The Public Reading
                                                     316(b) of the Clean Water Act (CWA) for                    • Hand Delivery: Water Docket, EPA                  Room is open from 8:30 a.m. to 4:30
                                                     all existing power generating facilities                Docket Center, EPA West Building                       p.m., Monday through Friday, excluding
                                                     and existing manufacturing and                          Room 3334, 1301 Constitution Ave.,                     legal holidays. The telephone number
                                                     industrial facilities that withdraw more                NW., Washington, DC, Attention Docket                  for the Public Reading Room is 202–
                                                     than 2 million gallons per day (MGD) of                 ID No. EPA–HQ–OW–2008–0667. Such                       566–1744, and the telephone number for
                                                     water from waters of the U.S. and use                   deliveries are only accepted during the                the Water Docket is 202–566–2426.
                                                     at least twenty-five (25) percent of the                Docket’s normal hours of operation, and                FOR FURTHER INFORMATION CONTACT: For
                                                     water they withdraw exclusively for                     special arrangements should be made                    additional technical information,
                                                     cooling purposes. The proposed                          for deliveries of boxed information by                 contact Paul Shriner at 202–566–1076;
                                                     national requirements, which would be                   calling 202–566–2426.                                  e-mail: shriner.paul@epa.gov. For
                                                     implemented through National                               Instructions: Direct your comments to               additional economic information,
                                                     Pollutant Discharge Elimination System                  Docket No. EPA–HQ–OW–2008–0667.                        contact Erik Helm at 202–566–1049; e-
                                                     (NPDES) permits, would establish                        EPA’s policy is that all comments                      mail: helm.erik@epa.gov. For additional
                                                     national requirements applicable to the                 received will be included in the public                biological information, contact Tom
                                                     location, design, construction, and                     docket without change and may be                       Born at 202–566–1001; e-mail:
                                                     capacity of cooling water intake                        made available online at http://                       born.tom@epa.gov.
                                                     structures at these facilities by setting               www.regulations.gov, including any                     SUPPLEMENTARY INFORMATION:
                                                     requirements that reflect the best                      personal information provided, unless                     What Entities Are Regulated By This
                                                     technology available (BTA) for                          the comment includes information                       Action? This proposed rule would apply
                                                     minimizing adverse environmental                        claimed to be Confidential Business                    to existing facilities that use cooling
                                                     impact. The proposed rule constitutes                   Information (CBI) or other information                 water intake structures to withdraw
                                                     EPA’s response to the remand of the                     whose disclosure is restricted by statute.             water from waters of the U.S. and have
                                                     Phase II existing facility rule and the                 Do not submit information that you                     or require a National Pollutant
                                                     remand of the existing facilities portion               consider to be CBI or otherwise                        Discharge Elimination System (NPDES)
                                                     of the Phase III rule. In addition, EPA is              protected through http://                              permit issued under Section 402 of the
                                                     also responding to the decision in                      www.regulations.gov or e-mail. The                     CWA. Existing facilities subject to this
                                                     Riverkeeper I and proposing to remove                   http://www.regulations.gov Web site is                 regulation would include those with a
                                                     from the Phase I new facility rule the                  an ‘‘anonymous access’’ system, which                  design intake flow greater than 2 MGD.
                                                     restoration-based compliance alternative                means EPA will not know your identity                  If a facility meets these conditions, it is
                                                     and the associated monitoring and                       or contact information unless you                      subject to today’s proposed regulations.
                                                     demonstration requirements. EPA                         provide it in the body of your comment.                If a facility has or requires a NPDES
                                                     expects this proposed regulation would                  If you send an e-mail comment directly                 permit but does not meet the 2 MGD
                                                     minimize adverse environmental                          to EPA without going through http://                   intake flow threshold, it would be
                                                     impacts, including substantially                        www.regulations.gov your e-mail                        subject to permit conditions
                                                     reducing the harmful effects of                         address will be automatically captured                 implementing section 316(b), developed
                                                     impingement and entrainment. As a                       and included as part of the comment                    by the NPDES permit director, on a
                                                     result, the Agency anticipates this                     that is placed in the public docket and                case-by-case basis, using best
                                                     proposed rule would help protect                        made available on the Internet. If you                 professional judgment. This proposal
                                                     ecosystems affected by cooling water                    submit an electronic comment, EPA                      defines the term ‘‘cooling water intake
                                                     intake structures and preserve aquatic                  recommends that you include your                       structure’’ to mean the total physical
                                                     organisms and the ecosystems they
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                                                                                                             name and other contact information in                  structure and any associated waterways
                                                     inhabit in waters used by cooling water                 the body of your comment and with any                  used to withdraw water from waters of
                                                     intake structures at existing facilities.               disk or CD–ROM you submit. If EPA                      the U.S., provided that at least twenty-
                                                     DATES: Comments must be received on                     cannot read your comment due to                        five percent of the water withdrawn is
                                                     or before July 19, 2011.                                technical difficulties and cannot contact              used for cooling purposes. The cooling
                                                     ADDRESSES: Submit your comments,                        you for clarification, EPA may not be                  water intake structure extends from the
                                                     identified by Docket No. EPA–HQ–OW–                     able to consider your comment.                         point at which water is withdrawn from
                                                     2008–0667 by one of the following                       Electronic files should avoid the use of               the surface water source up to, and
                                                     methods:                                                special characters, any form of                        including, the intake pumps. Generally,


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                                                                                 Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                                             22175

                                                     facilities that meet these criteria fall into                          The following table lists the types of                                provides a guide for readers regarding
                                                     two major groups: steam electric                                     entities that are potentially subject to                                entities likely to be regulated by this
                                                     generating facilities and manufacturing                              this proposed rule. This table is not                                   action. Other types of entities not listed
                                                     facilities.                                                          intended to be exhaustive, but rather                                   in the table could also be regulated.

                                                                                                                                                                                           Standard Industrial               North American Industry
                                                              Category                                          Examples of regulated entities                                             Classification Codes                   Codes (NAIC)

                                                     Federal, State and                Operators of steam electric generating point source dischargers                                    4911 and 493 ............         221111, 221112, 221113,
                                                       Local Government.                that employ cooling water intake structures..                                                                                         221119, 221121, 221122,
                                                                                                                                                                                                                              221111, 221112, 221113,
                                                                                                                                                                                                                              221119, 221121, 221122.
                                                     Industry ......................   Operators of industrial point source dischargers that employ                                       See below .................       See below.
                                                                                         cooling water intake structures..
                                                                                       Steam electric generating ...............................................................          4911 and 493 ............         221111, 221112, 221113,
                                                                                                                                                                                                                              221119, 221121, 221122,
                                                                                                                                                                                                                              221111, 221112, 221113,
                                                                                                                                                                                                                              221119, 221121, 221122.
                                                                                       Agricultural production ....................................................................       0133 ..........................   111991, 11193.
                                                                                       Metal mining ...................................................................................   1011 ..........................   21221.
                                                                                       Oil and gas extraction (Excluding offshore and coastal subcat-                                     1311, 1321 ................       211111, 211112.
                                                                                         egories).
                                                                                       Mining and quarrying of nonmetallic minerals ...............................                       1474 ..........................   212391.
                                                                                       Food and kindred products ............................................................             2046, 2061, 2062,                 311221, 311311, 311312,
                                                                                                                                                                                            2063, 2075, 2085.                 311313, 311222, 311225,
                                                                                                                                                                                                                              31214.
                                                                                       Tobacco products ...........................................................................       2141 ..........................   312229, 31221.
                                                                                       Textile mill products ........................................................................     2211 ..........................   31321.
                                                                                       Lumber and wood products, except furniture ................................                        2415, 2421, 2436,                 321912, 321113, 321918,
                                                                                                                                                                                            2493.                             321999, 321212, 321219.
                                                                                       Paper and allied products ..............................................................           2611, 2621, 2631,                 3221, 322121, 32213,
                                                                                                                                                                                            2676.                             322121, 322122, 32213,
                                                                                                                                                                                                                              322291.
                                                                                       Chemical and allied products .........................................................             28 (except 2895,                  325 (except 325182,
                                                                                                                                                                                            2893, 2851, and                   32591, 32551, 32532).
                                                                                                                                                                                            2879).
                                                                                       Petroleum refining and related industries ......................................                   2911, 2999 ................       32411, 324199.
                                                                                       Rubber and miscellaneous plastics products .................................                       3011, 3069 ................       326211, 31332, 326192,
                                                                                                                                                                                                                              326299.
                                                                                       Stone, clay, glass, and concrete products .....................................                    3241 ..........................   32731.
                                                                                       Primary metal industries .................................................................         3312, 3313, 3315,                 324199, 331111, 331112,
                                                                                                                                                                                            3316, 3317, 3334,                 331492, 331222, 332618,
                                                                                                                                                                                            3339, 3353, 3363,                 331221, 22121, 331312,
                                                                                                                                                                                            3365, 3366.                       331419, 331315, 331521,
                                                                                                                                                                                                                              331524, 331525.
                                                                                       Fabricated metal products, except machinery and transportation                                     3421, 3499 ................       332211, 337215, 332117,
                                                                                         equipment.                                                                                                                           332439, 33251, 332919,
                                                                                                                                                                                                                              339914, 332999.
                                                                                       Industrial and commercial machinery and computer equipment ...                                     3523, 3531 ................       333111, 332323, 332212,
                                                                                                                                                                                                                              333922, 22651, 333923,
                                                                                                                                                                                                                              33312.
                                                                                       Transportation equipment ...............................................................           3724, 3743, 3764 ......           336412, 333911, 33651,
                                                                                                                                                                                                                              336416.
                                                                                       Measuring, analyzing, and controlling instruments; photographic,                                   3861 ..........................   333315, 325992.
                                                                                         medical, and optical goods; watches and clocks.
                                                                                       Electric, gas, and sanitary services ................................................              4911, 4931, 4939,                 221111, 221112, 221113,
                                                                                                                                                                                            4961.                             221119, 221121, 221122,
                                                                                                                                                                                                                              22121, 22133.
                                                                                       Educational services .......................................................................       8221 ..........................   61131.
                                                                                       Engineering, accounting, research, management and related                                          8731 ..........................   54171.
                                                                                         services.



                                                        To determine whether your facility                                Supporting Documentation                                                to this action. Although a part of the
                                                     could be regulated by this action, you                                                                                                       official docket, the public docket does
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                                                                                                                          1. Docket
                                                     should carefully examine the                                                                                                                 not include information claimed as
                                                     applicability criteria in § 125.91 of the                              EPA has established an official public                                Confidential Business Information (CBI)
                                                     proposed rule. If you have questions                                 docket for this action under Docket ID                                  or other information the disclosure of
                                                     regarding the applicability of this action                           No. EPA–HQ–OW–2008–0667. The                                            which is restricted by statute. For
                                                     to a particular entity, consult the person                           official public docket consists of the                                  information on how to access materials
                                                     listed for technical information in the                              documents specifically referenced in                                    in the docket, refer to the preceding
                                                     preceding FOR FURTHER INFORMATION                                    this action, any public comments                                        ADDRESSES section. To view docket
                                                     CONTACT section.                                                     received, and other information related                                 materials, please call ahead to schedule



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                                                     22176                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     an appointment. Every user is entitled                    B. Overview of Electric Generators                     J. What is the director’s role under today’s
                                                     to copy 266 pages per day before                          C. Overview of Manufacturers                              proposal?
                                                     incurring a charge. The Docket may                        D. Other Existing Facilities                         X. Related Acts of Congress, Executive
                                                                                                             V. Scope and Applicability of the Proposed                  Orders, and Agency Initiatives
                                                     charge 15 cents for each page over the                                                                           A. Executive Order 12866: Regulatory
                                                                                                                  Section 316(b) Existing Facility Rule
                                                     266-page limit plus an administrative                     A. General Applicability                                  Planning and Review
                                                     fee of $25.00.                                            B. What is an ‘‘existing facility’’ for                B. Paperwork Reduction Act
                                                                                                                  purposes of the section 316(b) Phase II             C. Regulatory Flexibility Act (RFA)
                                                     2. Electronic Access
                                                                                                                  rule?                                               D. Unfunded Mandates Reform Act
                                                        You may access this Federal Register                   C. What is ‘‘cooling water’’ and what is a                (UMRA)
                                                     document and the docket electronically,                      ‘‘cooling water intake structure?’’                 E. Executive Order 13132: Federalism
                                                     as well as submit public comments,                        D. Would my facility be covered if it is a             F. Executive Order 13175: Consultation
                                                     through the Web site http://                                 point source discharger?                               and Coordination With Indian Tribal
                                                                                                               E. Would my facility be covered if it                     Governments
                                                     www.regulations.gov by searching for                                                                             G. Executive Order 13045: Protection of
                                                                                                                  withdraws water from waters of the U.S.?
                                                     Docket ID No. EPA–HQ–OW–2008–                                What if my facility obtains cooling water              Children From Environmental Health
                                                     0667. For additional information about                       from an independent supplier?                          Risks and Safety Risks
                                                     the public docket, visit the EPA Docket                   F. What intake flow thresholds result in an            H. Executive Order 13211: Actions That
                                                     Center homepage at http://                                   existing facility being subject to this                Significantly Affect Energy Supply,
                                                     www.epa.gov/epahome/dockets.htm.                             proposed rule?                                         Distribution, or Use
                                                                                                               G. Offshore Oil and Gas Facilities, Seafood            I. National Technology Transfer and
                                                     3. Technical Support Documents                               Processing Vessels or LNG Import                       Advancement Act
                                                        The proposed regulation is supported                      Terminals BTA Requirements Under                    J. Executive Order 12898: Federal Actions
                                                                                                                  This Proposed Rule                                     To Address Environmental Justice in
                                                     by three major documents:                                                                                           Minority Populations and Low-Income
                                                        1. Economic and Benefits Analysis for                  H. What is a ‘‘new unit’’ and how are new
                                                                                                                  units addressed under this proposed                    Populations
                                                     the Proposed Section 316(b) Existing                                                                             K. Executive Order 13158: Marine
                                                                                                                  rule?
                                                     Facilities Rule (EPA–821–R–11–003),                                                                                 Protected Areas
                                                                                                             VI. BTA Consideration
                                                     hereafter referred to as the Economic                     A. EPA’s Approach to BTA                             XI. Solicitation of Data and Comments
                                                     and Benefits Analysis (EBA or more                        B. Technologies Considered To Minimize                 A. General Solicitation of Comment
                                                     simply EA). This document presents the                       Impingement and Entrainment                         B. Specific Solicitation of Comments and
                                                     analysis of compliance costs, closures,                                                                             Data
                                                                                                               C. Technology Basis for Today’s Proposed
                                                     energy supply effects, and a summary of                      Regulation                                        I. Legal Authority, Purpose, and
                                                     benefits associated with the proposed                     D. Options Considered for Today’s                    Background of Today’s Proposed
                                                     rule.                                                        Proposed Regulation                               Regulation
                                                        2. Environmental and Economic                          E. Option Selection
                                                     Benefits Analysis for the Proposed                        F. Four Factors Support EPA’s Decision To            A. Legal Authority
                                                                                                                  Establish Site-Specific BTA Entrainment
                                                     Section 316(b) Existing Facilities Rule                                                                          Today’s proposal is issued under the
                                                                                                                  Controls for Existing Facilities
                                                     (EPA–821–R–11–002), hereafter referred                    G. The Process for Establishing Site-                authority of sections 101, 301, 304, 308,
                                                     to as the Environmental and Economic                         Specific BTA Entrainment Controls                 316, 401, 402, 501, and 510 of the Clean
                                                     Benefits Analysis (EEBA). This                            H. Implementation                                    Water Act (CWA), 33 U.S.C. 1251, 1311,
                                                     document examines cooling water                           I. EPA’s Costing of the Preferred Option             1314, 1318, 1326, 1341, 1342, 1361, and
                                                     intake structure impacts and regulatory                   J. Consideration of Cost/Benefit on a Site-          1370.
                                                     benefits at the regional level.                              Specific Basis
                                                        3. Technical Development Document                    VII. Economic Impact of the Proposed Rule              B. Purpose of Today’s Proposed
                                                     for the Proposed Section 316(b) Existing                  A. Overview of Costs to Complying                    Regulation
                                                     Facilities Rule (EPA–821–R–11–001),                          Facilities and Federal and State                     The purpose of today’s proposed rule
                                                                                                                  Governments                                       is to propose national requirements for
                                                     hereafter referred to as the Technical                    B. Development of Compliance Costs
                                                     Development Document (TDD). This                          C. Social Cost of the Regulatory Options
                                                                                                                                                                    cooling water intake structures at
                                                     document presents detailed information                    D. Economic Impact                                   existing facilities that implement
                                                     on the methods used to develop unit                     VIII. Benefits Analysis                                section 316(b) of the CWA. Section
                                                     costs and describes the set of                            A. Introduction                                      316(b) of the CWA provides that any
                                                     technologies that may be used to meet                     B. Regional Study Design                             standard established pursuant to section
                                                     the proposed rule requirements.                           C. Physical Impacts of I&E Mortality                 301 or 306 of the CWA and applicable
                                                                                                               D. National Benefits of Today’s Considered           to a point source must require that the
                                                     Table of Contents                                            Options                                           location, design, construction, and
                                                     I. Legal Authority, Purpose, and Background               E. Uncertainty and Limitations                       capacity of cooling water intake
                                                          of Today’s Proposed Regulation                     IX. Implementation
                                                                                                               A. How would the proposed requirements
                                                                                                                                                                    structures reflect the best technology
                                                        A. Legal Authority                                                                                          available (BTA) for minimizing adverse
                                                        B. Purpose of Today’s Proposed Regulation                 be applied?
                                                                                                               B. When would affected facilities be                 environmental impact.
                                                        C. Background
                                                     II. Proposed Amendments Related to the                       required to comply?                                  EPA first promulgated regulations to
                                                          Phase I Rule                                         C. What are my requirements?                         implement section 316(b) in 1976. The
                                                        A. Restoration Provisions Not Authorized               D. What information must I submit in my              U.S. Court of Appeals for the Fourth
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                                                        B. Corrections to Subpart I                               permit application?                               Circuit remanded these regulations to
                                                     III. What new information has EPA obtained                E. When are application studies due?                 EPA which withdrew them, leaving in
                                                          or developed in support of this proposed             F. What are the monitoring requirements in           place a provision not remanded that
                                                          rule?                                                   today’s proposal for existing facilities?
                                                                                                                                                                    directed permitting authorities to
                                                        A. Additional Data                                     G. What reports would I be required to
                                                                                                                  submit?                                           determine BTA for each facility on a
                                                        B. Implementation Experience
                                                        C. New or Revised Analyses                             H. What records would I be required to               case-by-case basis. In 1995, EPA entered
                                                     IV. Revised Industry Description                             keep?                                             into a consent decree establishing a
                                                        A. Water Use in Power Production and                   I. Are there other federal statutes that could       schedule for taking final action on
                                                          Manufacturing                                           be incorporated into a facility’s permit?         regulations to implement section 316(b).


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                            22177

                                                     Pursuant to a schedule in the amended                   EPA and environmental petitioners in                   regulate the discharge of pollutants; and
                                                     decree providing for final action on                    the case to remand the existing facility               (3) requirements for effluent limitations
                                                     regulations in three phases, in 2001,                   portion of the rule back to the Agency                 and other conditions in NPDES permits
                                                     EPA published a Phase I rule governing                  for further rulemaking. See section C.2                to implement applicable technology-
                                                     new facilities. The U.S. Court of                       below for a more detailed discussion of                based effluent limitations guidelines
                                                     Appeals for the Second Circuit, while                   the history of EPA’s actions to address                and standards and applicable State
                                                     generally upholding the rule, rejected                  standards for cooling water intake                     water quality standards.
                                                     the provisions allowing restoration to be               structures.                                               Section 402 of the CWA authorizes
                                                     used to meet the requirements of the                       In response to the remand in Phase II,              EPA (or an authorized State or Tribe) to
                                                     rule. Riverkeeper, Inc. v. U.S. EPA, 358                the remand of the existing facility                    issue an NPDES permit to any person
                                                     F. 3d 174, 181 (2d Cir.2004)                            portion of the Phase III rule, and the                 discharging any pollutant or
                                                     (‘‘Riverkeeper I’’). Today’s proposed rule              associated Supreme Court decision, EPA                 combination of pollutants from a point
                                                     proposes to delete these restoration                    is today proposing a number of                         source into waters of the United States.
                                                     provisions.                                             requirements. Most significantly, EPA is               Forty-seven States and one U.S. territory
                                                        In 2004, EPA published the Phase II                  proposing requirements reflecting the                  are authorized under section 402(b) to
                                                     rule applicable to existing power plants                best technology available for                          administer the NPDES permitting
                                                     with a design intake flow greater than or               minimizing adverse environmental                       program. NPDES permits restrict the
                                                     equal to 50 MGD. Following challenge,                   impact, applicable to the location,                    types and amounts of pollutants,
                                                     the Second Circuit remanded numerous                    design, construction, and capacity of                  including heat, that may be discharged
                                                     aspects of the rule to the Agency,                      cooling water intake structures for                    from various industrial, commercial,
                                                     including the Agency’s decision to                      existing facilities. EPA is treating                   and other sources of wastewater. These
                                                     reject closed-cycle cooling as BTA. The                 existing power generating facilities and               permits control the discharge of
                                                     Agency made this determination, in                      existing manufacturing and industrial                  pollutants by requiring dischargers to
                                                     part, based on a consideration of costs                 facilities in one proceeding. Today’s                  meet technology-based effluent
                                                     and benefits. The Second Circuit                        proposal applies to all existing power                 limitations guidelines (ELGs) or new
                                                     concluded that a comparison of the                      generating facilities and existing                     source performance standards (NSPS)
                                                     costs and benefits of closed-cycle                      manufacturing and industrial facilities                established pursuant to section 301 or
                                                     cooling was not a proper factor to                      that have a design intake flow of at least             section 306. Where such nationally
                                                     consider in determining BTA.                            two million gallons from waters of the                 applicable ELGs or NSPS exist, permit
                                                     Riverkeeper, Inc. v. U.S.EPA, 475 F. 3d                 United States and use at least twenty-                 authorities must incorporate them into
                                                     83 (2d Cir. 2007) (‘‘Riverkeeper II’’). In              five (25) percent of the water they                    permit requirements. Where they do not
                                                     2008, the U.S, Supreme Court agreed to                  withdraw exclusively for cooling                       exist, permit authorities establish
                                                     review the Riverkeeper II decision                      purposes. In addition, EPA is today also               effluent limitations and conditions,
                                                     limited to a single issue: whether                      responding to the decision in                          reflecting the appropriate level of
                                                     section 316(b) authorizes EPA to                        Riverkeeper I and proposing minor                      control (depending on the type of
                                                     balance costs and benefits in 316(b)                    changes to the Phase I rule for new                    pollutant) based on the best professional
                                                     rulemaking. In April 2009, in Entergy                   facilities. Specifically, EPA proposes to              judgment (BPJ) of the permit writer.
                                                     Corp. v. Riverkeeper Inc., 129 S. Ct.                   remove from the Phase I rule the                       Limitations based on these guidelines,
                                                     1498, 68 ERC 1001 (2009) (40 ER 770,                    restoration-based compliance alternative               standards, or on best professional
                                                     4/3/09), the Supreme Court ruled that it                and the associated monitoring and                      judgment are known as technology-
                                                     is permissible under section 316(b) to                  demonstration requirements.                            based effluent limits. Where technology-
                                                     consider costs and benefits in                                                                                 based effluent limits are inadequate to
                                                     determining the best technology                         C. Background                                          meet applicable State water quality
                                                     available to minimize adverse                           1. The Clean Water Act                                 standards, section 301(b)(1)(C) of the
                                                     environmental impacts. The court left it                                                                       Clean Water Act requires permits to
                                                     to EPA’s discretion to decide whether                      The Federal Water Pollution Control                 include more stringent limits to meet
                                                     and how to consider costs and benefits                  Act, also known as the Clean Water Act                 applicable water quality standards.
                                                     in 316(b) actions, including rulemaking                 (CWA), 33 U.S.C. 1251 et seq., seeks to                NPDES permits also routinely include
                                                     and BPJ determinations. The Supreme                     restore and maintain the chemical,                     standard conditions applicable to all
                                                     Court remanded the rule to the Second                   physical, and biological integrity of the              permits, special conditions, and
                                                     Circuit. Subsequently, EPA asked the                    nation’s waters. 33 U.S.C. 1251(a).                    monitoring and reporting requirements.
                                                     Second Circuit to return the rule to the                Among the goals of the Act is that                     In addition to these requirements,
                                                     Agency for further review of the rule.                  wherever attainable, an interim goal of                NPDES permits must contain conditions
                                                        In 2006, EPA published the Phase III                 water quality which provides for the                   to implement the requirements of
                                                     rule. The Phase III rule establishes                    protection and propagation of fish,                    section 316(b).
                                                     316(b) requirements for certain new                     shellfish, and wildlife and provides for                  Section 510 of the Clean Water Act
                                                     offshore oil and gas extraction facilities.             recreation in and on the water. 33 U.S.C.              provides that, except as provided in the
                                                     In addition, EPA determined that, in the                1251(a)(2).                                            Clean Water Act, nothing shall preclude
                                                     case of electric generators with a design                  In furtherance of these objectives, the             or deny the right of any State (or
                                                     intake flow of less than 50 MGD and                     CWA establishes a comprehensive                        political subdivision thereof) to adopt or
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                                                     existing manufacturing facilities, 316(b)               regulatory program, key elements of                    enforce any requirement respecting
                                                     requirements should be established by                   which are (1) a prohibition on the                     control or abatement of pollution;
                                                     NPDES permit directors on a case-by-                    discharge of pollutants from point                     except that if a limitation, prohibition or
                                                     case basis using their best professional                sources to waters of the United States,                standard of performance is in effect
                                                     judgment. In July 2010, the U. S. Court                 except in compliance with the statute;                 under the Clean Water Act, such State
                                                     of Appeals for the Fifth Circuit issued                 (2) authority for EPA or authorized                    may not adopt any other limitation,
                                                     a decision upholding EPA’s rule for new                 States or Tribes to issue National                     prohibition, or standard of performance
                                                     offshore oil and gas extraction facilities.             Pollutant Discharge Elimination System                 which is less stringent than the
                                                     Further, the court granted the request of               (NPDES) permits that authorize and                     limitation, prohibition, or standard of


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                                                     22178                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     performance under the Act. EPA                          of the United States for cooling and that              structures reflect BTA. EPA has
                                                     interprets this to reserve for the States               use a cooling water intake structure to                interpreted the cross reference as
                                                     authority to implement requirements                     do so.                                                 authorizing consideration of the same
                                                     that are more stringent than the Federal                   The CWA does not describe the                       factors considered under those
                                                     requirements under state law. PUD No.                   factors to be considered in establishing               provisions Thus, for example, section
                                                     1 of Jefferson County v. Washington                     section 316(b) substantive performance                 306 directs EPA to establish
                                                     Dep’t of Ecology, 511 U.S. 700, 705                     requirements that reflect the ‘‘best                   performance standards for new sources
                                                     (1994).                                                 technology available for minimizing                    based on the ‘‘best available
                                                        Sections 301, 304, and 306 of the                    adverse environmental impact’’ nor does                demonstrated control technology’’
                                                     CWA require that EPA develop                            it require that EPA develop nationally                 (BADT). 33 U.S.C. 1316(a)(1). In
                                                     technology-based effluent limitations                   applicable performance requirements                    establishing BADT, EPA ‘‘shall take into
                                                     guidelines and new source performance                   through rule making. The most recent                   consideration the cost of achieving such
                                                     standards that are used as the basis for                guidance in interpreting 316(b) comes                  effluent reduction, and any non-water
                                                     discharge requirements in wastewater                    from the U.S. Supreme Court’s decision                 quality environmental impact and
                                                     discharge permits. EPA develops these                   in Entergy Corp. v. Riverkeeper, Inc. As               energy requirements.’’ 33 U.S.C.
                                                     effluent limitations guidelines and                     noted, the decision was limited to the                 1316(b)(2)(B). The specific cross-
                                                     standards for categories of industrial                  single question of whether Section                     reference in CWA section 316(b) to
                                                     dischargers based on the pollutants of                  316(b) of the Clean Water Act authorizes               CWA section 306 ‘‘is an invitation to
                                                     concern discharged by the industry, the                 EPA to compare costs and benefits of                   look to section 306 for guidance in
                                                     degree of control that can be attained                  various technologies when setting                      discerning what factors Congress
                                                     using various levels of pollution control               national performance standards for                     intended the EPA to consider in
                                                     technology, consideration of various                    cooling water intake structures under                  determining the ‘best technology
                                                     economic tests appropriate to each level                Section 316(b) of the Clean Water Act.                 available’ ’’ for new sources. See
                                                     of control, and other factors identified                In Riverkeeper II, the Second Circuit                  Riverkeeper v. EPA, 358 F. 2d 174, 186
                                                     in sections 304 and 306 of the CWA                      rejected EPA’s determination that                      (2nd Cir. 2004).
                                                     (such as non-water quality                              closed-cycle cooling was not BTA                          Similarly, Section 301 of the CWA
                                                     environmental impacts including energy                  because it could not determine whether                 requires EPA to establish standards
                                                     impacts). EPA has promulgated                           EPA had improperly considered costs                    known as ‘‘effluent limitations’’ for
                                                     regulations setting effluent limitations                and benefits in its 316(b) rulemaking.                 existing point source discharges in two
                                                     guidelines and standards under sections                 The Supreme Court reversed and                         phases. In the first phase, applicable to
                                                     301, 304, and 306 of the CWA for more                   remanded the Second Circuit ruling in                  all pollutants, EPA must establish
                                                     than 56 industries. See 40 CFR parts 405                a 6–3 opinion authored by Justice                      effluent limitations based on the ‘‘best
                                                     through 471. EPA has established                        Scalia. The Court held that it is                      practicable control technology currently
                                                     effluent limitations guidelines and                     reasonable for EPA to conduct a cost-                  available’’ (BPT). 33 U.S.C.
                                                     standards that apply to most of the                     benefit analysis in setting national                   1311(b)(1)(A). In establishing BPT, the
                                                     industry categories that use cooling                    performance standards for cooling water                CWA directs EPA to consider the total
                                                     water intake structures (e.g., steam                    intake structures under Section 316(b).                cost of application of technology in
                                                     electric power generation, paper and                    The Court held that EPA has the                        relation to the effluent reduction
                                                     allied products, petroleum refining, iron               discretion to consider costs and benefits              benefits to be achieved from such
                                                     and steel manufacturing, and chemicals                  under Section 316(b) but is not required               application, and to also take into
                                                     and allied products).                                   to consider costs and benefits. The                    account the age of the equipment and
                                                        Section 316(b) states that any                       Court’s discussion of the language of                  facilities involved, the process
                                                     standard established pursuant to section                section 316(b)—section 316(b) is                       employed, the engineering aspects of
                                                     301 or section 306 of [the Clean Water]                 ‘‘unencumbered by specified statutory                  the application of various types of
                                                     Act and applicable to a point source                    factors’’—and its critique of the Second               control techniques, process changes,
                                                     shall require that the location, design,                Circuit’s decision affirms EPA’s broad                 non-water quality environmental impact
                                                     construction, and capacity of cooling                   discretion to consider a number of                     (including energy requirements), and
                                                     water intake structures reflect the best                factors in standard setting under section              such other factors as [EPA] deems
                                                     technology available for minimizing                     316(b). While the Supreme Court’s                      appropriate. 33 U.S.C. 1314(b)(1)(b).
                                                     adverse environmental impact.                           decision is limited to whether or not                     In the second phase, EPA must
                                                        Section 316(b) addresses the adverse                 EPA may consider one factor (cost/                     establish effluent limitations for
                                                     environmental impact caused                             benefit analysis) under section 316(b),                conventional pollutants based on the
                                                     specifically by the intake of cooling                   the language also suggests that EPA has                ‘‘best conventional pollution control
                                                     water, rather than discharges of                        wide discretion in considering other                   technology’’ (BCT), and for toxic
                                                     pollutants, including thermal                           factors that it deems relevant to 316(b)               pollutants based on the ‘‘best available
                                                     discharges, into waters of the United                   standard setting. (‘‘It is eminently                   technology economically achievable’’
                                                     States. Despite this special focus, the                 reasonable to conclude that § 1326b’s                  (BAT). 33 U.S.C. 1311(b)(2)(A), (E).
                                                     requirements of section 316(b) remain                   silence is meant to convey nothing more                   In determining BCT, EPA must
                                                     closely linked to several of the core                   than a refusal to tie the agency’s hands               consider, among other factors, the
                                                     elements of the NPDES permit program                    as to whether cost-benefit analysis                    relationship between the costs of
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                                                     established under section 402 of the                    should be used, and if so to what                      attaining a reduction in effluents and
                                                     CWA to control discharges of pollutants                 degree.’’ 129 S.Ct. 1498, 1508 (2009).                 the effluent reduction benefits derived,
                                                     into navigable waters. Thus, while                         Regarding the other factors EPA may                 and the comparison of the cost and level
                                                     effluent limitations apply to the                       consider, section 316(b) cross references              of reduction of such pollutants from the
                                                     discharge of pollutants by NPDES-                       sections 301 and 306 of the CWA by                     discharge from publicly owned
                                                     permitted point sources to waters of the                requiring that any standards established               treatment works to the cost and level of
                                                     United States, section 316(b) applies to                pursuant to those sections also must                   reduction of such pollutants from a
                                                     facilities subject to NPDES requirements                require that the location, design,                     class or category of industry source
                                                     that also withdraw water from a water                   construction and capacity of intake                    * * * and the age of equipment and


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                            22179

                                                     facilities involved, the process                        304, and 316(b). EPA has established                   technology available for cooling water
                                                     employed, the engineering aspects                       BAT effluent limitations guidelines and                intake structures). Section 402.10 stated
                                                     * * * of various types of control                       NSPS based on the efficacy of one or                   that the provisions of part 402 applied
                                                     techniques, process changes, the cost of                more technologies to reduce pollutants                 to ‘‘cooling water intake structures for
                                                     achieving such effluent reduction, non-                 in wastewater in relation to their costs               point sources for which effluent
                                                     water quality environmental impacts                     without necessarily considering the                    limitations are established pursuant to
                                                     (including energy requirements), and                    impact on the receiving waters. This                   section 301 or standards of performance
                                                     such other factors as [EPA] deems                       contrasts to 316(b) requirements, where                are established pursuant to section 306
                                                     appropriate. 33 U.S.C. 1314(b)(4)(B).                   EPA has previously considered the costs                of the Act.’’ Section 402.11 defined the
                                                        In determining BAT, the CWA directs                  of technologies in relation to the                     terms ‘‘cooling water intake structure,’’
                                                     EPA to consider ‘‘the age of equipment                  benefits of minimizing adverse                         ‘‘location,’’ ‘‘design,’’ ‘‘construction,’’
                                                     and facilities involved, the process                    environmental impact in establishing                   ‘‘capacity,’’ and ‘‘Development
                                                     employed, the engineering aspects                       316(b) limits, which historically has                  Document.’’ Section 402.12 included the
                                                     * * * of various types of control                       been done on a case-by case basis. In Re               following language: The information
                                                     techniques, process changes, the cost of                Public Service Co. of New Hampshire,                   contained in the Development
                                                     achieving such effluent reduction, non-                 10 ERC 1257 (June 17, 1977); In Re                     Document shall be considered in
                                                     water quality environmental impacts                     Public Service Co. of New Hampshire, 1                 determining whether the location,
                                                     (including energy requirements), and                    EBAD 455 (Aug. 4, 1978); Seacoast Anti-                design, construction, and capacity of a
                                                     such other factors as [EPA] deems                       Pollution League v. Costle, 597 F. 2d                  cooling water intake structure of a point
                                                     appropriate.’’ 33 U.S.C. 1314(b)(2)(B).                 306 (1st Cir. 1979). EPA concluded that,               source subject to standards established
                                                        Section 316(b) expressly refers to                   because both section 301 and 306 are                   under section 301 or 306 reflect the best
                                                     section 301, and the phrase ‘‘best                      expressly cross-referenced in section                  technology available for minimizing
                                                     technology available’’ is very similar to               316(b), EPA reasonably interpreted                     adverse environmental impact.
                                                     the phrases ‘‘best available technology                 section 316(b) as authorizing                             In 1977, fifty-eight electric utility
                                                     economically achievable’’ and ‘‘best                    consideration of the same factors,                     companies challenged those regulations,
                                                     practicable control technology currently                including costs, as in those sections.                 arguing that EPA had failed to comply
                                                     available’’ in that section. Thus, section              EPA interpreted ‘‘best technology                      with the requirements of the
                                                     316(b), section 301(b)(1)(A)—the BPT                    available’’ to mean the best technology                Administrative Procedure Act (APA) in
                                                     provision—and section 301(b)(1)(B)—                     available at an ‘‘economically                         promulgating the rule. Specifically, the
                                                     the BAT provision—all include the                       practicable’’ cost. This approach squared              utilities argued that EPA had neither
                                                     terms ‘‘best,’’ ‘‘technology,’’ and                     with the limited legislative history of                published the Development Document
                                                     ‘‘available,’’ but neither BPT nor BAT                  section 316(b) which suggested the BTA                 in the Federal Register nor properly
                                                     goes on to consider minimizing adverse                                                                         incorporated the document into the rule
                                                                                                             was to be based on technology whose
                                                     environmental impacts, as BTA does.                                                                            by reference. The U.S. Court of Appeals
                                                                                                             costs were ‘‘economically practicable.’’
                                                     See 33 U.S.C. 1311(b)(1)(A) and (2)(A).                                                                        for the Fourth Circuit agreed and,
                                                                                                             In debate on section 316(b), one
                                                     These facts, coupled with the brevity of                                                                       without reaching the merits of the
                                                                                                             legislator explained that ‘‘[t]he reference
                                                     section 316(b) itself, prompt EPA to look                                                                      regulations themselves, remanded the
                                                                                                             here to ‘best technology available’ is
                                                     to section 301 and, ultimately, section                                                                        rule. Appalachian Power Co. v. Train,
                                                                                                             intended to be interpreted to mean the
                                                     304 for further guidance in determining                                                                        566 F.2d 451 (4th Cir. 1977). EPA later
                                                                                                             best technology available commercially
                                                     the ‘‘best technology available to                                                                             withdrew part 402. 44 FR 32956 (June
                                                                                                             at an economically practicable cost.’’
                                                     minimize adverse environmental                                                                                 7, 1979). The regulation at § 401.14,
                                                                                                             118 Cong. Rec. 33,762 (1972) (statement
                                                     impact’’ of cooling water intake                                                                               which reiterates the statutory
                                                     structures for existing facilities.                     of Rep. Clausen) (emphasis added).
                                                                                                                For EPA’s initial Phase II rulemaking,              requirement, remains in effect.
                                                        By the same token, however, there are                                                                          Since the Fourth Circuit remanded
                                                     significant differences between section                 as it had during 30 years of BPJ section
                                                                                                                                                                    EPA’s section 316(b) regulations in
                                                     316(b) and sections 301 and 304. See                    316(b) permitting, EPA therefore
                                                                                                                                                                    1977, NPDES permit authorities have
                                                     Riverkeeper, Inc. v. United States                      interpreted CWA section 316(b) as
                                                                                                                                                                    made decisions implementing section
                                                     Environmental Protection Agency (2nd                    authorizing EPA to consider not only                   316(b) on a case-by-case, site-specific
                                                     Cir. Feb. 3, 2004) (‘‘not every statutory               the costs of technologies but also their               basis. EPA published draft guidance
                                                     directive contained [in sections 301 and                effects on the water from which the                    addressing section 316(b)
                                                     306] is applicable’’ to a section 316(b)                cooling water is withdrawn.                            implementation in 1977. See Draft
                                                     rulemaking). Moreover, as the Supreme                   2. History of Actions To Address                       Guidance for Evaluating the Adverse
                                                     Court recognized, while the provisions                  Cooling Water Intake Structures Under                  Impact of Cooling Water Intake
                                                     governing the discharge of toxic                        the NPDES Program                                      Structures on the Aquatic Environment:
                                                     pollutants must require the elimination                                                                        Section 316(b) Pub. L. 92–500 (U.S.
                                                     of discharges if technically and                        a. 1976 Rulemaking
                                                                                                                                                                    EPA, 1977). This draft guidance
                                                     economically achievable, section 316(b)                    In April 1976, EPA promulgated                      described the studies recommended for
                                                     has the less ambitious goal of                          regulations under section 316(b) that                  evaluating the impact of cooling water
                                                     ‘‘minimizing adverse environmental                      addressed cooling water intake                         intake structures on the aquatic
                                                     impact.’’ 129 S.Ct. 1498, 1506. In                      structures. 41 FR 17387 (April 26, 1976),              environment and recommended a basis
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                                                     contrast to the effluent limitations                    see also the proposed rule at 38 FR                    for determining the best technology
                                                     provisions, the object of the ‘‘best                    34410 (December 13, 1973). The rule                    available for minimizing adverse
                                                     technology available’’ is explicitly                    added a new § 401.14 to 40 CFR Chapter                 environmental impact. The 1977 section
                                                     articulated by reference to the receiving               I that reiterated the requirements of                  316(b) draft guidance states, ‘‘[t]he
                                                     water: to minimize adverse                              Clean Water Act section 316(b). It also                environmental-intake interactions in
                                                     environmental impact in the waters                      added a new part 402, which included                   question are highly site-specific and the
                                                     from which cooling water is withdrawn.                  three sections: (1) Section 402.10                     decision as to best technology available
                                                     This difference is reflected in EPA’s past              (Applicability), (2) § 402.11 (Specialized             for intake design, location, construction,
                                                     practices in implementing sections 301,                 definitions), and (3) § 402.12 (Best                   and capacity must be made on a case-


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                                                     22180                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     by-case basis.’’ (Section 316(b) Draft                  an applicant that withdraws equal to or                c. Phase II—Large Flow Existing Power
                                                     Guidance, U.S. EPA, 1977, p. 4). This                   greater than 10 MGD must select and                    Plants
                                                     case-by-case approach was also                          implement appropriate design and                          On February 16, 2004, EPA took final
                                                     consistent with the approach described                  construction technologies for further                  action on regulations governing cooling
                                                     in the 1976 Development Document                        minimizing impingement mortality and                   water intake structures at certain
                                                     referenced in the remanded regulation.                  entrainment. Applicants with greater                   existing power producing facilities. 69
                                                     The 1977 section 316(b) draft guidance                  than 2 MGD but less than 10 MGD flows                  FR 41576 (July 9, 2004). The final Phase
                                                     suggested a general process for                         are not required to reduce intake flow to              II rule applied to existing facilities that
                                                     developing information needed to                        a level commensurate with a closed-                    are point sources; that, as their primary
                                                     support section 316(b) decisions and                    cycle, recirculating cooling system, but               activity, both generate and transmit
                                                     presenting that information to the                      must still meet specific operational                   electric power or generate electric
                                                     permitting authority. The process                       criteria.                                              power for sale or transmission; that use
                                                     involved the development of a site                         Under Track II, the applicant has the               or propose to use a cooling water intake
                                                     specific study of the environmental                     opportunity to demonstrate to the                      structure with a total design intake flow
                                                     effects associated with each facility that              Director that the technologies he                      of 50 MGD or more to withdraw water
                                                     uses one or more cooling water intake                   employs will reduce the level of adverse               from waters of the United States; and
                                                     structures, as well as consideration of                 environmental impact to a comparable                   that use at least 25 percent of the
                                                     that study by the permitting authority in               level to what would be achieved by                     withdrawn water exclusively for cooling
                                                     determining whether the facility must                   meeting the Track I requirements for                   purposes. In addition, power producers
                                                     make any changes for minimizing                         restricting intake flow and velocity. In               fitting the description above were also
                                                     adverse environmental impact. Under                     making this demonstration, the                         subject to the final Phase II rule even if
                                                     this framework, the Director determined                 regulations allow an applicant to rely on              they obtain their cooling water from one
                                                     whether appropriate studies have been                   a combination of measures in additional
                                                     performed, whether a given facility has                                                                        or more independent suppliers of
                                                                                                             to technology controls for reducing                    cooling water. Such facilities were
                                                     minimized adverse environmental                         impingement and entrainment to
                                                     impact, and what, if any, technologies                                                                         subject to the rule if their supplier
                                                                                                             achieve results equivalent to the Track                withdraws water from waters of the U.S.
                                                     may be required.                                        I intake flow and velocity requirements.               even if the supplier was not itself a
                                                     b. Phase I—New Facility Rule                            These include measures to restore the                  Phase II existing facility. EPA included
                                                                                                             affected water body such as restocking                 this provision to prevent circumvention
                                                        On November 9, 2001, EPA took final
                                                                                                             fish and improvement of the                            of the Phase II rule requirements by a
                                                     action on regulations governing cooling
                                                                                                             surrounding habitat to offset the adverse              facility purchasing cooling water from
                                                     water intake structures at new facilities.
                                                     See 66 FR 65255 (December 18, 2001).                    effects that would otherwise be caused                 entities not otherwise subject to Section
                                                     On December 26, 2002, EPA made                          by the operation of the intake structures.             316(b).
                                                     minor changes to the Phase I                            These restoration measures would result                   The final Phase II rule and preamble
                                                     regulations. 67 FR 78947. The final                     in increases in fish and shellfish which,              also clarified the definition of an
                                                     Phase I new facility rule (40 CFR part                  in combination with any technologies                   ‘‘existing’’ power producing facility. The
                                                     125, subpart I) establishes requirements                employed, would result in a level of fish              Phase II rule defined an ‘‘existing
                                                     applicable to the location, design,                     and shellfish in the water body                        facility’’ as ‘‘any facility that commenced
                                                     construction, and capacity of cooling                   comparable to that which would result                  construction as described in
                                                     water intake structures at new facilities               from the reductions in impingement                     § 122.29(b)(4) on or before January 17,
                                                     that have a design capacity to withdraw                 mortality and entrainment that would                   2002; and any modification of, or
                                                     at least two million gallons per day                    be achieved under Track I. Note that                   addition of a unit at such a facility that
                                                     (MGD) and use at least twenty-five                      restoration provisions are no longer                   does not meet the definition of a new
                                                     percent of the water they withdraw                      authorized (and EPA is proposing to                    facility at § 125.83.’’ Given that the
                                                     solely for cooling purposes.                            delete them from the CFR in this rule                  definition of the term ‘‘existing facility’’
                                                        In the new facility rule, EPA adopted                making), but they are included in this                 was based in part on the Phase I
                                                     a two-track approach. Under Track I, for                description of the Phase I rule for                    definition of the term ‘‘new facility,’’ the
                                                     facilities that withdraw equal to or                    completeness. See Chapter II of this                   preamble to the final Phase II rule also
                                                     greater than 10 MGD, the intake flow of                 preamble for more information.                         clarified and provided some examples
                                                     the cooling water intake structure is                      In addition, under the Phase I rule,                of how the definition of ‘‘existing
                                                     restricted, at a minimum, to a level                    the Director (i.e., the permitting                     facility’’ might apply to certain changes
                                                     commensurate with that which could be                   authority) may establish less stringent                at power producing facilities.
                                                     attained by use of a closed-cycle,                      alternative requirements for a facility if                Under the Phase II rule, EPA
                                                     recirculating cooling system. For                       compliance with the Phase I standards                  established BTA performance standards
                                                     facilities that withdraw greater than 2                 would result in compliance costs                       for the reduction of impingement
                                                     MGD, the design through-screen intake                   wholly out of proportion to those EPA                  mortality and, under certain
                                                     velocity is restricted to 0.5 feet per                  considered in establishing the Phase I                 circumstances, entrainment (see 69 FR
                                                     second and the total quantity of intake                 requirements or would result in                        41590–41593). The performance
                                                     is restricted to a proportion of the mean               significant adverse impacts on local air               standards consisted of ranges of
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                                                     annual flow of a freshwater river or                    quality, water resources, or local energy              reductions in impingement mortality
                                                     stream, or to a level necessary to                      markets.                                               and/or entrainment (e.g., reduce
                                                     maintain the natural thermal                               EPA specifically excluded new                       impingement mortality by 80 to 95
                                                     stratification or turnover patterns                     offshore oil and gas extraction facilities             percent and/or entrainment by 60 to 90
                                                     (where present) of a lake or reservoir                  from the Phase I new facility rule, but                percent) relative to a ‘‘calculation
                                                     except in cases where the disruption is                 committed to consider establishing                     baseline’’ that reflected the level of
                                                     beneficial, or to a percentage of the tidal             requirements for such facilities in the                impingement mortality and entrainment
                                                     excursions of a tidal river or estuary. If              Phase III rulemaking. 66 FR 65338                      that would occur absent specific
                                                     certain environmental conditions exist,                 (December 18, 2001).                                   controls. These performance standards


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                            22181

                                                     were not based on a single technology                   selected design and construction                       that specified how compliance could be
                                                     but, rather, on consideration of a                      technologies, operational measures,                    determined based on implementation of
                                                     combination of technologies that EPA                    and/or restoration measures that, in                   a TIOP (§ 125.94(d)). Under these
                                                     determined were commercially                            combination with any existing design                   provisions, a TIOP could be requested
                                                     available and economically achievable                   and construction technologies,                         in the first permit term and continued
                                                     for the industries affected as a whole.                 operational measures, and/or restoration               use of a TIOP could be requested where
                                                     (69 FR 41598–41610). EPA based the                      measures, meet the applicable                          a facility was in compliance with such
                                                     impingement mortality and entrainment                   performance standards; (4) that it meets               plan and/or its Restoration Plan.
                                                     (I&E) performance standards on a                        the applicability criteria and has
                                                     combination of technologies because it                  installed and is properly operating and                d. Phase III Rulemaking—Low Flow
                                                     found no single technology to be most                   maintaining a rule-specified and/or                    Existing Power Plants, Existing
                                                     effective at all affected facilities. For               approved State-specified design and                    Manufacturing Facilities, and New
                                                     impingement standards, these                            construction technology (i.e., submerged               Offshore Oil and Gas Facilities
                                                     technologies included: (1) Fine and                     cylindrical wedgewire screens) in
                                                     wide-mesh wedgewire screens, (2)                                                                                  On June 16, 2006, EPA published a
                                                                                                             accordance with § 125.99(a) or an
                                                     barrier nets, (3) modified screens and                                                                         final Phase III rule that established
                                                                                                             alternative technology that meets the
                                                     fish return systems, (4) fish diversion                                                                        categorical regulations for new offshore
                                                                                                             appropriate performance standards and
                                                     systems, and (5) fine mesh traveling                    is approved by the Director in                         oil and gas extraction facilities that have
                                                     screens and fish return systems. With                   accordance with § 125.99(b); or (5) that               a design intake flow threshold of greater
                                                     regard to entrainment reduction, these                  its costs of compliance would be                       than 2 MGD and that withdraw at least
                                                     technologies include: (1) Aquatic filter                significantly greater either than the costs            25 percent of the water exclusively for
                                                     barrier systems, (2) fine mesh                          considered by the Administrator for a                  cooling purposes. For most such
                                                     wedgewire screens, and (3) fine mesh                    like facility to meet the applicable                   facilities, the rule establishes
                                                     traveling screens with fish return                      performance standards, or than the                     requirements virtually identical to the
                                                     systems. Because EPA based the                          benefits of meeting the applicable                     requirements applicable to new
                                                     performance standards on a                              performance standards at the facility.                 facilities in the Phase I rule. In the Phase
                                                     combination of technologies and                         Under the cost-cost comparison                         III rule, EPA declined to establish
                                                     because of the uncertainty inherent in                  alternative, a Director could determine                national standards for Phase III existing
                                                     predicting the efficacy of one or more of               that the cost of compliance for a                      facilities. Instead it concluded that CWA
                                                     these technologies as applied to                        particular facility would be significantly             section 316(b) requirements for electric
                                                     different Phase II facilities, EPA                      greater than the costs considered by                   generators with a design intake flow of
                                                     promulgated these standards as ranges.                  EPA in establishing the applicable                     less than 50 MGD and all existing
                                                     Furthermore, because the site-specific                  impingement mortality and entrainment                  manufacturing facilities would continue
                                                     performance was based on a comparison                   reduction performance standards.                       to be established on a case-by-case basis
                                                     to a once-through system without any                    Similarly, under the cost-benefit                      under the NPDES permit program using
                                                     specific controls on the shoreline near                 comparison alternative, a Director could               best professional judgment. (71 FR
                                                     the source waterbody (i.e., calculation                 determine that the cost of compliance                  35006).
                                                     baseline, see section III.A.2 for more                  for a particular facility would be
                                                     details), the rule also allowed facilities                                                                     3. Rulings by the U.S. Court of Appeals
                                                                                                             significantly greater than the benefits of
                                                     to receive credit towards meeting the                                                                          for the Second Circuit
                                                                                                             complying with the applicable
                                                     performance standards for I&E reduction                 performance standards. In the event of
                                                     associated with alternate locations of                                                                           Both the Phase I and Phase II 316(b)
                                                                                                             either of these determinations, the                    rules were challenged in the U.S. Court
                                                     their intakes (eg, deep water where fish                Director would have to make a site-
                                                     and shellfish were less abundant).                                                                             of Appeals for the Second Circuit. Key
                                                                                                             specific determination of BTA for                      aspects of each of these decisions are
                                                        The types of performance standard
                                                                                                             minimizing adverse environmental                       discussed below.
                                                     applicable to a particular facility (i.e.,
                                                                                                             impact that came as close as possible to
                                                     reductions in impingement mortality                                                                            a. Phase I Rule
                                                                                                             meeting the applicable performance
                                                     only or impingement mortality and
                                                                                                             standards at a cost that did not
                                                     entrainment) were based on several                                                                               Various environmental and industry
                                                     factors, including the facility’s location              significantly exceed either the costs EPA
                                                                                                             considered in establishing these                       groups challenged the Phase I 316(b)
                                                     (i.e., source waterbody), rate of use                                                                          rule. In February 2004, the Second
                                                     (capacity utilization rate), and the                    standards or the site-specific benefits of
                                                                                                             meeting these standards.                               Circuit sustained the entire rule except
                                                     proportion of the waterbody withdrawn.                                                                         for the restoration provision, ruling that
                                                        The Phase II rule identified five                       The final Phase II rule also provided
                                                                                                                                                                    restoration was not a technology as
                                                     compliance alternatives to meet the                     that a facility that chooses specified
                                                                                                                                                                    provided for in 316(b). With respect to
                                                     performance standards. A facility could                 compliance alternatives might request
                                                                                                             that compliance with the requirements                  the other provisions of the rule, the
                                                     demonstrate to the Director one of the
                                                                                                             of the rule be determined based on the                 Court concluded the Phase I rule was
                                                     following: (1) That it has already
                                                                                                             implementation of a Technology                         based on a reasonable interpretation of
                                                     reduced its flow commensurate with a
                                                                                                             Installation and Operation Plan (TIOP)                 the applicable statute and sufficiently
                                                     closed-cycle recirculating system (to
                                                                                                                                                                    supported by the record. Restoration
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                                                     meet both impingement mortality and                     that would indicate how the facility
                                                     entrainment), or that it has already                    would install and ensure the efficacy, to              provisions of the rule were remanded to
                                                     reduced its maximum through-screen                      the extent practicable, of design and                  EPA for further rulemaking consistent
                                                     velocity to 0.5 feet per second or less (to             construction technologies, and/or                      with the Court’s decision. Riverkeeper,
                                                     meet the impingement performance                        operational measures, and/or a                         Inc. v. EPA, 358 F.3d 174, 191 (2nd Cir.,
                                                     standard only); (2) that its current                    Restoration Plan. The rule also                        2004). Today’s proposal rule would
                                                     cooling water intake structure                          established requirements for the                       remove the restoration provisions from
                                                     configuration meets the applicable                      development and submittal of a TIOP                    the Phase I rule. See Chapter II of this
                                                     performance standards; (3) that it has                  (§ 125.95(b)(4)(ii)) as well as provisions             preamble for more details.


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                                                     22182                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     b. Phase II Rule                                        pending further rulemaking, permit                     structures for new offshore oil and gas
                                                        Industry, environmental stakeholders,                requirements for cooling water intake                  facilities. In sustaining these
                                                     and some States 1 challenged many                       structures at Phase II facilities should be            requirements, the Fifth Circuit upheld
                                                     aspects of the Phase II regulations. On                 established on a case-by-case, best                    EPA’s decision not to use cost benefit
                                                     January 25, 2007, the Second Circuit                    professional judgment (BPJ) basis (see                 balancing in determining the
                                                     (Riverkeeper, Inc. v. EPA, 475 F.3d 83,                 125.90(b)).                                            requirements for these new facilities.
                                                     (2d Cir., 2007)) upheld several                         5. Ruling by the U.S. Supreme Court                    This was in accord with the discretion
                                                     provisions of the Phase II rule and                                                                            afforded by 316(b) and affirmed by the
                                                                                                                Following the Phase II decision in the              Supreme Court, namely that EPA
                                                     decision and remanded others to EPA
                                                                                                             Second Circuit, several industry group                 properly interpreted section 316(b) as
                                                     for further rulemaking.
                                                        As noted above, for the final rule EPA               litigants petitioned the U.S. Supreme                  authorizing, but not requiring, the
                                                     rejected closed-cycle cooling as BTA.                   Court to hear an appeal regarding                      Agency to consider costs and benefits in
                                                     Instead, EPA selected a suite of                        several issues in the case. Entergy Corp.              its decision making.
                                                     technologies to reflect BTA, including                  et al. v. EPA, S. Ct. No. 07–588, et al.
                                                                                                             On April 14, 2008, the Supreme Court                   7. Settlement of Litigation in U.S.
                                                     e.g., screens, aquatic filter barriers, and                                                                    District Courts
                                                     barrier nets. Based on the chosen                       granted the petitions for writs of
                                                     technologies, EPA established national                  certiorari submitted by these Phase II                    On January 19, 1993, a group of
                                                     performance standards for reducing                      litigants, but limited its review to the               individuals and environmental
                                                     impingement mortality and entrainment                   issue of whether section 316(b)                        organizations 2 filed, under section
                                                     of fish and fish organisms but did not                  authorizes EPA to compare costs with                   505(a)(2) of the CWA, 33 U.S.C.
                                                     require the use of any specific                         benefits in determining BTA for cooling                1365(a)(2), a complaint in Cronin, et. al.
                                                     technology. Among the aspects of the                    water intake structures. The Supreme                   v. Reilly, 93 Civ. 314 (LTS)(S.D.N.Y.).
                                                     rule the Second Circuit remanded for                    Court held oral arguments in this case                 The plaintiffs alleged that EPA had
                                                     further clarification was EPA’s decision                on December 2, 2008, and issued a                      failed to perform a non-discretionary
                                                     to reject closed-cycle cooling as BTA                   decision on April 1, 2009. The Supreme                 duty to issue regulations implementing
                                                     and EPA’s determination of                              Court held that it is permissible for EPA              section 316(b) of the CWA, 33 U.S.C.
                                                     performance ranges as BTA. In addition,                 to rely on cost-benefit analysis in                    1326(b). In 1995, EPA and the plaintiffs
                                                     the Second Circuit found that,                          decision making for setting the Phase II               executed a consent decree in the case
                                                     consistent with its Phase I decision,                   national performance standards, and in                 that provided for EPA to implement
                                                     restoration was not a technology for                    providing for cost-benefit variances                   section 316(b) of the CWA by prescribed
                                                     BTA, and that EPA’s cost-benefit site-                  from those standards as part of the                    dates in the three separate rulemaking
                                                     specific compliance alternative was not                 Phase II regulations. The Court                        proceedings described above. In late
                                                     in accord with the Clean Water Act.                     indicated that the phrase ‘‘best                       2002, the district court entered an
                                                     There are also several issues for which                 technology available for minimizing                    amended consent decree that modified
                                                     the court requested additional                          adverse environmental impact’’ does not                the schedule for the Phase II and Phase
                                                     clarification, and some instances where                 unambiguously preclude use of cost-                    III rulemakings for existing facilities.
                                                     the court determined that EPA had                       benefit analysis in decision making. The                  On November 17, 2006, some of the
                                                     failed to provide adequate notice and                   ruling supports EPA’s discretion to                    same environmental organizations in
                                                     opportunity to comment on certain                       consider costs and benefits, but imposes               the Cronin case filed a second
                                                     provisions of the rule.                                 no obligation on the agency to do so.                  complaint, amended on January 19,
                                                                                                             6. Ruling by the U.S. Court of Appeals                 2007, in Riverkeeper, et al. v. EPA, 06
                                                     4. EPA Suspension of the Phase II Rule
                                                                                                             for the Fifth Circuit                                  Civ. 12987 (S.D.N.Y.). Here, the
                                                        As a result of the decision of the                                                                          plaintiffs alleged that EPA failed to
                                                     Second Circuit Court of Appeals in                         In 2009, EPA petitioned the Fifth
                                                                                                             Circuit to remand the existing facility                perform a non-discretionary duty under
                                                     Riverkeeper, Inc. v. EPA, 475 F.3d 83,                                                                         section 316(b) of the CWA in its final
                                                     (2d Cir., 2007), EPA, on July 9, 2007 (72               portion of the Phase III rule.
                                                                                                             Specifically, EPA requested remand of                  regulation covering the Phase III
                                                     FR 37107) suspended the requirements                                                                           facilities, and also had violated sections
                                                     for cooling water intake structures at                  those provisions in the Phase III rule
                                                                                                             that establish 316(b) requirements at                  706(2)(A) and 706(2)(C) of the
                                                     Phase II existing facilities, pending                                                                          Administrative Procedure Act (APA) in
                                                     further rulemaking. Specifically, EPA                   electric generators with a design intake
                                                                                                             flow of less than 50 MGD, and at                       the manner in which it had made that
                                                     suspended the provisions in                                                                                    decision.
                                                     § 122.21(r)(1)(ii) and (5), and part 125                existing manufacturing facilities, on a
                                                                                                             case-by-case basis using best                             Earlier, the same plaintiffs had also
                                                     Subpart J, with the exception of Sec.                                                                          petitioned for review of the Phase III
                                                     125.90(b). EPA explained that                           professional judgment. This request did
                                                                                                             not affect the Phase III rule requirements             rule in the U.S. Court of Appeals for the
                                                     suspending the Phase II requirements                                                                           Second Circuit. This and other petitions
                                                     was an appropriate response to the                      that establish categorical regulations for
                                                                                                             new offshore oil and gas extraction                    for review were consolidated for hearing
                                                     Second Circuit’s decision, and that such
                                                     action would allow it to consider how                   facilities that have a design intake flow                2 There are the following plaintiffs currently:
                                                     to respond to the remand. In addition,                  threshold of greater than 2 MGD and                    Riverkeeper, Inc.; Alex Matthiessen, a/k/a The
                                                     suspending the Phase II rule was                        that withdraw at least 25 percent of the               Hudson Riverkeeper; Maya K. Van Rossum, a/k/a
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                                                     responsive to the concerns of the                       water exclusively for cooling purposes.                The Delaware Riverkeeper; Terrance E. Backer, a/
                                                                                                                On July 23, 2010, the U. S. Court of                k/a The Soundkeeper; John Torgan, a/k/a The
                                                     regulated community and permitting                                                                             Narragansett BayKeeper; Joseph E. Payne, a/k/a The
                                                     agencies, both of whom sought guidance                  Appeals for the Fifth Circuit issued a                 Casco BayKeeper; Leo O’Brien, a/k/a the San
                                                     regarding how to proceed in light of the                decision regarding the Phase III rule.                 Francisco BayKeeper; Sue Joerger, a/k/a The Puget
                                                     approaching deadline of the remanded                    The Court granted EPA’s motion to                      Soundkeeper; Steven E. Fleischli, a/k/a The Santa
                                                                                                             remand the rule with respect to existing               Monica BayKeeper; Andrew Willner, a/k/a The
                                                     rule. EPA’s suspension clarified that                                                                          New York/New Jersey Baykeeper; The Long Island
                                                                                                             facilities. In addition, the Fifth Circuit             Soundkeeper Fund, Inc.; The New York Coastal
                                                      1 Rhode Island, Connecticut, Delaware,                 affirmed the portion of the rule that                  Fishermen’s Association, Inc.; and The American
                                                     Massachusetts, New Jersey, and New York.                regulated cooling water intake                         Littoral Society, Inc.



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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                           22183

                                                     in the U.S. Court of Appeals for the                    did not authorize restoration measures                 Phase I did not presume reliance on the
                                                     Fifth Circuit. Conoco Phillips v. EPA                   to comply with section 316(b)                          restoration provisions, and the deletion
                                                     (5th Cir. No. 06–60662). Following the                  requirements. The second category of                   of restoration measures in no way alters
                                                     Supreme Court decision in Entergy,                      changes reflects technical corrections or              the Agency’s BTA determination for
                                                     EPA, Riverkeeper and others requested                   errors that do not change the substance                Phase I facilities.
                                                     remand of the regulation to allow EPA                   of the current Phase I rule. EPA is not
                                                                                                                                                                    B. Corrections to Subpart I
                                                     to reconsider its decisions regarding                   reopening any other aspects of the Phase
                                                     Phase III facilities in light of more recent            I rule other than the provisions                          Today’s proposed rule proposes to
                                                     technical information and recent court                  specifically noted here.                               change the applicability statement at
                                                     decisions. As noted above, on July 23,                                                                         125.81(a)(3) to match the applicability
                                                                                                             A. Restoration Provisions Not                          of the technical requirements at 125.84
                                                     2010, the Fifth Circuit granted the joint
                                                                                                             Authorized                                             and application requirements at 125.86.
                                                     motion of EPA and environmental
                                                     petitioners for a voluntary remand. On                     As discussed above in Section I.C.2,                The applicability in all three instances
                                                     September 3, 2010, one of the industry                  the Phase I final rule established two                 should specify design intake flow or
                                                     petitioners filed a petition asking the                 compliance tracks. Track I requires                    withdrawals ‘‘greater’’ than the specified
                                                     Fifth Circuit panel to rehear its grant of              facilities to restrict intake flow and                 value of 2 MGD. See Basis for the Final
                                                     the motion to remand.                                   velocity. Track II gives a facility the                Regulation at 66 FR 65270.
                                                        On August 14, 2008, EPA filed a                      option of demonstrating to the Director                   Today’s proposed rule also proposes a
                                                     motion to terminate the Cronin                          that the control measures it employs                   correction to the source waterbody flow
                                                     proceeding because it had discharged its                will reduce the level of adverse                       information submission requirements.
                                                     obligations (‘‘to take final action’’) under            environmental impact to a comparable                   Track I requirements at 125.84(b)(3)
                                                     the decree with respect to the Phase II                 level to what would be achieved by                     apply to new facilities that withdraw
                                                     and III rulemakings. The plaintiffs in                  meeting the Track I requirements. As                   equal to or greater than 10 MGD. Track
                                                     Cronin asserted that EPA had not                        part of this demonstration, Track II                   I requirements at 125.84(c)(2) apply to
                                                     discharged its obligations under the                    allows a facility to make use of                       facilities that withdraw less than 10
                                                     second amended decree because the                       restoration measures. The                              MGD. The source waterbody flow
                                                     Second Circuit remanded core                            Comprehensive Demonstration Study                      information under 125.86(b)(3) requires
                                                     provisions of the 316(b) rule for existing              allowed a quantitative or qualitative                  a facility to demonstrate it has met the
                                                     power plants to EPA, and EPA had                        demonstration that restoration measures                flow requirements of both 125.84(b)(3)
                                                     suspended the Phase II rule. In the                     would meet, in whole or in part, the                   ‘‘and’’ 125.84(c)(2). However, a facility
                                                     Riverkeeper proceeding, on February 7,                  performance levels of Track I. Similarly,              cannot be subject to both 125.84(b)(3)
                                                     2007, EPA moved to dismiss arguing                      the Verification Monitoring Plan could                 and 125.84(c)(2) at the same time.
                                                     that the district court lacked jurisdiction             be tailored to verify that the restoration             Accordingly, the word ‘‘and’’ should
                                                     to hear the challenge to the Phase III                  measures would maintain the fish and                   read as ‘‘or’’ in 125.86(b)(3).
                                                     rule.                                                   shellfish in the waterbody at a                           In addition, today’s proposed rule
                                                        EPA entered into a settlement with                   substantially similar level to that which              proposes corrections to the application
                                                     the plaintiffs in both lawsuits. Under                  would be achieved under Track I. See                   requirement for the Source Water
                                                     the settlement agreement, EPA agreed to                 65 FR 65280–65281.                                     Biological Characterization at
                                                     sign a notice of a proposed rulemaking                     As discussed in Section I.C.3, the                  122.21(r)(4). Accordingly, references to
                                                     implementing section 316(b) of the                      Second Circuit concluded that EPA                      the Source Water Biological
                                                     CWA at existing facilities no later than                exceeded its authority by allowing new                 Characterization should read as (r)(4).
                                                     March 14, 2011 and to sign a notice                     facilities to comply with section 316(b)               However, the references to the Source
                                                     taking final action on the proposed rule                through restoration measures, and                      Water Biological Characterization at
                                                     no later than July 27, 2012. Plaintiffs                 remanded that aspect of the rule to EPA.               125.86(b)(4)(iii), at 125.87(a), and at
                                                     agreed to seek dismissal of both their                  The Supreme Court did not grant the                    125.87(a)(2) incorrectly refer to
                                                     suits, subject to a request to reopen the               petitions for writs of certiorari                      122.21(r)(3) and are thus being
                                                     Cronin proceeding in the event EPA                      concerning restoration provisions. Thus                corrected.
                                                     failed to meet the agreed deadlines. The                in EPA’s view the Agency is bound by
                                                                                                             the Second Circuit decision. Today’s                   III. What New Information Has EPA
                                                     district courts have now entered orders
                                                                                                             proposed rule proposes to amend Phase                  Obtained or Developed in Support of
                                                     of dismissal. On March 11, 2011, the
                                                                                                             I to remove those provisions in                        This Proposed Rule?
                                                     parties agreed to an amendment to the
                                                     settlement agreement to extend the date                 § 125.84(d) and 125.89(b)(1)(ii)                          In developing the Phase I, Phase II,
                                                     for proposal to March 28, 2011.                         authorizing restoration measures. This                 and Phase III rules, EPA collected and
                                                                                                             proposed rule also specifically proposes               analyzed a substantial amount of
                                                     II. Proposed Amendments Related to                      deletion of application requirements                   information regarding cooling water
                                                     the Phase I Rule                                        contained in the Comprehensive                         intake structures, their biological
                                                        EPA is proposing several limited                     Demonstration Study at                                 impacts, available technologies to
                                                     changes to the Phase I rule at 40 CFR                   § 125.86(c)(2)(ii); evaluation of proposed             reduce those impacts, and other relevant
                                                     subpart I. The changes fall into two                    restoration measures at                                subjects. EPA considered a sizable
                                                     categories. The first is deletion of the                125.86(c)(2)(iv)(C); and verification                  volume of material submitted during
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                                                     provision in the rule that would allow                  monitoring requirements at                             previous public comment periods, as
                                                     a facility to demonstrate compliance                    125.86(c)(2)(iv)(D)(2)) that are specific to           well as additional data from
                                                     with the Phase I BTA requirements in                    restoration. EPA acknowledges these                    stakeholders, industry groups,
                                                     whole or in part through restoration                    changes may reduce the alternatives                    technology vendors, and environmental
                                                     measures. The proposed change                           available to some Phase I facilities.                  organizations since those comment
                                                     responds to the decision of the U.S.                    However, EPA notes that the deletion of                periods. Many of the materials are
                                                     Court of Appeals for the Second Circuit                 restoration measures does not otherwise                summarized or discussed in the
                                                     which remanded these provisions to                      alter the availability of Track II. In any             preambles to these regulations or in the
                                                     EPA because it concluded the statute                    event, EPA’s determination of BTA for                  administrative record for these rules


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                                                     22184                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     (see, e.g., docket numbers W–00–03,                     reduction technologies, impingement                       The Edison Electric Institute
                                                     OW–2002–0049, and EPA–OW–2004–                          and/or entrainment sampling and                         published a study of the combined
                                                     0002). Today’s proposal is based on data                associated data, and a discussion of the                impact of EPA’s upcoming air, water
                                                     and information contained in the                        possible application of cooling towers)                 (316(b)), and solid waste rulemakings on
                                                     records supporting the Phase I, Phase II,               for each site are provided in the docket                the coal fired fleet of power plants. See
                                                     and Phase III rulemakings, as well as                   for the proposed rule. In addition, in                  Potential Impacts of Environmental
                                                     new information. This section                           response to stakeholder inquiries, EPA                  Regulation on the U.S. Generation Fleet
                                                     summarizes new data collected since                     made these site reports publicly                        Final Report. January 2011. As with the
                                                     the promulgation of the Phase III rule in               available well before publication of the                NERC study, conservative assumptions
                                                     June 2006; it will not review or                        proposed rule. A list of the facilities                 were made about EPA rules yet to be
                                                     summarize previous data collection                      visited by EPA is provided in the TDD.                  proposed or promulgated. The report
                                                     efforts except to frame discussions about                                                                       summarizes reductions in capacity, but
                                                                                                             2. Data Provided to EPA by Industrial,
                                                     the new data. For information on EPA’s                                                                          does not distinguish how much of that
                                                                                                             Trade, Consulting, Scientific or
                                                     historic data collection efforts, refer to                                                                      capacity was unused in the baseline
                                                                                                             Environmental Organizations or by the
                                                     the preambles and records for the three                                                                         scenario. Conservative costing
                                                                                                             General Public
                                                     rules (see, e.g., 65 FR 49070, 66 FR                                                                            assumptions such as 21 percent higher
                                                     28854, 68 FR 17131, 68 FR 13524, 69 FR                     EPA has continued to exchange                        average costs,5 and application of full
                                                     41593, 69 FR 68457, and 70 FR 71059).                   information with various stakeholders                   retrofit costs to new capacity (instead of
                                                                                                             in the development of today’s proposal.                 incremental costs for installing required
                                                     A. Additional Data                                      EPA met several times with Electric                     technology at new construction) gives
                                                       EPA has supplemented the existing                     Power Research Institute (EPRI), Edison                 results that are not comparable to any of
                                                     documents with additional information                   Electric Institute, Nuclear Energy                      the options explored for today’s
                                                     as summarized below.                                    Institute, and Utility Water Act Group,                 proposed rule. While this study
                                                                                                             along with other representatives from                   analyzed multiple scenarios, each
                                                     1. Site Visits
                                                                                                             facilities and affected industries on                   scenario combines the effects of
                                                        As documented in the suspended                       topics including the latest                             multiple rules so that the impact of the
                                                     2004 Phase II rule, EPA conducted site                  advancements in fish protection                         section 316(b) rule alone could not be
                                                     visits to 22 power plants in developing                 technologies, permit experience, and the                determined. Even so, the report
                                                     the 2004 rule. See 67 FR 17134. Since                   feasibility and cost of installing
                                                     2007, EPA has conducted over 50 site                                                                            provides useful insight on the potential
                                                                                                             technologies at certain types of                        impact of multiple rulemakings if each
                                                     visits to power plants and                              facilities.
                                                     manufacturing sites. The purpose of                                                                             EPA rule was promulgated at the level
                                                                                                                In 2010, the North American Electric
                                                     these additional visits was to: Gather                                                                          of stringency assumed in the study.
                                                                                                             Reliability Corporation (NERC) issued a                   EPA met with Riverkeeper and other
                                                     information on the intake technologies                  reliability study and found potentially                 environmental groups to discuss the
                                                     and cooling water systems in place at a                 substantial reliability effects under a                 progress of the revisions to the rule,
                                                     wide variety of existing facilities; better             316(b) rule scenario that would require                 advances in fish protection
                                                     understand how the site-specific                        closed-cycle cooling of all large power
                                                     characteristics of each facility affect the                                                                     technologies, state programs,
                                                                                                             plants. See Potential Resource
                                                     selection and performance of these                                                                              environmental issues associated with
                                                                                                             Adequacy Impacts of U.S.
                                                     systems; gather performance data for                                                                            cooling water withdrawals, and the
                                                                                                             Environmental Regulations. October
                                                     technologies and affected biological                                                                            feasibility of closed-cycle cooling.
                                                                                                             2010. The scenario assumes all existing
                                                     resources; and solicit perspectives from                                                                        Through these interactions, EPA has
                                                                                                             steam units with a capacity utilization
                                                     industry representatives. EPA used a                                                                            received additional data and
                                                                                                             factor of less than 35% would close,3
                                                     number of criteria in selecting the sites                                                                       information including, but not limited
                                                                                                             and assumes all in-scope electric
                                                     to visit, including those sites                                                                                 to: Efficacy data, operating information,
                                                                                                             generators would be required to install
                                                     representing a variety of geographical                                                                          cost information, feasibility studies,
                                                                                                             cooling towers within a 5-year window.
                                                     locations and different types of intakes,                                                                       environmental impacts, and non-water
                                                                                                             While the report’s focus was on energy
                                                     and sites that already had an                           reliability and reflects a regulatory                   quality related impact information for
                                                     impingement or entrainment technology                   scenario that is not directly comparable                various candidate BTA technologies.
                                                     in place for which the facility had                     to any of the options explored for                      3. Other Resources
                                                     collected performance data. EPA also                    today’s proposed rule, the report                          EPA also collected information on
                                                     asked trade associations to recommend                   nevertheless serves as a useful upper                   cooling water intake structure-related
                                                     sites facing unique circumstances that                  bound estimate of (1) the potential for                 topics from a variety of other sources,
                                                     may affect the adoption of certain                      premature generating unit retirements to                such as state and international policies.
                                                     control technologies. EPA also collected                avoid the costs of retrofitting existing                For example, the California Office of
                                                     information on 7 additional facilities                  cooling water intake systems and (2)                    Administrative Law approved the
                                                     that staff did not physically visit;                    increased power needs as a result of a                  ‘‘Policy on the Use of Coastal and
                                                     usually, these were other facilities                    capacity derating (i.e., the energy
                                                                                                                                                                     Estuarine Waters for Power Plant
                                                     owned by the parent company of a site                   penalty 4).
                                                                                                                                                                     Cooling’’ on September 27, 2010, which
                                                     visited by EPA. EPA also held                                                                                   requires that all coastal power plants
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                                                                                                               3 IPM analyses do not predict all units with
                                                     conference calls or met with                                                                                    reduce their intake flow to a level
                                                                                                             capacity utilization rates of less than 35% would
                                                     representatives of other sites at EPA’s                 close as a result of a closed-cycle cooling retrofit.   commensurate with closed-cycle
                                                     Washington, DC location.                                Thus the total loss in capacity under EPA’s Option      cooling. The Delaware state legislature
                                                        Copies of the site visit reports (which              2 would be 14,418 MW or 1.3% of existing capacity.
                                                                                                                                                                     passed a resolution that urges the
                                                     provide an overall facility description as                4 The report assumes the total energy penalty of
                                                                                                                                                                     Delaware Department of Natural
                                                     well as detailed information such as                    4 percent is a constant; EPA believes the energy
                                                                                                             penalty is reduced over time as units replace,
                                                     electricity generation, the facility’s                  repower, or make other modifications such as              5 EPRI’s site-specific evaluation of 82 facilities
                                                     cooling water intake structure and                      condenser replacement that would eliminate the          provides an average capital cost of $275 per GPM,
                                                     associated fish protection and/or flow                  turbine backpressure.                                   but the EEI report uses $319 per GPM.



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                                                     Resources and Environmental Control                     regulatory actions and identifying                     velocity reductions, implemented in whole
                                                     (DNREC) to consider closed-cycle                        appropriate approaches, each agency                    or in part for the purposes or reducing
                                                     cooling as BTA and to require closed-                   shall attempt to promote such                          impingement mortality and entrainment.
                                                     cycle cooling at all facilities. The New                coordination, simplification, and                          Under this approach, a facility that
                                                     York Department of Environmental                        harmonization. Each agency shall also                  had undertaken efforts to reduce
                                                     Conservation (DEC) released a draft                     seek to identify, as appropriate, means                impingement and entrainment impacts
                                                     policy in March 2010 that would require                 to achieve regulatory goals that are                   (e.g., by installing a fine mesh screen or
                                                     flow reduction equivalent to closed-                    designed to promote innovation.’’ Thus,                reducing intake flow) would be able to
                                                     cycle cooling at all existing facilities                EPA recognizes that it needs to                        ‘‘take credit’’ for its past efforts and only
                                                     that withdraw more than 20 MGD as                       approach these rulemakings, to the                     be required to incrementally reduce
                                                     part of the state’s plan to restore the                 extent that its legal obligations permit,              impingement mortality or entrainment
                                                     Hudson River. Additional examples of                    in ways that allow the industry to make                to meet the performance standards.
                                                     state programs are discussed further in                 practical investment decisions that                        In practice, both permittees and
                                                     the TDD.                                                minimize costs in complying with all of                regulatory agencies encountered
                                                        In addition to state-wide cooling                    the final rules, while still achieving the             difficulty with the calculation baseline,
                                                     water policies, some recent individual                  fundamentally important environmental                  specifically how a facility should
                                                     NPDES permits have incorporated                         and public health benefits that the                    determine what the baseline represented
                                                     requirements for significant reductions                 rulemakings must achieve. The Agency                   and how a particular facility’s site-
                                                     in cooling water flow. For example, EPA                 expects to have ample latitude to set                  specific configuration or operations
                                                     Region I (which develops NPDES                          requirements and guidelines in ways                    compared to the calculation baseline.
                                                     permits for several non-delegated New                   that can support the states’ and                       For facilities whose site configuration
                                                     England states) issued a final NPDES                    industry’s efforts in pursuing practical,              conforms to the calculation baseline, it
                                                     permit in October 2003 that required                    cost-effective and coordinated                         was relatively easy to determine
                                                     Brayton Point in Somerset,                              compliance strategies encompassing a                   impingement mortality and entrainment
                                                     Massachusetts to reduce cooling water                   broad suite of its pollution-control                   at the conditions representing the
                                                     intake flow and thermal discharges                      obligations.                                           calculation baseline. However, for
                                                     approximately 95 percent.6 Brayton is                                                                          facilities that have a different
                                                     currently constructing two natural draft                B. Implementation Experience                           configuration, estimating a hypothetical
                                                     cooling towers at the facility. New                       Following promulgation of the 2004                   calculation baseline could be difficult.
                                                     Jersey, as part of its policy for protecting            Phase II rule, states and EPA Regions                  For example, facilities with intake
                                                     marine life from the adverse impacts                    began to implement the rule. During                    configuration that differed significantly
                                                     created by power plants, issued a draft                 that time, EPA worked to assist states in              from the calculation baseline (e.g., a
                                                     permit for Oyster Creek that would                      understanding the rule requirements,                   submerged offshore intake) were unsure
                                                     require closed-cycle cooling, and is                    develop guidance materials, and                        as to how to translate their biological
                                                     studying closed-cycle cooling for two                   support review of the documentation of                 and technological data to represent the
                                                     units at Salem Generating Station. Other                the new requirements. As a result, EPA                 calculation baseline (a shoreline CWIS).
                                                     examples are documented in site visit                   became aware of certain elements of the                Oftentimes facilities encountered
                                                     reports found in the record for today’s                 2004 rule that were particularly                       difficulty in determining the
                                                     proposed action.                                        challenging or time-consuming to                       appropriate location for monitoring to
                                                        Electric generators are the subject of               implement. In developing today’s                       take place. Other facilities were unsure
                                                     several rulemaking efforts that either are              proposed rule, EPA has considered                      as to how to take credit for retired
                                                     or will soon be underway. In addition                   these challenges and crafted a revised                 generating units and other flow
                                                     to this rulemaking proposal, this                       regulatory framework that the Agency                   reductions practices. In site visits, EPA
                                                     includes regulation under section                       believes is easier for all stakeholders to             learned that facilities with little or no
                                                     110(a)(2)(D) of the Clean Air Act (CAA)                 understand and implement. Some of the                  historical biological data encountered a
                                                     addressing the interstate transport of                  key changes are described below.                       particularly difficult and time-intensive
                                                     emissions contributing to ozone and PM                                                                         task of collecting appropriate data and
                                                     air quality problems, coal combustion                   1. Calculation Baseline                                developing the calculation baseline. For
                                                     wastes, hazardous air pollutants under                     The 2004 Phase II rule required that                example, EPA found that for some sites
                                                     CAA section 112, and criteria pollutant                 facilities reduce impingement mortality                impingement was very difficult to
                                                     NSPS standards under CAA section 111.                   and entrainment from the calculation                   convert into a baseline, as facilities
                                                     They will also soon be the subject of a                 baseline. The calculation baseline was                 needed to predict which fish would be
                                                     rulemaking under CAA section 111                        intended to represent a ‘‘typical’’ Phase              impinged and then further estimate
                                                     concerning emissions of greenhouse                      II facility and outlined a configuration               which of those impinged organisms
                                                     gases. EPA recognizes that it is                        for a typical CWIS. (See 69 FR 41590.)                 survived. As a result, EPA has
                                                     important that each and all of these                    EPA defined the calculation baseline as                developed a new approach to the
                                                     efforts achieve their intended                          follows:                                               technology-based requirements
                                                     environmental objectives in a common-                   an estimate of impingement mortality and               proposed today that does not use a
                                                     sense manner that allows the industry to                entrainment that would occur at your site              calculation baseline.
                                                     comply with its obligations under these                 assuming that: the cooling water system has
                                                                                                                                                                    2. Entrainment Exclusion Versus
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                                                     rules as efficiently as possible and to do              been designed as a once-through system; the
                                                                                                             opening of the cooling water intake structure          Entrainment Survival
                                                     so by making coordinated investment
                                                                                                             is located at, and the face of the standard 3⁄8           As EPA worked towards revising the
                                                     decisions and, to the greatest extent
                                                                                                             inch mesh traveling screen is oriented                 existing facility rules, EPA discovered a
                                                     possible, by adopting integrated                        parallel to, the shoreline near the surface of
                                                     compliance strategies. In addition, EO                                                                         nuance to the performance based
                                                                                                             the source waterbody; and the baseline
                                                     13563 states that ‘‘[i]n developing                     practices, procedures, and structural                  requirements of the 2004 Phase II rule:
                                                                                                             configuration are those that [a] facility would        Entrainment exclusion versus
                                                       6 See http://www.epa.gov/ne/braytonpoint/             maintain in the absence of any structural or           entrainment survival. As discussed in
                                                     index.html.                                             operational controls, including flow or                section III.C below, EPA re-reviewed the


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                                                     data on the performance of intake                       screens was very poor, and in some                     and overall plant capacity as reported in
                                                     technologies and conducted statistical                  extreme cases comparable to the                        the most recent EIA database. These
                                                     analysis of the data. From this analysis,               extremely low survival of entrained                    inconsistencies resulted in Appendix A
                                                     it became apparent that the 2004 Phase                  organisms that are allowed to pass                     costs that were different from the
                                                     II rule did not fully consider the true                 entirely through the facility.10 More                  facility’s own compliance cost estimates
                                                     performance of intake technologies in                   specifically, EPA found that nearly 100                due to inconsistencies in the underlying
                                                     affecting ‘‘entrainable’’ organisms.                    percent of eggs were entrained unless                  parameters used to estimate these costs.
                                                        By definition, entrainment is the                    the mesh slot size was less than 2 mm,                 In addition, as described more fully in
                                                     incorporation of aquatic organisms into                 and mortality of eggs ‘‘converted’’ to                 Chapter 2 of this proposal’s Technical
                                                     the intake flow, which passes through                   impingement ranged from 20 to 30                       Development Document, EPA does not
                                                     the facility and is then discharged. In                 percent. Further, the mortality of larvae              have available technical data for all
                                                     order to pass through the technologies                  collected from a fine mesh screen was                  existing facilities. EPA obtained the
                                                     located at the CWIS (e.g., intake screens,              usually greater than 80 percent. As a                  technical data for facilities through
                                                     nets, etc.), the organisms must be                      result, a facility with entrainment                    industry questionnaires. In order to
                                                     smaller than the smallest mesh size.7                   exclusion technologies such as fine                    decrease burden associated with these
                                                     For coarse mesh screens (3/8″ mesh                      mesh screens could approach 90 percent                 questionnaires, EPA requested detailed
                                                     size), most ‘‘entrainables’’ simply pass                performance, but the subsequent                        information from a sample, rather than
                                                     through the mesh (and through the                       survival of eggs and larvae combined                   a census, of facilities. EPA has thus
                                                     facility) with only some contact with the               ranged from 0 to 52 percent (mean value                concluded that the costs provided in
                                                     screen.8 In this situation the mortality of             of 12 percent survival) depending on                   Appendix A are not appropriate for use
                                                     organisms passing through the facility                  life stage and species, and the facility’s             in a facility-level cost-cost test.
                                                     was assumed to be 100 percent.                          impingement mortality rates increased.                 Moreover, for most of the national
                                                     However, as mesh sizes are reduced,9                    In other words, a facility that simply                 requirements EPA is proposing here, a
                                                     more and more entrainables will                         excluded entrainable organisms (with                   cost-cost variance is not necessary for
                                                     actually become impinged on the                         no attention being paid to whether they                the reasons described below. As a result,
                                                     screens (i.e., ‘‘converted’’ from                       survive or not) could be deemed to have                EPA is not providing a framework
                                                     entrainable to impingeable) and would                   met its entrainment requirements under                 similar to Appendix A in today’s
                                                     then be subjected to spray washes and                   the 2004 Phase II rule, when in fact it                proposed rule.11 (See section III.C below
                                                     returned along with larger impinged                     may be causing the same level of                       and VII for more information about how
                                                     organisms as well as debris from the                    mortality as a facility with no                        EPA developed compliance costs.)
                                                     screens. Under the 2004 Phase II rule,                  entrainment controls at all. EPA’s                       First, the impingement mortality
                                                     these ‘‘converts’’ would be classified as               current review of entrainment and                      requirements of today’s proposed rule
                                                     a reduction in entrainment, since the                   entrainment mortality shows the same                   are economically achievable,12 and the
                                                     entrainment performance standard                        trends identified in the research reviews              low variability in the costs of
                                                     simply required a reduction in the                      by EPRI (2003), namely that entrainment                impingement mortality controls at a
                                                     number (or mass) of entrained                           decreases with increasing larval length,               facility makes such a provision
                                                     organisms entering the cooling system.                  increased sweeping flow, decreasing                    unnecessary. Second, a cost-cost
                                                     However, for some facilities the low                    slot (intake) velocity, and decreasing                 variance is not necessary for
                                                     survival rate of converts resulted in the               slot width. In other words, by using                   entrainment mortality requirements
                                                     facility having difficulty complying                    screens with finer mesh, entrainment                   because the costs of various
                                                     with the impingement mortality                          mortality can be converted to                          requirements are a factor considered in
                                                     limitations. By comparison, the                         impingement mortality without                          each site-specific determination. Under
                                                     performance standard for impingement                    necessarily protecting any more aquatic                the national rule, entrainment
                                                     was measured as impingement                             organisms.                                             requirements would be established on a
                                                     mortality. Organisms that were                          3. Cost-Cost Test                                      facility specific basis, except in the case
                                                     impinged (i.e., excluded) from the CWIS                                                                        of new units at an existing facility,
                                                                                                                In the 2004 Phase II rule, EPA                      which are subject to standards based on
                                                     were typically washed into a return                     developed facility-specific cost
                                                     system and sent back to the source                                                                             closed-cycle cooling or its equivalent. In
                                                                                                             estimates, and published those costs in                the facility-specific process proposed
                                                     water. In this case, impingement                        Appendix A (69 FR 41669). The 2004
                                                     mortality is an appropriate measure of                                                                         today for entrainment mortality, a
                                                                                                             Phase II rule also included a cost-cost                facility would be required to submit
                                                     the biological performance of the                       test (see 69 FR 41644) where a facility
                                                     technology.                                                                                                    facility-specific compliance cost
                                                                                                             could demonstrate that its costs to                    estimates. The determination of whether
                                                        Through EPA’s review of control
                                                                                                             comply with the 2004 rule were                         the cost of specific entrainment
                                                     technologies, the Agency found that the                 significantly greater than those that EPA
                                                     survival of ‘‘converts’’ on fine mesh                                                                          mortality technologies is too high is
                                                                                                             had considered. Since initial
                                                                                                                                                                    made by the Director on a case-by-case
                                                                                                             implementation of the July 9, 2004
                                                       7 In the case of many soft-bodied organisms such                                                             basis and accordingly a cost-cost
                                                     as eggs and larvae, the force of the intake flow can    316(b) Phase II rule, EPA has identified
                                                                                                                                                                    provision is unnecessary for these
                                                     be sufficient to bend organisms that are actually       several concerns with the facility-
                                                                                                                                                                    facilities. However, consistent with the
                                                     larger than the screen mesh and pull them into the      specific costs listed in Appendix A and
                                                                                                                                                                    Phase I rule, EPA has included a
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                                                     cooling system.                                         their use in the cost-cost test. First, EPA
                                                       8 Eggs are generally smaller than 2 millimeters in
                                                                                                             has identified numerous inconsistencies
                                                     diameter, while larvae head capsids are much more                                                                11 There is a form of ‘‘cost-cost variance’’ for new

                                                     variable in size, increasing as they mature to the      between facility permit applications,                  units at existing facilities, comparable to the
                                                     juvenile stage.                                         responses in the facility’s 316(b) survey,             provision in Phase I for new facilities. See further
                                                       9 Fine mesh screens were considered to be one                                                                discussion below.
                                                     technology that could be used to meet the                 10 Through-plant entrainment survival has been         12 The Phase II rule found impingement mortality

                                                     entrainment performance standards under the 2004        studied extensively, with EPRI’s Review of             (plus entrainment exclusion on certain waterbodies)
                                                     Phase II rule. EPA also reviewed performance data       Entrainment Survival Studies being amongst the         was economically achievable; EPA has not
                                                     for screens with mesh sizes as small as 0.5 mm, as      most comprehensive. See DCN 2–017A–R7 from the         identified any reason for revising this conclusion.
                                                     described in section III.C.                             Phase I docket.                                        See 69 FR 41603.



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                                                     provision for new units at existing                     13538–13539, EPA previously                            temperature, conditions when the
                                                     facilities that the Director may establish              developed a Technology Efficacy                        technology is in place, control
                                                     less stringent alternative requirements                 Database in an effort to document and                  conditions). The second table contains
                                                     for a facility if compliance with the                   assess the performance of various                      the reported performance data for a
                                                     Phase I standards would result in                       technologies and operational measures                  given study. Each row of this table
                                                     compliance costs wholly out of                          designed to minimize the impacts of                    contains one or more performance
                                                     proportion to those EPA considered in                   cooling water withdrawals (see DCN 6–                  measures for a particular species along
                                                     establishing the Phase I requirements or                5000 in the docket for the 2004 Phase                  with other factors when they were
                                                     would result in significant adverse                     II rule). In support of today’s proposal,              specified (e.g., age category, dates or
                                                     impacts on local air quality, water                     EPA has updated that performance                       seasons of data collection, water
                                                     resources other than impingement or                     database. In updating the database,                    temperature, velocity, elapsed time to
                                                     entrainment, or local energy markets.                   EPA’s objective was to review the                      mortality). For one option considered
                                                     C. New or Revised Analyses                              methods used to generate data in these                 for today’s proposed rule, EPA used this
                                                                                                             studies and to combine relevant data                   database in an attempt to revise the
                                                        In addition to collecting new                        across studies in order to produce
                                                     information, EPA has re-evaluated some                                                                         impingement mortality and entrainment
                                                                                                             statistical estimates of the overall                   limits developed for the Phase II rule.
                                                     existing data and analyses that underlay                performance of each of the technologies.
                                                     its earlier decisions. The standards of                                                                        However, as described in section VI, the
                                                                                                                In developing the updated database,                 performance data for screens and other
                                                     the 2004 Phase II regulation required                   EPA considered data from over 150
                                                     impingement mortality reduction for all                                                                        intake technologies indicates that those
                                                                                                             documents. This includes documents
                                                     life stages of fish and shellfish of 80 to                                                                     technologies were not very effective at
                                                                                                             previously contained in all three phases
                                                     95 percent from the calculation baseline                                                                       minimizing entrainment mortality in
                                                                                                             of EPA’s 316(b) rulemaking records as
                                                     (for all Phase II facilities) and                                                                              comparison to closed-cycle cooling. As
                                                                                                             well as new documents obtained during
                                                     entrainment reduction requirements of                                                                          a result, EPA has not included this
                                                                                                             development of today’s proposal. These
                                                     60 to 90 percent (for certain Phase II                  documents contain information on the                   option in today’s proposed rule package.
                                                     facilities). EPA based these performance                operation and/or performance of various                2. Impingement Mortality and
                                                     requirements on a suite of technologies                 forms and applications of these                        Entrainment Technology Performance
                                                     and compliance alternatives. For today’s                technologies, typically at a specific                  Estimates
                                                     proposal, EPA has reanalyzed various                    facility or in a controlled setting such as
                                                     candidate technologies as the basis for                 a research laboratory. The studies                        To evaluate the effectiveness of
                                                     EPA’s BTA decision. This reanalysis                     presented in these documents were                      different control technologies and the
                                                     includes, but is not limited to, a                      performed by owners of facilities with                 extent to which the various regulatory
                                                     reanalysis of candidate BTA                             cooling water intake structures,                       options considered for today’s proposal
                                                     technologies, their effectiveness, their                organizations that represent utilities and             minimize adverse environmental
                                                     costs, and their application. This section              the electric power industry, and other                 impacts associated with cooling water
                                                     highlights some of the results from this                research organizations. EPA established                intake structures, EPA used the data
                                                     reanalysis. See Section VI for a thorough               two general criteria for using data from               collected in the revised performance
                                                     discussion of EPA’s updated BTA
                                                                                                             the documents: (1) The data must be                    database to develop impingement
                                                     analysis and determination. Based on
                                                                                                             associated with technologies for                       mortality and entrainment reduction
                                                     this reanalysis, EPA has reached several
                                                                                                             minimizing impingement mortality or                    estimates associated with each
                                                     conclusions. The first is that closed-
                                                                                                             entrainment 13 that are currently viable               technology. For some technologies, this
                                                     cycle cooling reduces impingement and
                                                                                                             (as recognized by EPA) for use by                      proposal reflects updated information or
                                                     entrainment mortality to the greatest
                                                                                                             industries with cooling water intake                   a different methodology for estimating
                                                     extent. The second is that screen
                                                                                                             structures that are (or will be) subject to            effectiveness. For impingement
                                                     technologies are significantly less
                                                                                                             Section 316(b) regulation; and (2) the                 mortality, EPA focused on 14 studies of
                                                     effective, particularly in comparison
                                                                                                             data must represent a quantitative                     31 species for traveling screens with
                                                     with closed-cycle cooling, in reducing
                                                                                                             measure (e.g., counts, densities, or                   post-Fletcher modifications and with a
                                                     entrainment mortality than EPA had
                                                                                                             percentages) that is related to the                    48 hour 14 or less holding time, and
                                                     concluded in 2004. Finally, EPA
                                                                                                             impingement mortality or entrainment                   found the monthly impingement
                                                     determined that while none of the
                                                                                                             of some life form of aquatic organisms                 mortality corresponding to the 95th
                                                     reviewed technologies cause
                                                                                                             within cooling water intake structures                 percentile was 31 percent mortality.
                                                     unacceptable energy reliability
                                                                                                             under the given technology.                            EPA’s full analysis of impingement
                                                     concerns, particulate emission                             For studies meeting the above criteria,
                                                     increases, or adverse economic impacts                                                                         mortality limitations may be found in
                                                                                                             EPA populated a new database. This                     Chapter XI of the TDD. EPA found the
                                                     at the national level, the performance                  performance study database consisted of
                                                     and availability of some technologies                                                                          best performance of entrainment
                                                                                                             two primary data tables. The first table
                                                     varies widely depending on local                                                                               exclusion for fine mesh screens was 73
                                                                                                             contains specific information on a
                                                     factors, and these issues could be a                                                                           to 82 percent for eggs and 46 to 52
                                                                                                             particular study, such as the document
                                                     significant concern at individual sites.                                                                       percent for larvae at 0.5 mm slot sizes.
                                                                                                             and study IDs, facility name, water
                                                                                                                                                                    The best performance of fine mesh
                                                     1. Revised Performance Database                         body, data classification (e.g.,
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                                                                                                             impingement mortality, entrainment),                   screens for entrainment survival (and
                                                        In its Section 316(b) rule development                                                                      not just exclusion) was 29 to 34 percent,
                                                     efforts to date, EPA has gathered                       technology category, and other test
                                                                                                             conditions when specified (e.g., mesh                  with zero survival of eggs and larvae
                                                     industry documents and research                                                                                under certain conditions. The next
                                                     publications with information from                      size, intake velocity, flow rate, water
                                                                                                                                                                    section further discusses the distinction
                                                     studies which evaluated the                               13 There were insufficient numbers of studies
                                                     performance of a range of technologies                  specifically looking at entrainment mortality or        14 Holding times beyond 48 hours often result in
                                                     for minimizing impingement or                           entrainment survival, therefore EPA broadened the      mortality due to holding conditions rather than
                                                     entrainment. As explained in 68 FR                      review to include any measure of entrainment.          mortality due to impingement.



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                                                     between entrainment exclusion and                       organisms that are ‘‘converted’’ from                   of water when not generating electricity.
                                                     entrainment survival.                                   entrained to impinged on fine mesh                      EPA also found that load-following and
                                                                                                             screens. These data show that under                     peaking plants operate at or near 100
                                                     3. Exclusion Technologies
                                                                                                             most operational conditions, many                       percent capacity (and therefore 100
                                                        As discussed in section III.B above,                 larvae die as a result of the impact and                percent design intake flow) when they
                                                     screens and other technologies operate                  impingement on fine mesh screens. In                    are operating, and these operations
                                                     using a principle of excluding                          the case of eggs, the data indicate that                occur frequently during peak summer
                                                     organisms from entering the cooling                     some species may die, but some do                       electricity demand, coinciding with
                                                     system. For technologies other than                     survive. The data also demonstrate that                 some of the most biologically sensitive
                                                     cooling towers, EPA generally                           if the organisms can withstand the                      portions of the year.16 Accordingly,
                                                     calculated their efficacy as the mean                   initial impingement on the fine mesh                    today’s proposed requirements are not
                                                     percent efficacy of the available data.                 screen, the majority of entrainable                     based on waterbody type or CUR. See
                                                     Because EPA has sufficient data to                      organisms survive after passing through                 further discussion in Section VI.
                                                     evaluate impingement mortality, its                     a fish return and returning to the source
                                                     impingement mortality technology                        water. Finally, the data indicate that                  IV. Revised Industry Description
                                                     efficacy calculation accounts for                       survival increases as the body length                     Today’s proposed rule applies to all
                                                     mortality. However, because EPA has                     and age of the larvae increases.15 EPA                  existing electric generating and
                                                     data on entrainment exclusion but lacks                 seeks additional data on the                            manufacturing facilities, except for
                                                     sufficient entrainment mortality data to                survivability (or mortality) of organisms               certain water going vessels as described
                                                     calculate exclusion technology                          that are converted from entrained to                    in section V. EPA has earlier fully
                                                     entrainment mortality efficacy, EPA’s                   impinged on fine mesh screens.                          described the electricity industry in the
                                                     calculated mean entrainment percent                                                                             2002 Phase II proposed rule (see, for
                                                     efficacy does not account for mortality.                4. Application of Requirements Based
                                                                                                                                                                     example, 67 FR 17135) and the
                                                     Available data on today’s proposed                      on Capacity Utilization Rate (CUR) and
                                                                                                                                                                     manufacturing industries in the 2004
                                                     technology basis demonstrate that                       Waterbody Type
                                                                                                                                                                     Phase III proposed rule (see, for
                                                     entrainment reductions associated with                     In the 2004 Phase II rule, the type of               example, 69 FR 68459).17 While these
                                                     fine mesh technologies vary depending                   performance standard applicable to a                    general descriptions continue to broadly
                                                     on life stage and mesh size. See Section                particular facility (i.e., reductions in                reflect the current state of these
                                                     VIII and the TDD for additional                         impingement mortality only or                           industries, EPA has revised some of its
                                                     information on EPA’s estimate of                        impingement mortality and                               estimates of numbers of facilities,
                                                     entrainment reductions for today’s                      entrainment) depended on several                        intakes, flows, and other pertinent
                                                     proposal.                                               factors, including the facility’s location              information. In particular, this section
                                                        In reality, excluding an organism from               (i.e., source waterbody), capacity                      describes those facilities with a cooling
                                                     the cooling water intake does not                       utilization rate (CUR) (as an indicator of              water intake structure having a DIF of
                                                     minimize entrainment-related adverse                    the rate of use), and the proportion of                 greater than 2 MGD, related cooling
                                                     environmental impacts unless the                        the source waterbody withdrawn. EPA’s                   water use in power production and
                                                     excluded organisms survive and                          reanalysis of impingement and                           manufacturing activities, and an
                                                     ultimately return back to the waterbody.                entrainment data does not support the                   overview of the industry sectors in
                                                     In the 2004 Phase II rule, EPA made the                 premise that the difference in the                      scope for today’s proposed rule. See the
                                                     assumption that any entrainable                         density of organisms between marine                     TDD and EA for today’s proposed rule
                                                     organism which was entrained died                       and fresh waters justifies different                    for more detailed information including
                                                     (i.e., 100 percent mortality for organisms              standards. More specifically, the average               industry profiles.
                                                     passing through the facility) and any                   density of organisms in fresh waters
                                                     organism not entrained survived. In                     may be less than that found in marine                   A. Water Use in Power Production and
                                                     other words, if a technology reduced                    waters, but the actual density of aquatic               Manufacturing
                                                     entrainment by 60 percent, then EPA                     organisms in some specific fresh water                    Water is used for a wide variety of
                                                     estimated 40 percent of the organisms                   systems exceeds that found in some                      application in the United States. The
                                                     present in the intake water would die in                marine waters. In other words, there is                 U.S. Geologic Survey (USGS) publishes
                                                     comparison to 100 percent in the                        considerable overlap in the range of                    a comprehensive review of water use
                                                     absence of any entrainment reduction.                   densities found in marine waters and in                 across industry sectors every 5 years.
                                                     As explained in Section VI, while it has                fresh waters. EPA also believes the                     The 2005 report indicated that 410
                                                     been conjectured that certain species of                different reproduction strategies of                    billion gallons per day (BGD) of water
                                                     eggs have been shown to survive                         freshwater versus marine species makes                  are withdrawn for various uses. (See
                                                     entrainment under certain conditions,                   broad characterizations regarding the
                                                     EPA has not received any new data for                   density less valid a rationale for                         16 Some facilities continue to withdraw cooling

                                                     either the most common species or the                   establishing different standards for                    water even when not generating for a variety of
                                                     most frequently identified species of                                                                           reasons: to discourage biofouling or mechanical
                                                                                                             minimizing adverse environmental                        seizures, to promote continued water flow, or to
                                                     concern described in available studies                  impact.                                                 maintain a state of readiness. Peaking facilities
                                                     and, as such, has not altered its decision                 In re-considering the applicability of               (those with a CUR of less than 15percent, as defined
                                                     that for purposes of national                           requirements based on CUR, EPA found                    in the 2004 Phase II rule) may withdraw relatively
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                                                     rulemaking, entrainment should be                                                                               small volumes on an annual basis, but if they
                                                                                                             that even infrequently used facilities                  operate during biologically important periods such
                                                     presumed to lead to 100 percent                         may still withdraw significant volumes                  as spawning seasons or migrations, then they may
                                                     mortality. Today’s proposed rule would                                                                          have nearly the same adverse impact as a facility
                                                     allow facilities to demonstrate, on a site-               15 EPA found this is a very important distinction     that operates year round.
                                                     specific basis, that entrainment                        when reviewing technology efficacy, as some                17 EPA also addressed both electric generators and

                                                     mortality of one or more species of                     studies do not include the smaller, more fragile, and   manufacturers in the 2000 Phase I proposed rule
                                                                                                             often non-motile stages of larvae. Older stages of      (see, for example, 65 FR 49070). The support
                                                     concern is not 100 percent.                             larvae have started to develop avoidance responses,     documents for all three rule phases also provide
                                                        For today’s proposal, EPA analyzed                   and generally have already started developing           information characterizing the affected industry
                                                     the limited data on the survivability of                scales and skeletal structures.                         sectors.



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                                                                             Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                          22189

                                                     DCN 10–6872.) Of that amount,                            returned to the boiler.20 Non-contact                    In power plants, cooling water may be
                                                     approximately 201 BGD is withdrawn                       cooling water is used to extract heat and              used for contact cooling of pumping
                                                     by electric generators, primarily for non-               return the steam to water in a                         equipment, such as the cooling water
                                                     contact cooling,18 plus water                            condenser. The water can then be                       pump bearings. Contact cooling water is
                                                     withdrawals by other industrial sites of                 pumped back to the boiler for heating to               more frequently needed by
                                                     18.2 BGD for a total of 219 BGD. This                    repeat the cycle. Consistent with                      manufacturing processes, such as
                                                     total flow represents the universe of                    engineering theory, there are limits to                quench water (e.g., water into which
                                                     flow potentially subject to regulation                   the maximum efficiency of a thermal                    bars of hot metal are dipped for rapid
                                                     under 316(b), therefore today’s proposed                 plant. Thermal power plants are                        cooling or control of the formed metal
                                                     rule may address over half of the water                  actually not very efficient at converting              temperature), mechanical pulping,
                                                     withdrawals in the entire nation.19                      fuel to electricity; only 30 to 60 percent             forming and molding processes, food
                                                        Industrial water use (broadly defined                 of the fuel is captured as electricity,                and agricultural products, and
                                                     as water used by power plants and                        with the higher efficiency units relying               petrochemical gas quenching.
                                                     manufacturers) falls generally into one                  on further use of the steam for further                3. Process Water
                                                     of four categories: non-contact cooling                  heating (usually referred to as
                                                                                                              cogeneration) or energy purposes (such                    Process water is water that is used
                                                     water, contact cooling water, process                                                                           directly in an industrial process. While
                                                     water, and other water uses. A more                      as combined cycle power generators or
                                                                                                              other process warming). Depending on                   steam electric plants do have some
                                                     detailed description of each category                                                                           process water, process water is more
                                                     and how it relates to 316(b) is provided                 the type of generating unit, roughly one-
                                                                                                              third to two-thirds of the total energy                typically associated with manufacturers,
                                                     below.                                                                                                          as the primary industrial process at
                                                                                                              generated is lost in the form of heat that
                                                     1. Non-Contact Cooling Water                             must be subsequently dissipated.                       power plants (electricity generation) is
                                                                                                                                                                     usually cooled with non-contact cooling
                                                        Power plants and manufacturers                           At manufacturers, non-contact cooling
                                                                                                                                                                     water. Examples of process water
                                                     frequently generate large amounts of                     is also a significant component of water
                                                                                                                                                                     include water used to break down wood
                                                     heat in their industrial processes. Non-                 use. Some manufacturers have electric
                                                                                                                                                                     pulp in a paper mill, water that is used
                                                     contact cooling systems are one of the                   generating units which generally
                                                                                                                                                                     in creating consumer products such as
                                                     most common techniques used to                           operate in the same manner as
                                                                                                                                                                     beverages or personal care products,
                                                     dissipate this heat. In a non-contact                    summarized above. In some cases,                       water added to facilitate transportation
                                                     cooling system, water is pumped                          virtually all of the manufacturing                     of materials within a manufacturing
                                                     through a heat exchanger or other                        facility’s cooling water withdraws are                 process, water needed as a raw material,
                                                     equipment where it comes into indirect                   for power production. In contrast to                   and water used in numerous chemical
                                                     contact with heated materials in the                     power generators, some manufacturing                   separations processes. Process water
                                                     industrial process. The water absorbs                    facilities also need a reliable source of              may be used as an ingredient in the
                                                     heat and is subsequently discharged (in                  high pressure steam for manufacturing                  intermediate products, consumed by the
                                                     a once-through cooling system) or                        processes. Other manufacturers may                     products, lost to evaporation, extracted
                                                     recirculated (in a closed-cycle system).                 need to condense steam generated from                  later in the process line for treatment
                                                     In these systems, the cooling water does                 other processes, or may need to extract                and discharge, or further reused.
                                                     not come into contact with any                           heat from a raw or processed material                     EPA has found through site visits,
                                                     industrial materials, equipment or                       (e.g., to reduce the temperature of an                 extensive experience with
                                                     processes; the cooling water is                          intermediate petroleum or chemical                     manufacturing water use in the
                                                     contained within the cooling system for                  product before it enters a subsequent                  development of previous effluent
                                                     heat absorption and generally requires                   processing stream). Some facilities                    guidelines, and a general review of
                                                     very little treatment (except heat                       engage in testing or research, and have                water uses by manufacturing processes
                                                     removal) before discharge.                               cooling needs for these activities.                    that a significant amount of reduction,
                                                                                                              2. Contact Cooling Water                               reuse, and recycling has already
                                                        At power generators, non-contact
                                                                                                                                                                     occurred in most manufacturing
                                                     cooling is by far the largest water use.                    Contact cooling water differs from                  processes, in part due to pretreatment
                                                     Approximately three quarters of the                      non-contact cooling in that contact                    standards and NPDES permit
                                                     total annual electricity output in the                   cooling systems use cooling water in                   conditions. Beyond these reductions,
                                                     United States results from steam                         direct contact with the hot equipment or               today’s proposed rule recognizes that
                                                     powered turbines. Power plants heat                      heated materials. As a result, contact                 many industrial facilities have worked
                                                     water inside a boiler. The water is                      cooling water may intermingle with                     to reduce the volume of process water
                                                     turned to steam, at which point the                      industrial products or equipment and                   usage at their sites and to increase the
                                                     temperature of the steam can be                          often will take up pollutants other than               reuse of process water for other
                                                     increased with further heating, allowing                 heat, such as oil and grease or metals.                purposes within the facility. A leading
                                                     additional energy to be stored in the                    Contact cooling water often requires                   facility or an entire industry may have
                                                     steam. The steam is then used to spin                    treatment for these pollutants before it               evolved to use less process water in its
                                                     a turbine, producing electricity. The                    may be discharged.                                     industrial process. For example, EPA
                                                     steam must then be condensed and                                                                                has found some facilities have
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                                                                                                                20 The thermodynamic laws governing the              undergone plant wide energy audits to
                                                       18 Irrigationwas the next highest user of water at     Rankine cycle in power plants requires a heat          reduce their energy needs by up to 25
                                                     31% of the total withdrawn.                              source and a heat sink. The difference in
                                                       19 In the Phase I rule, EPA also presented data        temperature and pressure is a major factor in
                                                                                                                                                                     percent, providing a roughly 25 percent
                                                     indicating that the combined 316(b) rules for            maintaining efficiency of the thermal engine.          reduction in cooling water needs. One
                                                     electric generators and the largest manufacturing        Additional reasons for condensing the steam            analysis of paper mills estimates that
                                                     sectors would address approximately 99% of all           include: handling pressure drops in the system, the    over 39 billion gallons daily of water is
                                                     cooling water withdrawals in the U.S. See 65 FR          need to remove non-condensable gases before they
                                                     49071 and the Phase I Economic and Engineering           damage equipment, to allow make-up water to be
                                                                                                                                                                     recycled and not used solely for cooling
                                                     Analyses of the Proposed § 316(b) New Facility           added to the system, and to safely allow pumping       purposes by a typical mill. Further,
                                                     Rule.                                                    of the water back to the boiler.                       there has been a 69 percent reduction in


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                                                     22190                         Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     the average volume of treated effluent at                               pollutant for biological treatment                        required by state policy to comply with
                                                     pulp and paper mills (see DCN 10–                                       purposes, or to reduce the temperature                    standards based on closed-cycle cooling,
                                                     6902). In response to effluent guidelines                               of an effluent.                                           and thus for regulatory analysis
                                                     discharge limitations, some facilities                                                                                            purposes are not expected to be affected
                                                                                                                             B. Overview of Electric Generators
                                                     have reduced their compliance costs by                                                                                            by the proposed rule. In addition, 39
                                                     reducing the volume of wastewater they                                     In the Phase I proposal, EPA                           facilities are projected to be baseline
                                                     must treat. Some effluent limitation                                    described its rationale for setting the                   closures according to Integrated
                                                     guidelines have also established explicit                               threshold for section 316(b) national                     Planning Model analyses (see Section
                                                     requirements for flow reduction. In the                                 requirements at 2 MGD. As described in                    VII of this preamble and Chapter 6 of
                                                     case of iron and steel facilities, effluent                             that proposed rule, EPA selected 2 MGD                    the EA for discussion of IPM analysis).21
                                                     limitations require no discharge of                                     to ensure that almost all cooling water                   Based on (1) data collected from these
                                                     process wastewater pollutants (for                                      withdrawn from waters of the U.S. is                      Surveys; (2) the compliance
                                                     example, see 40 CFR part 420 subpart D                                  covered by a national regulation. The                     requirements in today’s proposed rule,
                                                     Steelmaking). As another observed                                       Agency recognized that there was                          and (3) the in-scope threshold of 2 MGD
                                                     example of the recycling of process                                     relatively little information currently                   DIF (see section V for further
                                                     water, a facility might use non-contact                                 available regarding the lower bound of                    explanation of the 2 MGD threshold),
                                                     cooling water for condensing steam, but                                 withdrawals at which significant levels                   EPA has therefore identified 559
                                                     then reuse the heated water for washing                                 of impingement and entrainment and,                       Electric Generators that are in scope of
                                                     raw materials instead of discharging the                                therefore, adverse environmental                          today’s 316(b) Existing Facilities
                                                     water.                                                                  impact, was likely to occur. At the time,                 Proposed Rule.22 23
                                                        See section V for more information on                                most case studies available to the
                                                                                                                             agency documenting impingement and                           EPA estimates that the 559 steam
                                                     how water reuse and conservation
                                                                                                                             entrainment from cooling water                            electric generators represent 3 percent of
                                                     efforts are considered in compliance
                                                                                                                             withdrawals focused on facilities                         all parent-entities, approximately 11
                                                     alternatives for today’s proposed rule.
                                                                                                                             withdrawing very large amounts of                         percent of all facilities, and over 45
                                                     4. Other Uses                                                           water (in most cases greater than 100                     percent of the electric power sector
                                                        Given the diversity of industrial                                    MGD). After soliciting comment and                        capacity. Based on the 2007 EIA
                                                     processes across the U.S., there are                                    data on several different thresholds, the                 database, EPA estimates that 388 of
                                                     many other industrial uses of water not                                 Agency adopted 2 MGD in the final rule.                   these in-scope facilities are owned by
                                                     intended to be addressed by today’s                                     66 FR 65288.                                              utilities and 171 in-scope facilities are
                                                     proposed rule. Emergency water                                             While the overview of the electric                     owned by non-utilities.24 The majority
                                                     withdrawals, such as fire control                                       generating facilities in the previous                     of electric generating facilities expected
                                                     systems and nuclear safety systems, are                                 Phase II and III proposed and final rules                 to be subject to today’s proposed
                                                     not considered as part of a facility’s                                  has not changed substantially, this                       Existing Facilities rule, or 285 facilities,
                                                     design intake flow. Warming water at                                    section combines those multiple                           are investor-owned utilities, while
                                                     liquefied natural gas terminals, and                                    industry profiles into one overview. The                  nonutilities make up the second largest
                                                     hydro-electric plant withdrawals for                                    information below is generally based on                   category. For a detailed discussion of
                                                     electricity generation are not cooling                                  data from the U.S. Department of                          parent-entities, see Chapter 5 and 7 of
                                                     water uses and are not addressed by                                     Energy’s (DOE) ‘‘Annual Electric                          the EA (DCN 10–0002).
                                                     today’s proposal. Other water uses                                      Generator Report’’ (Form EIA–860) and                        As reported in Exhibit IV–1,
                                                     might include service water and                                         ‘‘Annual Electric Power Industry                          approximately half of the in-scope
                                                     dilution water. Service water is a                                      Report’’ (Form EIA–861), and EPA’s                        electric generators draw water from a
                                                     generic term that often refers to uses                                  Section 316(b) Industry Surveys.                          freshwater river (306 facilities or 55
                                                     other than non-contact cooling (i.e., it                                According to the 2007 EIA database, 38                    percent), followed by lakes or reservoirs
                                                     may include contact cooling), but can                                   of the 671 facilities have ceased                         (117 facilities or 21 percent) and
                                                     also include specialty water uses such                                  operation since the Survey and 15                         estuaries or tidal rivers (83 facilities or
                                                     as makeup water for radiation waste                                     facilities will likely do so by the time                  15 percent). The exhibit also shows that
                                                     systems at nuclear power plants.                                        today’s proposed rule is promulgated                      most of the in-scope facilities (355
                                                     Examples of dilution water are using                                    (i.e., 2012). EPA also excluded 20                        facilities or 63 percent) employ a once-
                                                     water to reduce the concentration of a                                  electric generators that are already                      through cooling system.

                                                                EXHIBIT IV–1—NUMBER OF IN-SCOPE ELECTRIC GENERATORS BY WATERBODY AND COOLING-SYSTEM TYPE a
                                                                                                                               Recirculating         Once-through            Combination                 Other                 Total b
                                                                           Waterbody type                                        Number                Number                  Number                   Number                Number

                                                     Estuary/Tidal River ...........................................                            5                      69                    8                       1                    83
                                                     Ocean ...............................................................                      0                       9                    0                       0                     9
                                                     Lake/Reservoir .................................................                          36                      73                    7                       1                   117
                                                     Freshwater Stream/River .................................                                102                     166                   32                       5                   306
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                                                       21 For the purpose of this analysis, a facility is                    estimates for the total of expected in-scope facilities   that were developed for the suspended 2004 Phase
                                                     considered no longer in operation and retired if it                     based on the full set of facilities sampled in the        II Final Regulation analysis.
                                                     no longer has any steam operations.                                     Section 316(b) Industry Surveys. See Appendix 3.A:           24 Electric utilities engage in the generation,
                                                       22 EPA developed the estimates of the number                          Weighting Concepts of the Economic and Benefits
                                                                                                                                                                                       transmission, and the distribution of electricity for
                                                     and characteristics of facilities expected to be                        Analysis report for further discussion of the sample
                                                                                                                             weights used in this analysis.                            sale generally in a regulated market. Utilities
                                                     within the scope of today’s proposed rule, based on
                                                     the facility sample weights that were developed for                       23 EPA estimates of the characteristics of facilities   include investor-owned, publicly-owned, and
                                                     the suspended 2004 Phase II Final Regulation                            expected to be within the scope of today’s proposed       cooperative entities.
                                                     analysis. These weights provide comprehensive                           rule are also based on the facility sample weights



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                                                                                   Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                     22191

                                                             EXHIBIT IV–1—NUMBER OF IN-SCOPE ELECTRIC GENERATORS BY WATERBODY AND COOLING-SYSTEM TYPE a—
                                                                                                       Continued
                                                                                                                              Recirculating         Once-through            Combination               Other         Total b
                                                                           Waterbody type                                       Number                Number                  Number                 Number        Number

                                                     Great Lake .......................................................                       4                       37                    2                  0               43

                                                           Total ..........................................................                  148                     355                  49                   7              559
                                                        a The  numbers of facilities are calculated on a sample-weighted basis.
                                                        b Individual values may not sum to totals due to independent rounding.




                                                     C. Overview of Manufacturers                                                EXHIBIT IV–2—EXISTING MANUFAC- Exhibit IV–3 provides the distribution
                                                        EPA obtained information on in-scope                                     TURERS BY INDUSTRY—Continuedof manufacturing intakes by source
                                                     Manufacturers presented in the tables                                                                   water body and cooling system type. In
                                                     below from the EPA’s Section 316(b)                                           Number of facilities      total, EPA estimates that 593 intakes
                                                     Industry Surveys (the Industry Screener                   Sector                                        will be within the scope of today’s rule.
                                                                                                                                              Number in- The vast majority (453 facilities or 77
                                                     Questionnaire (SQ) and the Industry                                         Sector total  scope b c
                                                     Detailed Questionnaire (DQ)). Based on                                                                  percent) withdraw cooling water from
                                                     the Survey data and the compliance                 Paper ................           597             225 freshwater streams or rivers, followed
                                                     requirements in today’s proposed rule,             Petroleum .........              352              39 by Great Lakes (47 facilities). Two
                                                     EPA estimates 592 industry facilities              Steel ..................       1,525              68 hundred eighty-seven (48 percent)
                                                     with greater than 2 MGD DIF would be                                                                    manufacturers employ once-through
                                                                                                              Total ...........       36,178           a 575
                                                     subject to today’s proposal; 575 of these                                                               cooling systems, 119 (20 percent) use
                                                     facilities are in the 6 primary                       a In-scope facility counts include baseline       closed-cycle cooling systems, and 124
                                                     manufacturing industries.25                        closures and exclude an estimated additional (21 percent) use ‘‘combination’’ systems.
                                                        Exhibit IV–2 below presents in-scope            17 facilities with NAICS codes that do not fall An estimated 192 (32 percent)
                                                     and industry-wide facility and parent              into any of these six primary manufacturing in-
                                                                                                        dustries.                                            manufacturers have installed one or
                                                     entity counts by industry. The largest                b Number of in-scope facilities are weighted      more cooling towers. In the total of 593
                                                     share of manufacturers, or 225 facilities,         estimates; see Appendix 3.A of the EA for in- facility/intake combinations, EPA does
                                                     is in the Pulp and Paper industry, while           formation on weights development. Individual not have information on the cooling
                                                     facilities in the Chemicals and Allied             values may not sum to totals due to inde-
                                                     Products make up the second largest                pendent rounding of sample-weighted (non in- water system type for 4 facilities/
                                                                                                        teger) estimates.                                    intakes. Note that not all manufacturers
                                                     category at 179 facilities.                           c These facility count estimates are based
                                                                                                                                                             that have installed a cooling tower are
                                                                                                        on sample weights that are applicable for esti- classified as using closed-cycle cooling
                                                               EXHIBIT IV–2—EXISTING                    mating the number of facilities that would be
                                                         MANUFACTURERS BY INDUSTRY                      within the scope of today’s proposed rule. systems, as facilities with multiple
                                                                                                        However, because of missing financial data on cooling water systems may be
                                                                                                        certain facilities, these weights were not used ‘‘combination’’ systems that employ both
                                                                               Number of facilities     in assessing the economic impact of the rule.
                                                         Sector                                         Alternative weights, which yield modestly dif- closed-cycle and once-through cooling.
                                                                                          Number in- ferent total in-scope facility estimates (e.g., Manufacturers may also list ‘‘helper’’
                                                                             Sector total  scope b c    569 in-scope facilities in the Primary Manufac- cooling towers in their survey
                                                                                                        turing Industries instead of the 575 reported in
                                                     Aluminum ..........             333             26 this table), were used for developing facility responses, which are generally used to
                                                     Chemicals .........           4,433            179 count estimates in the economic impact mitigate discharge temperatures and do
                                                     Food ..................      28,938             37 analysis.                                            not necessarily affect intake flows.

                                                                      EXHIBIT IV–3—NUMBER OF IN-SCOPE MANUFACTURERS BY WATERBODY AND COOLING-SYSTEM TYPE
                                                                                                  Recirculating b             Once-through           Combination               Other            Type unknown        Total a
                                                            Waterbody type                          Number                      Number                 Number                 Number               Number          Number

                                                     Estuary/Tidal River ...........                                   1                      23                     16                    0                   0               40
                                                     Ocean ...............................                             0                      11                      0                    0                   0               11
                                                     Lake/Reservoir .................                                  7                      13                     12                   11                   0               42
                                                     Freshwater Stream/River                                         111                     215                     82                   41                   4              453
                                                     Great Lake .......................                                0                      25                     14                    7                   0               47

                                                           Total ..........................                          119                     287                     124                  59                   4              593
                                                        a Facilitycounts include baseline closures and exclude 17 facilities with NAICS codes that do not fall into the six primary manufacturing indus-
                                                     tries (see Chapter 3 of EA for more detail). Individual facilities may be reported more than once in this table if they have multiple intakes while a
                                                     single intake that serves both recirculating and once-through systems is counted once as a combination. Individual values may not sum to totals
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                                                     due to independent rounding of sample-weighted (non integer) estimates.
                                                        b Four facilities have an unknown CWS type.




                                                       25 The remaining 17 facilities have NAICS codes

                                                     that do not fall into any of these six primary
                                                     manufacturing industries.

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                                                     22192                      Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     D. Other Existing Facilities                                      industries: Food processing; aircraft                      receive any data during the Phase III
                                                                                                                       engines and engine parts; cutlery;                         proposed rule comment period that
                                                        EPA’s data collection efforts largely                          sawmills and planing mills; finishers of                   suggests otherwise. EPA’s analysis of
                                                     focused on five industrial sectors:                               broad woven fabrics of cotton; potash,                     costs and impacts includes these
                                                     Chemicals and allied products (SIC                                soda and borate minerals; iron ores; and                   additional existing facilities.
                                                     Major Group 28); primary metals                                   sugarcane and sugar beets. These data
                                                     industries (SIC Major Group 33); paper                            from other industries, while not a                         V. Scope and Applicability of the
                                                     and allied products (SIC Major Group                              statistically derived sample, confirm                      Proposed Section 316(b) Existing
                                                     26); petroleum and coal products (SIC                             that the primary industry sectors                          Facility Rule
                                                     Major Group 29); and food and kindred                             discussed above account for the vast                          The proposed rule includes all
                                                     products (SIC Major Group 20).26 The                              majority of non-power plant cooling                        existing facilities with a design intake
                                                     first four sectors use a significant                              water use. The data collected for these                    flow of more than 2 MGD. The proposed
                                                     portion of the cooling water withdrawn                            other industries suggests that the intake                  rule also clarifies the definition and
                                                     among all manufacturing industries and                            structure design and construction at                       requirements for new units at existing
                                                     were more heavily targeted in EPA’s                               these industries were substantially                        facilities. The applicable requirements
                                                     industry questionnaire effort, but data                           similar to the industries for which EPA                    are summarized in Exhibits V–1 and V–
                                                     were also collected from the following                            did collect data, and EPA did not                          2.

                                                                                                    EXHIBIT V–1—APPLICABILITY BY PHASE OF THE 316(b) RULES
                                                                                      Facility characteristic                                                                        Applicable rule

                                                     New power generating or manufacturing facility ......................................              Phase I rule.
                                                     New offshore oil and gas facility ..............................................................   Phase III rule.
                                                     New unit at an existing power generating or manufacturing facility ........                        This proposed rule.
                                                     Existing power generating or manufacturing facility ................................               This proposed rule.
                                                     Existing offshore oil and gas facility and seafood processing facilities ...                       This proposed rule (Case-by-case, best professional judgment).


                                                                       EXHIBIT V–2—APPLICABLE REQUIREMENTS OF TODAY’S PROPOSED RULE FOR EXISTING FACILITIES
                                                                                      Facility characteristic                                                                    Applicable requirements

                                                     Existing facility with a AIF >125 MGD ......................................................       Impingement mortality requirements at 125.94(b) and Entrainment
                                                                                                                                                          Characterization Study requirements at 125.94(c) (categorical rule).
                                                     Existing facility with a DIF >2 MGD but AIF not greater than 125 MGD                               Impingement mortality requirements at 125.94(b) (categorical rule).
                                                     New unit with a DIF >2 MGD at an existing facility .................................               Impingement and entrainment mortality requirements at 125.94(d) (cat-
                                                                                                                                                          egorical standard).
                                                     Other existing facility with a DIF of 2 MGD or smaller or that has an in-                          Case-by-case, best professional judgment.
                                                       take structure that withdraws less than 25 percent of the water for
                                                       cooling purposes.



                                                        Initially, EPA divided the 316(b)                              facilities in the 2006 Phase III rule for                     • The total design intake flow of the
                                                     rulemaking into three phases in                                   purposes of today’s proposed rule. This                    cooling water intake structure(s) is
                                                     response to litigation and to make the                            consolidation also provides a ‘‘one-stop                   greater than 2 MGD; and
                                                     best use of its resources (see Section I).                        shop’’ for information related to today’s                     • The cooling water intake
                                                     However, as EPA’s analysis progressed,                            proposed rulemaking, as all existing                       structure(s) withdraw(s) cooling water
                                                     it became clear that cooling water intake                         facilities would be addressed in an                        from waters of the United States and at
                                                     structures are operated similarly at most                         equitable manner by the same set of                        least twenty-five (25) percent of the
                                                     industrial facilities (i.e., both power                           technology-based requirements.                             water withdrawn is used exclusively for
                                                     producing and manufacturing facilities).                                                                                     cooling purposes measured on an
                                                                                                                       A. General Applicability                                   average annual basis for each calendar
                                                     From a biological perspective, the effect
                                                                                                                                                                                  year.
                                                     of intake structures on impingement and                              This rule would apply to owners and                        EPA is proposing to continue to adopt
                                                     entrainment does not differ depending                             operators of existing facilities that meet                 provisions to ensure that the rule does
                                                     on whether an intake structure is                                 all of the following criteria:                             not discourage the reuse of cooling
                                                     associated with a power plant or a                                   • The facility is a point source that                   water for other uses such as process
                                                     manufacturer. Instead the impingement                             uses or proposes to use cooling water                      water. The definition of cooling water at
                                                     and entrainment impacts associated                                from one or more cooling water intake                      125.93 provides that cooling water used
                                                     with intakes of the same type are                                 structures, including a cooling water                      in a manufacturing process either before
                                                     generally comparable, and today’s                                 intake structure operated by an                            or after it is used for cooling is
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                                                     proposed rule addresses these impacts                             independent supplier not otherwise                         considered process water for the
                                                     without discriminating which facilities                           subject to 316(b) requirements that                        purposes of calculating the percentage
                                                     are behind the intake structure. Thus,                            withdraws water from waters of the                         of a facility’s intake flow that is used for
                                                     EPA is consolidating the universe of                              United States and provides cooling                         cooling purposes. Therefore, water used
                                                     potentially regulated facilities from the                         water to the facility by any sort of                       for both cooling and non-cooling
                                                     2004 Phase II rule with the existing                              contract or other arrangement;                             purposes does not count towards the 25
                                                       26 EPA also identified many other industry sectors              of industries that use cooling water and their             NAICS and SIC Codes can be found in section A
                                                     that use cooling water; a more comprehensive list                                                                            of the Supplementary Information.



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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                         22193

                                                     percent threshold. EPA notes this                       cooling and thus will be addressed by                        new facility in the Phase I rule are
                                                     definition is the same definition used                  today’s rule.                                                captured by the definition of existing
                                                     for new facilities in the Phase I rule at                  EPA decided to propose requiring the                      facility in this proposed rule.
                                                     125.83. Examples of water withdrawn                     Director, exercising BPJ, to establish                          A point source would be subject to
                                                     for non-cooling purposes includes water                 BTA impingement and entrainment                              Phase I or today’s proposed rule even if
                                                     withdrawn for warming by liquefied                      mortality standards for an existing                          the cooling water intake structure it uses
                                                     natural gas facilities and water                        offshore oil and gas facility, a seafood                     is not located at the facility.30 In
                                                     withdrawn for public water systems by                   processing vessel, or an offshore                            addition, modifications or additions to
                                                     desalinization facilities. Further, the                 liquefied natural gas import terminal.                       the cooling water intake structure (or
                                                     proposed rule at 125.91(c) specifies that               Such a facility would be subject to                          even the total replacement of an existing
                                                     obtaining cooling water from a public                   permit conditions implementing CWA                           cooling water intake structure with a
                                                     water system or using treated effluent                  section 316(b) where the facility is a                       new one) does not convert an otherwise
                                                     (such as wastewater treatment plant                     point source that uses a cooling water                       unchanged existing facility into a new
                                                     ‘‘gray’’ water) as cooling water does not               intake structure and has, or is required                     facility, regardless of the purpose of
                                                     constitute use of a cooling water intake                to have, an NPDES permit. At their                           such changes (e.g., to comply with
                                                     structure for purposes of this rule.                    discretion, permit writers may further                       today’s proposed rule or to increase
                                                                                                             determine that an intake structure that                      capacity). Rather, the determination as
                                                        Today’s proposed rule focuses on                     withdraws less than 25% of the intake                        to whether a facility is new or existing
                                                     those facilities that are significant users             flow for cooling purposes should be                          focuses on whether it is a green field or
                                                     of cooling water; only those facilities                 subject to section 316(b) requirements,                      stand-alone facility and whether there
                                                     that use more than 25% of the water                     and set appropriate requirements on a                        are changes to the cooling water intake
                                                     withdrawn for cooling purposes are                      case-by-case basis, using best                               to accommodate it.
                                                     subject to the proposed rule. EPA                       professional judgment. Today’s
                                                     previously considered a number of                       proposed rule is not intended to                             C. What is ‘‘cooling water’’ and what is
                                                     approaches for clarifying applicability                 constrain permit writers at the Federal,                     a ‘‘cooling water intake structure?’’
                                                     of the rule (66 FR 28854 and 66 FR                      State, or Tribal level, from addressing                         EPA has not revised the definition of
                                                     65288). EPA adopted the 25% threshold                   such cooling water intake structures.                        cooling water intake structure for
                                                     in each of the Phase I, II, and III rules,                                                                           today’s proposed rule. A cooling water
                                                     and EPA has not received any new data                   B. What is an ‘‘existing facility’’ for
                                                                                                                                                                          intake structure is defined as the total
                                                     or identified new approaches that                       purposes of the Section 316(b) Phase II
                                                                                                                                                                          physical structure and any associated
                                                                                                             rule?
                                                     would provide further clarity to the                                                                                 constructed waterways used to
                                                     applicability of the rule. EPA is                          In today’s proposed rule, EPA is                          withdraw cooling water from waters of
                                                     proposing to continue to adopt 25% as                   defining the term ‘‘existing facility’’ to                   the United States. Under the definition
                                                     the threshold for the percent of flow                   include any facility that commenced                          in today’s proposed rule, the cooling
                                                     used for cooling purposes to ensure that                construction before January 18, 2002, as                     water intake structure extends from the
                                                     a large majority of cooling water                       provided for in § 122.29(b)(4).28 EPA is                     point at which water is withdrawn from
                                                     withdrawn from waters of the U.S. is                    proposing to establish January 17, 2002                      the surface water source up to, and
                                                     addressed by requirements for                           as the date for distinguishing existing                      including, the intake pumps. Today’s
                                                     minimizing adverse environmental                        facilities from new facilities because                       proposed rule proposes for existing
                                                     impact. Because power generating                        that is the effective date of the Phase I                    facilities the same definition of a
                                                     facilities typically use far more than 25               new facility rule. Thus, existing                            ‘‘cooling water intake structure’’ that
                                                     percent of the water they withdraw                      facilities include all facilities the                        applies to new facilities under Phase I.
                                                     exclusively for cooling purposes, the 25                construction of which commenced on or                        Today’s proposal also adopts the new
                                                     percent threshold will ensure that                      before this date. In addition, EPA is                        facility rule’s definition of ‘‘cooling
                                                     intake structures accounting for nearly                 defining the term ‘‘existing facility’’ in                   water’’ as water used for contact or
                                                     all cooling water used by the power                     this proposed rule to include                                noncontact cooling, including water
                                                     sector are addressed by today’s                         modifications and additions to such                          used for equipment cooling, evaporative
                                                     proposed requirements. While                            facilities, the construction of which                        cooling tower makeup, and dilution of
                                                     manufacturing facilities often withdraw                 commences after January 17, 2002, that                       effluent heat content. The definition
                                                     water for more than cooling purposes,                   do not meet the definition of a new                          specifies that the intended use of
                                                     the majority of the water is withdrawn                  facility at § 125.83, which is the                           cooling water is to absorb waste heat
                                                     from a single intake structure.27 Once                  definition used to define the scope of                       rejected from the processes used or
                                                                                                             the Phase I rule.29                                          auxiliary operations on the facility’s
                                                     water passes through the intake, water
                                                                                                                The preamble to the final Phase I rule
                                                     can be apportioned to any desired use,                                                                               premises. The definition also indicates
                                                                                                             discusses this definition at 66 FR 65256;
                                                     including uses that are not related to                                                                               that water used in a manufacturing
                                                                                                             65258–65259; 65285–65287, December
                                                     cooling. However, as long as at least                                                                                process either before or after it is used
                                                                                                             18, 2001. EPA’s definition of an
                                                     25% of the water is used exclusively for                                                                             for cooling is process water and would
                                                                                                             ‘‘existing facility’’ in today’s proposed
                                                     cooling purposes, the intake will be                                                                                 not be considered cooling water for
                                                                                                             regulation is intended to ensure that all
                                                     subject to the requirements of today’s                                                                               purposes of determining whether 25
                                                                                                             sources excluded from the definition of
                                                     rule. EPA estimates that approximately                                                                               percent or more of the flow is cooling
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                                                     68% of manufacturers and 93% of                           28 Construction is commenced if the owner or               water. This clarification is necessary
                                                     power-generating facilities that meet the               operator has undertaken certain installation and site        because cooling water intake structures
                                                     other proposed thresholds for the rule                  preparation activities that are part of a continuous         typically bring water into a facility for
                                                     use more than 25% of intake water for                   on-site construction program, and it includes                numerous purposes, including
                                                                                                             entering into certain specified binding contractual
                                                                                                             obligations as one criterion (§ 122.29(b)(4)).               industrial processes; use as circulating
                                                       27 Facilities may also use groundwater wells or         29 The Phase I rule also listed examples of

                                                     municipal water for various uses, but the volume        facilities that would be ‘‘new’’ facilities and facilities     30 For example, a facility might purchase its

                                                     of these withdrawals is usually much smaller than       that would ‘‘not be considered a ‘new facility’ ’’ in        cooling water from a nearby facility that owns and
                                                     the volume withdrawn from surface waters.               two numbered paragraphs.                                     operates a cooling water intake structure.



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                                                     22194                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     water, service water, or evaporative                    E. Would my facility be covered if it                  Solid Waste Agency of Northern Cook
                                                     cooling tower makeup water; dilution of                 withdraws water from waters of the                     County v. U.S. Army Corps of Engineers,
                                                     effluent heat content; equipment                        U.S.? What if my facility obtains cooling              531 U.S. 159 (2001) (SWANCC). A copy
                                                     cooling; and air conditioning. Note                     water from an independent supplier?                    of that guidance was published as an
                                                     however, that all intake water                             The requirements in today’s proposed                Appendix to an Advanced Notice of
                                                     (including cooling and process) is                      rule apply to cooling water intake                     Proposed Rulemaking on the definition
                                                     included in the determination as to                     structures that have the design capacity               of the phrase ‘‘waters of the U.S.,’’ see 68
                                                     whether the 2 MGD DIF threshold for                     to withdraw amounts of water equal to                  FR 1991 (January 15, 2003), and may be
                                                     covered intake structures is met.                       or greater than 2 MGD from ‘‘waters of                 obtained at (http://www.epa.gov/owow/
                                                                                                             the United States.’’ Waters of the United              wetlands/pdf/ANPRM–FR.pdf). The
                                                     D. Would my facility be covered only if
                                                                                                             States include the broad range of surface              agencies additionally published
                                                     it is a Point Source Discharger?
                                                                                                             waters that meet the regulatory                        guidance in 2008 regarding the term
                                                        Today’s proposed rule would apply                                                                           ‘‘waters of the United States’’ in light of
                                                     only to facilities that are point sources               definition at 40 CFR 122.2, which
                                                                                                                                                                    both the SWANCC and subsequent
                                                     (i.e., have an NPDES permit or are                      includes lakes, ponds, reservoirs,
                                                                                                                                                                    Rapanos case (Rapanos v. United
                                                     required to obtain one). This is the same               nontidal rivers or streams, tidal rivers,
                                                                                                                                                                    States, 547 U.S. 715 (2006)).
                                                     requirement EPA included in the Phase                   estuaries, fjords, oceans, bays, and                      The Agency recognizes that some
                                                     I new facility rule at § 125.81(a)(1).                  coves. These potential sources of                      facilities that have or are required to
                                                     Requirements for complying with                         cooling water may be adversely affected                have an NPDES permit might not own
                                                     section 316(b) will continue to be                      by impingement and entrainment.                        and operate the intake structure that
                                                     applied through NPDES permits.                             Some facilities discharge heated water
                                                                                                                                                                    supplies their facility with cooling
                                                        Based on the Agency’s review of                      to manmade cooling ponds, and then
                                                                                                                                                                    water. In addressing facilities that have
                                                     potential existing facilities that employ               withdraw water from the ponds for                      or are required to have an NPDES
                                                     cooling water intake structures, the                    cooling purposes. EPA recognizes that                  permit that do not directly control the
                                                     Agency anticipates that most existing                   cooling ponds may, in certain                          intake structure that supplies their
                                                     facilities subject to this proposed rule                circumstances, constitute a closed-cycle               facility with cooling water, revised
                                                     will control the intake structure that                  cooling system and therefore may                       § 125.91 provides (similar to the new
                                                     supplies them with cooling water, and                   already comply with some or all of the                 facility rule) that facilities that obtain
                                                     discharge some combination of their                     technology-based requirements in                       cooling water from a public water
                                                     cooling water, wastewater, or storm                     today’s proposed rule. However,                        system or use treated effluent are not
                                                     water to a water of the United States                   facilities that withdraw cooling water                 deemed to be using a cooling water
                                                     through a point source regulated by an                  from cooling ponds that are waters of                  intake structure for purposes of this
                                                     NPDES permit. Under these                               the United States and that meet the                    proposed rule. However, obtaining
                                                     circumstances, the facility’s NPDES                     other criteria for coverage (including the             water from another entity that is
                                                     permit will include the requirements for                requirement that the facility has or will              withdrawing water from a water of the
                                                     the cooling water intake structure. In the              be required to obtain an NPDES permit)                 US would be counted as using a cooling
                                                     event that an existing facility’s only                  would be subject to today’s proposed                   water intake structure for purposes of
                                                     NPDES permit is a general permit for                    rule. In some cases water is withdrawn                 determining whether an entity meets the
                                                     storm water discharges, the Agency                      from a water of the United States to                   threshold requirements of the rule. For
                                                     anticipates that the Director would write               provide make-up water for a cooling                    example, facilities operated by separate
                                                     an individual NPDES permit containing                   pond. In many cases, EPA expects such                  entities might be located on the same,
                                                     requirements for the facility’s cooling                 make-up water withdrawals are                          adjacent, or nearby property(ies); one of
                                                     water intake structure. Alternatively,                  commensurate with the flows of a                       these facilities might take in cooling
                                                     requirements applicable to cooling                      closed-cycle cooling tower, and again                  water and then transfer it to other
                                                     water intake structures could be                        the facility may already comply with                   facilities prior to discharge of the
                                                     incorporated into general permits. If                   requirements to reduce its intake flow                 cooling water to a water of the United
                                                     requirements are placed into a general                  under the proposed rule. In those cases                States. Section 125.91(b) specifies that
                                                     permit, they must meet the                              where the withdrawals of make-up                       use of a cooling water intake structure
                                                     requirements set out at 40 CFR 122.28.                  water come from a water of the United                  includes obtaining cooling water by any
                                                        As EPA stated in the preamble to the                 States, and the facility otherwise meets               sort of contract or arrangement with one
                                                     final Phase I rule (66 FR 65256                         today’s criteria for coverage (including a             or more independent suppliers of
                                                     (December 18, 2001)), the Agency                        design intake flow of 2 million gallons                cooling water if the supplier or
                                                     encourages the Director to closely                      per day), the facility would be subject to             suppliers withdraw water from waters
                                                     examine scenarios in which a facility                   today’s proposed rule requirements.                    of the United States but that is not itself
                                                     withdraws significant amounts of                           EPA does not intend this rule to                    a new or existing facility subject to
                                                     cooling water from waters of the United                 change the regulatory status of cooling                section 316(b), except if it is a public
                                                     States but is not required to obtain an                 ponds. Cooling ponds are neither                       water system.
                                                     NPDES permit. As appropriate, the                       categorically included nor categorically                  As a practical matter, existing
                                                     Director will necessarily apply other                   excluded from the definition of ‘‘waters               facilities are the largest users of cooling
                                                     legal requirements, where applicable,                   of the United States’’ at 40 CFR 122.2.                water, and typically require enough
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                                                     such as section 404 or 401 of the Clean                 The determination whether a particular                 cooling water to warrant owning the
                                                     Water Act, the Coastal Zone                             cooling pond is, or is not, a water of the             cooling water intake structures. In some
                                                     Management Act, the National                            United States is to be made by the                     cases, such as at nuclear power plants
                                                     Environmental Policy Act, the                           permitting authority on a case-by-case                 or critical baseload facilities, the need
                                                     Endangered Species Act, or similar State                basis. The EPA and the U.S. Army Corps                 for cooling water includes safety and
                                                     or Tribal authorities to address adverse                of Engineers have jointly issued                       reliability reasons that would likely
                                                     environmental impact caused by cooling                  jurisdictional guidance concerning the                 preclude any independent supplier
                                                     water intake structures at those                        term ‘‘waters of the United States’’ in                arrangements. Therefore, EPA does not
                                                     facilities.                                             light of the Supreme Court’s decision in               expect much application of this


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                                                                             Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                     22195

                                                     provision. EPA is nevertheless retaining                except in limited circumstances, such as               reduce facility burden by more than
                                                     the provision in order to prevent                       when a facility undergoes major                        two-thirds of the potentially in-scope
                                                     facilities from circumventing the                       modifications. On the other hand, actual               facilities, and would focus permit
                                                     requirements of today’s proposed rule                   flows can vary significantly over                      authorities on the majority of cooling
                                                     by creating arrangements to receive                     sometimes short periods of time. For                   water withdrawals by addressing
                                                     cooling water from an entity that is not                example, a peaking power plant may                     approximately 200 billion gallons of
                                                     itself subject to today’s proposed rule,                have an actual intake flow close to the                daily cooling water withdrawals.
                                                     and is not explicitly exempt from                       design intake flow during times of full                  In today’s proposal, EPA seeks to
                                                     today’s rule (such as drinking water or                 energy production, but an AIF of zero                  clarify that for some facilities, the
                                                     treatment plant discharges reused as                    during periods of standby. Use of design               design intake flow is not necessarily the
                                                     cooling water).                                         intake flow provides clarity as to                     maximum flow associated with the
                                                                                                             regulatory status, is indicative of the                intake pumps. For example, a power
                                                     F. What intake flow thresholds result in                                                                       plant may have redundant circulating
                                                                                                             possible magnitude of environmental
                                                     an existing facility being subject to this                                                                     pumps, or may have pumps with a
                                                                                                             impact, and would avoid the need for
                                                     proposed rule?                                                                                                 name plate rating that exceeds the
                                                                                                             monitoring to confirm a facility’s status.
                                                        There are two ways in which EPA                      Also see 69 FR 41611 for more                          maximum water throughput of the
                                                     determines the cooling water flow at a                  information about these thresholds.                    associated piping. EPA intends for the
                                                     facility. The first way is based on the                    Under current NPDES permitting                      design intake flow to reflect the
                                                     design intake flow (DIF), which reflects                regulations at § 122.21, all existing                  maximum volume of water that a plant
                                                     the maximum intake flow the facility is                 facilities greater than 2 MGD DIF must                 can physically withdraw from a source
                                                     capable of withdrawing. While this                      submit basic information describing the                waterbody over a specific time period.
                                                     normally is limited by the capacity of                  facility, source water physical data,                  This also means that a plant that has
                                                     the cooling water intake pumps, other                   source water biological characterization               permanently taken a pump out of
                                                     parts of the cooling water intake system                data, and cooling water intake system                  service or has flow limited by piping or
                                                     could impose physical limitations on                    data. Under this proposed rule, all                    other physical limitations should be
                                                     the maximum intake flow the facility is                 facilities greater than 2 MGD DIF must                 able to consider such constraints when
                                                     capable of withdrawing. The second                      submit additional facility-specific                    reporting its DIF. EPA solicits comment
                                                     way is based on the actual intake flow                  information including the proposed                     on whether the definition of DIF should
                                                     (AIF), which reflects the actual volume                 impingement mortality reduction plan,                  be revised to make this clarification
                                                     of water withdrawn by the facility. EPA                 relevant biological survival studies, and              more apparent.
                                                     has defined AIF to be the average water                 operational status of each of the
                                                     withdrawn each year over the preceding                                                                         G. Offshore Oil and Gas Facilities,
                                                                                                             facility’s units.33 Certain facilities                 Seafood Processing Vessels or LNG
                                                     3 years. Both of these definitions are                  withdrawing the largest volumes of
                                                     used in today’s proposed rule.                                                                                 Import Terminals BTA Requirements
                                                                                                             water for cooling purposes have                        Under This Proposed Rule
                                                        In this proposed rule EPA considered                 additional information and study
                                                     requirements based on the intake flow at                requirements such as the Entrainment                     Under today’s proposal, existing
                                                     the existing facility. EPA is proposing                 Characterization Study as described                    offshore oil and gas facilities, seafood
                                                     the rule to apply to facilities that have               below.                                                 processing facilities and LNG import
                                                     a total design intake capacity of at least                 EPA is proposing to use actual intake               terminals would be subject to 316(b)
                                                     2 MGD (see § 125.91).31 Above 2 MGD,                    flow (AIF) rather than design intake                   requirements on a best professional
                                                     99.7% of the total water withdrawals by                 flow (DIF) for purposes of determining                 judgment basis. In the Phase III rule,
                                                     utilities and other industrial sources                  which facilities must conduct an                       EPA studied offshore oil and gas
                                                     would potentially be covered (if the                    Entrainment Characterization Study.                    facilities and seafood processing
                                                     other criteria for coverage are met) while              Environmental impacts, particularly                    facilities 34 and could not identify any
                                                     58% of the manufacturers, 70% of the                    entrainment and entrainment mortality,                 technologies (beyond the protective
                                                     non-utilities, and 100% of the utilities                result from actual water withdrawals,                  screens already in use) that are
                                                     would be covered. EPA also chose the                    and not the maximum designed                           technically feasible for reducing
                                                     greater than 2 MGD threshold to be                      withdrawals. Further, using actual flow                impingement or entrainment in such
                                                     consistent with the applicability criteria              may encourage some facilities to reduce                existing facilities.35 As discussed in the
                                                     in the Phase I rule.32 EPA continues to                                                                        Phase III rule, known technologies that
                                                                                                             their flows in order to avoid collecting
                                                     believe that this threshold ensures that                                                                       could further reduce impingement or
                                                                                                             supplemental data and submitting the
                                                     the largest users of cooling water will be                                                                     entrainment would result in
                                                                                                             additional entrainment characterization
                                                     subject to the proposed rule.                                                                                  unacceptable changes in the envelope of
                                                        EPA proposes to continue to use a                    study. Furthermore, any facility that has
                                                                                                                                                                    existing platforms, drilling rigs, mobile
                                                     threshold based on design intake flow as                DIF greater than 2 MGD is required to
                                                                                                                                                                    offshore drilling units (MODUs),
                                                     opposed to actual intake flow for several               submit basic information that will allow
                                                                                                                                                                    seafood processing vessels (SPVs), and
                                                     reasons. In contrast to actual intake                   the permitting authority to verify its
                                                                                                                                                                    similar facilities as the technologies
                                                     flow, design intake flow is a fixed value               determination of whether or not it meets
                                                                                                                                                                    would project out from the hull,
                                                     based on the design of the facility’s                   the 125 MGD AIF threshold.
                                                                                                                                                                    potentially decrease the seaworthiness,
                                                                                                                EPA has selected a threshold of 125
                                                     operating system and the capacity of the                                                                       and potentially interfere with structural
                                                                                                             MGD AIF because a threshold of 125
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                                                     circulating and other water intake
                                                                                                             MGD would capture 90 percent of the
                                                     pumps. This provides clarity, as the                                                                             34 EPA studied naval vessels and cruise ships as
                                                                                                             actual flows but would only establish                  part of its development of a general NPDES permit
                                                     design intake flow does not change,
                                                                                                             the Entrainment Characterization Study                 for discharges from ocean-going vessels. (See
                                                                                                             requirements for 30 percent of existing                http://cfpub.epa.gov/npdes/
                                                        31 The 2004 Phase II rule applied to existing
                                                                                                                                                                    home.cfm?program_id=350 for more information.)
                                                     power-generating facilities with a design intake        facilities. This would significantly                   EPA studied seafood processing vessels and oil and
                                                     flow of 50 mgd or greater. Facilities potentially in                                                           gas exploration facilities in the 316(b) Phase III rule.
                                                     scope of the Phase III rule had a DIF of greater than     33 The proposed rule contains streamlined              35 As discussed in today’s preamble, requirements
                                                     2 MGD.                                                  information submission requirements for facilities     for new offshore facilities set forth in the Phase III
                                                        32 See 65 FR 49067/3 for more information.           that already employ closed cycle cooling.              rule remain in effect.



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                                                     22196                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     components of the hull. EPA also                        units are modeled after the requirements               consider in determining BTA but courts
                                                     believes that for many of these facilities,             for a new facility in the Phase I rule.                have held that, given section 316(b)’s
                                                     the cooling water withdrawals are most                    EPA has adopted this approach for the                reference to sections 301 and 306 of the
                                                     substantial when the facilities are                     following reasons. As new units are                    Act, EPA may look to the factors
                                                     operating far out at sea—and therefore                  built at existing facilities to provide                considered in those sections in
                                                     not withdrawing from a water of the                     additional capacity, facilities have the               establishing those standards for section
                                                     U.S. The EPA is aware that LNG                          ideal opportunity to design and                        316(b) standard setting. The Supreme
                                                     facilities may withdraw hundreds of                     construct the new units without many                   Court noted that, given the absence of
                                                     MGD of seawater for warming (re-                        of the additional expenses associated                  any factors language in Section 316(b),
                                                     gasification). However, some existing                   with retrofitting an existing unit to                  EPA has more discretion in its standard
                                                     LNG facilities may still withdraw water                 closed-cycle. The incremental                          setting under section 316(b) than under
                                                     where 25 percent or more of the water                   downtime that can be associated with                   the effluent guidelines provisions. EPA
                                                     is used for cooling purposes. As                        retrofitting to closed-cycle cooling is                has broad discretion in determining
                                                     discussed in section V, EPA has not                     avoided altogether at a new unit. In                   what is the ‘‘best’’ available technology
                                                     identified a uniformly applicable and                   addition, when new units are added, the                for minimizing adverse environmental
                                                     available technology for minimizing                     condensers can be configured for                       impact. EPA is not bound to evaluate
                                                     impingement and entrainment (I&E)                       closed-cycle, reducing energy                          the factors it considers in standard
                                                     mortality at these facilities. However,                 requirements, and high efficiency                      setting in precisely the same way it
                                                     technologies may be available for some                  cooling towers can be designed as part                 considers them in establishing effluent
                                                     existing LNG facilities. LNG facilities                 of the new unit, allowing for installation             limitations guidelines under section 304
                                                     that withdraw any volume of water for                   of smaller cooling towers. Thus, the                   of the Clean Water Act. Thus, the U.S.
                                                     cooling purposes would be subject to                    capital costs for closed cycle cooling at              Supreme Court has explained that,
                                                     case-by-case, best professional judgment                new units are lower than the capital                   under section 316(b), ‘‘best’’ technology
                                                     BTA determinations.                                     costs for once-through cooling. These                  may reflect a consideration of a number
                                                        EPA has not identified any new data                  advantages may not always be available                 of factors and that ‘‘best’’ does not
                                                     or approaches that would result in a                    when retrofitting cooling towers at an                 necessarily mean the technology that
                                                     different determination. Therefore,                     existing unit.                                         achieves the greatest reduction in
                                                     today’s rule would continue to require                    In consideration of the fact that                    environmental harm that the regulated
                                                     that the BTA for existing offshore oil                  additional unit construction decisions                 universe can afford. Rather, the ‘‘best’’
                                                     and gas extraction facilities and seafood               rest largely within the control of the                 (or ‘‘most advantageous’’ technology in
                                                     processing facilities is established by                 individual facility, EPA decided that                  the court’s words) may represent a
                                                     NPDES permit directors on a case-by-                    subjecting new units to the same                       technology that most efficiently
                                                     case basis using best professional                      national BTA requirements as those                     produces the reductions in harm.
                                                     judgment. EPA solicits comment and                      applicable to new facilities is warranted.                EPA has interpreted section 316(b) to
                                                     data on the appropriateness of national                                                                        require the Agency to establish a
                                                                                                             VI. BTA Consideration
                                                     categorical standards for these facilities.                                                                    standard based on the best technology
                                                                                                                In response to the Supreme Court’s                  available that will minimize
                                                     H. What is a ‘‘new unit’’ and how are                   decision in Entergy Corp. et al. v. EPA                impingement and entrainment—the two
                                                     new units addressed under this                          in April 2009, and the Second Circuit                  main adverse effects of cooling water
                                                     proposed rule?                                          decision in Riverkeeper II, EPA has                    intake structures. In EPA’s view, there
                                                        The Phase I rule did not distinguish                 reevaluated the requirements for                       are several important considerations
                                                     between new stand-alone facilities and                  existing facilities under section 316(b).              underpinning its decision. First, its BTA
                                                     new units where the units are built on                  As discussed in Section III, for the BTA               determination should be consistent
                                                     a site where a source is already located                determinations proposed below, EPA                     with,and reflective of, the goals of
                                                     and does not totally replace the existing               collected additional data and                          Section 101 of the CWA: ‘‘to restore and
                                                     source. Because EPA is not changing the                 information and updated the technology                 maintain the physical, chemical, and
                                                     new facility rule definitions, and is only              efficacy and costs analyses prepared for               biological integrity of the Nation’s
                                                     proposing clarifying revisions to the                   the earlier rulemaking efforts. These                  waters,’’ with an interim goal of
                                                     existing facility rule, this proposed                   data and analyses serve to update the                  protecting water quality so as to provide
                                                     provision is not intended to otherwise                  rulemaking record and allow EPA to                     for the protection and propagation of
                                                     reopen the Phase I rule. Today’s                        apply greater technical rigor to EPA’s                 fish, shellfish, and wildlife and provide
                                                     proposed rule establishes requirements                  analysis of BTA. As a result, EPA has                  for recreation in and on the water.
                                                     for new units added to an existing                      decided not to re-propose requirements                    Second, because the Supreme Court
                                                     facility that are not a ‘‘new facility’’ as             similar to those of the final Phase II rule,           has concluded that EPA may
                                                     defined at § 125.83. Today’s proposal                   but would adopt, for the reasons                       permissibly consider costs and benefits
                                                     seeks to clarify the definitions of ‘‘new’’             explained in this preamble, a new                      in its BTA determination and E.O.
                                                     versus ‘‘existing’’ by first noting that, for           framework. In addition, as previously                  13563 directs EPA only to propose
                                                     purposes of section 316(b), a facility                  noted, EPA decided to address all                      regulations based on a reasoned
                                                     cannot be defined as a new facility and                 existing facilities subject to 316(b) in               determination that the benefits justify
                                                     an existing facility at the same time. In               one rule (i.e., Phase II and Phase III).               the costs, EPA has taken costs and
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                                                     this rule, while EPA will continue to                                                                          benefits into account in this proposal.
                                                     treat replacement and new units for the                 A. EPA’s Approach to BTA                               EPA has concluded that the benefits of
                                                     same industrial purpose as existing                        Section 316(b) of the CWA requires                  the proposed option justify its costs. See
                                                     facilities, EPA intends to have different               EPA to establish standards for cooling                 section VI. E below.
                                                     requirements for the addition of new                    water intake structures that reflect the                  Both Riverkeeper decisions recognize
                                                     units. A replacement unit or repowered                  ‘‘best technology available for                        that EPA may consider a number of
                                                     unit, as distinct from constructing an                  minimizing adverse environmental                       factors in establishing section 316(b)
                                                     additional unit, would not be treated as                impact.’’ The statute is silent with                   standards. In the Phase I Riverkeeper
                                                     a new unit. The requirements for new                    respect to the factors that EPA should                 case, the court explained that the cross


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                           22197

                                                     reference in section 316(b) to sections                    As a result of this thorough                        entrainment and their resulting impact,
                                                     301 and 306 is an ‘‘invitation’’ to look to             evaluation, EPA is proposing the use of                see 67 FR 17136–17140 and the EEBA.
                                                     those statutory provisions for guidance                 modified traveling screens with a fish                    As described in Section III.D,
                                                     concerning the factors EPA should                       handling and return system or reduced                  reductions in impingement or
                                                     consider in determining BTA. In the                     intake velocity as BTA for impingement                 entrainment do not necessarily mean
                                                     Phase II decision, the court stated that                mortality. EPA’s record shows modified                 reductions in mortality. For purposes of
                                                     the interpretation of section 316(b)                    traveling screens are available for all                this proposal, EPA has developed the
                                                     should be ‘‘informed’’ by these other two               facilities, whereas reduced intake                     following definitions for impingement
                                                     provisions. EPA may consider the                        velocity may not be available at all                   and entrainment and mortality:
                                                     factors involved in establishing effluent               locations. For entrainment, on the other                  • Impingement: The entrapment of all
                                                     discharge limitations when regulating                   hand, EPA could identify no single                     life stages of fish and shellfish on the
                                                     intake structures. The factors                          technology that represented BTA for all                outer part of an intake structure or
                                                     specifically delineated in CWA sections                 facilities for the reasons explained in                against a screening device during
                                                     301 and 306 that EPA may consider                       detail below. Instead, as the national                 periods of intake water withdrawal.
                                                     include: cost of the technology, taking                                                                           • Impingement Mortality: The death
                                                                                                             BTA entrainment requirement for
                                                     into account the age of the equipment                                                                          of fish or shellfish due to impingement
                                                                                                             existing facilities, EPA is proposing to
                                                     and facilities, process employed,                                                                              (as defined above). Note impingement
                                                                                                             adopt regulations that establish a                     mortality need not occur immediately;
                                                     engineering aspects associated with a                   process for the permitting authority to
                                                     particular technology, process changes                                                                         impingement may cause harm to the
                                                                                                             determine entrainment BTA controls on                  organism, which results in mortality
                                                     and non-water quality environmental                     a site-specific basis following the
                                                     impact (including energy requirements).                                                                        several hours after the impingement
                                                                                                             consideration of several factors. In                   event. For purposes of this proposed
                                                        In selecting the ‘‘best’’ technology,
                                                                                                             addition to the general considerations                 rule, impingement mortality is limited
                                                     EPA looked at a number of factors.
                                                                                                             discussed above, EPA has identified the                to those organisms collected or retained
                                                     Thus, EPA first considered the
                                                     availability and feasibility of various                 following specific factors as the key                  by 3⁄8 inch sieve.
                                                     technologies, their costs including                     elements in its decision not to prescribe                 • Entrainment: The incorporation of
                                                     potential costs to facilities as well as                a single technology as the basis for a                 all life stages of fish and shellfish with
                                                     households, and economic impacts of                     national BTA determination. These                      intake water flow entering and passing
                                                     different technologies. EPA reviewed                    factors are local energy reliability, air              through a cooling water intake structure
                                                     the efficacy of these technologies in                   emissions permits, land availability, and              and into a cooling system.
                                                     reducing impingement and entrainment                    remaining useful plant life. The rest of                  • Entrainment Mortality: The death of
                                                     mortality, including cost-effectiveness                 this chapter describes each of these                   fish or shellfish due to entrainment.
                                                     relationships. EPA also considered                      considerations in detail.                              This also includes the death of those
                                                     additional factors set out in 304(b) of the                                                                    fish and shellfish due to fine mesh
                                                                                                             B. Technologies Considered to Minimize
                                                     Clean Water Act, including location,                                                                           screens or other technologies used to
                                                                                                             Impingement and Entrainment                            exclude the organisms from
                                                     age, size, and type of facility. EPA next
                                                     considered the non-water quality effects                  As described in Section IV, power                    entrainment. For purposes of this
                                                     of different technologies on energy                     plants and manufacturers withdraw                      proposed rule, entrainment mortality is
                                                     production and availability, electricity                large volumes of cooling water on a                    limited to those organisms passing
                                                     reliability, and potential adverse                      daily basis. The majority of                           through a 3⁄8-inch sieve.
                                                     environmental effects that may arise                    environmental impacts associated with                     Based on available information, as
                                                     from the use of the different controls                  intake structures are caused by water                  described in section III.D, EPA is
                                                     evaluated.                                              withdrawals that ultimately result in the              assuming for purposes of this rule that
                                                        EPA has also considered the costs and                loss of aquatic organisms. These losses                all entrained organisms are a loss, i.e.,
                                                     the benefits of the different technologies              may be due to impingement,                             no entrained organisms survive.
                                                     it evaluated for BTA. Consideration of                  entrainment, or both. Impingement                      Therefore, in the absence of entrainment
                                                     benefits in particular is complicated by                                                                       control, entrainment is assumed to lead
                                                                                                             occurs when organisms are trapped
                                                     the absence of well-developed tools or                                                                         to entrainment mortality. Also see
                                                                                                             against the outer part of a screening
                                                     data to fully express the ecological                                                                           Chapter A7 of the Phase II Regional
                                                                                                             device of an intake structure.36 The
                                                     benefits in monetized terms. EPA has,                                                                          Studies Document (DCN 6–0003; EPA–
                                                                                                             force of the intake water traps the
                                                     however, used the best currently                                                                               HQ–OW–2002–0049–1490). Entrainable
                                                                                                             organisms against the screen and they
                                                     available science to monetize the                                                                              organisms generally consist of eggs and
                                                                                                             are unable to escape. Not all organisms
                                                     benefits of the various options in four                                                                        early life stage larvae. Early larvae
                                                                                                             contained in the incoming water are
                                                     major categories: Recreational fishing,                                                                        generally do not have skeletal
                                                                                                             impinged, however. Some may pass
                                                     commercial fishing, nonuse benefits,                                                                           structures, have not yet developed
                                                                                                             through the screening system and the
                                                     and benefits to threatened and                                                                                 scales, and in many cases are incapable
                                                                                                             intake structure and travel through the                of swimming for several days post
                                                     endangered species (see Exhibit VIII–
                                                                                                             entire cooling system including the                    hatching. However, for impingement,
                                                     10). EPA believes that the benefits
                                                     estimated for the first two categories are              pumps, condenser tubes, and discharge                  mortality occurs less than 100% of the
                                                     fairly complete, while the benefits                     pipes. This is referred to as entrainment.             time. Impingeable organisms are
                                                                                                             Various factors lead to the susceptibility
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                                                     estimated for the latter two categories                                                                        generally larger juvenile or adult fish,
                                                     are incomplete for a number of reasons.                 of an organism to impingement or                       with fully formed scales and skeletal
                                                     For example, the non-use benefits                       entrainment. For more detailed                         structures, and well developed survival
                                                     consider only the northeast and middle                  discussion of impingement and                          traits such as avoidance responses.
                                                     Atlantic states. EPA will continue to                                                                          EPA’s data demonstrate that, under the
                                                                                                                36 Typically, cooling water intake structures use
                                                     refine its tools in order to develop a                                                                         proper conditions, many impinged
                                                                                                             various screening devices to prevent large objects
                                                     more complete analysis concerning                       (e.g., trash, logs) from being drawn in with the       organisms survive.
                                                     benefits during the rulemaking                          cooling water and ultimately clogging or damaging         In addition to these definitions it is
                                                     proceeding.                                             the cooling water system.                              helpful to further characterize


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                                                     22198                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     impingement and entrainment as those                    quantity of water being withdrawn.                      these technologies as well as others, see
                                                     terms are used in the literature and in                 Reduced volumes of cooling water                        the TDD, ‘‘California’s Coastal Power
                                                     studies conducted by power plants.                      produce a corresponding reduction in                    Plants: Alternative Cooling System
                                                     Historically, traveling screens deployed                I&E, and therefore reduced I&E                          Analysis’’ (DCN 10–6964), and EPRI’s
                                                     by power plants utilized a 3⁄8-inch mesh                mortality. The second way to reduce I&E                 ‘‘Fish Protection at Cooling Water Intake
                                                     size. For this reason, most studies and                 is to install technologies or operate in a              Structures: A Technical Reference
                                                     reports referring to impingement are in                 manner that either (a) gently excludes                  Manual’’ (DCN 10–6813).
                                                     fact referring to those organisms                       organisms or (b) collects and returns
                                                                                                                                                                     a. Variable Frequency Drives and
                                                     impinged on a 3⁄8-inch mesh screen.                     organisms. Under the first approach,
                                                                                                                                                                     Variable Speed Pumps
                                                     Impingement can also refer to any                       technologies or practices are used to
                                                     organism incapable of swimming away                     divert those organisms that would have                     A facility with variable speed drives
                                                     from the intake structure due to the                    been subject to I&E. The second                         or pumps operating at their design
                                                     water velocity at the intake. Similarly,                approach is to install collection and                   maximum can withdraw the same
                                                     entrainable organisms are those                         return technologies; organisms not                      volume of water as a conventional
                                                     organisms fitting through a mesh of less                diverted are collected and returned back                circulating water pump. However,
                                                     than or equal to 3⁄8 of an inch. This also              to the source water.                                    unlike a conventional circulating water
                                                     means the majority of entrainable                          Though not available to all facilities,              pump, variable speed drives and pumps
                                                     organisms are comprised of eggs, larvae,                a third approach to reducing                            allow a facility to reduce the volume of
                                                     and juveniles. More recent studies,                     impingement and entrainment is                          water being withdrawn for certain time
                                                     particularly those that evaluate mesh                   relocating the facility’s intake to a less              periods. The pump speed can be
                                                     sizes smaller than 3⁄8 of an inch,                      biologically rich area in a water body,                 adjusted to reduce water withdrawals
                                                     continue to refer to impingement as any                 usually further from shore and/or at                    when cooling water needs are lower,
                                                     organism caught on the screen. This can                 greater depths, or varying the timing of                such as when ambient water
                                                     cause some confusion, as many                           withdrawals by time of day, season, etc.,               temperatures are colder (and therefore
                                                     organisms that would have been                          to target withdrawals to times when                     capable of dissipating more heat) or
                                                     entrained with a 3⁄8-inch mesh instead                  organism densities are lower. This                      when fewer generating units are
                                                     become impinged by the finer mesh.                      approach can be effective at entrainment                operating. In site visits, EPA found that
                                                     These are referred to as ‘‘impinged                     reduction, but is not generally available               variable speed drives and pumps were
                                                     entrainables’’ or ‘‘converts.’’ EPA has                 to inland facilities.                                   typically used at units operating below
                                                     also found that most studies of                            The section below further describes                  capacity, such as load following units.
                                                     entrainment are biased towards the                      flow reduction and exclusion                            For this reason most base load
                                                     larger (older) larvae with higher survival              technologies.                                           generating units and continuously
                                                     rates and do not analyze survival of                                                                            operated manufacturing processes
                                                                                                             1. Flow Reduction                                       would obtain minimal reductions in
                                                     smaller larvae. This corresponds to
                                                     larvae body lengths sufficient to have                     Flow reduction is commonly used to                   flow as a result of these technologies.
                                                     begun scale and bone development, and                   reduce impingement and entrainment.                     EPA estimates that facilities with
                                                     generally reflects the more motile early                For purposes of rulemaking, EPA                         intermittent water withdrawals could
                                                     life stages. EPA found these study                      assumes that entrainment and                            achieve a 5 to 10 percent reduction in
                                                     findings cannot be applied to non-                      impingement (and associated mortality)                  flow.38 EPA is further aware that some
                                                     motile life stages, which are incapable                 at a particular site are proportional to                facilities need to withdraw water for
                                                     of avoidance responses. As discussed in                 source water intake volume.37 Thus, if                  cooling even while the facility is not in
                                                     Section III.C, it is also important to note             a facility reduces its intake flow, it                  production, such as facilities on standby
                                                     that the prevention of entrainment by                   similarly reduces the amount of                         status, or nuclear facilities where the
                                                     some exclusion technologies may result                  organisms subject to impingement and                    heat energy generated by fission must
                                                     in very high entrainment reductions, but                entrainment. Some common flow                           still be dissipated while the facility is
                                                     these organisms do not necessarily                      reduction technologies include: Variable                out of service.
                                                     survive interactions with the exclusion                 frequency drives, variable speed pumps,
                                                                                                                                                                     b. Seasonal Flow Reductions
                                                     technology. Therefore, while                            seasonal operation or seasonal flow
                                                     entrainment refers specifically to                      reductions, unit retirements, use of                       Seasonal flow reduction refers to the
                                                     passage through the cooling water                       alternate cooling water sources, water                  reduction or elimination of a quantity of
                                                     intake system, entrainment mortality                    reuse, and closed-cycle cooling systems.                water being withdrawn during certain
                                                     also includes those smaller organisms                   For additional detailed information on                  biologically important time periods.
                                                     killed by exclusion from the cooling                                                                            Most facilities that practice seasonal
                                                     water intake system. Today’s rule                          37 Impingement rates are related to intake flow,     flow reductions do so in order to reduce
                                                                                                             intake velocity, and the swimming ability of the fish   entrainment because peak entrainment
                                                     proposes to use the 3⁄8-inch mesh size as               subject to impingement. Entrainment is generally
                                                     part of the definition of impingement                   considered to be proportional to flow and therefore
                                                                                                                                                                     events are often seasonal, typically
                                                     and entrainment mortality as a means of                 reduced on a 1-to-1 basis via flow reductions, as       occurring during local spawning season,
                                                     clearly differentiating those organisms                 EPA assumes for purposes of national rulemaking         while impingement is more sporadic.
                                                                                                             that entrainable organisms are uniformly                For example, clupeids species
                                                     that may be susceptible to impingement                  distributed throughout the source water. EPA has
                                                     or entrainment, and thereby avoiding                                                                            experience impingement episodes
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                                                                                                             consistently applied this assumption throughout
                                                     any confusion over the status of                        the 316(b) rulemaking process (see, e.g., 66 FR         sporadically all throughout the winter
                                                     ‘‘impinged entrainables’’ or ‘‘converts.’’              65276 for a discussion of proportional flow             and spring. Largemouth bass, on the
                                                                                                             requirements in the Phase I rule or 69 FR 41599)        other hand, may spawn in the late-
                                                        Generally, there are two basic                       and continues to believe that it is broadly
                                                     approaches to reduce impingement and                    applicable on a national scale and is an appropriate
                                                                                                                                                                     spring, which would thus be a season of
                                                     entrainment (I&E) mortality. The first                  assumption for a national rulemaking. EPA
                                                                                                             recognizes that this assumption is not necessarily        38 Withdrawals of colder water could allow
                                                     approach is flow reduction, where the                   true on a site specific basis and that relocating or    facilities to reduce their intake using variable speed
                                                     facility installs technology or operates                varying the time pattern of withdrawals may be          drives and pumps, but EPA does not have data on
                                                     in a manner to reduce or eliminate the                  effective strategies to reduce I&E in some cases.       the efficacy or availability of this approach.



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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                        22199

                                                     potentially high entrainment for this                   same effect in reducing impingement                       quantity of water that must be
                                                     species. During this specific peak                      and entrainment, as new or additional                     withdrawn from a water body. Because
                                                     entrainment time period, a facility could               withdrawals from surface waters may be                    the heat is transferred through
                                                     operate less (or perhaps not at all)                    reduced. An example is using ‘‘gray’’                     evaporation, while the amount of water
                                                     thereby reducing or eliminating the                     water as a source of cooling water; a                     withdrawn from the water source is
                                                     volume of cooling water withdrawn.                      facility reaches an agreement with a                      greatly reduced, it is not eliminated
                                                     This may be accomplished through a                      nearby wastewater treatment plant to                      completely because make-up water is
                                                     combination of variable speed pumps or                  accept the WWTP’s effluent as a source                    required to replace that lost through
                                                     shutting down some portion of the                       of cooling water.40 Such alternative                      evaporation and blowdown. There are
                                                     pumping system. Seasonal flow                           sources are limited by available                          two main types of wet cooling systems:
                                                     reduction may also consist of operating                 capacity, consistency of flow, and                        Natural draft and mechanical. While
                                                     a once-through cooling system during                    increasing competition for these sources                  wet cooling towers reduce withdrawals
                                                     part of the year and switching to closed-               of water, and may be more challenging                     relative to once-through systems, they
                                                     cycle during peak entrainment season.                   to find for existing facilities than for                  may increase the consumptive use of
                                                     Facilities may also choose to schedule                  new facilities that are not yet fixed in                  water since they tend to rely on
                                                     periodic maintenance to occur during                    location.                                                 evaporation (which is not returned to
                                                     these time periods; these maintenance                                                                             the water body) for heat dissipation.
                                                     activities often require the facility to                e. Water Reuse                                            When once-through cooling is used and
                                                     reduce or cease operations and can be                      Typically associated with                              withdrawals are a significant portion of
                                                     timed to coincide with the most                         manufacturing facilities, water reuse                     the waterbody, the return of heated
                                                     biologically productive periods. By                     (defined as using water for multiple                      water may contribute to greater
                                                     identifying species of concern at                       processes) can reduce the volume of                       evaporation from the water body.
                                                     facilities visited by EPA, the Agency has               water needed for cooling, process, or                     However, EPA does not have data on the
                                                     identified some sites where entrainment                 other uses. For example, a facility might                 relative magnitude of these effects. The
                                                     is significant all year long, and other                 withdraw water for non-contact cooling                    relative loss of water through
                                                     sites where peak entrainment occurs in                  water and then re-use the heated                          evaporation for closed cycle and once-
                                                     as few as three to four months of the                   effluent as part of an industrial process.                through systems is site specific,
                                                     year. In addition, not all power                        In effect, the facility has eliminated the                depending on the exact design of the
                                                     generating facilities in a local area could             need to withdraw additional water for                     systems.
                                                     stop operating at the same time without                 the latter process. EPA has observed                         A natural draft cooling tower is tall 42
                                                     interrupting local electricity reliability.             significant water reuse at manufacturing                  and has a hyperbolic shape. The height
                                                     Therefore, not all facilities can utilize               facilities, but has not developed                         of these towers creates a temperature
                                                     seasonal flow reduction technologies.                   national level data for such reuse due to                 differential between the top and bottom
                                                     c. Unit Retirements                                     the range of different manufacturing                      of the tower, creating a natural chimney
                                                                                                             sectors and the significant variability in                effect that facilitates heat transfer as
                                                        Some power plants have retired units                 manufacturing processes (during site                      heated water contacts rising air. In
                                                     completely or have essentially ceased                   visits, it was observed that complex                      contrast, mechanical cooling towers rely
                                                     all operations but have yet to be                       facilities have found it difficult to assess              on motorized fans to draw air through
                                                     formally retired or decommissioned.                     their specific water reuse). See Section                  the tower and into contact with the
                                                     Reasons for their inactivity vary,39 but                IV for further discussion on water usage                  heated water. These towers are likely to
                                                     the end result is the facility eliminates               in specific industrial sectors.                           be much shorter units than natural draft
                                                     the need for cooling water withdrawals                                                                            cooling towers,43 and due to their
                                                     for these units. Similarly, manufacturers               f. Closed-cycle Cooling Towers                            modular construction can be built in
                                                     may retire processing units as market                      Closed-cycle cooling systems allow a                   multiples, but they may require more
                                                     demand changes, process lines are                       facility to transfer its waste heat to the                land area for the same amount of
                                                     moved to other sites, or production                     environment using significantly smaller                   cooling. Both types of towers require
                                                     technologies change. Unit closures                      quantities of (or in some cases no)                       electricity for pumps, while mechanical
                                                     provide clear reductions in flow, but the               water. There are two main types of                        draft towers also require electricity to
                                                     demand for electricity (or other                        closed-cycle cooling systems: Wet                         operate the fans; both electricity needs
                                                     products) may dictate that production                   cooling and dry cooling. Each of these                    serve to reduce a facility’s net
                                                     be increased at the facility in question                is described below.                                       generating output. Thus the monetary
                                                     or another facility altogether; there is                                                                          and environmental costs of making up
                                                     usually no guarantee that the intake                    Wet Cooling Tower Systems
                                                                                                                                                                       this reduction in energy efficiency need
                                                     flow will be permanently retired. EPA                     In a wet cooling system, cooling water                  to be considered. These environmental
                                                     expects flow reductions due to unit                     that has absorbed waste heat, transfers                   costs include human health and welfare
                                                     closures could be reasonably included                   that heat through evaporation of some of                  effects from increased air emissions,
                                                     as part of a facility’s I&E mortality                   the heated water into the surrounding                     including the global climate change
                                                     reductions for a period of up to 10 years.              air and recirculates the cooling water to                 effects of increased greenhouse gas
                                                     d. Alternate Sources of Cooling Water                   continue the cooling process.41 This                      output at fossil-fueled plants. Both
                                                                                                             process enables a facility to re-use the                  natural draft and mechanical cooling
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                                                       While not reducing the overall usage                  remaining water, thereby reducing the                     towers can operate in freshwater or
                                                     of water at a facility, using an alternate
                                                                                                                                                                       saltwater environments. Saltwater
                                                     source of cooling water may have the                      40 See, for example, EPA’s site visit report for
                                                                                                                                                                       applications typically require more
                                                                                                             PSEG’s Linden Generating Station (DCN 10–6557),
                                                       39 Note that some generating units are retired for    which has a capacity of 1230 MW, 35% CUR, and             make-up water than freshwater
                                                     market-driven reasons (i.e., the unit is no longer      uses 7–8 mgd of gray water as makeup water for its
                                                     considered sufficiently profitable to operate). They    cooling towers.                                             42 Natural draft towers can be as high as 500 feet

                                                     may also be mothballed, placed on cold storage, or        41 In addition, a smaller portion of the heat is also   or more.
                                                     maintained in various other states of operational       removed through direct contact between the warm             43 Mechanical draft towers typically range from

                                                     readiness.                                              water and the cooler surroundings.                        30 to 75 feet in height.



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                                                     22200                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     applications, making them less efficient                wet towers, which can also offer plume                 differently, however, with the slot size
                                                     in reducing water withdrawals.44                        abatement controls.                                    referring to the maximum distance
                                                     Optimized cooling towers may achieve                                                                           between longitudinally adjacent wires.
                                                                                                             2. Exclusion Technologies To Minimize
                                                     flow reductions of 97.5 percent or better                                                                      These screens are designed to have a
                                                                                                             Impingement and/or Entrainment
                                                     and 94.9 percent or better for freshwater                                                                      low through-slot velocity (less than 0.5
                                                     and saltwater sources, respectively.                       Over the last several decades, in                   ft/sec or 0.15 m/sec) and typically have
                                                                                                             addition to flow reduction and closed-                 smaller slot sizes than a coarse mesh
                                                     Dry Cooling Tower Systems                               cycle cooling, numerous technologies                   traveling screen. The entire wedgewire
                                                        Dry cooling systems virtually                        have been developed in an effort to                    structure is submerged in the source
                                                     eliminate the need for cooling water                    minimize impingement and entrainment                   waterbody.
                                                     withdrawals.45 Unlike wet cooling                       mortality associated with cooling water                   When appropriate conditions are met,
                                                     systems, in dry cooling systems, waste                  intake systems. The following                          these screens exploit physical and
                                                     heat is transferred completely through                  summarizes the most widely used                        hydraulic exclusion mechanisms to
                                                     convection and radiation, rather than                   technologies as well as the most                       achieve consistently high impingement
                                                     evaporation. Direct dry cooling is much                 effective and best performing                          reductions (and as a result,
                                                     like a car radiator; turbine exhaust                    technologies. For additional detailed                  impingement mortality reductions).
                                                     steam passes through tubes or fins and                  information on these technologies as                   Wedgewire screens require an ambient
                                                     the condensate is returned for reuse in                 well as others, see the TDD, CA Report,                current crossflow to maximize the
                                                     the turbine. The system is completely                   and EPRI report.                                       sweeping velocity provided by the
                                                     closed to the atmosphere and there is no                a. Screens                                             waterbody. The screen orientation and
                                                     contact between the outside air and the                                                                        cross current flow carries organisms
                                                                                                             i. Traveling Screens                                   away from the screen allowing them to
                                                     steam or the resulting condensate. Due
                                                     to the heavy reliance of dry cooling on                    Traveling screens are a technology in               avoid or escape the intake current.
                                                     ambient air temperatures and the lower                  place at virtually all cooling water                   Lower intake velocities also allow fish
                                                     efficiency of heat transfer through                     intake structures. These screens were                  to escape from the screen face.
                                                     convection and radiation, dry cooling                   originally designed to prevent debris                  Entrainment reductions can potentially
                                                     towers are much larger and therefore                    from entering the cooling water system,                be observed when the screen slot size is
                                                     more expensive 46 than wet cooling                      but also prevent some fish and shellfish               small enough and intake velocity is low
                                                     towers for a given cooling load. Dry                    from entering the cooling water system.                enough to exclude egg and larval life
                                                     cooling towers have been built in areas                 Traveling screens have been installed in               stages.47 There is also limited evidence
                                                     where limited water supplies exist for                  numerous environmental conditions:                     suggesting that extremely low intake
                                                     either once-through cooling or wet                      Salt water, brackish water, fresh water,               velocities can allow some egg and larval
                                                     cooling make-up water, such as the arid                 and icy water. Based on the technical                  life stages to avoid the intake due to
                                                     southwestern U.S. Dry cooling is not                    survey, EPA found 93 percent of electric               hydrodynamic influences of the cross
                                                     demonstrated and available for nuclear                  generators and 73 percent of                           current. Therefore performance is
                                                     facilities, due to the backup cooling                   manufacturers employ traveling screens                 largely dictated by local conditions that
                                                     systems and related safety needs                        or other intake screens. There are many                are further dependent on the source
                                                     required at a nuclear facility.                         types of traveling screens (e.g., through              waterbody’s biological composition.
                                                                                                             flow, dual flow, center flow). The most                Costs of wedgewire screens also
                                                     Hybrid Cooling Tower Systems                            common design in the U.S. is the                       increases significantly as slot size and
                                                                                                             through flow system. The screens are                   design intake velocity decrease.
                                                       In certain applications, a facility may
                                                                                                             installed behind bar racks (trash racks)               Wedgewire screens may also employ
                                                     choose a hybrid cooling tower design
                                                                                                             but in front of the water circulation                  cleaning and de-icing systems such as
                                                     that incorporates elements of both wet
                                                                                                             pumps. The screens rotate up and out of                air-burst sparging to aid in maintaining
                                                     and dry cooling. Typically, the base of
                                                                                                             the water where debris (including                      open intake structures and low intake
                                                     the tower functions as a wet cooling
                                                                                                             impinged organisms) is removed from                    velocities.
                                                     tower and the upper portion as a dry
                                                                                                             the screen surface by a high pressure                     According to data from the industry
                                                     tower; the most common reason for this
                                                                                                             spray wash. Screen wash cycles are                     questionnaire, EPA’s site visits, and
                                                     design is to reduce the visible plume
                                                                                                             triggered manually or by a certain level               industry documents, dozens of facilities
                                                     emitted from the tower, which is
                                                                                                             of head loss across the screen                         across the U.S. employ cylindrical
                                                     accomplished by recapturing some of                     (indicating clogging). By definition, this             wedgewire screens. However,
                                                     the water vapor evaporated in the wet                   technology works by collecting or                      wedgewire screens are not feasible for
                                                     portion of the tower. This design is also               ‘‘impinging’’ fish and shellfish on the                facilities with limited access to source
                                                     usually much shorter than natural draft                 screen. Traveling screens are ideally                  water, such as shallow water or limited
                                                                                                             used with a fish handling and return                   shoreline frontage. Wedgewire screens
                                                        44 Modular cooling tower units provide an
                                                                                                             system, discussed further in Section                   may also not be feasible where the size
                                                     additional cooling tower alternative. Modular
                                                     cooling towers resemble mechanical cooling towers,      VI.B.3 below.                                          and number of wedgewire screens
                                                     but are portable, typically rented for short-term
                                                                                                             ii. Cylindrical Wedgewire Screens                      would interfere with navigational
                                                     periods and quickly assembled.                                                                                 traffic. As described above, locations
                                                        45 Dry cooling systems do blow down some of the         Cylindrical wedgewire screens, also                 also need to have an adequate source
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                                                     circulating water within the cooling system to          called ‘‘V’’ screens or profile screens,
                                                     prevent the buildup of materials within the                                                                    water sweeping velocity. Most of the
                                                     condenser. However, the volume of makeup water
                                                                                                             unlike traveling screens, are a passive                performance data for wedgewire screens
                                                     is extremely low—a dry cooling system typically         intake system. Wedgewire screens                       is based on coarse mesh slot sizes with
                                                     reduces intake flows by 98–99 percent over a            consist of a v-shaped, cross section wire              an intake velocity of 0.5 feet per second.
                                                     comparable once-through cooling system.                 on a framing system. Slot sizes for                    As it is extremely difficult to measure
                                                        46 The construction and capital costs for dry
                                                                                                             conventional traveling screens typically
                                                     cooling towers have been reported as five to 10
                                                     times as expensive as wet cooling towers, and the
                                                                                                             refer to a square opening (3⁄8″ × 3⁄8″) that             47 Note that this is entrainment exclusion and not

                                                     parasitic load for dry cooling is higher than for wet   is punched or woven into the screen                    necessarily related to the survival of entrainable
                                                     cooling. See DCN 10–6679.                               face. Wedgewire screens are constructed                organisms. See Section III.B.2 for more detail.



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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                      22201

                                                     impingement and entrainment                             fine mesh screens are demonstrated for                  facility recently ceased operations.49
                                                     reductions in the field, most                           some locations, but are not the best                    EPA has updated performance data for
                                                     performance data is based on barge                      performing technologies, and are not                    AFB for small flow intakes, but does not
                                                     studies and lab studies. EPA does not                   available technologies for the industry                 have enough data to evaluate the
                                                     have data on the performance of fine                    as a whole. See Chapter 6 of the TDD                    technology at large intakes and in all
                                                     mesh wedgewire screens on                               for more details.                                       waterbodies.
                                                     entrainment survival; therefore EPA has                                                                         3. Collection and Return
                                                     only considered wedgewire screens for                   b. Barrier Nets
                                                     impingement mortality. For additional                                                                              Conventional traveling screens were
                                                                                                                Barrier nets are nets that fully encircle            not designed with the intention of
                                                     discussion of the specific design and                   the intake area of water withdrawal,
                                                     operation of cylindrical wedgewire                                                                              protecting fish and aquatic organisms
                                                                                                             from the bottom of the water column to                  that become entrapped against them.
                                                     screens, see the TDD. The following
                                                                                                             the surface and that prevent fish and                   Marine life may become impinged
                                                     section discusses the importance of
                                                                                                             shellfish from coming in contact with                   against the screens from high intake
                                                     mesh size to impingement and
                                                                                                             the intake structure and screens.                       velocities that prevent their escape.
                                                     entrainment mortality reductions.
                                                                                                             According to data from the industry                     Prolonged contact with the screens may
                                                     iii. Screen Mesh Size Considerations                    questionnaire (as of the year 2000), at                 suffocate insufficiently strong species or
                                                     Coarse Mesh                                             least a half dozen facilities employ a                  certain susceptible life stages of fish.
                                                                                                             barrier net. Typically, barrier nets have               Exposure to high pressure sprays and
                                                        Coarse mesh traveling screens are the                large mesh sizes (e.g., 1⁄2-inch or 12.7                other screening debris may cause
                                                     typical traveling screen fitted on the                  mm) 48 and are designed to prevent                      significant injuries that result in latent
                                                     majority of cooling water intakes. A                    impingement. Due to the large mesh                      mortality, or increase the susceptibility
                                                     large number of facilities have intake                  size, they offer no reduction in                        to predation or re-impingement.
                                                     screens with 3⁄8-inch (9.5 mm) mesh                     entrainment. They are often deployed                    Organisms that do survive initial
                                                     panels. This size mesh is common                        seasonally, wherever seasonal                           impingement and removal are not
                                                     because, as a general rule of thumb, the                migrations create high impingement                      typically provided with a specifically-
                                                     maximum screen slot size is never larger                events or to avoid harsh winter                         designed mechanism to return them to
                                                     than one half of the condenser tube                                                                             the water body and are handled in the
                                                                                                             conditions which jeopardize integrity of
                                                     diameter (the condenser tubing is the                                                                           same fashion as other screening debris.
                                                                                                             the net. Barrier nets also prevent
                                                     narrowest point in the cooling water                                                                            Other objects collected on the screen are
                                                                                                             impingement of shellfish on the intake
                                                     system and, as such, is most susceptible                                                                        typically removed with a high-pressure
                                                                                                             traveling screen. Shellfish such as
                                                     to clogging from debris), and this tubing                                                                       spray and deposited in a dumpster or
                                                                                                             crustaceans may pose a unique issue for
                                                     is typically 3⁄4 or 7⁄8 inches in diameter.                                                                     debris return trough for disposal.
                                                     Mesh of 3⁄8-inch (roughly 9.5 mm) does                  traveling screens because the shellfish
                                                                                                             are not impinged, but rather they may                   Screens are rotated periodically based
                                                     not prevent entrainment and in the                                                                              on a set time interval or when the
                                                     absence of any other precautions can                    grab hold of the traveling screen surface
                                                                                                             and are not removed from the traveling                  pressure differential between the
                                                     lead to high mortality of impinged fish.                                                                        upstream and downstream faces exceeds
                                                     Coarse mesh traveling screens have been                 screen by pressure wash sprays. Barrier
                                                                                                             nets have been shown to be particularly                 a set value. Conventional traveling
                                                     in use by both power plants and                                                                                 screen systems have been modified to
                                                     manufacturers for more than 75 years                    helpful in this regard. For this reason,
                                                                                                             the costs of options considered today                   reduce impingement-related mortalities
                                                     and represent the baseline technology.                                                                          with collection and return systems. In
                                                     Similarly, the majority of successful                   include the costs of barrier nets to
                                                                                                             minimize impingement mortality of                       simplest form, this is comprised of a
                                                     wedgewire installations are coarse                                                                              return flume or trough with sufficient
                                                     mesh.                                                   shellfish.
                                                                                                                                                                     water volume and flow to enable
                                                     Fine Mesh                                               c. Aquatic Filter Barriers                              impinged organisms to return to the
                                                                                                                                                                     source water. Return systems should be
                                                       Fine mesh traveling and wedgewire                        Aquatic Filter Barriers (AFBs), such as              designed to avoid predation and latent
                                                     screens are similar to coarse mesh                      the Gunderboom Marine Life Exclusion                    mortality while organisms are in the
                                                     screens, with the only difference being                 System (MLES) or simply                                 flume, positioned at an appropriate
                                                     the size of the screen mesh. The mesh                   ‘‘Gunderboom,’’ are similar to barrier                  water depth for high survival of the
                                                     size of fine mesh screens varies,                       nets in that they extend throughout the                 organisms, located at an appropriate
                                                     depending on the organisms to be                        area of water withdrawal from the                       elevation to avoid large drops of the
                                                     protected, but typically range from 0.5                 bottom of the water column to the                       organisms back to the surface water, and
                                                     to 5 mm. Typically, facilities have                     surface. However, AFBs consist of water                 sited to avoid repeated impingement of
                                                     incorporated fine mesh in an effort to                  permeable fabric panels with small                      the organisms by the intake structure.
                                                     reduce entrainment. Data in the record                  pores (< 20 microns). AFBs reduce both                     Following the 1972 Clean Water Act’s
                                                     demonstrate that entrainment typically                  impingement mortality and entrainment                   requirement to require technology-based
                                                     decreases as mesh size decreases.                       because they present a physical barrier                 solutions to minimize adverse
                                                     However, slot sizes larger than 2 mm do                 to all life stages. The surface area of an              environmental impacts, some
                                                     not prevent eggs from passing through                   AFB is quite large compared to a                        conventional coarse mesh traveling
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                                                     the screen. Fine mesh traveling screens                 traveling screen, allowing for extremely                screen systems were modified to reduce
                                                     have been in use in this industry since                 low water velocities. The low velocity                  impingement mortality by removing fish
                                                     the 1980s. EPA estimates as many as 17                  allows non-motile organisms to drift                    trapped against the screen and returning
                                                     percent of existing intakes could not be                away. EPA is aware of one power plant                   them to the receiving water with as few
                                                     expanded in size to accommodate a 2                     that used an AFB, but notes that this                   injuries as possible. The first modified
                                                     mm mesh, and as many as 55 percent of
                                                     existing intakes could not accommodate                    48 Barrier net mesh sizes vary, depending on the        49 This facility ceased operations for reasons other
                                                     a 0.5 mm slot size under conditions of                  configuration, level of debris loading, species to be   than impingement and entrainment related to
                                                     low intake velocities. For these reasons,               protected, and other factors.                           cooling water intake.



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                                                     22202                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     screens, also known as ‘‘Ristroph’’                     types of waterbodies, shoreline                          For additional and more detailed
                                                     screens, feature capture and release                    locations are thought to have the                      discussion of the specific design and
                                                     modifications. In the simplest sense,                   potential for greater environmental                    operation of offshore intake locations
                                                     these screens are fitted with troughs                   impact because the water is withdrawn                  and velocity caps, see the TDD.
                                                     (also referred to as buckets) containing                from the most biologically productive                  5. Reduced Intake Velocity
                                                     water that catch the organisms as they                  areas especially with regards to earlier
                                                     rise out of the water and are sprayed off               life stages. Some facilities employ an                    Impingement mortality can be greatly
                                                     of the screen. The return component                     offshore intake to withdraw water from                 reduced by reducing the through-screen
                                                     consists of a gentle mechanism to                       less biologically productive areas to                  velocity in any screen. Reducing the rate
                                                     remove impinged fish from the                           reduce entrainment relative to intakes                 of flow of cooling water through the
                                                     collection buckets, such as a low-                      located in more productive shoreline                   screen (through-screen velocity) to 0.5
                                                     pressure spray. The buckets empty into                  areas, though impingement (and                         ft/sec or less reduces impingement of
                                                     a collection trough that returns fish to                therefore impingement mortality)                       most fish because it allows them to
                                                     a suitable area in the source water body.               reductions have also been observed.                    escape the intake current. (See 66 FR
                                                     These modified screens have shown                       Obviously, reduction in impingement                    65274 and DCN 2–028A, EPRI’s
                                                     significant improvements in reducing                    mortality and entrainment depend on                    ‘‘Technical Evaluation of the Utility of
                                                     impingement mortality compared with                     intake location at a particular site, but              Intake Approach Velocity as an
                                                     unmodified screen systems.                              the greatest potential for reductions is               Indicator of Potential Adverse
                                                        Data from early applications of the                  found with far offshore locations at                   Environmental Impact Under Clean
                                                     ‘‘Ristroph’’ screen design showed that                  distances of several hundred feet,                     Water Act 316(b).’’) Limited lab studies
                                                     while initial survival rates might be                   something not possible on many rivers                  indicate that entrainment also may
                                                     high at some installations, latent                      and streams. Both depth and the                        decrease as through-screen velocity
                                                     mortality rates were higher than                        offshore location must be evaluated to                 decreases and that through-screen
                                                     anticipated, indicating significant                     determine if fish densities and species                velocity may have an effect on
                                                     injuries could be sustained during the                  distribution at the offshore location are              entrainment survival rates, although
                                                     impingement and return process that                     substantially different than those near                such data is extremely variable by
                                                     were not immediately fatal. Based on a                  the shoreline. Two areas where far                     species (see DCN 10–6802 and DCN10–
                                                     study conducted by Ian Fletcher in the                  offshore locations are commonly used                   6803). As a result, some Phase II
                                                     1990s (see DCN 5–4387), industry                        today include the oceans and Great                     facilities have designed and operate
                                                     identified several additional critical                  Lakes.                                                 their modified traveling screens or
                                                     screen modifications to address latent                                                                         wedgewire screens so as not to exceed
                                                     mortality. These include redesign of the                   EPA found most offshore intakes are                 a through-screen velocity of 0.5 ft/sec.
                                                     collection buckets to minimize                          fitted with a velocity cap. Velocity caps              In addition, for the reasons described in
                                                     turbulence, addition of a fish guard rail/              are a physical structure rising vertically             Section VI.B.2, aquatic filter barriers
                                                     barrier to prevent fish from escaping the               from the sea bottom and placed over top                and velocity caps 50 are likely to have
                                                     collection bucket, replacement of screen                of the intake pipe. Intake water is
                                                                                                                                                                    velocities of 0.5 ft/sec or less. Swim
                                                     panel materials with ‘‘fish friendly’’                  withdrawn through openings in the
                                                                                                                                                                    speed studies demonstrate that for most
                                                     smooth woven mesh, and a low pressure                   velocity cap in a manner which converts
                                                                                                                                                                    facilities, an intake velocity of 0.5 feet
                                                     wash to remove fish prior to any high                   the direction of flow from vertical to
                                                                                                                                                                    per second or less results in 90 percent
                                                     pressure spray to remove debris on the                  horizontal. The horizontal flow provides
                                                                                                                                                                    or better reductions in impingement
                                                     ascending side. The Fletcher analysis                   a physiological trigger in fish to induce
                                                                                                                                                                    mortality for most species. (EPA notes
                                                     also identified that longer impingement                 an avoidance response thereby reducing
                                                                                                                                                                    that preliminary results from recent
                                                     duration, insufficient water retention in               impingement mortality. The velocity
                                                                                                                                                                    studies of fine mesh screens suggest that
                                                     the buckets, and exposure to the air and                cap further serves to limit the zone of
                                                                                                                                                                    at even lower intake velocities such as
                                                     temperature extremes could negatively                   influence of the intake to the depth level
                                                                                                                                                                    0.25 feet per second, there may be some
                                                     impact fish survival. Finally, these                    at which the velocity cap is situated,
                                                                                                                                                                    hydrodynamic influences that reduce
                                                     findings indicate that modified Ristroph                thus affecting only the life stages that
                                                                                                                                                                    entrainment mortality even more,
                                                     screens must be continually rotated                     live at that depth. Furthermore, the
                                                                                                                                                                    because flow dynamics are nonlinear. It
                                                     instead of the periodic rotation schedule               velocity at an offshore intake is lower
                                                                                                                                                                    is unclear whether such observations
                                                     common with conventional screen                         than the velocity of an equivalent sized
                                                                                                                                                                    hold true when cooling water
                                                     systems. Performance data for modified                  intake at the shoreline due to
                                                                                                                                                                    withdrawals (water volumes) are large.)
                                                     traveling screens with fish return                      differences in pressure, resulting in a
                                                                                                                                                                    Therefore, EPA has concluded reduced
                                                     systems show low levels of                              lower intake velocity at the velocity cap
                                                                                                                                                                    intake velocity is a candidate best
                                                     impingement mortality across a wide                     than at a shoreline intake. Velocity caps
                                                                                                                                                                    performing technology for impingement
                                                     variety of water body types and fish                    are also usually equipped with supports
                                                                                                                                                                    mortality.
                                                     species. Therefore, EPA has concluded                   and bar spacing selected to prevent
                                                     modified traveling screens with a fish                  larger aquatic organisms (e.g., turtles or             C. Technology Basis for Today’s
                                                     return system is a candidate best                       marine mammals) from entering the                      Proposed Regulation
                                                     performing technology for impingement                   intake pipe. Because velocity caps                       As described in the previous section,
                                                     mortality.                                              operate under the principle that the                   EPA examined the full range of
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                                                        For additional and more detailed                     organisms can escape the current,                      technologies that reduce impingement
                                                     discussion of the specific design and                   velocity caps do not offer entrainment                 and/or entrainment, and evaluated these
                                                     operation of these screen modifications,                reductions over and above those                        technologies based on their efficacy in
                                                     see the TDD.                                            achieved by being located offshore.                    reducing impingement and entrainment,
                                                                                                             Reductions in entrainment observed                     availability, and cost. Based on an
                                                     4. Intake Location and Velocity Caps                    with velocity caps occur due to the                    assessment of these factors, EPA has
                                                        Currently, the most common intake                    difference in organism densities in far
                                                     location for a cooling water intake                     offshore deep water compared to a                        50 Velocity as measured at the velocity cap

                                                     structure is along a shoreline. In some                 surface intake at the shoreline.                       opening.



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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                          22203

                                                     identified three best performing                        average 51 standard to account for year-               previously not included a variability
                                                     technologies for further analysis as the                to-year variability. The annual average                factor for annual limits. Thus, EPA’s
                                                     basis for today’s proposed rule:                        standard requires that impingement                     proposed approach to calculating the
                                                     Modified traveling screens with a fish                  mortality not exceed 12 percent,                       annual standard for mortality
                                                     return (for fish impingement), barrier                  calculated as the average of monthly                   impingement is consistent with past
                                                     nets (for shellfish impingement on tidal                impingement mortality for 12                           practice. EPA requests comment on its
                                                     waters), and mechanical draft wet                       consecutive months as determined by                    proposed approach for calculating and
                                                     cooling towers (for impingement and                     the Director. The 12 percent value                     implementing the annual standard.
                                                     entrainment at new units). Although                     corresponds to the long-term average                     This technology does not minimize
                                                     EPA has identified velocity reduction to                performance of the technology that EPA                 adverse environmental impacts
                                                                                                             has identified as BTA, based on                        associated with entrainment, and does
                                                     0.5 feet per second or less as a candidate
                                                                                                             available data from eight episodes of                  not specifically address impingement
                                                     best performing technology for
                                                                                                             sampling collected on three different                  mortality of shellfish.
                                                     impingement mortality, EPA is not                                                                                EPA selected the seasonal deployment
                                                                                                             waterbody types over all seasons (see
                                                     proposing reduced intake velocity as                                                                           of barrier nets on estuaries and oceans
                                                                                                             Chapter 11 of the TDD for more
                                                     BTA because it is not available at all                                                                         as the best performing technology for
                                                                                                             information). EPA expects facilities to
                                                     facilities, but is allowing facilities to               track their compliance with the annual                 minimizing the impingement mortality
                                                     comply with intake velocity of 0.5 feet                 average standard on an ongoing basis,                  of shellfish (crustaceans) because no
                                                     per second or less where available.                     and to proactively modify their                        other technology has been identified
                                                        EPA has concluded that modified                      technology or operations when any                      that is available, demonstrated, and
                                                     traveling screens, such as Ristroph                     individual monthly average suggests                    feasible. EPA did not select wedgewire
                                                     screens and equivalent modified                         that they may be in danger of exceeding                screens as a candidate technology for
                                                     traveling screens are a best performing                 the annual average standard in the                     impingement mortality because
                                                     technology for impingement mortality.                   future. EPA recognizes that some                       wedgewire screens are not available and
                                                     These screens use coarse size mesh with                 variability in the annual average is                   feasible for all existing facilities.
                                                     collection buckets designed to minimize                 inevitable, and thus the only way to                   Wedgewire screen performance requires
                                                     turbulence, a fish guard rail/barrier to                consistently achieve the 12 percent                    an adequate crossflow of the source
                                                     prevent fish from escaping the                          annual standard is to target a better level            water that is not present in all
                                                     collection bucket, ‘‘fish friendly’’ smooth             of performance as the long-term average                waterbodies. Wedgewire screens also
                                                     woven mesh, and a low pressure wash                     performance. While EPA’s data show a                   require a minimum water depth in order
                                                     to remove fish prior to any high                        long-term average performance of 12                    to fully submerge the screens; the
                                                     pressure spray to remove debris on the                  percent impingement mortality for the                  requisite depth and space to submerge
                                                                                                             BTA technology, EPA believes that by                   the screens is not available at all
                                                     ascending side. The fish removal spray
                                                                                                             continuously monitoring and adaptively                 locations, and further may pose an
                                                     must be of lower pressure and the fish
                                                                                                             adjusting the operation of the                         obstacle to navigation. However, where
                                                     return must be fish friendly and provide
                                                                                                             technology, facilities can achieve a                   passive screens such as cylindrical
                                                     sufficient water and minimize                                                                                  wedgewire screens are feasible, data in
                                                     turbulence. Modified traveling screens                  better long-term performance than is
                                                                                                             documented in the data, and thus                       the record shows they would perform
                                                     must generally be continually rotated to                                                                       equally as well or better than seasonal
                                                                                                             consistently meet the annual average.
                                                     obtain the highest reductions in                           EPA also considered applying a                      deployment of barrier nets. EPA has
                                                     impingement mortality. As discussed in                  confidence or tolerance limit to the                   included a provision in the proposed
                                                     Section III, traveling screens with post-               long-term average in deriving the annual               regulation that specifies that passive
                                                     Fletcher modifications achieve a                        average standard. EPA rejected this                    screens meet the IM requirement for
                                                     monthly impingement mortality of 31                     approach because EPA believes that                     shellfish.
                                                     percent mortality (performance                          facilities can achieve better long-term                  One technology for reducing
                                                     corresponding to the 95th percentile of                 performance than documented in the                     impingement mortality as well as
                                                     the beta distribution) under conditions                 data by maintaining tight control on                   reducing entrainment mortality is wet
                                                     of 48 hour or less holding times. The                   their technology and operations and                    cooling towers. Mechanical cooling
                                                     use of the 95th percentile is consistent                adaptively managing the technology to                  towers achieve flow reductions of 97.5
                                                     with the convention EPA has used for                    achieve the best possible performance.                 percent for freshwater and 94.9 percent
                                                     monthly average limitations in the                      While EPA has not included any                         for saltwater sources by operating the
                                                     effluent guidelines program (i.e., for                  additional costs for this adaptive                     towers at a minimum of 3.0 and 1.5
                                                     pollutant discharges). In developing the                management, EPA believes that such                     cycles of concentration, respectively.
                                                     monthly average standard proposed for                   adaptive management should be part of                  Based on the high levels (greater than 95
                                                     this rule, EPA has taken into account                   the routine maintenance and operation                  percent on average) of flow reduction
                                                     the reasonable anticipated variability in               of the technology and additional costs                 obtained by optimized cooling tower
                                                     impingement mortality that may occur                    should not be necessary.                               operation, EPA has identified wet
                                                     at a well-operated facility. Variability                   EPA has occasionally used annual                    cooling towers as a candidate best
                                                     occurs due to changes in seasons,                       limits in the effluent guidelines program              performing technology for both
                                                     differing intake locations, higher                      (most recently for the pulp and paper                  impingement mortality and entrainment
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                                                     mortality of certain species, and                       industry category (40 CFR 430,                         mortality for new units at existing
                                                     speciation found in different water                     promulgated in 1998) and has                           facilities. As discussed further below,
                                                     bodies.                                                                                                        EPA is not proposing cooling towers as
                                                                                                               51 The annual average should not be confused         BTA for existing facilities (other than
                                                        In contrast to the monthly average,                  with a rolling average of the preceding 12 months;     new units) because it is not available on
                                                     which is adjusted to reflect month-to-                  EPA has specified in the rule language at § 125.96     a national basis. As described in Section
                                                     month variability in performance of the                 that the annual average means 12 consecutive
                                                                                                             months as specified by the Director. EPA expects
                                                                                                                                                                    VI.B, other technologies are
                                                     technology, EPA has not included an                     that compliance with the annual average standard       demonstrated, but are not the best
                                                     upward adjustment of the annual                         would be determined once each calendar year.           performing technologies and/or are not


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                                                     22204                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     available technologies for the industry                 would be required to meet either the                      EPA did not select intake velocity as
                                                     as a whole.                                             design or the performance standard for                 the sole technology basis for
                                                        Although, EPA’s record shows                         impingement mortality. Entrainment                     impingement mortality controls
                                                     numerous instances of existing facility                 controls would be established by the                   because, although the performance of
                                                     retrofits to closed-cycle, EPA has not                  permitting authority on a case-by-case                 0.5 feet per second intake velocity is
                                                     identified it as BTA for the reasons                    basis taking into account those factors at             slightly better than the selected
                                                     discussed below. EPA has also not                       a particular facility that are specified in            technology, the intake velocity is not
                                                     identified any other available and                      today’s proposal and the information                   available or feasible for all existing
                                                     demonstrated candidate technology for                   required by the existing permit                        facilities (see Chapter 6 of the TDD).
                                                     entrainment mortality that is available                 regulations at § 122.21(r)(1)–(8) for all              However, EPA has long recognized the
                                                     on a national basis; see Section VI.B and               facilities with at least 2 MGD DIF. In                 relationship between impingement and
                                                     the TDD for other entrainment                           addition, under EPA’s CWA sections                     intake velocity. EPA conducted an
                                                     technologies that may be available on a                 301, 308, 316(b), and 402 authority, in                analysis of fish swim speeds in the
                                                     site-specific basis. EPA did not select                 the case of facilities withdrawing greater             Phase I rule (see 66 FR 65274) and
                                                     the other flow reduction technologies                   than 125 MDG AIF (actual intake flow),                 concluded that a design through-screen
                                                     such as variable speed drives and                       the site-specific determination of BTA                 velocity of 0.5 feet per second would be
                                                     seasonal flow reductions as the                         would be based on a submission of                      protective of 96% of motile organisms.
                                                     technology basis for entrainment                        certain other required information. The                As a result, a facility may chose to
                                                     mortality because these technologies are                proposal would amend the permit                        comply with the impingement mortality
                                                     not feasible for all facilities. Further,               application requirements at                            standards in today’s proposed rule by
                                                     EPA has not identified a basis for                      § 122.21(r)(9)–(11) to require the facility            instead demonstrating that the through-
                                                     subcategorizing existing facilities for                 to prepare an Entrainment                              screen design velocity does not exceed
                                                     where these flow reduction technologies                 Characterization Study that would fully                0.5 feet per second, or by demonstrating
                                                     are feasible, because their seasonal                    characterize the amount of entrainment                 that the actual average intake velocity
                                                     operation depends on the site-specific                  at the facility. (See below for more                   does not exceed 0.5 feet per second.
                                                     biology of the facility. EPA did not                    details about the study). In addition,                    While the data shows the majority of
                                                     select relocation of a shoreline intake to              under the proposal, the facility would                 healthy motile organisms would be
                                                     far offshore as a technology basis                      provide detailed information on the                    protected by a maximum intake velocity
                                                     because this technology is not feasible                 other factors relevant to the Director’s               of 0.5 feet per second, some species
                                                     for all facilities. Even if EPA                         site-specific BTA determination. These                 would not be adequately protected.
                                                     subcategorized by water body type (i.e.,                would include information concerning                   Some facilities employ traveling
                                                     intake location), the performance of wet                the technologies available for control of              screens, but do not have fish friendly
                                                     cooling towers for entrainment mortality                such entrainment, the costs of controls,               modifications such as a fish handling
                                                     is at least three times that of a far                   the non-water quality impacts of such                  and return system. EPA is concerned
                                                     offshore intake. Therefore relocation of                controls, and both the monetized and                   that some facilities would comply with
                                                     the intake is not the best performing                   non-monetized benefits of such                         the impingement mortality requirements
                                                     technology for minimizing entrainment                   controls. The CWA requires, and EPA                    by the intake velocity compliance
                                                     mortality.                                              encourages, the public to have a role in               alternative, and would continue to
                                                                                                             the permitting process; therefore EPA                  operate unmodified traveling screens.
                                                     D. Options Considered for Today’s
                                                                                                             has also included meaningful public                    This is particularly a concern where the
                                                     Proposed Regulation                                                                                            traveling screens are located in a
                                                                                                             opportunity for participation in the site-
                                                       After careful consideration of the                    specific decision making to help ensure                forebay, potentially resulting in
                                                     technologies available as described in                  the soundness of both the information                  entrapment of any impinged organisms.
                                                     Section VI.C, EPA developed four                        and subsequent determinations.                         Therefore, EPA is considering a
                                                     primary options based on these                                                                                 provision that would require facilities to
                                                     technologies for today’s proposed rule.                 a. Impingement Mortality Controls                      either demonstrate that the species of
                                                     Three of the options would require the                     As described earlier in this section,               concern are adequately protected by the
                                                     same impingement mortality standards,                   traveling screens have undergone a                     maximum intake velocity requirements,
                                                     but would vary the approach to                          number of technological improvements                   or to employ specific fish friendly
                                                     entrainment mortality controls. The                     over the years and modern screens have                 protective measures including, at a
                                                     fourth option would allow both                          proven to be highly effective in                       minimum, a fish handling and return
                                                     impingement and entrainment mortality                   promoting the survival of impinged                     system. EPA solicits comment and data
                                                     controls to be established on a site-                   organisms. The proposed rule requires                  on such a provision.
                                                     specific BPJ basis for facilities with a                the use of state-of-the-art screens with                  EPA did not select wedgewire screens
                                                     DIF less than 50 MGD. The options are                   fish buckets, a low pressure spray wash,               as the technology basis for impingement
                                                     described briefly below, followed by a                  a dedicated fish return line, etc., but is             mortality controls because wedgewire
                                                     discussion of EPA’s evaluation of each                  not specifying any particular screen                   screens are not available and feasible for
                                                     option as BTA.                                          configuration, mesh size or screen                     all existing facilities. EPA also did not
                                                                                                             operations, so long as facilities can                  need to include wedgewire screens as a
                                                     1. Option 1—Uniform Impingement                         consistently meet the numeric                          compliance alternative because
                                                     Mortality Controls at All Existing
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                                                                                                             impingement mortality limits                           wedgewire screens designed with an
                                                     Facilities; Site-Specific Entrainment                   (impingement mortality also includes a                 intake velocity of 0.5 feet per second
                                                     Controls for Existing Facilities (Other                 design standard for shellfish). EPA is                 can demonstrate compliance with the
                                                     Than New Units) That Withdraw Over                      also not specifying additional design or               impingement mortality limits based on
                                                     2 MGD DIF; Uniform Entrainment                          operational criteria to promote                        the intake velocity as just described.
                                                     Controls for All New Units at Existing                  development of improved technologies,                  EPA did not select flow reduction by
                                                     Facilities                                              and to allow facilities to use variations              retrofit to closed-cycle cooling as the
                                                        Under this option, all existing                      such as dual flow traveling screens and                technology basis for impingement
                                                     facilities withdrawing more than 2 MGD                  drum screens.                                          mortality because closed-cycle cooling


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                                                     costs more than 10 times that of                           In the case of site-specific                        Finally, the information must include a
                                                     modified traveling screens with a fish                  entrainment controls for facilities                    discussion of the changes in non-water
                                                     return system. In other words, modified                 withdrawing greater than 125 MGD AIF,                  quality factors attributed to technologies
                                                     traveling screens with a fish return                    EPA’s proposal would, in addition,                     and/or operational measures
                                                     system and closed-cycle cooling are                     require these facilities to develop and                considered, including but not limited to
                                                     comparable in impingement mortality                     submit an entrainment characterization                 increases and decreases in the
                                                     performance, but modified traveling                     study for use by the Director in                       following: energy consumption; thermal
                                                     screens with a fish return system is                    establishing site-specific BTA. See                    discharges; air pollutant emissions
                                                     more cost-effective than flow reduction                 Section V.F for more on development of                 including particulates and associated
                                                     at preventing impingement mortality.                    the 125 MGD threshold. (Facilities                     human health and global climate change
                                                     EPA is not including wet cooling towers                 under the 125 MGD AIF threshold must                   impacts; water consumption; noise;
                                                     as a compliance alternative (e.g., a pre-               still provide certain water body and                   safety (e.g., visibility of cooling tower
                                                     approved technology) because EPA’s                      water population information under the
                                                                                                                                                                    plumes, icing); grid reliability, and
                                                     data shows existing facilities that                     current permit applications
                                                                                                                                                                    facility reliability. See Section IX for a
                                                     retrofit to a closed-cycle cooling system               requirements at § 122.21(r)). An early
                                                     have an intake velocity of less than 0.5                step in conducting the entrainment                     thorough discussion of these study
                                                     feet per second. As a practical matter,                 characterization study is the preparation              requirements.
                                                     make-up water withdrawals are made at                   of an entrainment mortality data                          Under this option, it is EPA’s
                                                     such low velocities that facilities with                collection plan, which must be                         expectation that the Director would
                                                     closed-cycle can demonstrate                            submitted to the Director for review and               review the candidate technologies for
                                                     compliance with the alternative reduced                 comment before implementation. The                     entrainment mortality control that at a
                                                     intake velocity to meet the impingement                 entrainment mortality data collection                  minimum includes closed-cycle cooling
                                                     mortality limits. For estuaries and                     plan would include, at a minimum, the                  and fine mesh screens. In the decision
                                                     oceans, EPA is proposing seasonal                       specific entrainment monitoring                        about what additional entrainment
                                                     deployment of barrier nets on estuaries                 methods, taxonomic identification,                     controls (if any) to require, the Director
                                                     as the technology basis for minimizing                  latent mortality identification,                       would consider all of the facility-
                                                     the impingement mortality of shellfish                  documentation of all methods, and                      specific factors described above. At a
                                                     (crustaceans) because no other                          quality assurance/quality control                      minimum, the Director must provide a
                                                     technology has been identified that is                  procedures for sampling and data                       discussion explaining how issues
                                                     available, demonstrated, and feasible.                  analysis appropriate for a quantitative                concerning local energy reliability, air
                                                     As noted previously, use of wedgewire                   survey. EPA would also require peer                    emissions or land availability insofar as
                                                     screens (along with the limitations on                  review of the entrainment mortality data
                                                                                                                                                                    they relate to the feasibility of adoption
                                                     intake velocity) obviates the need for                  collection plan. Peer reviewers would
                                                                                                                                                                    of a particular entrainment technology,
                                                     barrier nets.                                           be selected in consultation with the
                                                                                                             Director who may consult with EPA and                  remaining useful plant life, and the
                                                     b. Entrainment Controls                                                                                        relationship of social benefits to social
                                                                                                             federal, State, and Tribal fish and
                                                                                                             wildlife management agencies with                      costs were addressed in the site-specific
                                                       The proposal would require
                                                                                                             responsibility for fish and wildlife                   determination. Under the proposal, the
                                                     consideration of site-specific
                                                                                                             potentially affected by the cooling water              Director must issue a written
                                                     entrainment controls for each facility
                                                     above 2 MGD DIF. EPA considered                         intake structure(s).                                   explanation for the basis of the BTA
                                                     proposing no further controls to address                   The Entrainment Characterization                    determination for each facility. EPA also
                                                     entrainment mortality, and to rely                      Study would include information                        expects the written explanation would
                                                     instead only on the BTA impingement                     already collected to meet current                      provide a review of the social costs (and
                                                     mortality controls, which would achieve                 § 122.21(r)(4) requirements. In addition,              not just the facility costs (see chapter 11
                                                     up to a 31 percent reduction in total                   under the new permit application                       of the EA) of the various technologies;
                                                     AEI. EPA has not selected this option as                requirements proposed for                              a review of the potential reductions in
                                                     the basis for national BTA because EPA                  § 122.21(r)(5)–(12), the facility would                entrainment and entrainment mortality;
                                                     believes that some facilities may be able               submit certain additional site-specific                and a review and analysis of monetized
                                                     to do more to control entrainment and                   information. This would include an                     and non-monetized benefits).
                                                     that requiring a structured site-specific               engineering study of the technical                        Under Option 1, new units at an
                                                     analysis of candidate BTA technologies                  feasibility and incremental costs of                   existing facility that withdraws more
                                                     for entrainment control will allow the                  candidate entrainment mortality control                than 2 MGD would have requirements
                                                     Director to determine where it is                       technologies. The facility would also                  similar to the requirements of a new
                                                     appropriate to require such controls.                   study, evaluate, and document: the                     facility in Phase I. Under this option,
                                                     However, one outcome of the site                        technical feasibility of technologies at a
                                                                                                                                                                    new units would be required to reduce
                                                     specific analysis may be that the                       minimum including closed-cycle
                                                                                                                                                                    flow commensurate with closed-cycle
                                                     Director would determine that no other                  cooling and fine mesh screens with a
                                                                                                                                                                    cooling for the new unit. Under the
                                                     technologies beyond impingement                         mesh size of 2 mm or smaller;
                                                     control meet the criteria for selection as              engineering cost estimates of all                      proposal, as with Track II of the Phase
                                                                                                                                                                    I rule, a facility could demonstrate
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                                                     BTA, because no other technologies are                  technologies considered; any outages,
                                                     feasible and/or their benefits do not                   downtime, or other impacts to revenue                  compliance with entrainment control
                                                     justify their costs. EPA requests                       along with a discussion of all reasonable              requirements by establishing reductions
                                                     comment on the option of basing                         attempts to mitigate these cost factors;               in entrainment mortality for the new
                                                     national BTA on impingement controls                    and a discussion of the magnitude of                   unit that are 90 percent of the
                                                     only and dropping the specific                          water quality and other benefits, both                 reductions that would be achieved by
                                                     requirement for a structured site-                      monetized and non-monetized, of the                    closed-cycle cooling.
                                                     specific analysis of entrainment BTA                    candidate entrainment mortality
                                                     options, as discussed below.                            reduction technologies evaluated.


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                                                     22206                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     2. Option 2—Impingement Mortality                       demonstrate flow reductions                            4. Option 4—Uniform Impingement
                                                     Controls at All Existing Facilities That                commensurate with closed-cycle                         Mortality Controls at Existing Facilities
                                                     Withdraw Over 2 MGD DIF; Require                        cooling based on optimized wet cooling                 With Design Intake Flow of 50 MGD or
                                                     Flow Reduction Commensurate With                        towers.                                                More; BPJ Permits for Existing Facilities
                                                     Closed-Cycle Cooling by Facilities                         As part of this option, EPA would                   With Design Intake Flow Between 2
                                                     Greater Than 125 MGD DIF and at New                                                                            MGD and 50 MGD DIF; Uniform
                                                                                                             provide flexibility to the Director to
                                                     Units at Existing Facilities                                                                                   Entrainment Controls for All New Units
                                                                                                             establish compliance timelines for each
                                                        Under Option 2, all in-scope existing                                                                       at Existing Facilities
                                                                                                             existing facility to mitigate grid
                                                     facilities would be required to achieve                 reliability and local electricity                         Under Option 4, only in-scope
                                                     the numeric impingement mortality                       reliability. Under this option, most                   existing facilities with a design intake
                                                     limits described in Option 1 above. In                  existing facilities would have no more                 flow of 50 MGD or more would be
                                                     addition, this option would require flow                than 10 years to complete the retrofit to              required to comply with uniform
                                                     reduction commensurate with closed-                     closed-cycle cooling. Under this option                national impingement regulatory
                                                     cycle cooling by facilities greater than                                                                       requirements as described in Option 1
                                                                                                             the Director would determine when and
                                                     125 MGD DIF and at new units. Option                                                                           above. In-scope facilities with a design
                                                                                                             if any such schedule for compliance is
                                                     2 explores using the facility size, in                                                                         intake flow less than 50 MGD would not
                                                                                                             necessary, and if the facility is
                                                     terms of design intake flow (DIF), as a                                                                        be subject to the national impingement
                                                     factor for establishing different BTA for               implementing closed-cycle as soon as                   requirements in today’s proposed rule
                                                     different subcategories. EPA’s analysis                 possible. This provision would give the                but would continue to have their 316(b)
                                                     shows that a DIF of 125 MGD would be                    Director the discretion to provide                     permit requirements established on a
                                                     an appropriate threshold for this                       nuclear facilities with no more than 15                case-by-case, best professional judgment
                                                     purpose; see Section V. For all facilities              years to complete the retrofit, because                basis. In the case of an existing facility
                                                     that withdraw over 2 MGD but less than                  all nuclear facilities are baseload                    below 50 MGD that adds a new unit, the
                                                     or equal to 125 MGD DIF, entrainment                    generating units and the additional                    flow associated with the new unit
                                                     controls would be determined by the                     flexibility in timelines would further                 would be subject to the uniform
                                                     permitting authority on a case-by-case                  mitigate energy reliability, and because               entrainment requirements based on
                                                     basis taking into account the factors at                the retrofits at these types of facilities in          closed cycle cooling. Finally, all
                                                     a particular facility. Facilities greater               particular involve additional                          existing facilities withdrawing in excess
                                                     than 125 MGD DIF would not submit                       complexities and safety issues. The                    of 2 MGD of design intake flow would
                                                     Entrainment Characterization Studies                    Director would have the discretion to                  be subject to entrainment controls
                                                     (because under this option this rule                    provide manufacturing facilities with no               established on a site-specific basis.
                                                     would have already determined that                      more than 15 years to complete the                        EPA considered additional
                                                     closed cycle is BTA for that facility), but             retrofit due to the complexity of                      thresholds, subcategories, and other
                                                     all facilities would still submit                       manufacturing facilities, multiple                     factors to explore other options; see
                                                     § 122(r)(2)–(r)(7) to the Director to                   process units and product lines, and to                Chapter 7 of the TDD for more
                                                     inform the BTA determination as                         allow consideration of production                      information. In particular, EPA
                                                     described in Option 1. Requirements for                 schedules in setting such a timeline.                  considered an approach that required
                                                     new units at an existing facility would                                                                        impingement mortality controls only,
                                                     be the same as described in Option 1.                   3. Option 3—Establish Impingement                      but is not proposing such an approach
                                                        EPA also considered a variation of                   Mortality Controls at All Existing                     because it would only address one-third
                                                     this option that uses 125 MGD Actual                    Facilities That Withdraw Over 2 MGD                    of the mortality due to impingement and
                                                     Intake Flow (AIF) rather than 125 MGD                   DIF; Require Flow Reduction                            entrainment on a nationwide basis and
                                                     Design Intake Flow (DIF) as the                         Commensurate With Closed-Cycle                         EPA believes there is value in the
                                                     threshold. Setting the threshold at 125                 Cooling at All Existing Facilities Over 2              structured site-specific entrainment
                                                     MGD AIF would allow a Permit Director                   MGD DIF                                                BTA determination required in Option
                                                     to treat differently those facilities that                                                                     1. As discussed in Section VI.E, EPA is
                                                     are above 125 MGD on a DIF basis but                       Under this option, all in-scope                     aware of technologies that can further
                                                     below 125 MGD on an AIF basis relative                  existing facilities would be required to               reduce entrainment mortality for some
                                                     to today’s Option 2. EPA traded off                     achieve numeric impingement mortality                  facilities. EPA also considered an
                                                     introducing more flexibility at those                   limits as described in Option 1 above.                 approach that would establish both
                                                     facilities for simplicity of                            In addition, this option would require                 impingement and entrainment mortality
                                                     implementation (DIF is static), but                     flow reduction commensurate with                       requirements on a case-by-case basis
                                                     solicits comment on both the threshold                  closed-cycle cooling by all facilities                 taking into account the factors at a
                                                     and the flow basis for this option.                     (including new units at existing                       particular facility, but is not proposing
                                                        The technology basis for entrainment                 facilities) as described in Option 2. This             such an approach because there are low-
                                                     mortality controls for facilities greater               option would similarly authorize the                   cost technologies for impingement
                                                     than 125 MGD DIF under this option                      Director to establish compliance                       mortality that are available, feasible, and
                                                     would be wet cooling towers as                                                                                 demonstrated for facilities on a national
                                                                                                             timelines for each existing facility to
                                                     described in Section VI.B. The record                                                                          basis. EPA requests comment on these
                                                                                                             mitigate grid reliability and local
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                                                     shows optimized wet cooling towers                                                                             and the other approaches discussed in
                                                                                                             electricity reliability as described in
                                                     achieve flow reductions of 97.5 percent                                                                        Chapter 7.
                                                     and 94.9 percent for freshwater and                     Option 2 above. Requirements for new
                                                     saltwater sources, respectively.                        units at an existing facility would be the             E. Option Selection
                                                     Optimized operation of wet cooling                      same as described in Option 1.                           EPA is proposing Option 1 as best
                                                     towers would be demonstrated through                                                                           technology available for minimizing
                                                     flow monitoring and conductivity                                                                               adverse environmental impact under
                                                     measurements. Alternatively, this                                                                              section 316(b) of the CWA. As
                                                     option would allow facilities to                                                                               previously explained, in evaluating


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                                                     technologies that reduce impingement                    may permissibly consider the benefits,                 existence values for threatened and
                                                     or entrainment mortality as the possible                both quantitative and qualitative,                     endangered species, secondary and
                                                     basis for section 316(b) requirements,                  derived from reductions in the adverse                 tertiary ecosystem impacts, benthic
                                                     EPA assessed a number of different                      environmental impacts associated with                  community impacts, shellfish impacts
                                                     technologies. Based on this technology                  cooling water intake structures and the                and the impacts arising from reductions
                                                     assessment, EPA concluded that closed-                  costs of achieving them and determine                  in thermal discharges that would be
                                                     cycle cooling reduces impingement and                   the extent of reductions warranted                     associated with closed cycle. Changes in
                                                     entrainment mortality to the greatest                   under the circumstances. Further, E.O.                 fish assemblages due to impingement,
                                                     extent.                                                 13563 directs agencies, to the extent                  entrainment and thermal effects are also
                                                       But EPA has determined that closed                    permitted by law, to propose or adopt a                not fully valued. These categories of
                                                     cycle cooling is not the ‘‘best technology              regulation only upon a reasoned                        benefits that are not fully valued are
                                                     available’’ for this proposal. After                    determination that its benefits justify its            often referred to as non-use benefits:
                                                     considering all of the relevant factors,                costs (recognizing that some benefits                  those benefits people derive absent a
                                                     EPA proposes that it should not                         and costs are difficult to quantify). E.O.             use or activity, such as fishing; the value
                                                     establish a uniform BTA entrainment                     13563, Sec. 1(b)(1).                                   one places on knowing that an aquatic
                                                     standard based on closed-cycle cooling                    Pursuant to the principles spelled out               ecosystem is healthy is a non-use value.
                                                     for existing facilities other than for new              in the Executive Order, EPA has                        Non-use benefits could be more
                                                     units. Instead, for existing facilities                 assessed costs and benefits for its                    completely evaluated than they have
                                                     other than new units, EPA is proposing                  proposed regulatory option and has                     been to date. EPA intends to
                                                     that the permitting authority should                    reasonably determined that the benefits                characterize these benefits more fully
                                                     establish BTA entrainment mortality                     of its proposed rule justify the costs.                through the use of a stated preference
                                                     controls on a site-specific basis. Site-                EPA has analyzed the social cost of this               survey of the general population and
                                                     specific proceedings are the appropriate                rule to be $384 million annually. New                  will consider the results of this survey
                                                     forum for weighing all relevant                         unit requirements would cost $15                       analysis in development of the final
                                                     considerations in establishing BTA                      million per year. As will be described in              rule. Although not discussed in this
                                                     entrainment mortality controls as                       more detail below, there are significant               preamble, EPA also conducted an
                                                     discussed in section F below.                           benefits associated with the proposed                  alternative benefits analysis that is
                                                       EPA proposes to reject closed-cycle                   rule. These benefits include the annual                suggestive of the potential for a more
                                                     cooling as the basis for national                       reduction in impingement of 615                        complete analysis to result in monetary
                                                     entrainment controls and choose an                      million age-one equivalents. In addition,              benefits that are much more in line with
                                                     option under which the permitting                       there are important other benefits that                social costs (see chapter 9 of the EEBA).
                                                     authority would establish entrainment                   EPA was not able to fully quantify such                These factors all lend further support to
                                                     controls on a site-specific basis after                 as reductions in impingement and                       EPA’s conclusion that benefits
                                                     considering specified factors. EPA                      entrainment at new units, impacts to                   associated with the proposal justify its
                                                     concluded that closed-cycle is not the                  many shellfish species, and non-use                    costs.
                                                     best technology available for                           values associated with the vast majority                  EPA is proposing that the permitting
                                                     minimizing adverse environmental                        of fish and shellfish. The rule would                  authority would consider social costs
                                                     impact on a national basis. The record                  also require establishing site-specific                and benefits on a site specific basis in
                                                     shows that closed-cycle cooling is not                  entrainment control through a process                  establishing entrainment mortality
                                                     practically feasible in a number of                     in which specific environmental                        controls. This approach is consistent
                                                     circumstances. While EPA cannot                         conditions and the localized benefits of               with the direction of E.O. 13563 and
                                                     identify with precision the extent of                   entrainment reductions will be assessed                supported by several considerations.
                                                     these limitations on installation on                    along with the costs of controls. The                     On the basis of currently available
                                                     closed-cycle on a nation-wide basis,                    information generated in the required                  information, a national evaluation of
                                                     EPA knows that the circumstances are                    studies would enhance the transparency                 benefits no matter how accurate would
                                                     not isolated or insignificant. In light of              of decision-making, and the opportunity                necessarily fail to account for the
                                                     this, EPA decided that it should not                    for meaningful public participation and                variations in benefits from location to
                                                     establish closed-cycle cooling as the                   ensure decision-making based on the                    location. A national assessment would
                                                     presumptive BTA entrainment control.                    best available data. Overall, these                    tend to mask variations in benefits and
                                                     Instead, entrainment controls should be                 requirements will foster protection and                costs from different geographical
                                                     determined in a site-specific setting                   restoration of healthy aquatic                         locations for different water bodies.
                                                     where the opportunity for local                         ecosystems that have important                         Thus for example, some fish species at
                                                     community input in decision-making                      commercial, recreational, aesthetic and                coastal facilities have biological
                                                     process will be maximized.                              cultural values to their surrounding                   spawning attributes that differ from
                                                       Four factors, in particular, led EPA,                 communities. Many of the benefits that                 those at other locations. The proportion
                                                     for this proposal, to reject a uniform                  would result from the rule are not                     of the receiving water withdrawn for
                                                     standard based on closed-cycle cooling                  quantified, and as a result the Agency’s               cooling may also vary among sites. The
                                                     and illustrate why site-specific standard               quantitative benefits analysis                         values that communities place on their
                                                     setting is the proper approach here.                    underestimates the totality of the rule’s              resources may vary from site to site. As
                                                     These factors are energy reliability, air               benefits. Based on the record, EPA has                 a consequence, for example, one
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                                                     emissions permits, land availability, and               determined that the proposed                           ecological environment may experience
                                                     remaining useful plant life. Further                    impingement and entrainment mortality                  large masses of hardier eggs subject to
                                                     explanation is provided below as to why                 controls will result in benefits that                  potential entrainment while another
                                                     these factors support establishing BTA                  justify the costs of the rule.                         will have fewer but less hardy eggs
                                                     entrainment mortality control on a site-                  EPA would also note that its valuation               susceptible to entrainment. The
                                                     specific basis as discussed in section F                of the benefits is not yet complete. For               resulting differences in the value of
                                                     below.                                                  example, EPA’s analysis does not fully                 reduced entrainment—which may be
                                                       As noted, the Supreme Court in its                    quantify or monetize certain potentially               dramatic for some sites—necessarily
                                                     Entergy decision determined that EPA                    important categories of benefits, such as              disappear in a national aggregation of


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                                                     22208                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     results. The Agency has decided this                    DIF less than 50 MGD. Unlike the Phase                 Furthermore, it may be difficult or
                                                     masking of variation in benefits                        III determination, Option 4 would not                  impossible to obtain air permits for
                                                     supports a requirement to consider the                  rely on BPJ for new units at existing                  cooling towers at existing facilities
                                                     localized benefits of entrainment control               facilities or manufacturing facilities                 located in nonattainment areas or
                                                     technologies in the site-specific process               with DIF greater than 50 MGD. This is                  attainment areas with maintenance
                                                     to establish entrainment mortality                      consistent with the recommendations of                 plans. Third, EPA has identified land
                                                     controls.                                               the Small Business Advocacy Review                     availability concerns that might limit
                                                        Today’s proposed rule establishes                    Panel for the Phase III rule, which noted              the feasibility of the installation of
                                                     requirements based on closed-cycle                      that an applicability threshold in the                 cooling towers on a site-specific basis.
                                                     cooling for new units added to an                       range of 20 to 50 MGD would remove                     Finally, EPA concluded that there are
                                                     existing facility that are not a ‘‘new                  a significant number of Phase III                      circumstances in which construction
                                                     facility’’ as defined at § 125.83. The                  facilities, but only a small percent of                and installation of cooling towers might
                                                     requirements for new units are                          flow, from coverage under national                     not be warranted given the remaining
                                                     essentially the same as the requirements                requirements, and recommended that                     useful life of a particular facility. How
                                                     for a new facility in the Phase I rule.                 EPA analyze a range of potential                       all of these factors support the Agency’s
                                                        EPA also considered a variation of                   thresholds, particularly those between                 conclusion that site-specific, not
                                                     Option 1 that would exclude existing                    20 and 50 MGD. EPA is also aware of                    national, entrainment controls for most
                                                     facilities (except existing facilities that             concerns that even though Option 1 by                  existing facilities except those installing
                                                     add a new unit) with a design intake                    itself does not have a significant adverse             new units is discussed in detail below.
                                                     flow under 50 MGD from the national                     impact on a substantial number of small
                                                     impingement mortality requirements of                                                                          1. Energy Reliability Should Be
                                                                                                             entities, many of the small entities
                                                     today’s proposal (Option 4). These                                                                             Considered on a Localized Basis
                                                                                                             affected by the rule, particularly those
                                                     smaller facilities would continue to be                 in the electric power sector, are subject                 During EPA’s site visits, several urban
                                                     permitted on a case-by-case, best                       to cumulative impacts from a number of                 areas were identified where the existing
                                                     professional judgment basis for both                    other major regulations that will likely               transmission system would not be able
                                                     impingement and entrainment controls.                   have to be implemented in the same                     to transfer sufficient electricity during
                                                     Under this option, 98.9 percent of the                  time frame as this rule. For the final                 periods of extended downtime. This
                                                     monetized benefits of Option 1 are                      rule, EPA will also evaluate the relative              limitation to reliability occurs even
                                                     realized. In addition, almost all small                 costs and benefits of Option 4, once it                when a surplus of electricity can be
                                                     businesses would be excluded from the                   has more complete benefits information,                generated within the same NERC region.
                                                     impingement requirement of the                          including results from its WTP Survey                  For example, EPA identified localized
                                                     national rule, thereby reducing impacts                 on impacts to fish populations. EPA                    circumstances in Los Angeles and
                                                     of the national rule to small businesses.               solicits comment on Option 4 and the                   Chicago where an extended outage of
                                                     The cost of Option 4 would result in                    impacts, including the cumulative                      one or more generating units could not
                                                     savings of $57 million over Option 1.                   impacts of today’s proposal on small                   be readily replaced by excess capacity
                                                        EPA rejected Option 4 for the                        entities generally. EPA also requests                  in nearby areas. Currently available
                                                     proposal as BTA because EPA found                       comment on whether, if Option 4 were                   models are not able to predict localized
                                                     that Option 1 is available, feasible, and               adopted for the final rule, it should                  impacts, and instead are limited to
                                                     demonstrated for all in-scope facilities                include uniform national requirements                  measures of reserve capacity in broader
                                                     on a national basis. Moreover, EPA                      for new units at existing facilities with              geographic regions. This uncertainty
                                                     analysis showed that economically                       DIF less than 50 MGD based on closed-                  about the extent and likelihood of local
                                                     Option 1 does not have a significant                    cycle cooling.                                         reliability impacts is an important
                                                     impact on a substantial number of small                                                                        consideration in the decision to propose
                                                     entities, including those that would be                 F. Four Factors Support EPA’s Decision                 requiring site-specific development of
                                                     exempted from the national                              To Establish Site-Specific BTA                         section 316(b) entrainment
                                                     impingement mortality controls under                    Entrainment Controls for Existing                      requirements.
                                                     Option 4. Of the 13 full-facility closures              Facilities                                                One approach EPA could have
                                                     discussed below in Section VII, none are                  The four key factors that support                    adopted in today’s proposed rule would
                                                     predicted to be small businesses.                       determining entrainment mortality                      have been to establish a uniform
                                                     Additionally, the analysis performed                    controls on a site-specific basis (except              entrainment requirement and then to
                                                     under the Regulatory Flexibility                        with respect to new units) and rejecting               address these local reliability concerns
                                                     Analysis showed that under Option 1,                    Options 2 and 3 are energy reliability,                by providing permitting authorities the
                                                     five to six small entities would incur                  increased air emissions, land                          flexibility to establish extended
                                                     costs exceeding 1 percent of revenue                    availability, and remaining useful life.               compliance timelines (i.e., 10 to 15
                                                     and 3 small entities would incur costs                  First, EPA recognized that there may be                years) (see Option 2). This would have
                                                     exceeding 3 percent of revenue. As                      potential adverse consequences to the                  allowed facilities to develop more
                                                     percentages of the estimated total of                   reliability of energy delivery on the                  workable construction schedules with
                                                     small in-scope entities (56–96 small in-                local level from the installation of                   their permit writers and coordinate with
                                                     scope entities, see above), these small                 cooling towers. Second, EPA also is                    NERC to schedule installation down
                                                     entities represent 5–13 percent of small                aware that increased air emissions may                 times accounting for generating supply
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                                                     in-scope entities at the 1 percent of                   be associated with increased                           reliability needs. This approach would
                                                     revenue threshold, and 3–5 percent of                   combustion of fossil fuel as the result of             have been consistent with EPA’s
                                                     small in-scope entities at the 3 percent                installation of closed cycle cooling, and              assessment that, at the national level
                                                     of revenue threshold.                                   additional PM formulation associated                   (rather than local level), closed-cycle
                                                        Option 4 is similar to the final                     with plume drift (even with plume                      cooling would not pose material energy
                                                     determination with respect to the Phase                 abatement technology). These increased                 reliability consequences; see EA for
                                                     III rule, which relied on BPJ to                        air emissions have human health,                       more information. EPA was concerned
                                                     determine impingement and                               welfare, and global climate change                     that such a flexible approach, however,
                                                     entrainment BTA for all facilities with                 impacts which must be considered.                      would not resolve all local reliability


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                    22209

                                                     concerns, because currently available                   cooling tower, there are plume                         solutions when faced with limited
                                                     information is not adequate to establish                abatement and drift eliminator                         available land. EPA attempted to
                                                     either the extent or significance of                    technologies that may address this                     determine a threshold of land (for
                                                     possible electric reliability concerns.                 concern (and EPA has included costs for                example, one option explored a
                                                        These same concerns would not apply                  such technologies in its analysis of                   threshold of approximately 160 acres
                                                     in the case of the installation of new                  Options 2 and 3). However, emissions                   per GW) below which a facility could
                                                     units because of the smaller nature of                  may not be eliminated entirely. EPA                    not feasibly install cooling towers.
                                                     such projects and the availability of                   expects most effects of PM from cooling                While EPA originally estimated as many
                                                     options like seasonal operation and                     tower emissions would be so localized                  as 23 percent of facilities would not
                                                     portable cooling towers to address the                  as to be wholly on the facility’s                      have enough space,54 EPA found some
                                                     flow reduction requirements. Since the                  property. (See DCN 10–6954.) EPA                       facilities with a small parcel of land
                                                     unit is not yet online, the potential for               recognizes this is separate from PM                    were still able to install closed-cycle
                                                     local energy reliability to be                          emissions from the stack as a result of                cooling by engineering creative
                                                     compromised is minimal; also, local                     increased fuel usage. In addition,                     solutions. On the other hand, EPA
                                                     energy reliability is likely improved                   plumes of water vapor from the cooling                 found that some facilities with large
                                                     with the addition of the new unit, even                 tower may cause safety issues due to                   acreage still could not feasibly install
                                                     if older units are later retired.                       icing of nearby roadways, and visibility               cooling towers due to local zoning or
                                                     2. Increased Air Emissions Could Be a                   constraints for facilities located near an             other local concerns. In conjunction
                                                     Factor on a Local Basis                                 airport. EPA’s review of emissions data                with setback distances to mitigate noise
                                                                                                             from E–GRID (year 2005) suggests that                  and plume abatement (based on GPS
                                                        As previously discussed, closed-cycle                impacts from other pollutants will be                  mapping of residential areas), EPA
                                                     cooling would result in increased air                   less significant, but on a localized basis             estimates as many as 25 percent of
                                                     emissions of various pollutants,                        these could still be significant. They                 facilities may have one or more
                                                     including particulates, sulfur dioxide,                 include human health, welfare, and                     constraints on available space that
                                                     nitrogen oxides, mercury, and                           global climate change impacts                          would limit retrofit of cooling towers for
                                                     greenhouse gases, among others.52 As a                  associated with a variety of pollutant                 the entire facility or would result in
                                                     result of the installation of closed-cycle              that are emitted from fossil fuel                      increased compliance costs. At this
                                                     cooling structures, fossil-fueled facilities            combustion generally. EPA is not able to               time, EPA lacks adequate data to better
                                                     would need to burn additional fuel                      quantify the frequency with which                      analyze how land constraints can be
                                                     (thereby emitting additional PM, CO2,                                                                          accommodated at existing facilities.
                                                                                                             facilities may experience these local
                                                     SO2, NOX, and Hg). There are two                                                                                  In contrast, for new units, because the
                                                                                                             impacts, and therefore EPA believes a
                                                     reasons for this: (1) To compensate for                                                                        amount of space dedicated to closed-
                                                                                                             site-specific assessment must be
                                                     energy required to operate cooling                                                                             cycle would be limited to the new unit
                                                                                                             conducted to fully address such local
                                                     towers, and (2) slightly lower generating                                                                      rather than the entire facility, space
                                                                                                             impacts.
                                                     efficiency attributed to higher turbine                    EPA believes that emissions are less                constraints would be much less of an
                                                     backpressure. In contrast to retrofits,                 of a concern at new units. The                         issue. New units also pose the
                                                     new units can have their cooling water                  condensers can be optimized for closed-                opportunity to properly design an
                                                     intake systems optimized for cooling                                                                           optimized closed-cycle cooling system
                                                                                                             cycle, reducing energy requirements,
                                                     towers, reducing the size of the cooling                                                                       for the new unit. Retrofitting an existing
                                                                                                             and high efficiency cooling towers can
                                                     towers, increasing their efficiency, and                                                                       facility would require a facility to
                                                                                                             be incorporated into the design of the
                                                     reducing energy requirements (see                                                                              identify (or possibly obtain) enough
                                                                                                             new unit, potentially allowing for
                                                     Section VI.E).                                                                                                 acres to accommodate the cooling
                                                        The impact of the increased emissions                installation of smaller cooling towers.
                                                                                                             Turbine backpressure and the associated                towers and their tie-in. By not uniformly
                                                     varies based on the local circumstances.                                                                       requiring facilities to retrofit to closed-
                                                     The increased emissions may consist of                  energy penalty can be eliminated in a
                                                                                                             new unit. However, new units will still                cycle, EPA has determined that more
                                                     cooling tower emissions, stack                                                                                 land is available for new unit
                                                     emissions from increased fuel usage,                    have a parasitic energy penalty.
                                                                                                             Therefore energy penalties and air                     construction, especially in light of
                                                     and plumes of water vapor. EPA’s                                                                               compact design and more efficient use
                                                     analysis suggests that the most                         emissions for tower operations can be
                                                                                                             minimized but not eliminated. The                      of limited resources. Furthermore, new
                                                     significant impacts will be specifically                                                                       units and their corresponding cooling
                                                     for PM2.5, which, in addition to                        effects of requiring closed cycle cooling
                                                                                                             at new units of existing facilities is                 system can be built in stages rather than
                                                     increased mortality and morbidity, may                                                                         as a facility-wide retrofit.
                                                     result in a facility having difficulty in               similar to the effects of this requirement
                                                                                                                                                                       While EPA has concluded that space
                                                     obtaining air permits in those localities               at new facilities and would not pose an
                                                                                                                                                                    constraints would not foreclose the
                                                     in non-attainment for PM2.5 because of                  unacceptable impact. See the TDD for
                                                                                                                                                                    installation of closed cycle cooling for
                                                     the need to identify offsets to its                     more information.
                                                                                                                                                                    new units at existing facilities, EPA has
                                                     emissions. EPA notes that while there is                3. Land Availability Could Be A Factor                 concerns about whether, on a national
                                                     the potential for increases in PM (e.g.,                on a Localized Basis                                   basis, physical geography would
                                                     salt drift) in the vicinity of any wet                     While EPA’s record indicated that the               constrain the full retrofit of closed-cycle
                                                                                                             majority of facilities have adequate                   cooling to existing facilities. Under the
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                                                        52 EPA recognizes that retrofitting closed cycle

                                                     cooling could be combined with other energy             available land for placement of cooling                  54 EPRI reported at least 6 percent of sites
                                                     efficiency or pollution control technologies with the   towers,53 some facilities do have                      evaluated were deemed ‘‘infeasible’’ on the basis
                                                     net effect of reducing air emissions; however,          feasibility constraints. Based on site                 that no space was available on which to locate a
                                                     facilities could (and may well have to under other      visits, EPA has found that several                     cooling tower. (DCN 10–6951) While EPA does not
                                                     rules) install such technologies anyway, without                                                               have access to the facility level data, and is
                                                     converting to closed cycle cooling as well.             facilities have been able to engineer                  therefore unable to confirm the infeasibility
                                                     Comparing closed-cycle cooling to once-through                                                                 analysis, EPRI’s report supports EPA’s assertion that
                                                     cooling with all other technologies held constant,        53 In the case of fossil fuel plants, scrubber       there is significant uncertainty around space
                                                     there is an energy penalty that would lead to greater   controls may also be newly required to comply with     constraints for facilities to install closed-cycle
                                                     air emissions.                                          air rules and standards.                               cooling.



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                                                     22210                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     circumstances, EPA decided not to                       local differences and argues for site-                 thinks that similar decisions would be
                                                     propose uniform entrainment standards                   specific evaluations.                                  able to be made under this proposed
                                                     for all existing facilities based on                       As a result, EPA proposes that closed-              rule.
                                                     closed-cycle cooling. Instead, EPA has                  cycle cooling for all existing units is not               The proposal would require that the
                                                     determined that it should establish a                   BTA on a national basis, except for new                facility’s permit application must
                                                     process for site-specific determination                 units at existing facilities.                          include the following information: The
                                                     of entrainment controls. Site-specific                     EPA has decided to propose Option 1                 facility would submit an engineering
                                                     proceedings would provide the                           as the basis for national performance                  study of the technical feasibility and
                                                     opportunity to address these issues,                    standards that represent the ‘‘best                    incremental costs of candidate
                                                     along with the other factors discussed in               technology available’’ for cooling water               entrainment mortality control
                                                     this preamble in determining which                      intake structures at existing facilities.              technologies. The facility would also
                                                     additional entrainment mortality                        EPA proposes that a uniform national                   study, evaluate, and document: the
                                                     controls, if any, are appropriate.                      impingement standard coupled with                      technical feasibility of technologies at a
                                                                                                             entrainment controls determined on a                   minimum including closed-cycle
                                                     4. Remaining Useful Plant Life Could Be                 site-specific basis represents the best                cooling and fine mesh screens with a
                                                     a Factor on a Facility Basis                            technology available for minimizing the                mesh size of 2 mm or smaller;
                                                        Many facilities are nearing the end of               adverse environmental impacts                          engineering cost estimates of all
                                                     their useful life. Considering the long                 associated with intake structures. EPA’s               technologies considered; any outages,
                                                     lead time to plan, design, and construct                proposed decision to reject a single                   downtime, or other impacts to revenue
                                                     closed-cycle cooling systems such as                    uniform national entrainment standard                  along with a discussion of all reasonable
                                                     wet cooling towers, EPA proposes that                   is based on closed-cycle cooling not                   attempts to mitigate these cost factors;
                                                     the permit authority should be given the                being the ‘‘best technology available’’ on             and a detailed discussion of the
                                                     latitude to consider the remaining                      a national basis and not warranted                     magnitude of water quality benefits,
                                                     useful plant life in establishing                       under the circumstances. This proposed                 both monetized and non-monetized, of
                                                     entrainment mortality standards for that                decision flowed from EPA’s                             the candidate entrainment mortality
                                                     facility. The remaining useful plant life               consideration of the factors described                 reduction technologies evaluated.
                                                     along with other site-specific                          above and its conclusion that                          Finally, the study must include a
                                                                                                             determination of BTA for entrainment                   detailed discussion of the changes in
                                                     information, would affect the evaluation
                                                                                                             through a process that allowed full and                non-water quality factors attributed to
                                                     of the benefits (non-monetized and
                                                                                                             site-specific assessment of these factors              technologies and/or operational
                                                     monetized) of closed-cycle at a
                                                                                                             with respect to candidate entrainment                  measures considered, including but not
                                                     particular facility. For example, closed-
                                                                                                             controls including closed-cycle cooling                limited to increases and decreases in the
                                                     cycle at a facility that is going to shut
                                                                                                             represented the most appropriate course                following: energy consumption; thermal
                                                     down in 3 years would not result in the
                                                                                                             here.                                                  discharges; air pollutant emissions
                                                     benefits that a facility that would
                                                                                                                                                                    including particulates and their health
                                                     continue to operate for 20 years.                       H. Implementation
                                                                                                                                                                    and environmental impacts; noise;
                                                     Because of this factor, EPA proposes                      EPA’s proposal would require a site-                 safety (e.g., visibility of cooling tower
                                                     that requiring closed-cycle cooling                     specific determination of BTA. In that                 plumes, icing); grid reliability, and
                                                     should be evaluated on a facility-                      process, the permit writer would have                  facility reliability. See Section IX for a
                                                     specific basis, arguing against a uniform               access to all the information necessary                thorough discussion of these study
                                                     national entrainment mortality                          for an informed decision about which                   requirements.
                                                     standard.                                               additional technology to reduce                           Certain facilities would submit an
                                                        This is obviously not an issue for new               entrainment mortality, if any, is BTA,                 Entrainment Characterization Study
                                                     units. A new unit has its full useful life              including a full consideration of                      including an entrainment mortality data
                                                     before it and thus would experience the                 whether the benefits justify the costs.                collection plan that would indicate, at a
                                                     maximum possible entrainment                              The adoption of the proposed Option                  minimum, the specific entrainment
                                                     mortality reductions throughout that                    1 approach of site-specific BTA                        monitoring methods, taxonomic
                                                     useful life. Considering this factor, EPA               entrainment decisions will result in one               identification, latent mortality
                                                     is proposing that new units be treated                  of two outcomes at any facility: BTA is                identification, documentation of all
                                                     the same as new facilities. EPA believes                an entrainment mortality technology                    methods, and quality assurance/quality
                                                     this factor, along with the other factors               beyond what the facility has already                   control procedures for sampling and
                                                     discussed above, indicates that it is                   installed (this may include closed cycle               data analysis appropriate for a
                                                     reasonable to require new units to meet                 cooling or other technologies, see                     quantitative survey. EPA would also
                                                     entrainment mortality requirements                      Section VI.B and C), or BTA requires no                require peer review of the entrainment
                                                     based on closed-cycle cooling.                          additional controls for entrainment                    mortality data collection plan. Peer
                                                     G. The Process for Establishing Site-                   mortality. Thus, EPA expects that,                     reviewers would be selected in
                                                     Specific BTA Entrainment Controls                       under the proposed approach, there will                consultation with the Director who may
                                                                                                             be additional entrainment controls for                 consult with EPA and Federal, State,
                                                        EPA believes that the factors                        some facilities and none for others.                   and Tribal fish and wildlife
                                                     discussed above support establishment                     EPA notes that in a number of areas                  management agencies with
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                                                     of BTA entrainment requirements on a                    of the country (California, Delaware,                  responsibility for fish and wildlife
                                                     site-specific basis and counsels against                New York and New England; see, e.g.,                   potentially affected by the cooling water
                                                     establishing a national rule based on a                 DCNs 10–6963 and 10–6841, as well as                   intake structure(s). Further, facilities
                                                     single BTA technology for entrainment                   EPA Region I’s Brayton Point),                         with greater than 125 MGD AIF must
                                                     controls. In addition, there are other                  permitting authorities have already                    complete an Entrainment
                                                     factors that also support site-specific                 required or are considering requiring                  Characterization Study (ECS). The ECS
                                                     decision-making. Thus, as noted, for                    existing facilities to install closed-cycle            could include information already
                                                     example, a national weighing of cost                    cooling operations. EPA supports those                 collected to meet current § 122.21(r)(2)–
                                                     and benefits tends to mask important                    state efforts and determinations and                   (r)(4) requirements. With the


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                                                                               Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                           22211

                                                     information in this study, the permit                      I. EPA’s Costing of the Preferred Option               Supreme Court in Entergy made clear,
                                                     writer will know more about potential                         For the purposes of this proposal,                  one factor that EPA may consider is the
                                                     entrainment mortality reductions. Data                     EPA has prepared an economic analysis                  costs and benefits associated with
                                                     from the ECS would also corroborate                        according to Executive Order 12866. For                various control options. That is, in
                                                     any through-plant entrainment survival                     the preferred option, this analysis                    setting standards, EPA may consider the
                                                     study results from Performance Studies                     incorporates the full costs and partially              benefits derived from reductions in the
                                                     conducted in 122.21(r)(7). Data                            monetized benefits of impingement                      adverse environmental impacts
                                                     collected as part of the ECS would                         controls, including the costs of                       associated with cooling water intake
                                                     support the Benefits Valuation Study in                                                                           structures and the costs of achieving the
                                                                                                                conducting the entrainment
                                                     122.21(r)(11) by parsing entrainment                                                                              reductions. As previously explained,
                                                                                                                characterization studies. There may be
                                                     mortality, for example, by recreational/                                                                          EPA has determined that the benefits of
                                                                                                                additional costs and benefits associated
                                                     commercial species and those species                                                                              the proposed rule justify its costs. In
                                                                                                                with reductions in entrainment
                                                     that are strictly forage species,55 by                                                                            addition, EPA has explained why
                                                                                                                mortality that result from the Director’s
                                                     species most susceptible to thermal                                                                               consideration of costs and benefits is
                                                                                                                BTA entrainment determinations.
                                                     effects (including thermal barriers), and                                                                         also appropriate in the site-specific
                                                                                                                Because this process will play out over
                                                     by species of particular local or regional                                                                        permit setting when establishing
                                                                                                                the next 10 to 15 years as Directors
                                                     concern and threatened and endangered                                                                             entrainment controls.
                                                                                                                consider waterbody-specific data, local                   In the site-specific proceeding, the
                                                     species. EPA’s benefits estimate were                      impacts, and public comment, and
                                                     based on an extrapolation of available                                                                            permit writer would be required to
                                                                                                                weigh costs and benefits of further                    consider, among other factors,
                                                     I&E mortality studies; the specific                        entrainment reductions, air quality
                                                     entrainment characterization study                                                                                quantified and qualitative social
                                                                                                                impacts, grid reliability, and land                    benefits and social costs of available
                                                     conducted by a facility may lead to a                      availability, estimates of the costs of
                                                     different estimate of I&E mortality for                                                                           entrainment controls, including
                                                                                                                these site-specific determinations would               ecological benefits and benefits to any
                                                     that facility than its portion of EPA’s                    be highly speculative.
                                                     regional estimate in the analysis in                                                                              threatened or endangered species. The
                                                                                                                   For illustrative purposes, EPA                      permit writer would be able to reject
                                                     Section VIII.                                              analyzed two hypothetical outcomes for                 otherwise available entrainment
                                                        The purpose of the ECS is to better                     site-specific BTA determinations under                 controls if the costs of the controls are
                                                     understand, and thus help minimize,                        Option 1. EPA analyzed the cost of                     not justified by their associated benefits
                                                     the impact of entrainment on species of                    closed-cycle at the 76 largest fossil fuel             (taking into account both quantified and
                                                     concern. More specifically, the ECS                        plants withdrawing from tidal waters                   non-quantified benefits) as well as the
                                                     should identify species of concern that                    and arrived at an annual compliance                    other factors discussed in the proposed
                                                     may be entrained, and estimate their                       cost for these facilities of $762 million.             rule.
                                                     baseline mortality rates given current                     EPA also analyzed a variant on the                        In making the site-specific
                                                     entrainment controls. Moreover, the                        above scenario. EPA estimates this                     entrainment BTA determination, the
                                                     ECS should include as much                                 second scenario would involve 46                       proposal would require that the Director
                                                     information as practical about the                         facilities at an annual compliance cost                consider the information required under
                                                     aquatic ecosystem effects of entrainment                   of $480 million, assuming only baseload                § 122.21(r) to be submitted with the
                                                     mortality of species of concern. An                        and load following facilities would                    section 316(b) permit application.
                                                     understanding of the potential                             retrofit to closed-cycle cooling.                      Further, in the case of the larger cooling
                                                     ecosystem consequences of entrainment                         These hypothetical scenarios                        water intake structures (125 MGD AIF or
                                                     mortality for species of concern will                      illustrate the site-specific costs if a                greater), the proposed rule would
                                                     help inform decisions about permit                         significant number of facilities install               require submission of additional
                                                     requirements for additional technologies                   and operate a closed-cycle cooling                     information including, among other
                                                     and management practices. EPA will                         system. These scenarios assume                         things, studies on entrainment at the
                                                     endeavor to identify high quality                          facilities would install only closed-cycle             facility, the costs and feasibility of
                                                     examples of ECSs as they are completed,                    cooling and operate it year-round. This                control options, and information on the
                                                     and post them to the web site for this                     may represent an upper-bound cost for                  monetized and non-monetized benefits
                                                     rule as a resource for ECS preparation.                    those facilities. EPA also assumed that                of entrainment controls. In evaluating
                                                        Following the permit writer’s review                    cooling towers will be installed at fossil             benefits, the Director should not ignore
                                                     of this information, the permit writer                     fuel plants within 10 years. EPA is                    benefits that cannot be monetized and
                                                     must determine what BTA entrainment                        aware that there are other possible                    consider only the I&E reductions that
                                                     standard to propose and explain in                         scenarios for projecting which facilities              can be counted. The assessment of
                                                     writing the basis for the proposal. The                    might be required to install closed-cycle              benefits must take into account all
                                                     written explanation and the draft permit                   cooling or other entrainment mortality                 benefits, including categories such as
                                                     would then be available for comment                        technologies as a result of individual                 recreational, commercial and other use
                                                     from the interested public under the                       BTA determinations. Some of these                      benefits, benefits associated with
                                                     Permitting Authority’s normal                              would show lower or higher costs than                  reduced thermal discharges, reduced
                                                     permitting process. Therefore, EPA’s                       those presented here. EPA requests                     losses to threatened and endangered
                                                     proposed BTA standard would establish                      comment on other scenarios that might                  species, altered food webs, nutrient
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                                                     uniform requirements for impingement                       better capture the range of costs that                 cycling effects, and other nonuse
                                                     mortality and a process in which BTA                       result from the structured analysis of                 benefits. Merely because there is no
                                                     entrainment controls would be                              entrainment mortality BTA required by                  price tag on those benefits does not
                                                     determined on a site-specific basis.                       today’s proposed rule.                                 mean that they are not valuable.
                                                                                                                                                                          Under the proposal, the Director must
                                                                                                                J. Consideration of Cost/Benefit on a                  explain the basis for rejecting an
                                                       55 Distinctionsbetween predator and prey cannot          Site-Specific Basis                                    available technology not selected for
                                                     be made on the basis of species alone; the young
                                                     of some recreational and commercial species                  In establishing performance standards                entrainment control in light of the
                                                     function as forage fish.                                   for entrainment controls, as the                       submissions, with a consideration of the


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                                                     22212                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     same four factors that argued against a                    After considering all of the factors                options. The final part reviews the
                                                     uniform requirement for closed-cycle                    relevant to a particular site, the Director            economic impact of the regulatory
                                                     cooling. EPA expects that the Director’s                must establish appropriate entrainment                 options.
                                                     decision about BTA controls will also                   controls at those facilities. The Director
                                                                                                                                                                    A. Overview of Costs to Complying
                                                     reflect consideration of the costs and                  must review available control
                                                                                                                                                                    Facilities and Federal and State
                                                     benefits (monetized and non-monetized)                  technology and may reject otherwise
                                                     of the various control technologies                     available entrainment controls as BTA if               Governments
                                                     considered for the facilities.                          the social costs of the controls are not                  For estimating the total cost and
                                                        As noted, the permit writer may reject               justified by their social benefits (taking             economic impact of the regulatory
                                                     an otherwise available entrainment                      into account both quantified and non-                  options presented in this preamble, EPA
                                                     technology as BTA (or not require any                   quantified benefits) or if there are other             estimated costs associated with the
                                                     BTA controls) if the costs of the controls              adverse factors that cannot be mitigated               following cost components: Initial fixed
                                                     are not justified by the benefits. EPA                  that the Director deems unacceptable.                  and capital costs, annual operating and
                                                     decided to adopt this approach in                       As designed, EPA’s proposed                            maintenance costs, downtime costs,
                                                     determining site-specific entrainment                   requirement for the establishment of                   recordkeeping, monitoring, studies, and
                                                     controls because it is permissible under                site-specific BTA entrainment                          reporting costs. The cost estimates
                                                     Entergy and consistent with the more                    requirements strikes an appropriate                    reflect the incremental costs attributed
                                                     than 30-year history of section 316(b)                  balance between environmental                          only to today’s proposal. For example,
                                                     permitting decisions as well as E.O.                    improvements and costs by electively                   facilities with closed-cycle recirculating
                                                     13563.                                                  requiring closed-cycle cooling or other                systems would likely already meet all of
                                                        This history illustrates the role that               entrainment technologies at some                       the proposed performance standards,
                                                     cost/benefit considerations have played.                facilities, without requiring the same                 and therefore most facilities with
                                                     As early as 1977, EPA issued a                          technologies at all facilities.                        closed-cycle cooling would not incur
                                                     permitting decision and a General                                                                              costs to retrofit new technologies
                                                     Counsel opinion that explained that,                    VII. Economic Impact of the Proposed
                                                                                                             Rule                                                   (though such facilities would still incur
                                                     while Section 316(b) does not require a                                                                        some components of permitting costs).
                                                     formal cost-benefit analysis, the                          This section summarizes EPA’s                       EPA assumes, based on its technical
                                                     relationship of costs and benefits may                  analysis of the social cost and economic               survey data that most closed-cycle
                                                     be considered in 316(b) decision-                       impact for the following regulatory                    cooling systems operate with an intake
                                                     making. In re Pub. Serv. Co. of N.H.                    options: Option 1: Impingement                         velocity of less than 0.5 fps, and so
                                                     (Seabrook Station, Units 1 and 2), No.                  mortality (IM) limitations based on                    would comply with the impingement
                                                     76–7, 1977 WL 22370 (June 10, 1977),                    modified traveling screens for all                     BTA requirements. However, EPA
                                                     remanded on other grounds, 572 F.2d                     facilities with flow greater than 2                    recognizes a facility with closed-cycle
                                                     872 (1st Cir. 1978); accord In re Central               million gallons per day (MGD), closed                  cooling may incur additional costs to
                                                     Hudson Gas & Elec. Corp., Op. EPA                       cycle cooling or its equivalent for new                meet the proposed performance
                                                     Gen. Counsel, NPDES No. 63, 1977 WL                     units, and a site-specific determination               standards; some facilities with closed-
                                                     28250, at *8 (July 29, 1977). In the more               of entrainment BTA for all other                       cycle cooling were assumed to incur
                                                     than 30 years since then, EPA and state                 facilities: Option 2: Intake flow                      costs of modified screens with a fish
                                                     permitting authorities have considered                  commensurate with closed-cycle                         handling and return system. Because
                                                     the relationship between costs and                      cooling for facilities that have a design              EPA assumes the fish handling and
                                                     benefits to some extent in making                       intake flow of greater than 125 MGD and                return system would meet the
                                                     individual permitting decisions. See,                   IM limitations based on modified                       requirements to eliminate entrapment,
                                                     e.g., In re Pub. Serv. Co. of N.H.                      traveling screens for all facilities with              EPA has not included further costs for
                                                     (Seabrook Station, Units 1 and 2), No.                  flow greater than 2 MGD; Option 3:
                                                                                                                                                                    entrapment.
                                                     76–7, 1978 WL 21140 (E.P.A. Aug. 4,                     Intake flow commensurate with closed-                     For the economic analyses, EPA
                                                     1978), aff’d, Seacoast Anti-Pollution                   cycle cooling for all facilities and IM                distinguished between the two industry
                                                     League v. Costle, 597 F.3d 306, 311 (1st                limitations based on modified traveling
                                                                                                                                                                    groups covered by the standards for
                                                     Cir. 1979).                                             screens, for all facilities with flow
                                                                                                                                                                    existing facilities as follows:
                                                        Because E.O. 13563 directs agencies                  greater than 2 MGD; and Option 4:
                                                     to propose and adopt rules only upon a                  Impingement mortality (IM) limitations                    Manufacturing and Other Industries
                                                     reasoned determination that the benefits                based on modified traveling screens for                (‘‘Manufacturers’’)—facilities in the paper,
                                                     justify the costs, EPA is proposing to                  all facilities with flow greater than 50               aluminum, steel, chemicals, petroleum, food
                                                                                                                                                                    and kindred products, and other industries.
                                                     apply this same standard in BTA                         million gallons per day (MGD), closed                  In addition to engaging in production
                                                     entrainment determinations. This                        cycle cooling or its equivalent for new                activities, some of these facilities also
                                                     approach is consistent with the                         units, and a site-specific determination               generate electricity for their own use and
                                                     framework EPA has traditionally                         of entrainment BTA for all other                       occasionally for sale. Electric power
                                                     followed and would allow for a full                     facilities and of impingements mortality               producers (‘‘Electric Generators’’)—facilities
                                                     assessment in permit decisions of both                  controls for facilities with flow less than            owned by investor-owned utilities,
                                                     qualitative and quantitative benefits and               or equal to 50 MGD. These options are                  municipalities, States, Federal authorities,
                                                     costs. As designed, EPA’s proposed                      described more fully in Section VI.C.                  cooperatives, and nonutilities, whose
                                                                                                                                                                    primary business is electric power generation
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                                                     requirement for the establishment of                       The first part of this section provides
                                                     site-specific BTA entrainment                           an overall summary of the costs of the                 or related electric power services.
                                                     requirements strikes an appropriate                     regulatory options to complying                          Costs to complying Electric
                                                     balance between environmental                           facilities and federal and state                       Generators and Manufacturers include
                                                     improvements and costs, allowing the                    governments. This discussion is                        technology costs, cost of installation
                                                     permitting authority to consider all of                 followed by a review of the method for                 downtime, and costs of administrative
                                                     the relevant factors on a site-specific                 developing compliance cost estimates.                  activities; in addition, electric
                                                     basis and determine BTA on the basis of                 The third part provides an estimate of                 generating facilities are expected to
                                                     those factors.                                          the total social costs of the regulatory               incur certain energy penalty costs (see


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                     22213

                                                     Chapter 3 of the EBA report for a                       develop a series of model facilities that              representative and appropriate for most
                                                     discussion of costs to complying                        exhibit the typical characteristics of the             facilities.56 The following section
                                                     facilities and of implementation costs to               affected facilities and calculate costs for            describes how EPA used this new
                                                     federal, State, and local governments).                 each model facility; EPA would then                    database to estimate compliance costs.
                                                     Manufacturing facilities may also need                  determine how many of each model
                                                                                                                                                                    3. Tools for Developing Compliance
                                                     additional electricity to run certain                   facility would be needed to accurately
                                                                                                                                                                    Costs
                                                     technologies, but if they do not produce                represent the full universe of affected
                                                     this electricity themselves, these                      facilities.                                               During the 2004 Phase II rule, EPA
                                                     additional energy requirements are                         EPA has estimated costs for                         began developing a spreadsheet based
                                                     included in operating costs, rather than                potentially regulated facilities using a               tool that would provide facilities and
                                                     accounted for separately as an energy                   combination of the facility-specific and               permit authorities with a simple and
                                                     penalty. Electric Generators incurring                  model facility approaches. The facility-               transparent method for calculating
                                                     these costs include facilities owned by                 specific approach used in this effort                  facility-specific compliance costs. EPA
                                                     private firms, governments, and electric                involved calculating compliance costs                  refined the tool in developing the Phase
                                                     co-operatives. Manufacturers incurring                  for 891 individual facilities for which                III regulations. EPA has since made
                                                     these costs include facilities owned by                 EPA had detailed technical data from its               further refinements to the cost tool,
                                                     private firms only. The administrative                  various industry questionnaires                        which was used to calculate the
                                                     costs to federal, State, and local                      regarding the intake design and                        compliance costs for impingement
                                                     governments include the costs of rule                   technology. Specifically, these are the                mortality for today’s proposed rule. The
                                                     implementation—e.g., permits,                           in-scope facilities that completed the                 cost tool employs a decision tree (see
                                                     monitoring, and working with in-scope                   detailed technical questionnaire. Where                the TDD for a graphical presentation of
                                                     facilities to achieve compliance. Costs                 facilities reported data for separate                  the decision tree) to determine a
                                                     are initially developed on a pre-tax, as                cooling water intake structures (CWISs),               compliance response for each model
                                                     incurred, basis. These costs underlie the               compliance costs may have been                         facility and assigns a technology
                                                     analysis of the social costs of the                     derived for each intake and these intake               ‘‘module’’ that represents a retrofit to a
                                                     regulatory options and are also used in                 costs were summed together to obtain                   given technology. Cost estimates are
                                                     assessing the impact of compliance                      total costs for each facility. These                   derived through a series of
                                                     requirements on in-scope facilities and                 facilities became model facilities and                 computations that apply facility-specific
                                                     the affected industrial categories. In the              each facility’s costs were then                        data (such as DIF, width of intake
                                                     analysis of facility impacts, costs are                 multiplied by a weighting factor                       screens, etc.) to the selected technology
                                                     accounted for on an after-tax basis.                    (derived from a statistical analysis of the            module. Cost tool outputs include
                                                                                                             industry questionnaire) specific to each               capital costs, incremental operation and
                                                     B. Development of Compliance Costs                      facility to obtain industry-wide costs for             maintenance (O&M) costs, and
                                                       This section describes the data and                   the national economic impacts analyses.                installation downtime (in weeks).
                                                     methods used to estimate compliance                     The weighting factors are similar to ones                 To calculate the compliance costs of
                                                     costs of the options considered and the                 derived during the development of the                  retrofitting to closed-cycle cooling for
                                                     costs of today’s proposed rule. Costs                   2004 Phase II Rule for extrapolating the               controlling entrainment mortality, EPA
                                                     were developed for technology controls                  impacts of DQ facilities to all in-scope               utilized a second tool based on a cost-
                                                     to address impingement mortality                        facilities.                                            estimating spreadsheet developed by the
                                                     separately from controls for entrainment                                                                       Electric Power Research Institute (EPRI).
                                                     mortality, as the requirements of the                   2. Updates to the Survey Data                          EPRI’s first draft methodology presented
                                                     various rule options considered would                      In the 2004 Phase II rule, EPA                      three different levels of capital cost
                                                     lead to different technologies being used               developed facility-specific cost                       (Easy, Average, Difficult) based on the
                                                     by each facility to comply. Some of the                 estimates for all facilities and published             relative difficulty of the retrofit project.
                                                     options considered would impose                         those costs in Appendix A (69 FR                       For electric generators, EPA used costs
                                                     different compliance timelines for                      41669). Since the initial implementation               for the Average level of difficulty, as it
                                                     impingement mortality and entrainment                   of the 2004 Phase II rule, EPA identified              was developed across a broad spectrum
                                                     mortality technologies. As a result,                    several concerns with using only the                   of facilities and is the most appropriate
                                                     different methodologies were used and                   facility-specific costing approach, as                 for estimating national level costs.57 For
                                                     each is briefly described below. More                   well as the use of those costs in                      manufacturers, EPA used the Difficult
                                                     detailed information on these                           Appendix A. Since 2004, EPA has                        level of retrofit costs. This reflects the
                                                     methodologies, as well as costs of other                collected data from industry and other                 more complex water systems and
                                                     technologies and regulatory approaches,                 groups as described in section III. These              generally more frequent technical
                                                     are available in the TDD.                               data generally reflect changes to actual               challenges to retrofitting closed-cycle
                                                                                                             intake flow, design intake flow, intake                cooling at a manufacturing facility.
                                                     1. Combined Facility-Specific and                       velocity, technology in place, and                     While some manufacturers only
                                                     Model-Facility Approach                                 operational status. EPA developed a                    withdraw cooling water for power or
                                                        EPA develops national level costs                    new master database including this new                 steam generation, many manufacturers
                                                     estimates for facilities within scope of                data to supplement the data from the                   have multiple units or processes that
                                                     the various regulatory options. In                      detailed technical questionnaire.                      utilize cooling water. In site visits, EPA
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                                                     general, facility-specific data can be                  Although it has been approximately 10                  found the largest manufacturing
                                                     used to determine what requirements                     years since the detailed technical                     facilities would require multiple
                                                     apply to a given facility or whether that               questionnaire was initially collected,                 retrofits, and accordingly believes the
                                                     facility would already meet the                         EPA has conducted over 50 site visits,
                                                     requirements set forth in the proposed                  reviewed current permits, and                            56 EPA notes that, while it has not collected

                                                     rule. This approach requires facility-                  conducted literature reviews including                 updated technical information for every facility, it
                                                                                                                                                                    has updated financial data, as discussed later in this
                                                     specific technical data for all of the                  comparisons to data collected by EPRI,                 section.
                                                     approximately 1,200 existing facilities                 EIA, and EEI. Based on that review EPA                   57 For purposes of energy reliability estimates,

                                                     in scope. An alternative approach is to                 has concluded the master database is                   EPA used the Difficult level for electric generators.



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                                                     22214                   Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     Difficult level of retrofit costs is more                preliminary assessment of which model                  when other major upgrades are being
                                                     representative for purposes of                           facilities would not currently meet                    done, reducing downtime.
                                                     estimating national level costs.                         impingement mortality requirements                        For most facilities subject to
                                                     Additionally, EPA’s tool includes                        through either approach, and assigned                  impingement mortality, no downtime
                                                     additional modifications to EPRI’s                       technology costs based on the                          was assigned. Facilities that are
                                                     methodology, such as increased                           installation of modified traveling                     replacing or rehabilitating existing
                                                     compliance costs for approximately 25                    screens with a fish handling and return                traveling screens typically do so one
                                                     percent of facilities to reflect the                     system. This assigned technology is                    intake bay at a time without affecting
                                                     additional expense of noise control or                   assumed to meet the BTA standard (see                  the overall operations. EPA has also
                                                     plume 58 abatement, and using only the                   § 125.94(b)). However, some facilities                 found that facilities that need to scrub
                                                     cooling water flow rate for non-contact                  might still incur costs for restructuring              screens do so during other routinely
                                                     cooling water flow 59 for purposes of                    their intakes to avoid entrapment.61                   scheduled outages. For some
                                                     estimating costs for closed-cycle                        EPA solicits comment and data on the                   compliance technologies such as
                                                     cooling. EPA has included the                            costs of this requirement.                             relocating an intake, or expanding an
                                                     spreadsheet tools in the docket for the                                                                         existing intake to lower the intake
                                                     proposed rule to assist both facilities                    For facilities subject to entrainment                velocity, several weeks of downtime are
                                                     and permit authorities in estimating                     mortality requirements, EPA selected                   incurred, as these are more invasive
                                                     compliance costs. (See DCNs 10–6655                      wet cooling towers as the technology                   tasks.
                                                     and DCN 10–6930).                                        basis for determining the compliance                      For facilities subject to entrainment
                                                                                                              costs. In some cases, costs reflect                    mortality controls, EPA reviewed
                                                     4. Which technologies form the basis for                 installation of multiple technologies, as              historical retrofit data and site visits
                                                     compliance cost estimates?                               impingement mortality and entrainment                  conducted since 2004, and has largely
                                                        EPA identified two broad classes of                   mortality requirements were applied                    retained its assumptions for downtime
                                                     control technologies that may be used                    separately to each facility. EPA also                  from the Phase II and Phase III rules. On
                                                     singularly or in combination to comply                   evaluated other technologies for                       average, EPA assumes the net
                                                     with the proposed rule. These classes of                 reducing entrainment mortality, such as                construction downtime for a cooling
                                                     control technologies are: (1)                            seasonal operation of cooling towers,                  tower retrofit for non-nuclear electric
                                                     Technologies that address impingement                    partial towers, variable speed pumps,                  generators is 4 weeks. This total
                                                     mortality (IM) and (2) technologies that                 and fine mesh screens. The performance                 downtime allows for the tie-in of the
                                                     address entrainment mortality (EM). See                  of these technologies is further                       cooling tower to the existing cooling
                                                     Section VI for further details. Under the                described in section VI; a detailed                    water system. The refueling outage
                                                     various options considered, a facility                   discussion of how the costs were                       downtime, the safety-sensitive nature of
                                                     may be subject to one or both                            developed may be found in the TDD.                     nuclear facility retrofits, and other data
                                                     requirements, depending on their                                                                                in EPA’s record supports 28 weeks as
                                                                                                              5. How is facility downtime assessed?                  the net construction downtime for
                                                     configuration, technologies in use, or
                                                     other site-specific factors.                                Downtime is the amount of time that                 nuclear facilities. Downtime for
                                                        For the impingement mortality                         a facility may need to shut down due to                manufacturing facilities that use cooling
                                                     requirements, EPA analyzed data from a                   the installation of a compliance                       water for power and steam generation
                                                     wide variety of technologies and                         technology. Downtime estimates                         was converted into the incremental cost
                                                     facilities and concluded that modified                   primarily assume that the facility would               for purchase of those utilities during the
                                                     Ristroph (or equivalent) coarse mesh                     need to completely shut down                           outage. For individual process units
                                                     traveling screens are the most                           operations to retrofit an intake, such as              other than power or steam generation
                                                     appropriate basis for determining the                    relocating an intake, connecting wet                   units at a manufacturing facility (i.e.
                                                     compliance costs.60 As discussed in                      cooling towers into the facility, or                   cooling water use for purposes other
                                                     Section VI of the preamble, a facility                   reinforcing condenser housings.                        than power production), on average the
                                                     may also comply with impingement                         Downtime estimates are provided as                     downtime was assumed to be zero. In
                                                     mortality requirements by meeting a                      incremental outages, taking into account               EPA’s extensive experience with
                                                     maximum intake velocity limit. Based                     the periodic outages all facilities already            manufacturers while developing
                                                     on facility-specific data, EPA made a                    incur as part of preventative                          effluent guidelines, EPA found
                                                                                                              maintenance or routinely scheduled                     manufacturers are generally able to shut
                                                        58 The EPRI tool includes drift abatement
                                                                                                              outages. For example, nuclear facilities               down individual intakes for specific
                                                     technologies in its cost assumptions, so no                                                                     process lines, use inventory approaches
                                                     additional costs were included for drift eliminators.    have refueling outages approximately
                                                        59 As described in the TDD, EPA only used non-        every 18 months lasting approximately                  such as temporary increases of
                                                     contact cooling water flows in determining the           40 days.62 The entrainment control                     intermediate products, and develop
                                                     proper size for wet cooling towers, the technology       implementation periods, 10 years for                   other workarounds without interrupting
                                                     that forms the technical basis for entrainment
                                                                                                              fossil fuel plants and 15 years for                    the production of the entire facility.
                                                     mortality. Cooling towers are not widely used for                                                               EPA requests comment from those
                                                     contact cooling or process water, so these flows         nuclear plants, in Options 2 and 3
                                                     were excluded. For electric generators, the vast         would provide facilities with an                       manufacturing facilities that have made
                                                     majority of flow is non-contact cooling, but             opportunity to schedule the retrofit                   modifications to their cooling water
                                                     manufacturers are more varied in their water usage.                                                             systems on their experiences with
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                                                        60 Note that this does not preclude the use of
                                                                                                                61 Facilities incurring costs for impingement
                                                                                                                                                                     facility downtime. See below for further
                                                     other technologies; EPA simply used the available
                                                     performance data in deriving the performance             mortality are assumed to meet the requirement for      discussion of how installation
                                                     requirements and excluded technologies that were         entrapment. Because EPA does not know how many         downtime in weeks is included in the
                                                     either inconsistent performers or did not offer          facilities that already comply with impingement        estimated national costs.
                                                     sufficient data for analysis in a national categorical   mortality requirements would incur additional
                                                     regulation. EPA’s research has shown that other          costs to avoid entrapment, EPA conducted a             6. How is the energy penalty assessed?
                                                     technologies may also be capable of meeting the          sensitivity analysis of the additional costs; see
                                                     proposed requirements, but EPA did not opt to            Chapter 12 of the TDD.                                    The term ‘‘energy penalty’’ in relation
                                                     identify these technologies as the technology basis        62 Nuclear Energy Institute (NEI) reported average   to a conversion to closed-cycle cooling
                                                     for today’s proposal.                                    length of outage from 2003 to 2009.                    has two components: One is the extra


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                      22215

                                                     power required to operate fans at a                     economic impacts. See the EBA for                         • New units can incorporate closed-
                                                     mechanical draft cooling tower, as well                 more information. In conducting its                    cycle cooling in a more cost effective
                                                     as additional pumping requirements                      analysis, EPA found the equations used                 manner.
                                                     (often referred to as the parasitic energy              to derive the cost module estimates                       • The duration of new unit
                                                     penalty), and the other is the lost power               produced substantially higher costs per                construction is sufficiently long enough
                                                     output due to the reduction in steam                    MGD rates at lower flow levels. To                     that there would be, in nearly all
                                                     turbine efficiency because of an increase               reflect the higher per unit costs of                   circumstances, no net increase in
                                                     in cooling water temperature (often                     retrofits at lower DIF (i.e. smaller)                  ‘‘construction downtime.’’
                                                     referred to as the turbine efficiency                   facilities, EPA derived separate model                    • For power generation systems, the
                                                     penalty or turbine backpressure                         facility cost equations for facilities with            design of boilers, steam turbines and
                                                     penalty). Energy penalty costs only                     DIF <10 MGD and those with DIF ≥ 10                    condensers ‘‘from scratch’’ allows for the
                                                     apply to facilities retrofitting a cooling              MGD. (See the TDD).                                    optimization of the system design and
                                                     tower; facilities installing a new                                                                             cooling water flow volume to minimize
                                                                                                             8. How did EPA assess costs for new
                                                     impingement mortality technology will                                                                          the heat rate penalty. Flow is reduced
                                                                                                             units?
                                                     generally see little or no measureable                                                                         over a comparable once-through cooling
                                                     change in energy usage. EPA’s national                     This section describes the data and
                                                                                                                                                                    system, which reduces closed-cycle
                                                     level costs include the costs for both                  methods used to estimate compliance
                                                                                                                                                                    cooling system costs.
                                                     components. The parasitic energy                        costs for new units at existing electric
                                                                                                             generators and manufacturers.                             • Because major components of the
                                                     penalty was included as a separate
                                                                                                             Compliance costs for new units at                      once-through intake and cooling system
                                                     component in the O&M costs and was
                                                                                                             existing electric generators are                       must be constructed from scratch, the
                                                     assessed for all facilities. The turbine
                                                                                                             calculated using a similar methodology                 capital costs of closed-cycle cooling for
                                                     efficiency penalty was typically
                                                                                                             to the compliance cost estimates for                   new units are lower than the capital
                                                     expressed as a percentage of power
                                                                                                             existing facilities. EPA is not able to                costs of once-through cooling.63
                                                     output; EPA estimates the turbine
                                                     efficiency energy penalty for nuclear                   predict which facilities will construct                   • There will be an increase in the
                                                     and non-nuclear power generation                        new units, however the national                        parasitic energy requirements associated
                                                     would be 2.5% and 1.5%, respectively                    projections of increased capacity (i.e.                with fan operation in the closed-cycle
                                                     (see the TDD). For most manufacturers,                  additional megawatts capacity to be                    cooling towers.
                                                     the energy penalty for turbine efficiency               constructed each year) can be converted                   • While parasitic energy requirements
                                                     loss for non-nuclear power plants (i.e.,                to a number of new units of a specified                for pumping head will increase as well,
                                                     1.5%) was assumed. This may overstate                   size; EPA then applied the cost                        it may be offset, at least in part, by
                                                     costs where cooling water is used by a                  equations to these projected new units.                reductions in pumping flow associated
                                                     manufacturing facility for purposes                     Based on site visits, EPA has found that               with optimization. Any capacity losses
                                                     other than power production.                            industry trends towards water                          due to parasitic energy penalty can be
                                                                                                             conservation and reuse in addition to                  accounted for in the new unit design.
                                                     7. How did EPA assess facility-level                    the operational flexibility at existing                   • New construction allows the use of
                                                     costs for the national economic impacts                 manufacturers would result in no                       an optimized cooling system design that
                                                     and energy reliability analyses?                        additional compliance costs for                        can minimize any system efficiency
                                                        To assess the national economic                      achieving flow commensurate with                       losses associated with conversion to
                                                     impacts, EPA conducted a modeling                       closed-cycle cooling at new units. EPA                 closed-cycle.
                                                     analysis using IPM (Integrated Planning                 solicits comment on this assumption.
                                                     Model). This model is widely used by                                                                           Estimation of New Capacity Subject to
                                                                                                             a. New Units at Existing Electric                      the Rule
                                                     EPA for analysis of rules and policies
                                                     affecting electric generating facilities.               Generators
                                                                                                                                                                      New generating units will be
                                                     This analysis is used to assess economic                   Power generation units that meet the                constructed at either ‘‘greenfield’’
                                                     impacts, increases in household                         definition of a ‘‘new unit’’ will be                   facilities subject to the Phase I
                                                     electricity bills, and changes in                       required to meet entrainment reduction                 regulation or at existing facilities where
                                                     electricity reliability. In contrast to the             based on closed-cycle cooling or an                    they may be subject to the new unit
                                                     model facility costing approach, the IPM                equivalent reduction in entrainment                    requirements for entrainment
                                                     model requires a facility-level cost for                mortality for the cooling water                        reduction.64 New generating capacity at
                                                     each facility. Model facility costs were                component of the intake flow based on                  existing facilities can occur in three
                                                     converted to a per MGD DIF basis, and                   the average intake flow (AIF). Estimates               ways: (1) From new units added to an
                                                     then averaged to derive cost equations                  for compliance costs for new units are                 existing facility; (2) repowering,
                                                     using DIF as the independent variable.                  based on the net difference in costs                   replacement and major upgrades of
                                                     This cost equation thus provides                        between what cooling system                            existing units; and (3) minor increases
                                                     average costs that can be applied to any                technologies would have been built                     in system efficiency and output.
                                                     facility by simply scaling to that                      under the current regulatory structure                 Repowered, replaced, and upgraded
                                                     facility’s DIF. EPA also used a                         and what will be built given the change                units are not considered new units
                                                     conservative compliance scenario in                     in requirements imposed by the                         under today’s proposed rule and would
                                                     order to develop a bounding ‘‘worst                     proposed regulation. Compliance costs                  not be subject to requirements for
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                                                     case’’ impact analysis by assuming all                  are derived using estimates of the new                 entrainment reduction. While a small
                                                     facilities would be subject to                          generating capacity that will be subject               portion of this new capacity may result
                                                     Entrainment Mortality reductions based                  to these requirements.                                 from minor increases in plant efficiency
                                                     on closed-cycle cooling towers. In the                     Generally speaking, EPA has                         and output, this analysis assumes all
                                                     worst case scenario EPA conducted the                   identified a number of differences in
                                                     IPM analysis using the Difficult level                  costs between a closed-cycle cooling                     63 See  DCN 10–6650 and DCN 10–6651.
                                                     cost for all facilities, thereby generating             retrofit at an existing facility compared                64 This  discussion will focus only on new units
                                                     an upper bound of total costs and                       to installing closed-cycle cooling at a                at existing facilities; for a discussion of the Phase
                                                     conservative predictions of the                         new unit:                                              I rule, see 66 FR 65256.



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                                                     22216                           Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     new capacity will occur be associated                                        combined cycle capacity would be                                   At existing nuclear facilities, only
                                                     with new units.                                                              constructed at new ‘‘greenfield’’ facilities                     new capacity associated the
                                                       New power generation capacity                                              and would be subject to Phase I                                  construction of new generating units
                                                     estimates by fuel/plant type were                                            requirements while the remainder (24%                            would be subject to the new unit
                                                     derived from IPM modeling. For the                                           of coal and 12% of combined cycle)                               requirements. Considering their size and
                                                     new unit costs analysis EPA focused on                                       would occur at existing facilities and be                        heat discharge as well as recent trends
                                                     coal and combined cycle, since these                                         subject to existing facility regulations.                        in industry, it is assumed that any new
                                                     comprised the majority of increased                                          EPA has selected a conservative value of                         nuclear units will utilize closed-cycle
                                                     capacity that utilize a steam cycle and                                      30% reflecting both coal and combined                            cooling 65 and so the capacity for these
                                                     are most likely to be constructed at                                         cycle to serve as an estimate for the                            nuclear facilities is not included in the
                                                     existing generation facilities. In the                                       portion of new capacity that would be                            costs of requirements for new units.
                                                     Phase I rule analysis, EPA determined                                        constructed at existing facilities.                              Exhibit VII–1 presents a summary of
                                                     that 76% of new coal and 88% of new                                                                                                           new capacity estimates for all fuel types.

                                                                                                                                EXHIBIT VII–1—ESTIMATED NEW CAPACITY
                                                                                                                                                                                       New capacity                 New capacity incurring costs
                                                                                                                                                                                         (MW) a                           under this rule
                                                                                                         Fuel type
                                                                                                                                                                                Annual                                Annual
                                                                                                                                                                                                  24 Year total                     24 Year total
                                                                                                                                                                                average                               average

                                                     Coal ..................................................................................................................           3,573              85,744            1,072          25,723
                                                     Combined Cycle ..............................................................................................                     1,491              35,795              447          10,739
                                                        a   Includes capacity subject to both Phase I and existing facility requirements.


                                                     Baseline Compliance                                                          facilities (e.g., New York, California,                          existing generating unit(s) and is
                                                                                                                                  Delaware). EPA expects this to be                                assumed to be sized such that the
                                                       Baseline compliance reflects the                                           particularly true where the new unit                             existing once-through cooling water
                                                     scenario whereby new units will use                                          would result in a substantial increase in                        intake volume will provide sufficient
                                                     once-through cooling or closed-cycle                                         the volume of once-through cooling                               flow to meet heat discharge
                                                     cooling. About 32% of existing facility                                      water withdrawn above what is                                    requirements. Based on 2007 IPM
                                                     steam generating capacity already                                            currently permitted. Thus,                                       projections (since more recent
                                                     employs closed-cycle and another 11%                                         approximately 50% of new fossil units                            projections do not include this
                                                     employ combination cooling systems.                                          at existing facilities in the baseline
                                                     EPA assumes that at existing plants                                                                                                           distinction) approximately 85% of
                                                                                                                                  scenario would already be compliant                              projected total new combined cycle
                                                     where closed-cycle cooling is already                                        with the proposed rule. EPA requests
                                                     employed for at least part of the                                                                                                             capacity was estimated to be repowered
                                                                                                                                  comment on this assumption.                                      oil and gas units. The estimate for
                                                     generating capacity that closed-cycle
                                                     would be used for any new capacity,                                          Repowering Versus New Units                                      repowered coal capacity was very small
                                                     regardless of the requirements of today’s                                      The increased capacity at existing                             (less than 1%). However, since there are
                                                     proposed rule. Therefore at least 43% of                                     fossil fuel facilities is divided into two                       significant economic advantages to
                                                     new capacity is projected to be                                              types of projects. The first is new unit(s)                      repowering, EPA believes this to be an
                                                     compliant in the baseline (i.e., they will                                   added adjacent to the existing                                   underestimate and selected a more
                                                     already meet the entrainment mortality                                       generating units which would require a                           conservative value of 10%. Exhibit VII–
                                                     requirements of the proposed rule for                                        new intake or the existing intake to be                          2 presents the capacity values assumed
                                                     new units). For example, a number of                                         substantially modified in order to                               to be compliant in the baseline or that
                                                     regulatory authorities have adopted or                                       supply the needed additional volume of                           require costs associated with closed-
                                                     pursued closed-cycle cooling                                                 cooling water. The second is a                                   cycle cooling for new added units
                                                     requirements for some or all existing                                        repowered unit which replaces an                                 versus repowering.

                                                                                 EXHIBIT VII–2—NEW CAPACITY SUBJECT TO NEW UNIT REQUIREMENT BY COST CATEGORY
                                                                                                                                                                                                      Capacity subject to new unit compliance
                                                                                                                                                                                                                    costs (MW)
                                                                                  Fuel type
                                                                                                                                                                                                      Annual average             24 Year total

                                                     Coal ...................................................................    Baseline is Compliant .......................................                        536                  12,862
                                                                                                                                 New Added Unit ...............................................                       482                  11,575
                                                     Combined Cycle ...............................................              Baseline is Compliant .......................................                        224                   5,369
                                                                                                                                 New Added Unit ...............................................                        34                     805
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                                                        65 Less than half of the current U.S. nuclear plants

                                                     still use once through cooling.


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                                                                            Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                            22217

                                                     Compliance Cost Estimation                              b. New Units at Existing Manufacturers                 to meet any additional reductions not
                                                                                                                Similar to new units at existing                    accounted for by any other reuse or
                                                       Compliance costs reflect compliance                                                                          reduction strategies employed.
                                                     with the proposed requirements for                      electric generators, manufacturing
                                                                                                             ‘‘units’’ that meet the definition of a                Additionally, new units can utilize
                                                     closed-cycle for the new unit; these                                                                           cooling system designs specifically
                                                     costs do not represent costs to retrofit                ‘‘new unit’’ will be required to meet
                                                                                                             entrainment reduction requirements.                    tailored to process requirements. The
                                                     the entire facility to closed-cycle.                                                                           modular nature of closed-cycle cooling
                                                     Compliance costs for new units are                      These requirements will require closed-
                                                                                                             cycle cooling or an equivalent reduction               and the flexibility inherent in the
                                                     derived from EPA’s estimates for                                                                               process system allows for more optimal
                                                     retrofitting a closed-cycle cooling                     in entrainment for the cooling water
                                                                                                                                                                    placement of cooling tower units, thus
                                                     system at existing facilities where the                 component of the intake flow based on
                                                                                                                                                                    minimizing piping costs.
                                                                                                             the average intake flow (AIF). Estimates
                                                     costs are expressed on a per MGD basis.                                                                           • Flow reductions associated with the
                                                                                                             for compliance costs for new units are                 use of variable speed pumps can result
                                                     For new units, the cost equations are
                                                                                                             based on the net difference in costs                   in benefits associated with both reduced
                                                     converted to a cost per MW capacity.
                                                                                                             between what would have been built                     flow and pumping energy costs.
                                                     The cooling water flow estimates are
                                                                                                             under the current regulatory structure                    For power generation facilities and
                                                     based on plant fuel efficiency values of
                                                                                                             (baseline) and what will be built given                generating units that use once-through
                                                     42% for coal (the average of values for
                                                                                                             the change in requirements imposed by                  cooling, the majority of the intake flow
                                                     super-critical and ultra-critical steam),
                                                                                                             the proposed regulation. Thus, baseline                is used for non-contact cooling
                                                     57% for combined cycle, and 33.5% for
                                                                                                             manufacturing unit process design and                  purposes. Process water typically
                                                     nuclear. [DCN 10–2827]. Cost
                                                                                                             cooling water technology would be                      constitutes a few percent or less of the
                                                     components were broken out as follows.
                                                                                                             based on the response to the permitting                total. A review of the responses to the
                                                     Capital Costs                                           authorities application of existing                    detailed technical survey showed that
                                                                                                             requirements including 316(b),                         the median and average values for the
                                                       EPA has found that for new units, the                 applicable industrial water use and                    percent of design intake flow used for
                                                     total estimated capital costs for a closed-             discharge standards (e.g., categorical                 cooling purposes reported for each
                                                     cycle cooling system is slightly less than              standards), and BPJ.                                   separate cooling water intake at power
                                                     the capital costs of a once-through                        As discussed in section IV of the                   generation facilities were 100% and
                                                     cooling system (when including costs                    preamble, it has become standard                       85% respectively. In contrast, most
                                                     for a new intake structure). Therefore, a               practice for industries to adopt water                 industrial manufacturing operations
                                                     conservative estimate of the incremental                use reduction and reuse practices                      utilize a substantial portion of intake
                                                     compliance capital costs are $0 for new                 wherever practical. A new unit provides                water for non-cooling purpose and the
                                                     units.                                                  the opportunity to employ such                         same median and average values for
                                                                                                             measures to the fullest extent. Thus, the              manufacturing facilities were 50% and
                                                     O&M Costs
                                                                                                             baseline cooling AIF for ‘‘new units’’ at              52%, respectively. In addition, this
                                                        Fixed and variable O&M costs are                     manufacturers should, in most cases, be                cooling flow component data includes
                                                     adjusted by deducting the O&M costs for                 much smaller than the AIF for a                        contact cooling water, as discussed in
                                                     traveling screens assumed in the                        comparable existing unit. This is                      section IV.A (i.e., flow reduction is only
                                                     baseline once-through system. Energy                    especially true for new units that                     required for non-contact cooling water
                                                     costs are also adjusted downward to                     perform a similar function or produce a                flows), thus decreasing the proportion.
                                                     account for reduced pumping volume                      similar product to existing units since                Therefore, a ‘‘typical’’ manufacturing
                                                     passing through the intake structure and                economic factors such as the need to                   unit may use less than 50% of AIF for
                                                     adjusted up to account for the increase                 increase process efficiencies are often                cooling purposes of the type that may be
                                                     in pumping head through the cooling                     driving factors in the decision to                     subject to the ‘‘new unit’’ requirements.
                                                     tower.                                                  construct a new unit. EPA recognizes                   In many cases, this ‘‘typical’’ facility may
                                                                                                             that while this appears to be a general                be able to reuse 100% of the cooling
                                                     Downtime                                                trend, it may not always be true on a                  water in place of the process
                                                                                                             site-specific basis.                                   component. Thus, the ‘‘typical’’
                                                       Each of the new units will involve                       For manufacturing process units that                manufacturing facility may be capable
                                                     extensive construction activities that                  are newly constructed, many of the                     of designing a ‘‘new’’ process that could
                                                     would result in a prolonged                             same cost-related factors listed above for             meet the ‘‘new unit’’ requirements
                                                     construction downtime regardless of the                 power generators apply but additional                  through water reuse alone. EPA has
                                                     cooling system requirements. Thus, no                   factors may include:                                   observed significant innovation and
                                                     downtime costs are assessed for new                        • A much greater proportion of intake               water reuse during site visits to
                                                     unit compliance.                                        flow is used for process water and other               manufacturing facilities, and notes
                                                     Energy Penalty                                          non-cooling purposes which greatly                     extensive industry trends towards
                                                                                                             increases the opportunity to design and                internal water and energy audits.
                                                       The energy penalty consists of                        incorporate cooling water reuse                           Since this 50% value is the median of
                                                     parasitic load and heat rate penalties.                 strategies within the unit.                            all reported manufacturing cooling
                                                     Both types of installation—new and                         • Where the new unit comprises only                 water intake systems, at least half of
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                                                     retrofit—face parasitic load associated                 a portion of the plant, cooling water                  manufacturing cooling water systems
                                                     with fans and pumps, but only retrofits                 reduction may be accomplished through                  may have the potential to meet the ‘‘new
                                                     would face a heat rate penalty, which is                reuse elsewhere within the plant. The                  unit’’ requirements simply by reusing
                                                     the largest portion of a retrofit energy                proposed rule provides credit for such                 non-contact water as process water. For
                                                     penalty. Energy penalty costs associated                flow reductions.                                       the remainder, modifications to the
                                                     with net changes in parasitic energy                       • The modular nature of closed-cycle                process that reduce cooling water use
                                                     requirements between once-through and                   cooling allows for the limited                         such as use of variable speed pumps
                                                     closed-cycle cooling are included in the                application of closed-cycle cooling only               may provide additional reduction. For
                                                     O&M cost estimates.                                     to the portion of cooling flow necessary               some, there may be a need to install


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                                                     22218                        Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     cooling towers for the cooling flow                                  of social costs, EPA discounted all costs                 $327 million under Option 4. At a 7
                                                     component that cannot be reused. EPA                                 to the beginning of 2012, the date at                     percent discount rate, these costs are
                                                     assumes, however, that this, however,                                which this proposal would become                          $459 million, $4,699 million, $4,862
                                                     will in most instances be a small portion                            effective under the regulation                            million, and $383 million, respectively.
                                                     of the total intake flow. Also, if the new                           development schedule. EPA assumed                         The largest component of social cost is
                                                     unit comprises only a portion of the                                 that all facilities subject to the                        the pre-tax cost of regulatory
                                                     entire manufacturing facility, there may                             regulation would achieve compliance                       compliance incurred by complying
                                                     be other process units and plant                                     between 2013 and 2027, inclusive,                         facilities. These costs include one-time
                                                     operations nearby that could reuse the                               depending on the compliance schedules                     technology costs of complying with the
                                                     cooling water (or supply reusable water)                             associated with the four regulatory                       rule, one-time costs of installation
                                                     in order to meet the flow reduction                                  options considered in the proposed rule                   downtime, annual fixed and variable
                                                     requirements. The proposed rule                                      for specific categories of facilities. EPA                operating and maintenance (O&M) costs,
                                                     encourages facilities to incorporate                                 performed the social cost analysis over                   the value of electricity requirements for
                                                     flexible water use arrangements,                                     a 50-year period to reflect: The last year                operating compliance technology, and
                                                     including a provision where cooling                                  in which individual facilities are                        permitting costs (initial permit costs,
                                                     water that is reused elsewhere in the                                expected to achieve compliance (2027)                     annual monitoring costs, and permit
                                                     facility is not considered cooling water;                            under any of the regulatory options                       reissuance costs). In addition, all
                                                     as a result, facilities will have an                                 considered for this analysis, the                         Electric Generators are expected to
                                                     incentive to reuse water and avoid being                             technology life of the longest-lived                      become subject to I&E mortality
                                                     subject to 316(b) requirements.                                      compliance technology installed at any                    requirements at the 125 MGD threshold
                                                        For new units that would require an                               facility (30 years), and a period of 5                    under Option 2. Social cost also
                                                     increase in intake flow, EPA has found                               years after the last year of compliance                   includes implementation costs incurred
                                                     that the capital costs of the new intake                             technology operation during which                         by Federal and State governments.
                                                     and screen technology which requires                                 benefits continue to accrue. Under this
                                                                                                                                                                                    EPA’s social cost estimates exclude the
                                                     deeper pump and intake wells to                                      framework, the last year for which costs
                                                                                                                                                                                    cost to facilities estimated to be baseline
                                                     accommodate source water depth                                       were tallied in the analysis is 2056, with
                                                                                                                                                                                    closures. As further described in the
                                                     variations will be comparable to the                                 benefits continuing on a diminishing
                                                                                                                                                                                    EBA document, in the case of Electric
                                                     capital costs for closed-cycle                                       basis through 2061. Because the analysis
                                                                                                                                                                                    Generators, the baseline closure
                                                     technology. In these cases, closed-cycle                             period extends beyond the useful life of
                                                                                                                          compliance equipment assumed to be                        generating units were identified in
                                                     may have slightly higher O&M costs for                                                                                         Energy Information Administration
                                                     pump and fan energy but these costs                                  installed at facilities that achieve
                                                                                                                          compliance before 2017, the social cost                   reports or in the baseline IPM analyses,
                                                     may be offset by other cost savings such                                                                                       as having closed or projected to close
                                                     as reductions in water treatment costs.                              analysis accounts for re-installation of
                                                                                                                          IM compliance technologies after the                      independent of the requirements of the
                                                        The definition of new manufacturing
                                                                                                                          end of their initial useful life periods;                 existing facilities rule. For
                                                     units limits the applicability of closed-
                                                                                                                          however, EPA does not expect in-scope                     Manufacturers, EPA’s analyses
                                                     cycle requirements to new units. As
                                                                                                                          facilities to completely re-build cooling                 indicated that these facilities are in
                                                     such, it is assumed that the construction
                                                                                                                          towers (components such as piping and                     sufficiently weak financial condition
                                                     activities would involve substantial
                                                                                                                          the concrete basin can be reused) and                     before outlays for this regulation, that
                                                     downtime periods that would be of
                                                                                                                          EPA expects other technology                              the facilities are likely to close, again,
                                                     similar or more likely greater duration
                                                                                                                          replacement costs (such as pumps and                      independent of the requirements of the
                                                     than required for construction and tie-
                                                                                                                          fill material) are accounted for as part of               existing facilities rule. Because these
                                                     in activities associated with the closed-
                                                                                                                          the ongoing O&M expenses for cooling                      facilities are not expected to comply
                                                     cycle cooling technology. EPA
                                                                                                                          towers. Costs incurred by governments                     with the existing facilities rule, EPA did
                                                     concludes that only a small portion of
                                                                                                                          for administering the regulation were                     not include the costs that would
                                                     new units will need to meet new unit
                                                                                                                          analyzed over the same time frame. This                   otherwise be assigned to these facilities
                                                     flow reduction requirements through
                                                                                                                          analysis accounts for technology costs                    in the analysis of social cost. Consistent
                                                     the use of closed-cycle cooling and the
                                                                                                                          associated with new units starting in the                 with this treatment of costs, EPA also
                                                     associated net costs will be minimal.
                                                                                                                          first year after promulgation, i.e., 2013                 did not include benefits from these
                                                     EPA requests comment on these costing
                                                                                                                          (for more information on new units see                    facilities in the tally of benefits to
                                                     assumptions.
                                                                                                                          Chapter 3: Development of Costs for                       society for the analysis of social costs
                                                     C. Social Cost of the Regulatory Options                             Regulatory Options of the EBA report).                    and benefits of the existing facilities
                                                       EPA calculated the social cost of the                                 At a 3 percent discount rate, EPA                      rule.
                                                     four regulatory options for existing                                 estimates annualized costs of                               Exhibit VII–3 presents the social cost
                                                     Manufacturers and Electric Generators                                compliance of $384 million under                          of the proposed options, by type of cost,
                                                     using two social discount rate values: 3                             Option 1, $4,463 million under Option                     using 3 percent and 7 percent discount
                                                     percent and 7 percent. For the analysis                              2, $4,631 million under Option 3, and                     rates.

                                                                                                                       EXHIBIT VII–3—ANNUALIZED SOCIAL COST
                                                                                                                                            [In millions, 2009 $] a
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                                                                                                                                                          Option 1            Option 2               Option 3       Option 4

                                                     3% Discount Rate:
                                                     Direct Compliance Cost:
                                                         Manufacturers ...........................................................................             $61.31              $141.69                $172.92        $33.99
                                                         Electric Generators ...................................................................               318.77             4,319.59               4,457.79        289.77

                                                           Total Direct Compliance Cost ...................................................                    380.08             4,461.28               4,630.71        323.77



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                                                                                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                            22219

                                                                                                             EXHIBIT VII–3—ANNUALIZED SOCIAL COST—Continued
                                                                                                                                             [In millions, 2009 $] a

                                                                                                                                                           Option 1             Option 2               Option 3          Option 4

                                                     State and Federal Administrative Cost ............................................                               3.71                 1.62                   0.92              2.79

                                                         Total Social Cost ......................................................................               383.80              4,462.90               4,631.62           326.55
                                                     7% Discount Rate:
                                                     Direct Compliance Cost:
                                                         Manufacturers ...........................................................................               68.90                133.60                 157.49            39.04
                                                         Electric Generators ...................................................................                385.68              4,564.02               4,703.65           340.80

                                                         Total Direct Compliance Cost ...................................................                       454.58              4,697.62               4,861.14           379.84
                                                     State and Federal Administrative Cost ............................................                           4.23                  1.72                   0.91             3.26

                                                           Total Social Cost ......................................................................             458.81              4,699.35               4,862.05           383.10
                                                        a These social cost estimates do not include costs associated with installation of cooling tower technology at new generating units subject to
                                                     today’s rule. They also do not include costs associated with complying with site-specific BTA determinations under Options 1, 2, and 4. Section
                                                     VI.I discusses costs for complying with site-specific BTA determinations.


                                                        As shown in Exhibit VII–3,                                           EPA also estimated the costs for                         viability at the level of the affected
                                                     compliance cost in the Electric                                      installation of closed cycle cooling                        facility (facility-level analysis),
                                                     Generators segment accounts for the                                  system technology at New Generating                         including assessment of the potential for
                                                     majority of total social cost and direct                             Units, as required by today’s rule. These                   facility closures and of the potential for
                                                     compliance cost under all four options.                              costs are based on the estimates of                         affected facilities to incur financial
                                                     On a per regulated facility basis and at                             occurrence of new unit construction                         stress short of closure. For
                                                     a 3 percent discount rate, annualized                                that would be subject to the New Units                      manufacturers, EPA also assessed the
                                                     pre-tax costs in the Electric Generators                             requirement, and the incurrence of costs                    impact of compliance requirements on
                                                     segment amount to $0.57 million under                                as described above in the section titled                    the entities that own in-scope facilities
                                                     Option 1, $7.73 million under Option 2,                              ‘‘How Did EPA Assess Costs for New                          (firm-level analysis), based on the level
                                                     $7.97 million under Option 3, and $0.52                              Units?’’                                                    of compliance costs incurred by the
                                                     million under Option 4.66 For                                           The social costs of adding closed                        total of in-scope facilities owned by a
                                                     Manufacturers, the average cost per                                  cycle cooling system capability at newly                    firm in relation to the revenue of the
                                                     regulated facility at a 3 percent discount                           constructed units at existing facilities                    firm.
                                                     rate is $0.12 million under Option 1,                                are not included in the total social cost                      For Electric Generators, EPA assessed
                                                     $0.27 million under Option 2, $0.33                                  tallies presented above. EPA did not                        economic impact in three ways: (1) An
                                                     million under Option 3, and $0.07                                    include these costs in the tallies                          assessment of the impact of compliance
                                                     million under Option 4.67 EPA’s                                      presented above because EPA did not                         costs on first, complying facilities and
                                                     analysis found a similar profile of per                              estimate benefits from installation of                      second, the entities that own those
                                                     facility costs by industry segment for the                           closed cycle cooling systems at these                       facilities, based on comparison of
                                                     7 percent discount rate case (see EBA                                units (their location is unknown). As a                     compliance costs to facility and firm
                                                     Chapter 11 for additional detail). While                             result, comparisons of social cost, which                   revenue, (2) an assessment of potential
                                                     all four options require some form of                                would include these costs, with                             electricity price effects on residential
                                                     control technology at all facilities with                            benefits, which would not include the                       and other electricity consumers, and (3)
                                                     design intake flows of two MGD or                                    I&E mortality reductions from installing                    an assessment of the impact of the
                                                     greater, Option 2 and Option 3 require                               those closed cycle cooling systems,                         proposed regulatory options within the
                                                     more costly technologies, which raises                               would be inconsistent. The costs for                        context of the electricity markets in
                                                     the per-facility cost of compliance in                               adding closed cycle cooling system                          which affected facilities operate.
                                                     these options.                                                       capability at newly constructed units                          These analyses are based on the
                                                        EPA’s estimate of federal and State                               are the same across all four of the                         facilities included in EPA’s previous
                                                     government costs for administering this                              regulatory options presented in today’s                     316(b) surveys of electric generators and
                                                     proposal is comparatively minor in                                   proposed rule, because the technology                       those manufacturing industries whose
                                                     relation to the estimated direct cost of                             performance requirements for existing                       operations are most reliant on cooling
                                                     regulatory compliance. EPA estimates                                 units at existing facilities, which vary by                 water and that are expected to be most
                                                     government annual administrative costs                               regulatory option, do not apply to these                    affected by this proposal. For each
                                                     under 3 and 7 percent discount rates,                                newly constructed generating units. On                      regulatory option, only those facilities
                                                     respectively, of approximately $3.71                                 an annualized cost base, these amount                       that would be subject to national
                                                     million and $4.23 million (Option 1),                                to $14.7 million at a 3 percent discount                    standards, based on their DIF, are
                                                     $1.62 million and $1.72 million (Option                              rate, and $10.9 million at a 7 percent                      included in the analyses.
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                                                                                                                          discount rate.                                                 The following sections summarize the
                                                     2), $0.92 million and $0.91 million
                                                                                                                                                                                      methods and findings for manufacturers
                                                     (Option 3), and $2.79 million and $3.26                              D. Economic Impact                                          and electric power generators for these
                                                     million (Option 4).                                                    EPA assessed the economic impact of                       analyses.
                                                                                                                          the regulatory options in different ways
                                                       66 Calculated using the total of 559 in-scope
                                                                                                                          depending on the affected segment,                          a. Manufacturers
                                                     Electric Generators based on technical facility
                                                     weights.                                                             Manufacturers or Electric Generators:                         This section presents EPA’s estimated
                                                       67 Calculated using the total of 518 in-scope                        For Manufacturers, EPA assessed the                       economic impacts on Manufacturers for
                                                     Manufacturers based on technical facility weights.                   impact of compliance costs on business                      the three regulatory options. The


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                                                     22220                           Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     economic impact analyses for                                                specific definition of cash flow used in                      flow. If this analysis found that the
                                                     Manufacturers assess how facilities, and                                    these analyses is after-tax free cash flow                    facility’s business value would become
                                                     the firms that own them, are expected                                       available to all capital—equity and                           negative as a result of meeting
                                                     to be affected financially by the                                           debt—including an allowance for                               compliance requirements, then EPA
                                                     regulatory options. The facility impact                                     ongoing capital expenditures required                         judged the facility to be a regulatory
                                                     analysis starts with compliance cost                                        by the business. Correspondingly, the                         closure.
                                                     estimates from the EPA engineering                                          cost of capital reflects the combined                            EPA also identified facilities that
                                                     analysis (see section VII.B) and then                                       cost, after-tax, of equity and debt                           would likely incur moderate financial
                                                     calculates how these compliance costs                                       capital. For its analysis of economic/                        impacts, but that are not expected to
                                                     would affect the financial performance                                      financial impacts on the Manufacturers                        close, as a result of the rule. EPA
                                                     and condition of the sample facilities                                      industry segment, EPA used 7 percent                          established thresholds for two measures
                                                     and owning firms.                                                           as a real, after-tax cost of capital. Use of                  of financial performance and
                                                        Measures of economic impact include                                      the 7 percent discount rate is consistent                     condition—interest coverage ratio and
                                                     facility closures and associated losses in                                  with guidance from the Office of                              pre-tax return on assets—and compared
                                                     revenue and employment, financial                                           Management and Budget on the                                  the facilities’ performance before and
                                                     stress short of closure (‘‘moderate                                         opportunity cost of capital to society.                       after compliance under each regulatory
                                                     impacts’’), and firm-level impacts.68                                          In these analyses, EPA first calculated
                                                        In conducting the facility impact                                                                                                      option with these thresholds. EPA
                                                                                                                                 the baseline going concern value of the
                                                     analysis, EPA first eliminated from the                                                                                                   attributed incremental moderate
                                                                                                                                 facility using its baseline cash flow—
                                                     analysis those facilities that the Agency                                                                                                 impacts to the rule if both financial
                                                                                                                                 i.e., facility cash flow before
                                                     estimated to be at substantial risk of                                                                                                    ratios exceeded threshold values in the
                                                                                                                                 compliance-related outlays—and used
                                                     financial failure regardless of any                                         this value to determine whether a given                       baseline (i.e., there were no moderate
                                                     additional financial burden that might                                      facility is a baseline closure (for details                   impacts in the baseline), but at least one
                                                     result from the regulatory options under                                    see Chapter 4 of the EBA report). If EPA                      financial ratio fell below the threshold
                                                     consideration (baseline closure                                             found the facility’s estimated going                          value in the post-compliance case.
                                                     facilities). Second, for the remaining                                      concern value to be negative, then the                        i. Baseline Closure Analysis
                                                     facilities, EPA evaluated how                                               facility was judged a baseline closure—
                                                     compliance costs would likely affect                                        i.e., likely to fail financially,                                Exhibit VII–4 presents projected
                                                     facility financial performance and                                          independent of incurrence of                                  baseline closures for the estimated
                                                     condition. EPA identified a facility as a                                   compliance costs—and removed the                              facilities in the Primary Manufacturing
                                                     regulatory closure if it would have                                         facility from further consideration in the                    Industries and additional known
                                                     operated under baseline conditions but                                      impact and other economic analyses.                           facilities in Other Industries.69 From the
                                                     would fall below an acceptable financial                                       As the second step in the facility                         analysis as outlined above, EPA
                                                     performance level under the new                                             impact analysis, EPA adjusted the                             determined that 73 facilities (or 13
                                                     regulatory requirements.                                                    baseline cash flow to reflect the                             percent) of the estimated 569 regulated
                                                        EPA’s analysis of regulatory closures                                    expected financial effects of compliance                      facilities in the six Primary
                                                     is based on the estimated change in                                         technology installation and operation.                        Manufacturing Industries are baseline
                                                     facility After-Tax Cash Flow (cash flow)                                    Based on an assessment of cost pass-                          closures. The highest percentages of
                                                     as a result of the regulation and                                           through potential in the affected                             baseline closures occur in the Steel
                                                     specifically examines whether the                                           industries (see Chapter 5 and Appendix                        industry sector (32 percent). An
                                                     change in cash flow would be sufficient                                     4.A of the EBA), EPA assumed that none                        additional three facilities (or 30 percent)
                                                     to cause the facility’s going concern                                       of the facility’s compliance costs could                      of the 10 known facilities in Other
                                                     business value to become negative. EPA                                      be passed on to its customers as price                        Industries are projected to be baseline
                                                     calculated business value using a                                           and revenue increases—i.e., all                               closures. These facilities were excluded
                                                     discounted cash flow framework in                                           compliance costs must be absorbed                             from the post-compliance analysis of
                                                     which cash flow is discounted at an                                         within the facility’s cash flow. EPA then                     regulatory impacts, leaving 504 facilities
                                                     estimated cost of capital to calculate the                                  recalculated the facility’s business value                    for the assessment of compliance
                                                     going concern value of the facility. The                                    using the adjusted post-compliance cash                       impacts.

                                                                                                 EXHIBIT VII–4—SUMMARY OF BASELINE CLOSURES FOR MANUFACTURERS
                                                                                                                                                               Total number of          Number of          Percentage of            Operating in
                                                                                                   Sector                                                         facilities a       baseline closures    baseline closures          baseline

                                                     Paper ...............................................................................................                     230                  32                     14                    198
                                                     Chemicals ........................................................................................                        171                   4                      3                    167
                                                     Petroleum .........................................................................................                        36                   5                     15                     30
                                                     Steel .................................................................................................                    68                  22                     32                     46
                                                     Aluminum .........................................................................................                         27                   3                     12                     24
                                                     Food and Kindred Products .............................................................                                    37                   6                     17                     31
                                                     Total Facilities in Primary Manufacturing Industries ........................                                             569                  73                     13                    497
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                                                       68 For the analysis of three regulatory options                           responses of 14 sample facilities lacked certain              frames were adjusted upwards to account for their
                                                     presented in this document, neither employment                              financial data needed for the facility impact                 removal (the revised weights are referred to as the
                                                     loss nor output loss were in fact relevant because                          analysis while containing sufficient data to support          economic analysis weights). The difference in the
                                                     none of these options resulted in regulatory                                estimates of facility counts and compliance costs.            reported facility totals in the impact and social cost
                                                                                                                                 EPA therefore retained these sample facilities (37
                                                     closures.                                                                                                                                 analyses reflects the removal of these 14 facilities
                                                                                                                                 sample weighted facilities) in the broader analyses
                                                       69 The estimated number of Manufacturers
                                                                                                                                 but excluded them from the impact analysis. When              and the use of adjusted sample weights, which due
                                                     facilities considered in the impact analysis (579)                          these sample facilities were excluded from the                to rounding error results in a difference of 13
                                                     differs from the number reported in the broader                             impact analysis, the sample weights for the                   between the facilities in the impact analysis and
                                                     analyses (592). EPA determined that the survey                              remaining facilities within the affected sample               those in the other analyses.



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                                                                                 Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                        22221

                                                                                 EXHIBIT VII–4—SUMMARY OF BASELINE CLOSURES FOR MANUFACTURERS—Continued
                                                                                                                                                 Total number of           Number of          Percentage of       Operating in
                                                                                             Sector                                                 facilities a        baseline closures    baseline closures     baseline

                                                     Additional known facilities in Other Industries .................................                            10                     3                   30                  7

                                                            Total Manufacturers Facilities ...................................................                    579                  76                    13               504
                                                        a   Economic Analysis Weights were used to determine facility counts. See preceding footnote.


                                                     ii. Number of Facilities Subject to                               need to install a cooling tower to meet                    The reported costs exclude compliance
                                                     National Standards                                                these requirements. In addition, EPA                       costs for baseline closures. The total
                                                                                                                       estimates that 181 facilities would need                   annualized, after-tax compliance cost
                                                       EPA estimates that all of these 504                             to install additional IM technology to                     reported in Exhibit VII–5 represents the
                                                     Manufacturers facilities—497 facilities                           meet Option 3’s regulatory                                 cost actually incurred by complying
                                                     in the Primary Manufacturing Industries                           requirements. Under Option 4, 156
                                                     and 7 facilities in the Other Industries—                                                                                    firms, taking into account the reductions
                                                                                                                       facilities would be required to meet IM                    in tax liability resulting from
                                                     are subject to the requirements under                             standards; in this case, EPA estimates
                                                     the four regulatory options, although the                                                                                    compliance outlays and assuming no
                                                                                                                       that 139 facilities would need to install                  recovery of costs from customers
                                                     technology response anticipated at                                new technology to meet this
                                                     individual facilities differs under each                                                                                     through increased prices. The after-tax
                                                                                                                       requirement.                                               analysis uses a combined federal/State
                                                     option. Under Option 1, all 504 facilities
                                                     passing the baseline closure test would                           iii. Post-Compliance Facility Impact                       tax rate, and accounts for facilities’
                                                     be required to meet IM standards and                              Analysis; Summary of Impacts                               baseline tax circumstances. Specifically,
                                                     EPA estimates that 370 will need to                                  Of the 504 Manufacturers facilities                     tax offsets to compliance costs are
                                                     install new technology in order to do so.                         potentially subject to regulation after                    limited not to exceed facility-level tax
                                                     Under Option 2, 57 facilities with DIF                            excluding baseline closures, EPA                           payments as reported in facility
                                                     exceeding 125 MGD would be required                               estimated that no facilities would close                   questionnaire responses. The total
                                                     to meet I&E mortality standards, and                              or incur employment losses as a result                     annualized, after-tax compliance cost
                                                     EPA estimates that all of these facilities                        of the Options. EPA also found that no                     reported here is the sum of annualized,
                                                     would need to retrofit closed-cycle                               facilities would incur moderate impacts                    after-tax costs by facility at the year of
                                                     cooling. The remaining 448 facilities                             under Options 1, 2, and 4, but 17                          compliance, using a 7 percent after-tax
                                                     would be subject only to IM standards,                            facilities would incur moderate impacts                    cost of capital. This cost calculation
                                                     and EPA estimates that 366 would need                             under Option 3.                                            differs from the calculation of
                                                     to install new technology to meet these                              Exhibit VII–5 summarizes the                            compliance costs as included in the
                                                     requirements. Under Option 3, all 504                             estimated impacts of the proposed rule                     calculation of the total social costs of
                                                     facilities would be required to meet I&E                          on Manufacturers by option, including                      the regulation (see Section VII.C) where
                                                     mortality standards, and in this case                             facility impacts and total annualized                      costs are accounted for on a pre-tax
                                                     EPA estimates that 426 facilities would                           compliance costs on an after-tax basis.                    basis.

                                                                                     EXHIBIT VII–5—FACILITY IMPACTS AND COMPLIANCE COSTS FOR MANUFACTURERS
                                                                                                                                                      Option 1              Option 2              Option 3         Option 4

                                                                                                                              Primary Manufacturing Industries

                                                     Number of Facilities Operating in Baseline .....................................                         497                   497                   497               497
                                                     Number of Closures (Severe Impacts) ............................................                           0                      0                    0                 0
                                                     Percentage of Facilities Closing ......................................................                  0%                     0%                   0%                0%
                                                     Number of Facilities with Moderate Impacts ...................................                             0                      0                   17                 0
                                                     Percentage of Facilities with Moderate Impacts ..............................                            0%                     0%                3.40%             0.00%
                                                     Annualized Compliance Costs (after tax, million 2009 $) ...............                               $40.78                $108.71              $147.87            $23.38

                                                                                                                     Additional Known Facilities in Other Industries

                                                     Number of Facilities Operating in Baseline .....................................                            7                     7                    7                  7
                                                     Number of Closures (Severe Impacts) ............................................                            0                     0                    0                  0
                                                     Percentage of Facilities Closing ......................................................                   0%                    0%                   0%                 0%
                                                     Number of Facilities with Moderate Impacts ...................................                              0                     0                    0                  0
                                                     Percentage of Facilities with Moderate Impacts ..............................                             0%                    0%                   0%                 0%
                                                     Annualized Compliance Costs (after tax, million 2009 $) ...............                                 $1.13                 $1.52                $1.99              $0.60
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                                                     iv. Firm-Level Impact                                             water intake structures. A firm that                       a percentage of firm revenue and reports
                                                                                                                       owns multiple facilities could be                          here the estimated number and
                                                       In addition to analyzing the impact of                          adversely affected due to the cumulative                   percentage of affected firms incurring
                                                     the regulation at the facility level, EPA                         burden of regulatory requirements over                     compliance costs in three cost-to-
                                                     also examined the impact of the                                   these facilities. For the assessment of                    revenue ranges: Less than 1 percent; at
                                                     proposed rule on firms that own                                   firm-level effects, EPA calculated                         least 1 percent but less than 3 percent;
                                                     manufacturing facilities with cooling                             annualized after-tax compliance costs as                   and 3 percent or higher.


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                                                     22222                         Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                        EPA’s sample-based analysis of                                      firms incurring compliance costs and                          requirements under the regulation;
                                                     facilities in the Primary Manufacturing                                the costs incurred by any firm owning                         lower bound estimate of total
                                                     Industries supports specific estimates of                              a regulated facility. The cases are as                        compliance costs that a firm may incur.
                                                     the number of facilities expected to be                                follows:                                                      For this case, EPA inverted the prior
                                                     affected by the regulation and the total                                  1. Lower bound estimate of number of                       assumption and assumed (1) that a firm
                                                     compliance costs expected to be                                        firms owning facilities that face                             owns only the regulated sample
                                                     incurred in these facilities. However,                                 requirements under the regulation;                            facility(ies) that it is known to own from
                                                     the sample-based analysis does not                                     upper bound estimate of total                                 the sample analysis and (2) that this
                                                     support specific estimates of the number                               compliance costs that a firm may incur.                       pattern of ownership, observed for
                                                     of firms that own facilities in the                                    For this case, EPA assumed that any
                                                                                                                                                                                          sampled facilities and their owning
                                                     Primary Manufacturing Industries. In                                   firm owning a regulated sample
                                                                                                                                                                                          firms, extends over the facility
                                                     addition, and as a corollary, the sample-                              facility(ies), owns the known sample
                                                     based analysis does not support specific                               facility(ies) and all of the sample                           population represented by the sample
                                                     estimates of the number of regulated                                   weights associated with the sample                            facilities. This case minimizes the
                                                     facilities that may be owned by a single                               facility(ies). This case yields an                            possibility of multi-facility ownership
                                                     firm, or of the total of compliance costs                              approximate lower bound estimate of                           by a single firm and thus maximizes the
                                                     across regulated facilities that may be                                the count of affected firms, and an                           count of affected firms, but also
                                                     owned by a single firm. For the firm-                                  approximate upper bound estimate of                           minimizes the potential cost burden to
                                                     level analysis, EPA therefore considered                               the potential cost burden to any single                       any single firm.
                                                     two approximate bounding cases based                                   firm (see EBA Chapter 4 for information                          Exhibit VII–6 summarizes the results
                                                     on the sample weights developed from                                   on the analysis of firm-level impacts).                       of the firm-level analysis for these two
                                                     the facility survey. These cases provide                                  2. Upper bound estimate of number of                       analytic cases.
                                                     a range of estimates for the number of                                 firms owning facilities that face

                                                                    EXHIBIT VII–6—FIRM-LEVEL AFTER-TAX ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF REVENUE
                                                                                                                               Not analyzed due to            Number and percentage with after tax annual compliance costs/an-
                                                                                                                                 lack of revenue                                    nual revenue of:
                                                                                                                                   information b
                                                        Number of firms in the analysis                         Pot. reg.                                       Less than 1%                       1–3%                      At least 3%
                                                                                                                               Number           %             Num-              %
                                                                                                                                                               ber                        Number             %          Number             %

                                                                                                                                  Primary Manufacturing Industries


                                                     Case 1: Lower bound estimate of number of firms owning facilities that face requirements under the regulation; upper bound estimate of total
                                                       compliance costs that a firm may incur a

                                                     Option   1   ...........................................        117                3              3         113                 96             0              0             1              1
                                                     Option   2   ...........................................        117                3              3         113                 96             0              0             1              1
                                                     Option   3   ...........................................        117                3              3         113                 96             0              0             1              1
                                                     Option   4   ...........................................        117                0              0         117                100             0              0             0              0


                                                     Case 2: Upper bound estimate of number of firms owning facilities that face requirements under the regulation; lower bound estimate of total
                                                       compliance costs that a firm may incur.

                                                     Option   1   ...........................................        359                9              3         349                 97             0              0             1              0
                                                     Option   2   ...........................................        359                9              3         349                 97             0              0             1              0
                                                     Option   3   ...........................................        359                9              3         349                 97             0              0             1              0
                                                     Option   4   ...........................................        359                0              0         359                100             0              0             0              0

                                                                                                                                            Other Industries

                                                     Option   1   ...........................................           9               0              0               9            100             0              0             0              0
                                                     Option   2   ...........................................           9               0              0               9            100             0              0             0              0
                                                     Option   3   ...........................................           9               0              0               9            100             0              0             0              0
                                                     Option   4   ...........................................           9               0              0               9            100             0              0             0              0
                                                       a The alternative analysis case concepts are not applicable to the Other Industries firms and facilities, because these facilities do not receive
                                                     sample weights.
                                                       b For Options 1, 2, and 3, all facilities and parent firms are assigned costs; however three firms are not analyzed because no revenue data is
                                                     available. In Option 4, these three firms are assigned no costs, and so by definition have cost to revenue ratios less than 1% and are cat-
                                                     egorized as such.
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                                                        As presented in Exhibit VII–6, EPA                                  ownership cases outlined above. An                              EPA’s analyses indicate that the
                                                     estimated that the number of firms                                     additional 9 firms are known to own                           number of firms falling in the reported
                                                     owning regulated facilities in the                                     facilities in Other Industries.70                             cost-to-revenue impact ranges is the
                                                     Primary Manufacturing Industries range
                                                     from 117 (Case 1 estimate) to 359 (Case                                  70 The alternative analysis case approaches are             facilities, because these facilities do not receive
                                                     2 estimate), depending on the assumed                                  not applicable to the Other Industries firms and              sample weights.



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                                                                                   Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                               22223

                                                     same across Options 1, 2, and 3, by                                      options in three major ways: (1) Entity                  complying facilities, EPA calculated the
                                                     analysis case. No firms fall in the                                      level impacts (at both the facility and                  annualized after-tax compliance costs of
                                                     reported impact ranges under Option 4                                    parent company levels), (2) potential                    the regulatory options as a percentage of
                                                     for either analysis case. Under Case 1,                                  electricity price effects on residential                 baseline annual revenues, for 559 in-
                                                     Lower Bound Estimate of Number of                                        and other electricity consumers, and (3)                 scope facilities.71 72 Most of the revenue
                                                     Firms Owning Facilities/Upper Bound                                      broader electricity market impacts                       estimates used in this analysis were
                                                     Estimate of Costs Incurred by these                                      (taking into account the                                 developed using the average of facility-
                                                     Firms, zero of the estimated 117 firms                                   interconnectedness of regional and                       specific baseline (i.e., pre-promulgation)
                                                     owning Manufacturers facilities incur                                    national electricity markets, using five                 projections from the Integrated Planning
                                                     costs between 1 and 3 percent of                                         metrics, for the full industry, for in-                  Model (IPM) for 2015, 2020, 2025, and
                                                     revenue for all Options, and one firm                                    scope facilities only, and as the                        2028.73 In a few instances where IPM-
                                                     incurs costs exceeding 3 percent of                                      distribution of impacts at the facility
                                                     revenue under Options 1, 2, and 3. No                                                                                             based revenue values were not
                                                                                                                              level).
                                                     firms incur costs exceeding 3 percent of                                                                                          available, EPA used estimates based on
                                                     revenue under Option 4. The remaining                                    1. Assessment of the Impact on                           Energy Information Administration
                                                     113 (Options 1, 2, and 3), and 117                                       Complying Facilities and Parent Entities                 (EIA) data. EPA performed this analysis
                                                     (Option 4) firms incur costs below 1                                                                                              for each of the 257 facilities for which
                                                                                                                                 EPA assessed the cost to complying
                                                     percent of revenue or no costs.                                                                                                   compliance cost estimates were
                                                                                                                              facilities and parent entities based on
                                                        Under Case 2, Upper Bound Estimate                                    cost-to-revenue analyses. For these two                  explicitly developed. As stated above,
                                                     of Number of Firms Owning Facilities/                                    analyses, the Agency assumed that none                   EPA used facility sample weights to
                                                     Lower Bound Estimate of Costs Incurred                                   of the compliance costs will be passed                   estimate the total numbers of in-scope
                                                     by these Firms, zero firms in the                                        on to consumers through electricity rate                 facilities that fall within various cost-to-
                                                     Primary manufacturing industries are                                     increases and will instead be absorbed                   revenue ranges as reported in Exhibit
                                                     estimated to incur costs between 1 and                                   by complying facilities and their parent                 VII–7 (see Chapter 5 of the EBA report
                                                     3 percent of revenue under all Options.                                  entities. In performing these and other                  for a discussion of the facility-level cost-
                                                     Like Case 1, one firm incurs costs                                       impact analyses, EPA developed and                       to-revenue analysis).
                                                     exceeding 3 percent of revenue under                                     used sample weights to extrapolate
                                                     Options 1, 2, and 3, and no firms incur                                                                                             Exhibit VII–7, below, summarizes the
                                                                                                                              impacts assessed initially at the level of               facility-level cost-to-revenue analysis
                                                     costs exceeding 3 percent of revenue                                     a sample of facilities to the full
                                                     under Option 4. The remaining 349, and                                                                                            results for each option, by North
                                                                                                                              population of in-scope facilities.                       American Electricity Reliability
                                                     359 firms, respectively, incur costs
                                                                                                                              Specifically, EPA developed and used                     Corporation (NERC) region.74 EPA
                                                     below 1 percent of revenue or no costs.
                                                        For the firms owning Other Industries                                 different sets of weights, with each                     estimates for Options 1 and 4, that the
                                                     facilities, EPA’s analysis indicates that                                weight set being used to derive a                        majority of facilities subject to today’s
                                                     across all Options, no firms incur costs                                 specific estimate and/or used with a
                                                                                                                                                                                       proposal will incur annualized costs of
                                                     exceeding 1 percent of revenue.                                          different set of sample facilities to
                                                                                                                                                                                       less than 1 percent of revenue (481
                                                        Regardless of the analysis case or                                    which the weights were applied to
                                                                                                                                                                                       facilities or 86 percent). Under Options
                                                     regulatory option, the number and                                        derive a given estimate. (See Appendix
                                                                                                                              3.A of the EBA report for a discussion                   2 and 3, the majority of in-scope
                                                     percentage of firms incurring costs                                                                                               facilities, 333 (or approximately 60
                                                     between one and three percent of                                         on weights development and
                                                                                                                              application.)                                            percent) and 386 (or approximately 69
                                                     revenue, or exceeding three percent of                                                                                            percent), respectively, will incur
                                                     revenue, are small.                                                      a. Cost-to-Revenue Analysis for                          annualized costs exceeding 3 percent of
                                                     b. Electric Generators                                                   Complying Facilities                                     revenue.
                                                        For Electric Generators, EPA assessed                                   To provide insight on the potential
                                                     the economic impact of the regulatory                                    significance of the compliance costs to

                                                       EXHIBIT VII–7—FACILITY-LEVEL COST-TO-REVENUE ANALYSIS RESULTS BY REGULATORY OPTION AND NERC REGION A
                                                                                                                                                           Number of facilities with cost-to-revenue          Minimum         Maximum
                                                                                                                                             No rev-                        ratio of
                                                                       Number of in-scope facilities a, b                                                                                                       ratio           ratio
                                                                                                                                             enue c                                                              %               %
                                                                                                                                                              < 1%             1–3%             > 3%

                                                                                                                                            Option 1: IM Everywhere

                                                     ASCC ...............................................................................              0                0               0               0            0.00             0.00
                                                     ERCOT .............................................................................               5               28               7               2            0.00             3.28
                                                     FRCC ...............................................................................              0               18               4               4            0.00             3.49

                                                       71 For private, tax-paying entities, after-tax costs                   by the concept of a given analysis (e.g., should cost    being out of service for an extended period. EPA
                                                     are a more relevant measure of potential cost                            and revenue values be as of the Rule promulgation        believes the resulting cost-to-revenue comparison
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                                                     burden than pre-tax costs. For non tax-paying                            year, as of a facility’s expected compliance year, or    provides a more realistic assessment of potential
                                                     entities (e.g., State government and municipality                        as of a post-compliance, steady state operations         impact on a ‘‘steady state’’ operations basis.
                                                     owners of in-scope facilities), the estimated costs                      year?) and the availability of data for the analysis.       74 The NERC regions used for summarizing these
                                                     used in this calculation include no adjustment for                       For more information on the methodology for the
                                                     taxes.                                                                   facility-level cost-to-revenue analysis, see Chapter 5   findings are as of 2008. Some NERC regions have
                                                       72 For the facility cost-to-revenue analysis, EPA                      of the EBA report.                                       been re-defined over the past few years. The NERC
                                                     estimated compliance costs for all facilities as of an                     73 To develop the average of year-by-year revenue      region definitions used in today’s Proposed Existing
                                                     assumed single proxy compliance year, 2015, for                          values over the data years, EPA set aside from the       Facilities Regulation analyses vary by analysis
                                                     comparison with 2015 revenues. EPA’s choice of                           averaging calculation, revenue values for years that     depending on which region definition aligns better
                                                     the year for which cost and revenue values are used                      are substantially lower than the otherwise ‘‘steady      with the data elements underlying the analysis.
                                                     in a particular part of the cost analysis was driven                     state average’’—e.g., because of a generating unit



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                                                      EXHIBIT VII–7—FACILITY-LEVEL COST-TO-REVENUE ANALYSIS RESULTS BY REGULATORY OPTION AND NERC REGION A—
                                                                                                     Continued
                                                                                                                                                             Number of facilities with cost-to-revenue        Minimum    Maximum
                                                                                                                                              No rev-                         ratio of
                                                                       Number of in-scope facilities a, b                                                                                                       ratio      ratio
                                                                                                                                              enue c                                                             %          %
                                                                                                                                                                < 1%             1–3%            > 3%

                                                     HICC ................................................................................              0                  2             2               0        0.34        1.04
                                                     MRO .................................................................................              0                 43             4               0        0.00        1.80
                                                     NPCC ...............................................................................               0                 49            14               0        0.00        2.64
                                                     RFC ..................................................................................             0                148            13               3        0.00        3.58
                                                     SERC ...............................................................................               0                146             6               5        0.00        3.61
                                                     SPP ..................................................................................             0                 28             6               0        0.00        2.38
                                                     WECC ..............................................................................                0                 19             0               4        0.00        3.38

                                                           Total ..........................................................................             5                481            55               18       0.00        3.61

                                                                                                             Option 2: IM Everywhere and EM for Facilities With DIF > 125 MGD

                                                     ASCC ...............................................................................               0                 0              0             0          0.00        0.00
                                                     ERCOT .............................................................................                5                 5              1            31          0.00       43.39
                                                     FRCC ...............................................................................               0                 5              4            16          0.00       35.37
                                                     HICC ................................................................................              0                 0              0             3          3.87        8.48
                                                     MRO .................................................................................              0                20              6            20          0.00       10.96
                                                     NPCC ...............................................................................               0                15             10            38          0.00       37.53
                                                     RFC ..................................................................................             0                47             15           102          0.00       12.50
                                                     SERC ...............................................................................               0                44             14           100          0.00       24.23
                                                     SPP ..................................................................................             0                11              6            17          0.00       49.66
                                                     WECC ..............................................................................                0                19              0             4          0.00       40.10

                                                           Total ..........................................................................             5                166            55           333          0.00       49.66

                                                                                                                                       Option 3: I&E Mortality Everywhere

                                                     ASCC ...............................................................................               0                 0              0             0          0.00        0.00
                                                     ERCOT .............................................................................                5                 5              1            31          0.00       43.39
                                                     FRCC ...............................................................................               0                 5              4            16          0.00       35.37
                                                     HICC ................................................................................              0                 0              0             3          3.87        8.48
                                                     MRO .................................................................................              0                 6              7            33          0.00       18.38
                                                     NPCC ...............................................................................               0                 0              9            55          1.22       37.53
                                                     RFC ..................................................................................             0                38              8           119          0.00       51.38
                                                     SERC ...............................................................................               0                29             22           106          0.00       28.47
                                                     SPP ..................................................................................             0                11              6            17          0.00       49.66
                                                     WECC ..............................................................................                0                17              0             6          0.00       40.10

                                                           Total ..........................................................................             5                112            57           386          0.00       51.38

                                                                                                                               Option 4: IM for Facilities With DIF > 50 MGD

                                                     ASCC ...............................................................................               0                  0             0               0        0.00        0.00
                                                     ERCOT .............................................................................                5                 28             7               2        0.00        3.28
                                                     FRCC ...............................................................................               0                 18             4               4        0.00        3.49
                                                     HICC ................................................................................              0                  2             2               0        0.34        1.04
                                                     MRO .................................................................................              0                 43             4               0        0.00        1.80
                                                     NPCC ...............................................................................               0                 52            11               0        0.00        2.64
                                                     RFC ..................................................................................             0                151            12               2        0.00        3.54
                                                     SERC ...............................................................................               0                148             5               5        0.00        3.61
                                                     SPP ..................................................................................             0                 28             6               0        0.00        2.38
                                                     WECC ..............................................................................                0                 19             0               4        0.00        3.38

                                                           Total ..........................................................................             5                488            49               17       0.00        3.61
                                                        a Noexplicitly analyzed facilities are located in the ASCC region. For more information on explicitly and implicitly analyzed in-scope facilities
                                                     see Appendix 3.A of the EBA report.
                                                       b Facility counts exclude baseline closures.
                                                       c IPM and EIA report no revenue for 2 facilities (5 on the weighted basis); consequently, facility-level cost-to-revenue analysis is performed for
                                                     257 facilities (559 on the weighted basis).
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                                                     b. Parent Entity-Level Cost-to-Revenue                                     analysis at the entity level provides                   and obtained the entity’s revenue from
                                                     Analysis                                                                   insight on the impact of compliance                     publicly available data sources. For 5
                                                       EPA also assessed the economic                                           requirements on those entities that own                 identified ultimate parent entities that
                                                     impact of the options considered for                                       more than one in-scope facility. For this               own at least one explicitly analyzed
                                                     today’s proposed rule at the parent                                        analysis, EPA identified the domestic                   Electric Generator (i.e., Detailed
                                                     entity-level. The cost-to-revenue                                          parent entity of each in-scope facility                 Questionnaire (DQ) facilities and a


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                                                                                    Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                            22225

                                                     subset of the Short Technical                                           the Appendix 3.A of the EBA report.                      • Using facility-level weights: For this
                                                     Questionnaire (STQ) facilities with re-                                 EPA defined two cases combining                        case, facility-level weights were applied
                                                     circulating systems in their baseline)                                  entity-level sample weights with                       to the estimated compliance costs for
                                                     and that are non-U.S. firms EPA could                                   facility-level weights to yield                        facilities identified as being owned by a
                                                     not obtain revenue for a domestic entity                                approximate estimates of the numbers of                given parent entity.75 This calculation
                                                     but did obtain revenue at the level of the                              parent entities incurring costs in                     may overstate the number of facilities
                                                     international parent entity; for these 5                                specific cost-to-revenue ranges. Each                  and compliance costs at the level of any
                                                     entities, EPA used this international                                   case addresses a specific element of the               given parent entity, but also likely
                                                     entity revenue in the cost-to-revenue                                   understanding of entity-level effects (see             underestimates the number of parent
                                                     analysis. EPA compared the total                                        Chapter 5 of the EBA report for a                      entities. This analysis indicates that 97
                                                     annualized after-tax compliance costs,                                  discussion of the entity-level cost-to-                unique parent entities own 559 facilities
                                                     as of 2015 to the identified parent                                     revenue analysis):                                     subject to today’s proposal. From this
                                                     entity’s total sales revenue (see Chapter                                  • Estimation of facility costs at the               analysis, EPA estimates that the
                                                     5 of the EBA report).                                                   level of the parent entity, accounting for             majority of parent entities will incur
                                                        Because compliance costs for the                                     the potential ownership of implicitly                  annualized costs of less than one
                                                     regulatory options were directly                                        analyzed, sample-represented facilities                percent of revenues under Option 1 (85
                                                     attributable to only a subset of the in-                                by an identified parent entity and                     out of 97 parent entities or 89 percent),
                                                     scope facilities (i.e., the explicitly                                     • Estimation of the number of parent                Option 2 (54 out of 97 parent entities or
                                                     analyzed, Detailed Questionnaire (DQ)                                   entities, accounting for the potential                 56 percent), and Option 4 (86 out of 97
                                                     facilities and a subset of the Short                                    presence of parent entities that own                   parent entities or 91 percent). Under the
                                                     Technical Questionnaire (STQ) facilities                                only (an) implicitly analyzed                          more costly Option 3, a nearly equal
                                                     with re-circulating systems in their                                    facility(ies) and thus cannot be                       number of entities are expected to incur
                                                     baseline) and were therefore able to be                                 associated with the explicitly analyzed                costs above and below 1 percent of
                                                     linked with only a subset of the parent                                 facilities.                                            revenue, i.e., 46 and 45 out of 91 parent
                                                     entities that own in-scope facilities, EPA                                 The two analysis cases and the                      entities, respectively, not taking into
                                                     developed and used entity-level sample                                  findings from their analysis are as                    account 6 parent entities with unknown
                                                     weights for this analysis, as outlined in                               follows:                                               revenue (see Exhibit VII–8).

                                                                     EXHIBIT VII–8—ENTITY-LEVEL COST-TO-REVENUE ANALYSIS RESULTS, USING FACILITY-LEVEL WEIGHTS
                                                                                                                                                                         Number of entities with cost-to-revenue ratio ofa
                                                                                                                        Total number         Total number
                                                                       Parent entity type                                of facilities b      of entities             < 1%            1–3%               > 3%              Unknown

                                                                                                                                           Option 1: IM Everywhere

                                                     Cooperative ..............................................                      25                   11                   10               0                  1                     0
                                                     Federal .....................................................                   16                    1                    1               0                  0                     0
                                                     Investor-owned .........................................                       306                   38                   38               0                  0                     0
                                                     Municipality ..............................................                     25                   13                    9               4                  0                     0
                                                     Nonutility ..................................................                  170                   30                   23               0                  1                     6
                                                     Other political subdivision ........................                             0                    0                    0               0                  0                     0
                                                     State .........................................................                 17                    4                    4               0                  0                     0

                                                           Total ..................................................                 559                   97                   85               4                  2                     6

                                                                                                             Option 2: IM Everywhere and EM for Facilities With DIF > 125 MGD

                                                     Cooperative ..............................................                      25                   11                    7              1                   3                     0
                                                     Federal .....................................................                   16                    1                    0              0                   1                     0
                                                     Investor-owned .........................................                       306                   38                   20             14                   4                     0
                                                     Municipality ..............................................                     25                   13                    6              5                   2                     0
                                                     Nonutility ..................................................                  170                   30                   18              2                   4                     6
                                                     Other political subdivision ........................                             0                    0                    0              0                   0                     0
                                                     State .........................................................                 17                    4                    3              0                   1                     0

                                                           Total ..................................................                 559                   97                   54             22                  15                     6

                                                                                                                                   Option 3: I&E Mortality Everywhere

                                                     Cooperative ..............................................                      25                   11                    4              3                   4                     0
                                                     Federal .....................................................                   16                    1                    0              0                   1                     0
                                                     Investor-owned .........................................                       306                   38                   20             14                   4                     0
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                                                     Municipality ..............................................                     25                   13                    2              5                   6                     0
                                                     Nonutility ..................................................                  170                   30                   18              2                   4                     6
                                                     Other political subdivision ........................                             0                    0                    0              0                   0                     0
                                                     State .........................................................                 17                    4                    2              1                   1                     0

                                                           Total ..................................................                 559                   97                   46             25                  20                     6


                                                       75 Parent entity weights were not used in this                        weights and entity weights would overstate,            facilities and compliance costs assigned to parent
                                                     calculation because the combination of facility                         perhaps substantially, the estimate of in-scope        entities.



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                                                         EXHIBIT VII–8—ENTITY-LEVEL COST-TO-REVENUE ANALYSIS RESULTS, USING FACILITY-LEVEL WEIGHTS—Continued
                                                                                                                                                                          Number of entities with cost-to-revenue ratio ofa
                                                                                                                        Total number         Total number
                                                                       Parent entity type                                of facilities b      of entities              < 1%            1–3%               > 3%              Unknown

                                                                                                                            Option 4: IM for Facilities With DIF > 50 MGD

                                                     Cooperative ..............................................                      25                   11                  10                 0                  1                      0
                                                     Federal .....................................................                   16                    1                   1                 0                  0                      0
                                                     Investor-owned .........................................                       306                   38                  38                 0                  0                      0
                                                     Municipality ..............................................                     25                   13                  10                 3                  0                      0
                                                     Nonutility ..................................................                  170                   30                  23                 0                  1                      6
                                                     Other political subdivision ........................                             0                    0                   0                 0                  0                      0
                                                     State .........................................................                 17                    4                   4                 0                  0                      0

                                                           Total ..................................................                 559                   97                  86                 3                  2                      6
                                                        a EPA  was unable to determine entity-level revenues for 6 (8 weighted) parent entities; consequently, for the purpose of this analysis, EPA
                                                     used the sum of facility-level revenues for facilities owned by these parent entities.
                                                       b Facility counts exclude baseline closures.




                                                       • Using entity-level weights: For this                                level of any given parent entity, but                   analysis, EPA estimates that the
                                                     case, entity-level weights were applied                                 accounts more comprehensively for the                   majority of parent entities will incur
                                                     to the calculated number of parent                                      number of parent entities owning in-                    annualized costs of less than one
                                                     entities estimated to incur costs in each                               scope facilities. This analysis found that              percent of revenues regardless of the
                                                     cost-to-revenue range.76 This                                           140 unique domestic parent entities                     option.
                                                     calculation may understate the number                                   own 257 facilities subject to today’s
                                                     of facilities and compliance costs at the                               proposal (see Exhibit VII–9).77 From this

                                                                      EXHIBIT VII–9—ENTITY-LEVEL COST-TO-REVENUE ANALYSIS RESULTS, USING ENTITY-LEVEL WEIGHTS
                                                                                                                                                                          Number of entities with cost-to-revenue ratio of a
                                                                                                                        Total number         Total number
                                                                       Parent entity type                                of facilities b      of entities c            < 1%            1–3%               > 3%              Unknown

                                                                                                                                           Option 1: IM Everywhere

                                                     Cooperative ..............................................                      13                   20                  18                 2                  0                      0
                                                     Federal .....................................................                    7                    1                   1                 0                  0                      0
                                                     Investor-owned .........................................                       138                   42                  42                 0                  0                      0
                                                     Municipality ..............................................                     13                   35                  35                 0                  0                      0
                                                     Nonutility ..................................................                   78                   38                  29                 0                  1                      8
                                                     Other political subdivision ........................                             0                    0                   0                 0                  0                      0
                                                     State .........................................................                  8                    4                   4                 0                  0                      0

                                                           Total ..................................................                 257                   140                 129                2                  1                      8

                                                                                                             Option 2: IM Everywhere and EM for Facilities With DIF > 125 MGD

                                                     Cooperative ..............................................                      13                   20                  13                 5                  2                      0
                                                     Federal .....................................................                    7                    1                   0                 0                  1                      0
                                                     Investor-owned .........................................                       138                   42                  35                 6                  1                      0
                                                     Municipality ..............................................                     13                   35                  24                 8                  3                      0
                                                     Nonutility ..................................................                   78                   38                  25                 4                  1                      8
                                                     Other political subdivision ........................                             0                    0                   0                 0                  0                      0
                                                     State .........................................................                  8                    4                   3                 0                  1                      0

                                                           Total ..................................................                 257                   140                 101              23                   9                      8

                                                                                                                                   Option 3: I&E Mortality Everywhere

                                                     Cooperative ..............................................                      13                   20                   9                9                   2                      0
                                                     Federal .....................................................                    7                    1                   0                0                   1                      0
                                                     Investor-owned .........................................                       138                   42                  35                6                   1                      0
                                                     Municipality ..............................................                     13                   35                  13               11                  11                      0
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                                                     Nonutility ..................................................                   78                   38                  25                4                   1                      8
                                                     Other political subdivision ........................                             0                    0                   0                0                   0                      0
                                                     State .........................................................                  8                    4                   3                0                   1                      0


                                                       76 In the same way as stated above, facility                          estimate of in-scope facilities and compliance costs    Some NERC regions have been re-defined over the
                                                     weights were not used in conjunction with entity                        assigned to parent entities.                            past few years. The NERC region definitions used
                                                     weights because the combination of facility weights                        77 The NERC regions used to summarize these          in these analyses vary by analysis depending on
                                                     and entity weights would overstate, perhaps, the                        findings are as of 2004, which is the NERC region       which region definition aligns better with the data
                                                                                                                             basis used in the utility-level EIA 2007 database.      elements underlying the analysis.



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                                                                                    Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                           22227

                                                           EXHIBIT VII–9—ENTITY-LEVEL COST-TO-REVENUE ANALYSIS RESULTS, USING ENTITY-LEVEL WEIGHTS—Continued
                                                                                                                                                                         Number of entities with cost-to-revenue ratio of a
                                                                                                                        Total number       Total number
                                                                       Parent entity type                                of facilities b    of entities c             < 1%            1–3%              > 3%             Unknown

                                                           Total ..................................................                 257                  140                 86               29                 17                 8

                                                                                                                             Option 4: IM for Facilities With DIF > 50MGD

                                                     Cooperative ..............................................                      13                  20                  18                 2                 0                 0
                                                     Federal .....................................................                    7                   1                   1                 0                 0                 0
                                                     Investor-owned .........................................                       138                  42                  42                 0                 0                 0
                                                     Municipality ..............................................                     13                  35                  36                 0                 0                 0
                                                     Nonutility ..................................................                   78                  38                  29                 0                 1                 8
                                                     Other political subdivision ........................                             0                   0                   0                 0                 0                 0
                                                     State .........................................................                  8                   4                   4                 0                 0                 0

                                                           Total ..................................................                 257                  140                 130                2                 1                 8
                                                        a EPA   was unable to determine entity-level revenues for 6 (8 weighted) parent entities; consequently, for the purpose of this analysis, EPA
                                                     used the sum of facility-level revenues for facilities owned by these parent entities.
                                                        b Facility counts exclude baseline closures.
                                                        c There are a total of 143 parent entities on an unweighted basis, 3 of which are other political subdivision entities. These entities own only im-
                                                     plicitly analyzed facilities; consequently, there is no explicitly analyzed other political subdivision parent entity to represent these implicitly ana-
                                                     lyzed parent entities and total weighted entity counts do not include 3 other political subdivision entities.


                                                        As discussed above, because                                          percent, respectively) under Option 3.                 quantity for each NERC region as
                                                     compliance costs for the regulatory                                     The results for Option 4 are virtually                 reported by the EIA for 2007 for all
                                                     options were directly attributable to                                   identical to those of Option 1, with one               NERC regions except ASCC and HICC,
                                                     only a subset of the in-scope facilities                                fewer entity incurring costs between 1                 for which total 2015 electricity sales
                                                     and were therefore able to be linked                                    and 3 percent of revenue.                              projections came from the Department
                                                     with only a subset of the parent entities                                                                                      of Energy’s Annual Energy Outlook 2009
                                                                                                                             2. Assessment of Potential Electricity
                                                     that own in-scope facilities, EPA                                                                                              (AEO 2009).78 This analysis also uses
                                                                                                                             Price Effects
                                                     conducted entity cost-to-revenue                                                                                               the quantity of residential electricity
                                                     analysis using two weighting                                               As an additional measure of economic                sales per household as reported by the
                                                     approaches. Using facility-level weights                                impact, EPA assessed the potential                     2007 EIA for all NERC regions 2007.
                                                     is likely to underestimate the number of                                electricity price effects from today’s
                                                                                                                                                                                       To calculate the average cost per
                                                     parent entities and overstate the number                                Proposed Existing Facilities Regulation
                                                                                                                                                                                    household, by region, EPA divided total
                                                     of facilities and compliance costs at the                               in two ways: (1) An assessment of the
                                                                                                                                                                                    compliance costs for each NERC region
                                                     level of any given parent entity. At the                                potential annual increase in household
                                                                                                                                                                                    by the reported total MWh of sales
                                                     same time, using entity-level weights is                                electricity costs and (2) an assessment of
                                                                                                                                                                                    within the region. The potential annual
                                                     likely to account more comprehensively                                  the potential annual increase in
                                                                                                                                                                                    cost impact per household was then
                                                     for the number of parent entities owning                                electricity costs per MWh of total
                                                                                                                                                                                    calculated by multiplying the estimated
                                                     in-scope facilities but understate the                                  electricity sales. These analyses assume
                                                                                                                                                                                    average cost per MWh by the average
                                                     number of facilities and compliance                                     that all compliance costs will be passed
                                                                                                                                                                                    MWh per household, by NERC region.79
                                                     costs at the level of any given parent                                  through on a pre-tax basis as increased
                                                     entity.                                                                 electricity prices as opposed to the                      Exhibit VII–10 below, summarizes the
                                                        Under these alternative approaches, at                               treatment in the facility- and firm-level              annual household impact results for
                                                     the 1–3 percent of revenue impact level,                                analyses discussed in Section VII.D.b.1,               each option, by NERC region. These
                                                     EPA estimates that 4 and 2 firms (4.1                                   which assume that none of the                          results show that for Option 1, the
                                                     percent and 1.4 percent of firms owning                                 compliance costs will be passed to                     average annual cost per residential
                                                     in-scope facilities, respectively) would                                consumers through electricity rate                     household is expected to range from
                                                     fall in this impact range under Option                                  increases. For discussion of the                       $0.05 in WECC to $3.93 in SPP, for
                                                     1, 22 and 23 firms (22.7 percent and                                    reasonableness of this assumption see                  Option 2 from $0.09 in WECC to $27.11
                                                     16.4 percent, respectively) under Option                                EBA Chapter 5.                                         in SERC, and for Option 3 from $0.11
                                                     2, and 25 and 29 firms (25.8 percent and                                                                                       in WECC to $27.88 in SERC. Overall, for
                                                     20.7 percent, respectively) under Option                                a. Cost to Residential Households                      a typical U.S. household, Option 4 is
                                                     3. At the 3 percent of revenue impact                                      Using the assumptions outlined                      expected to result in the lowest annual
                                                     level, the Agency estimates that 2 and                                  above, EPA estimated the potential                     cost of $1.37 per household, while
                                                     1 firms (2.1 percent and 0.7 percent,                                   annual increase in electricity costs per               Option 3 is expected to result in the
                                                     respectively) would fall in this impact                                 household by NERC region. The                          highest annual cost of $17.60 per
                                                     range under Option 1, 15 and 9 firms                                    analysis uses the total annualized pre-                household. Option 1 and Option 2 are
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                                                     (15.5 percent and 6.4 percent,                                          tax compliance cost per megawatt hour                  estimated to result in annual costs of
                                                     respectively) under Option 2, and 20                                    (MWh) for the year 2015, in conjunction                $1.41 per household and $17.09 per
                                                     and 17 firms (20.6 percent and 12.1                                     with the reported total electricity sales              household, respectively.


                                                        78 AEO does not provide information for ASCC                         basis used in the utility-level EIA 2006 database.     analyses vary by analysis depending on which
                                                     and HICC.                                                               Some NERC regions have been re-defined over the        region definition aligns better with the data
                                                        79 The NERC regions used for summarizing these                       past few years. The NERC region definitions used       elements underlying the analysis.
                                                     findings are as of 2004, which is the NERC region                       in today’s Proposed Existing Facilities Regulation



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                                                     22228                           Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                       EXHIBIT VII–10—AVERAGE ANNUAL COST PER RESIDENTIAL HOUSEHOLD IN 2015 BY REGULATORY OPTION AND NERC
                                                                                                    REGION A B
                                                                                            NERC Region c                                                              Option 1             Option 2                Option 3             Option 4

                                                     ASCC ...............................................................................................                     $0.00                $0.00                    $0.00                $0.00
                                                     ECAR ...............................................................................................                      1.23                20.00                    20.47                 1.22
                                                     ERCOT ............................................................................................                        1.76                26.52                    26.52                 1.74
                                                     FRCC ...............................................................................................                      2.37                17.89                    18.21                 2.37
                                                     HICC ................................................................................................                     3.16                23.82                    23.82                 3.16
                                                     MAAC ...............................................................................................                      2.11                18.97                    19.31                 1.95
                                                     MAIN ................................................................................................                     1.46                19.18                    20.18                 1.41
                                                     MAPP ...............................................................................................                      1.79                16.00                    17.04                 1.74
                                                     NPCC ...............................................................................................                      1.38                19.89                    21.13                 1.37
                                                     SERC ...............................................................................................                      1.64                27.11                    27.88                 1.61
                                                     SPP ..................................................................................................                    3.93                21.56                    21.56                 3.86
                                                     WECC ..............................................................................................                       0.05                 0.09                     0.11                 0.01
                                                     U.S. ..................................................................................................                   1.41                17.09                    17.60                 1.37
                                                        a The
                                                            rate impact analysis assumes full pass-through of all compliance costs to electricity consumers.
                                                        b Cost
                                                             estimates exclude baseline closures.
                                                        c No
                                                           explicitly analyzed facilities are located in the ASCC region. For more information on explicitly and implicitly analyzed in-scope facilities
                                                     see Appendix 3.A of the EBA report.


                                                       As stated above, this analysis assumes                                    options. EPA used two data inputs in                               As reported in Exhibit VII–11,
                                                     that all of the compliance costs will be                                    this analysis (1) total pre-tax compliance                       annualized compliance costs (in dollars
                                                     passed onto consumers through                                               cost by NERC region, and (2) estimated                           per KWh sales) range from 0.001¢ in the
                                                     increased electricity rates. However, at                                    total electricity sales, from the AEO                            WECC region to 0.040¢ in the HICC
                                                     least some facilities and firms are likely                                  2009 for 2015, by NERC region, for all                           region for Option 1, from 0.001¢ in the
                                                     to absorb some of these costs, thereby                                      NERC regions except ASCC and HICC;                               WECC region to 0.303¢ in the HICC
                                                     reducing the impact of today’s proposed                                     for ASCC and HICC EPA used 2007 EIA.                             region for Options 2 and 3, and from
                                                     rule on electricity consumers. At the                                       The Agency summed sample-weighted                                less than 0.001¢ in the WECC region to
                                                     same time, EPA recognizes that Electric                                     pre-tax annualized compliance costs as                           0.040¢ in the HICC region for Option 4.
                                                     Generators that operate as regulated                                        of 2015 over complying facilities by
                                                                                                                                                                                                  On average, across the United States,
                                                     public utilities are generally permitted                                    NERC region to calculate an
                                                                                                                                                                                                  Option 4 results in the lowest cost of
                                                     to pass on environmental compliance                                         approximate total estimated annual cost
                                                                                                                                 in each region. EPA then calculated the                          0.012¢ per KWh, while Option 3 results
                                                     costs as rate increases to consumers.
                                                                                                                                 approximate average price impact per                             in the highest cost of 0.157¢ per KWh.
                                                     b. Compliance Cost per Unit of                                              unit of electricity consumption by                               Option 1 and Option 2 result in national
                                                     Electricity Sales                                                           dividing total compliance costs by the                           costs of 0.013¢ per KWh and 0.153¢ per
                                                        EPA also calculated the per unit of                                      reported total MWh of sales in each                              KWh, respectively.
                                                     electricity sales cost of the regulatory                                    NERC region.

                                                         EXHIBIT VII–11—COMPLIANCE COST PER UNIT OF ELECTRICITY SALES IN 2015 BY REGULATORY OPTION AND NERC
                                                                                            REGION (2009 ¢/KWH SALES) A B
                                                                                                                                                                         Annualized pre-tax                                     Compliance cost per
                                                                                                                                                                                                  Total electricity sales
                                                                                                NERC Region c                                                             compliance costs                                     unit of electricity sales
                                                                                                                                                                                                          (KWh)
                                                                                                                                                                             (2009 $)                                           (2009 ¢/KWh sales)

                                                                                                                                                 Option 1: IM Everywhere

                                                     ASCC .......................................................................................................                           $0             6,326,610,000                         0.000
                                                     ECAR .......................................................................................................                   62,390,503           569,849,487,305                         0.011
                                                     ERCOT ....................................................................................................                     40,029,111           313,395,965,576                         0.013
                                                     FRCC .......................................................................................................                   41,259,203           242,320,907,593                         0.017
                                                     HICC ........................................................................................................                   4,259,468            10,585,038,000                         0.040
                                                     MAAC .......................................................................................................                   61,468,467           294,365,234,375                         0.021
                                                     MAIN ........................................................................................................                  41,292,594           275,415,008,545                         0.015
                                                     MAPP .......................................................................................................                   27,565,966           165,189,056,396                         0.017
                                                     NPCC .......................................................................................................                   51,647,619           284,990,412,176                         0.018
                                                     SERC .......................................................................................................                   99,360,633           887,073,303,223                         0.011
                                                     SPP ..........................................................................................................                 63,811,175           204,172,271,729                         0.031
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                                                     WECC ......................................................................................................                     4,015,273           701,826,043,025                         0.001
                                                     U.S. ..........................................................................................................               497,100,012         3,960,424,804,688                         0.013

                                                                                                              Option 2: IM Everywhere and EM for Facilities with DIF > 125 MGD

                                                     ASCC .......................................................................................................                             0             6,326,610,000                        0.000
                                                     ECAR .......................................................................................................                 1,010,953,670           569,849,487,305                        0.177
                                                     ERCOT ....................................................................................................                     602,721,709           313,395,965,576                        0.192
                                                     FRCC .......................................................................................................                   311,699,736           242,320,907,593                        0.129
                                                     HICC ........................................................................................................                   32,074,166            10,585,038,000                        0.303



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                                                                                     Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                                      22229

                                                         EXHIBIT VII–11—COMPLIANCE COST PER UNIT OF ELECTRICITY SALES IN 2015 BY REGULATORY OPTION AND NERC
                                                                                      REGION (2009 ¢/KWH SALES) A B—Continued
                                                                                                                                                                        Annualized pre-tax                                  Compliance cost per
                                                                                                                                                                                                 Total electricity sales
                                                                                                NERC Region c                                                            compliance costs                                  unit of electricity sales
                                                                                                                                                                                                         (KWh)
                                                                                                                                                                            (2009 $)                                        (2009 ¢/KWh sales)

                                                     MAAC .......................................................................................................                551,710,436          294,365,234,375                        0.187
                                                     MAIN ........................................................................................................               542,786,160          275,415,008,545                        0.197
                                                     MAPP .......................................................................................................                246,541,770          165,189,056,396                        0.149
                                                     NPCC .......................................................................................................                744,738,535          284,990,412,176                        0.261
                                                     SERC .......................................................................................................              1,643,059,866          887,073,303,223                        0.185
                                                     SPP ..........................................................................................................              350,239,021          204,172,271,729                        0.172
                                                     WECC ......................................................................................................                   6,930,361          701,826,043,025                        0.001
                                                     U.S. ..........................................................................................................           6,043,455,430        3,960,424,804,688                        0.153

                                                                                                                                         Option 3: I&E Mortality Everywhere

                                                     ASCC .......................................................................................................                          0            6,326,610,000                        0.000
                                                     ECAR .......................................................................................................              1,035,075,751          569,849,487,305                        0.182
                                                     ERCOT ....................................................................................................                  602,721,709          313,395,965,576                        0.192
                                                     FRCC .......................................................................................................                317,419,881          242,320,907,593                        0.131
                                                     HICC ........................................................................................................                32,074,166           10,585,038,000                        0.303
                                                     MAAC .......................................................................................................                561,627,430          294,365,234,375                        0.191
                                                     MAIN ........................................................................................................               571,233,958          275,415,008,545                        0.207
                                                     MAPP .......................................................................................................                262,582,596          165,189,056,396                        0.159
                                                     NPCC .......................................................................................................                791,203,354          284,990,412,176                        0.278
                                                     SERC .......................................................................................................              1,689,520,164          887,073,303,223                        0.190
                                                     SPP ..........................................................................................................              350,239,021          204,172,271,729                        0.172
                                                     WECC ......................................................................................................                   8,641,891          701,826,043,025                        0.001
                                                     U.S. ..........................................................................................................           6,222,339,919        3,960,424,804,688                        0.157

                                                                                                                                 Option 4: IM for Facilities with DIF > 50MGD

                                                     ASCC .......................................................................................................                            0          6,326,610,000                        0.000
                                                     ECAR .......................................................................................................                   61,651,375        569,849,487,305                        0.011
                                                     ERCOT ....................................................................................................                     39,560,948        313,395,965,576                        0.013
                                                     FRCC .......................................................................................................                   41,259,203        242,320,907,593                        0.017
                                                     HICC ........................................................................................................                   4,259,468         10,585,038,000                        0.040
                                                     MAAC .......................................................................................................                   56,749,132        294,365,234,375                        0.019
                                                     MAIN ........................................................................................................                  40,018,375        275,415,008,545                        0.015
                                                     MAPP .......................................................................................................                   26,744,938        165,189,056,396                        0.016
                                                     NPCC .......................................................................................................                   51,290,663        284,990,412,176                        0.018
                                                     SERC .......................................................................................................                   97,785,654        887,073,303,223                        0.011
                                                     SPP ..........................................................................................................                 62,721,433        204,172,271,729                        0.031
                                                     WECC ......................................................................................................                       913,556        701,826,043,025                        0.000
                                                     U.S. ..........................................................................................................               482,954,744      3,960,424,804,688                        0.012
                                                        a Thisanalysis assumes full pass-through of all compliance costs to electricity consumers.
                                                        b Cost values exclude baseline closures.
                                                        c There are no explicitly analyzed facilities located in the ASCC region. For more information on explicitly and implicitly analyzed in-scope facili-
                                                     ties see Appendix 3.A of the EBA report.


                                                     3. Assessment of the Impacts in the                                         options because of the interdependence                          context of the broader electricity market
                                                     Context of Electricity Markets                                              of electricity generating units in                              instead of looking at the impact on a
                                                        In the analyses for the previous 316(b)                                  supplying power to the electric                                 standalone, single-facility basis.
                                                     regulations, EPA used the Integrated                                        transmission grid. Increases in                                    IPM V3.02 provides outputs for the
                                                     Planning Model (IPM), a comprehensive                                       electricity production costs and                                North American Electric Reliability
                                                     electricity market optimization model,                                      potential reductions in electricity                             Corporation (NERC) regions that lie
                                                     to assess the economic impact of                                            output at directly affected facilities—                         within the continental United States.
                                                     regulatory options within the context of                                    whether due to the temporary shutdown                           IPM V3.02 does not analyze electric
                                                     regional and national electricity                                           of electric generating units during                             power operations in Alaska and Hawaii
                                                     markets. For its economic impact                                            technology installation and/or the                              because these states’ electric power
                                                     assessment of today’s proposed                                              energy production penalties that can                            operations are not connected to the
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                                                     regulatory options, EPA used an                                             result from compliance system                                   continental U.S. power grid.
                                                     updated version of this same analytic                                       operation—can have a range of broader
                                                     system, Integrated Planning Model                                           market impacts that extend beyond the                              IPM V3.02 is based on an inventory of
                                                     Version 3.02 EISA (IPM V3.02), to assess                                    effect on complying facilities and their                        U.S. utility- and non-utility-owned
                                                     facility and market-level effects of the                                    direct customers. In addition, the                              boilers and generators that provide
                                                     options.                                                                    impact of compliance requirements on                            power to the integrated electric
                                                        Use of a comprehensive, market                                           directly affected facilities may be seen                        transmission grid, as recorded in the
                                                     analysis system is important in                                             differently when the analysis considers                         Department of Energy’s Energy
                                                     assessing the potential impact of the                                       the impact on those facilities in the                           Information Administration databases as


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                                                     22230                   Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     of 2005.80 The IPM baseline universe of                      EPA recognizes that due to downtime                  more—was not analyzed in IPM due to
                                                     facilities includes 533, or nearly all, of                or connection outages estimated to                      time constraints. Since this option
                                                     the 559 electric generating facilities that               occur in conjunction with installation of               mimics the requirements of Option 1,
                                                     EPA estimates will be within the scope                    several of the technologies, and the                    but only applies them to a subset of in-
                                                     of today’s proposed rule.81 IPM Version                   number of facilities that will need to                  scope facilities, the findings for this
                                                     3.02 embeds a baseline energy demand                      come into compliance over the years                     option in the IPM analysis would be
                                                     forecast that is derived from the                         after today’s rule is promulgated, short-               lower than those estimated for Option 1.
                                                     Department of Energy’s Annual Energy                      term electric reliability issues could
                                                     Outlook 2008 (AEO2008). IPM V3.02                         occur unless care is taken within each                    The IPM V3.02 runs provide analysis
                                                     incorporates in its analytic baseline the                 region to coordinate outages with NERC                  results for selected run-years. EPA
                                                     expected compliance response for the                      and, where possible, with normal                        specified these analysis years taking
                                                     following air regulations affecting the                   scheduled maintenance operations.                       into account the expected promulgation
                                                     power sector: Title IV of the Clean Air                   Based on this concern, EPA’s options                    date for today’s Proposed Existing
                                                     Act (the Acid Raid Program); the NOX                      were developed with flexibility                         Facilities Regulation (2012), the years in
                                                     SIP Call; various New Source Review                       provided to the permit authority to                     which facilities would be expected to
                                                     (NSR) settlements; 82 and several state                   tailor compliance timelines. EPA                        install compliance technology and
                                                     rules 83 affecting emissions of SO2 and                   anticipates in those instances where                    achieve compliance (2013–2027),87 and
                                                     NOX that were finalized through                           local electric reliability could be                     the years in which all complying
                                                     February 3, 2009. IPM also includes                       affected, facilities would notify the                   facilities would be expected to achieve
                                                     state rules that have been finalized and/                 Director via provisions in the permit                   compliance (2028 and subsequent
                                                     or approved by a state’s legislature or                   application. Once approved, facilities                  years). In the following sections, EPA
                                                     environmental agency, and in certain                      would receive workable construction                     reports results for the analysis year
                                                     instances, facility-level compliance                      schedules from permit writers to                        2028, which is the first year after
                                                     technology installations that have                        schedule installation down times                        promulgation in which all in-scope
                                                     already been undertaken because of                        without negatively impacting electric                   facilities would be expected to have
                                                     CAIR requirements.84 85                                   supply reliability.
                                                                                                                  In performing analyses based on IPM                  achieved compliance and thus
                                                        80 In some instances, facility information has been    V3.02, EPA first developed a baseline—                  represents a steady state of post-
                                                     updated to reflect known material changes in a            i.e., without regulation—projection of                  compliance operations, i.e., the steady-
                                                     plant’s generating capacity since 2005.
                                                                                                               electricity markets and facility                        state year.88 In addition, EPA also
                                                        81 The exclusions of facilities from the IPM
                                                                                                               operations over the period from the                     analyzed potential electricity market-
                                                     analysis include 4 facilities that are located in
                                                     Alaska or Hawaii (and thus not included in IPM),          expected promulgation date, 2012,                       level effects for years during which
                                                     4 ‘‘lower-48’’ facilities that are not connected to the   through 2028 (pre-regulation baseline                   facilities would be expected to shut
                                                     integrated electric transmission grid, 7 facilities       case). EPA then overlaid this analysis                  down operations temporarily to
                                                     excluded from the IPM baseline as the result of
                                                     custom adjustments made by ICF, and 11 facilities
                                                                                                               with the estimated compliance costs                     complete technology installation. For
                                                     that are not explicitly present in the 316(b) facility    and other operating effects—downtime                    the IPM-based analyses of IM-only
                                                     dataset for this analysis. See Chapter 6 of the EBA       for installation of compliance                          installations, the specified compliance
                                                     report for more details.                                  technology and energy penalty—for in-                   window is from 2013 to 2017, for
                                                        82 Include agreements between EPA and Southern
                                                                                                               scope facilities under selected                         cooling tower installations by fossil fuel
                                                     Indiana Gas and Electric Company (Vectren), Public
                                                     Service Enterprise Group, Tampa Electric Company,         regulatory options (post-compliance                     electric power generating facilities from
                                                     We Energies (WEPCO), Virginia Electric & Power            cases).                                                 2018 to 2022, and for cooling tower
                                                     Company (Dominion), Santee Cooper, Minnkota                  For the IPM analysis, EPA analyzed                   installations by nuclear electric power
                                                     Power Coop, American Electric Power (AEP), East           three options that closely correspond to
                                                     Kentucky Power Cooperative (EKPC), Nevada                                                                         generating facilities from 2023 to 2027.
                                                     Power Company, Illinois Power, Mirant, Ohio               those discussed elsewhere in this                       Consequently, the analysis of
                                                     Edison, and Kentucky.                                     document: (1) Non-Cooling Tower-                        compliance technology installation
                                                        83 Include current and future state programs in        Based Impingement and Entrainment
                                                     Connecticut, Delaware, Georgia, Illinois, Maine,
                                                                                                                                                                       downtime used output from model run-
                                                                                                               requirements at all in-scope facilities
                                                     Maryland, Massachusetts, Minnesota, Missouri,                                                                     years 2015 for IM technology
                                                                                                               (Option 1: IM Everywhere), (2)
                                                     New Hampshire, North Carolina, New Jersey, New                                                                    installations and 2020 and 2025 for CT
                                                     York, Oregon, Texas, and Wisconsin.                       Impingement Mortality Controls at all
                                                        84 For a detailed description of IPM Version 3.02,     in-scope facilities, and Cooling Towers                 installations by fossil fuel and nuclear
                                                     see Chapter 6 of the EBA report.                          at all in-scope facilities with DIF                     electric power generating facilities,
                                                        85 At the time that EPA began analyzing the
                                                                                                               exceeding 125 MGD (Option 2: IM                         respectively. The impacts of the analysis
                                                     Proposed Existing Facilities Rule options, the
                                                                                                               Everywhere and EM for Facilities with                   options are measured as the difference
                                                     Agency was still developing the regulatory                                                                        between key economic and operational
                                                     standards to replace CAIR requirements. The               DIF>125MGD), and (3) Cooling Towers
                                                     Transport Rule, which replaces CAIR, was proposed         at all in-scope facilities (Option 3: I&E               impact metrics between the pre-
                                                     on July 6, 2010, i.e., after EPA began to develop the     Mortality Everywhere).86 The fourth                     regulation baseline case and the post-
                                                     baseline for the current 316(b) existing facilities                                                               compliance case.
                                                     rule analyses. Consequently, the IPM baseline used
                                                                                                               option discussed elsewhere in this
                                                     for the analysis of the Proposed existing facilities      document—Option 4: Non-Cooling
                                                     rule options does not reflect requirements under the      Tower-Based Impingement and                                87 For the IPM-based analyses of IM-only

                                                     newly proposed Transport Rule. However, because           Entrainment requirements at all in-                     installations, the specified compliance window is
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                                                     EPA used IPM v3.02 EISA, i.e., the same IPM                                                                       from 2013 to 2017, for cooling tower installations
                                                     version used for the market model analysis of
                                                                                                               scope facilities with DIF of 50 MGD or
                                                                                                                                                                       by fossil fuel electric power generating facilities
                                                     316(b) regulatory options, to assess the impact of                                                                from 2018 to 2022, and for cooling tower
                                                     the proposed Transport Rule on the U.S. electric          given the uncertainties regarding the final standards
                                                                                                                                                                       installations by nuclear electric power generating
                                                     power sector, the 316(b) baseline includes other          promulgated, and the specific requirements that
                                                                                                                                                                       facilities from 2023 to 2027.
                                                     important existing regulations currently affecting        States will adopt in implementing the Transport
                                                                                                                                                                          88 The first year of full compliance is 2028 for
                                                     this industry sector. Consequently, on balance, EPA       Rule.
                                                     judges that the performance of the market model              86 The costs as analyzed in IPM differ slightly      Options 2 and 3, and 2018 for Option 1. To
                                                     analyses against the v3.02 EISA constitutes a             from those used in the non-IPM analyses. For more       facilitate comparison of market-level impacts across
                                                     reasonable cost and economic impact analysis for          details on these differences see Chapter 6 of the       options, this presentation focuses on 2028 as the
                                                     the Proposed Existing Facilities Rule—in particular,      EBA report.                                             steady state comparison year.



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                                                                                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                22231

                                                     a. Analysis Results for the Year 2028—                        facility closures and partial facility                   and 3 (EPA did not run Option 4
                                                     To Reflect Steady State, Post-                                closures (i.e., unit closures) in aggregate              separately because EPA assumes
                                                     Compliance Operations                                         capacity terms; (2) incremental capacity                 baseline MW capacity basis Options 1
                                                                                                                   closures as a percentage of baseline                     and 4 are similar, and Option 4 is less
                                                       For the steady-state analysis (year                         capacity; (3) post-compliance changes in                 stringent than Option 1. Results for
                                                     2028), EPA considered impact metrics                          variable production costs per MWh,                       Option 1 can be viewed as an upper
                                                     of interest at three levels of aggregation:                   calculated as the sum of total fuel and                  bound estimate of the market impacts of
                                                     (1) Impact on national and regional                           variable O&M costs divided by net                        Option 4 in Exhibits VII–12, VII–13,
                                                     electricity markets, (2) impact on the                        generation; (4) post-compliance changes                  VII–14, and VII–15). The NERC regions
                                                     group of in-scope power generating                            in energy price, where energy prices are                 are as follows: ERCOT (Electric
                                                     facilities (i.e., facilities that are expected                defined as the wholesale prices received
                                                     to be within the scope of today’s                                                                                      Reliability Council of Texas), FRCC
                                                                                                                   by facilities for the sale of electric                   (Florida Reliability Coordinating
                                                     proposed regulation but do not                                generation; and (5) post-compliance
                                                     necessarily incur technology cost), and                                                                                Council), MRO (Midwest Reliability
                                                                                                                   changes in pre-tax income, where pre-                    Organization), NPCC (Northeast Power
                                                     (3) impact on individual in-scope                             tax income is defined as total revenue
                                                     facilities.                                                                                                            Coordination Council), RFC
                                                                                                                   minus the sum of fixed and variable                      (ReliabilityFirst Corporation), SERC
                                                     (1) Impact on National and Regional                           O&M costs, fuel costs, and annualized
                                                                                                                                                                            (Southeastern Electricity Reliability
                                                     Electricity Markets                                           capital costs.
                                                                                                                     Exhibit VII–12 reports results for the                 Council), SPP (Southwest Power Pool),
                                                       For the assessment of market level                          three market model analysis Options for                  and WECC (Western Electricity
                                                     impacts, EPA considered five output                           each of the five metrics above, with                     Coordinating Council).
                                                     metrics from IPM V3.02: (1) Incremental                       national totals and detail at level of                      Additional results are presented in
                                                     capacity closures, calculated as the                          regional electricity markets defined on                  Chapter 6 of the EBA report. Chapter 6
                                                     difference between capacity under the                         the basis of the current NERC regions.                   also presents a more detailed
                                                     regulatory options and capacity under                         These market model analysis options                      interpretation of the results of the
                                                     the base case, which includes both full                       correspond to regulatory Options 1, 2,                   market-level analysis.

                                                        EXHIBIT VII–12—IMPACT OF MARKET MODEL ANALYSIS OPTIONS ON NATIONAL AND REGIONAL MARKETS AT THE YEAR
                                                                                                       2028
                                                                                                                            Incremental closures                   Change in vari-      Change in en-     Change in pre-
                                                                                              Baseline capacity                                                    able production      ergy price per     tax income
                                                              NERC region                           (MW)                                   Percent of base-         cost per MWh            MWh              (2009 $)
                                                                                                                    Capacity (MW)            line capacity               (%)                 (%)               (%)

                                                                                                                               Option 1: IM Everywhere

                                                     ERCOT .............................                98,757                  151                      0.2                 ¥0.1                   0.0             ¥0.4
                                                     FRCC ...............................               79,298                   75                      0.1                  0.3                   0.0             ¥0.4
                                                     MRO .................................              71,200                   29                      0.0                 ¥0.4                   0.0             ¥1.0
                                                     NPCC ...............................               79,688                  682                      0.9                 ¥0.4                   0.1              0.3
                                                     RFC ..................................            244,700                 ¥279                     ¥0.1                  0.2                   0.1             ¥0.1
                                                     SERC ...............................              286,461                  ¥79                      0.0                 ¥0.1                   0.0             ¥0.4
                                                     SPP ..................................             67,703                   13                      0.0                  0.0                   0.0             ¥0.5
                                                     WECC ..............................               219,764                    9                      0.0                  0.0                   0.0             ¥0.1

                                                           Total ..........................          1,147,571                       601                     0.1                0.0                 NA              ¥0.3

                                                                                                      Option 2: IM Everywhere and EM for Facilities with DIF > 125 MGD

                                                     ERCOT .............................                98,757                  4,462                        4.5             ¥1.1                  0.2              ¥9.5
                                                     FRCC ...............................               79,298                     36                        0.0              1.2                  0.1              ¥4.7
                                                     MRO .................................              71,200                    806                        1.1              1.5                  0.1              ¥8.4
                                                     NPCC ...............................               79,688                  3,862                        4.8             ¥2.6                 ¥1.6             ¥10.4
                                                     RFC ..................................            244,700                  3,197                        1.3              2.7                  0.3             ¥10.3
                                                     SERC ...............................              286,461                    903                        0.3              2.0                 ¥0.1              ¥8.9
                                                     SPP ..................................             67,703                    969                        1.4              0.9                 ¥0.1              ¥8.6
                                                     WECC ..............................               219,764                    184                        0.1              0.1                 ¥0.3              ¥0.8

                                                           Total ..........................          1,147,571                 14,418                        1.3                1.0                 NA              ¥7.6

                                                                                                                         Option 3—I&E Mortality Everywhere

                                                     ERCOT .............................                98,757                  4,498                        4.6             ¥1.2                  0.2              ¥9.5
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                                                     FRCC ...............................               79,298                     36                        0.0              1.3                  0.1              ¥4.8
                                                     MRO .................................              71,200                    801                        1.1              1.5                  0.1              ¥9.1
                                                     NPCC ...............................               79,688                  3,861                        4.8             ¥2.7                 ¥1.7             ¥11.0
                                                     RFC ..................................            244,700                  3,195                        1.3              2.7                  0.5             ¥10.2
                                                     SERC ...............................              286,461                    997                        0.3              2.0                  0.0              ¥8.9
                                                     SPP ..................................             67,703                  1,004                        1.5              0.9                  0.0              ¥8.7
                                                     WECC ..............................               219,764                    183                        0.1              0.1                 ¥0.3              ¥0.9

                                                           Total ..........................          1,147,571                 14,576                        1.3                1.0                 NA              ¥7.7



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                                                     22232                          Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                        As reported in Exhibit VII–12, the                                        Option 2 requires that facilities with                   facilities are required to install cooling
                                                     market model analysis indicates that                                      cooling water design intake of 125 MGD                      towers (nearly all) to meet compliance
                                                     Option 1 would have very small effects                                    or less meet non-cooling tower-based                        requirements. Under Option 3, capacity
                                                     on overall electricity markets, on both a                                 impingement mortality requirements                          loss is nearly the same as under Option
                                                     national and regional sub-market basis,                                   and site-specific entrainment mortality                     2—14,576 MW or 1.3 percent of the
                                                     in the year 2028, the first analysis year                                 BTA (i.e., Option 1 specifications),                        baseline capacity value—with all
                                                     of full compliance with the regulation.                                   while facilities with cooling water                         regions projected to incur closures. As
                                                     At the national level, the analysis                                       design intake exceeding 125 MGD                             under Option 2, the largest percentage
                                                     indicates a total reduction in capacity                                   install cooling towers. As expected, the                    impact under Option 3 occurs in NPCC,
                                                     from closures of 601 MW, or less than                                     market model analysis projects that the                     with a loss of approximately 4.8 percent
                                                     0.1 percent of the total capacity baseline                                more expensive Option 2 with some                           of the baseline capacity value. Similarly,
                                                     in 2028. At the regional level, the                                       facilities installing cooling towers                        the impact on variable production costs
                                                     greatest capacity reduction, 682 MW,                                      would have a greater impact than                            for electricity generation under Option 3
                                                     occurs in the NPCC region; this                                           Option 1 on national and regional                           is approximately the same as under
                                                     reduction would be approximately 0.9                                      electricity markets. Under Option 2,                        Option 2 at the national and regional
                                                     percent of baseline capacity. Two NERC                                    capacity closures total 14,418 MW, or                       level. At the national level, variable
                                                     regions—RFC and SERC—are estimated                                        1.3 percent of the baseline capacity                        production costs increase by 1.0
                                                     to experience avoided capacity                                            value, with all regions projected to incur                  percent, with the largest increase also
                                                     closures—i.e., one or more generating                                     closures. The largest percentage impact                     occurring in RFC, at 2.7 percent; again,
                                                     units that are otherwise projected to                                     occurs in NPCC, with a loss of                              only two of the 8 NERC regions—
                                                     cease operations in the baseline become                                   approximately 4.8 percent of the                            ERCOT and NPCC—record a decline of
                                                     more economically attractive sources of                                   baseline capacity value. Similarly,                         1.2 percent and 2.7 percent,
                                                     electricity in the post-compliance case,                                  variable production costs for electricity                   respectively. The effect on energy prices
                                                     because of relative changes in the                                        generation increase nationally by                           also varies across regions, with RFC
                                                     economics of electricity production                                       approximately 1.0 percent, with the                         recording the largest increase of 0.5
                                                     across the full market, and thus avoid                                    largest increase occurring in RFC, at 2.7                   percent and NPCC recording the largest
                                                     closure. This counterintuitive result is                                  percent; only two of the 8 NERC                             decline of 1.7 percent. The impact on
                                                     due to the integrated nature of                                           regions—ERCOT and NPCC—                                     total sector pre-tax income under
                                                     electricity markets.                                                      experience a decline of 1.1 percent and                     Option 3 is also similar to the impact
                                                        At the national level, the variable                                    2.6 percent, respectively. The effect on                    under Option 2; at the national level,
                                                     production cost of electricity stays                                      energy prices varies across regions, with                   pre-tax income declines by 7.7 percent
                                                     essentially the same, but with small                                      RFC recording the largest increase, at                      with all regions experiencing a loss in
                                                     variations by region. The greatest                                        0.3 percent, and NPCC recording the                         pre-tax income.
                                                     increase occurs in FRCC (0.3 percent)                                     largest decline, 1.6 percent. Finally, as
                                                     and the largest decline occurring in                                      would be expected with the higher                           (2) Impact on In-Scope Facilities
                                                     MRO and NPCC (0.4 percent). Energy                                        compliance outlays, longer installation
                                                     prices also change little across NERC                                     downtimes, and energy penalties with                           EPA used IPM V3.02 results for 2028
                                                     regions, with NPCC and RFC recording                                      some facilities installing cooling towers                   to assess the potential impact of the
                                                     small increases of 0.1 percent—these                                      under Option 2, total sector pre-tax                        regulatory Options on the subset of
                                                     very small estimated changes in energy                                    income is more materially affected                          electric generating facilities that are
                                                     prices are essentially within the analytic                                compared to Option 1: At the national                       estimated to be within the scope of
                                                     ‘‘noise’’ of the market model analysis                                    level, pre-tax income declines by 7.6                       today’s proposed regulation compliance
                                                     system. Given the additional costs from                                   percent. All regions experience a loss in                   requirements. Only results for in-scope
                                                     compliance with almost no change in                                       pre-tax income, with the largest loss                       facilities are reported in this analysis.
                                                     electricity prices, national sector-level                                 occurring in NPCC, at 10.4 percent.                            Exhibit VII–13 reports results for the
                                                     pre-tax income is projected to decline                                       The market model analysis projects                       first three of the regulatory Options for
                                                     slightly, by 0.3 percent. All regions                                     that the most expensive option, Option                      in-scope facilities, as a group. Chapter 6
                                                     except NPCC experience a decrease in                                      3 (I&E Mortality Everywhere), would                         of the EBA presents a more detailed
                                                     pre-tax income; the greatest decrease,                                    have a slightly greater impact on                           interpretation of the results of the
                                                     approximately 1.0 percent, occurs in                                      national and regional electricity markets                   analysis of today’s Proposed Existing
                                                     MRO.89                                                                    than Option 2, as more in-scope                             Facilities Regulation.

                                                               EXHIBIT VII–13—IMPACT OF MARKET MODEL ANALYSIS OPTIONS ON IN-SCOPE FACILITIES, AT THE YEAR 2028
                                                                                                                                                                                         Incremental closures                  Change in
                                                                                                                                                                                                                                 variable
                                                                                                                                                            Baseline capacity
                                                                                            NERC region                                                                                                  Percent of          production cost
                                                                                                                                                                  (MW)               Capacity             baseline              per MWh
                                                                                                                                                                                      (MW)                capacity              (percent)

                                                                                                                                              Option 1—IM Everywhere
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                                                     ERCOT ............................................................................................               35,985                 ¥99                   ¥0.3                  ¥0.2
                                                     FRCC ...............................................................................................             27,210                 ¥11                    0.0                   0.0

                                                       89 IPM does not model traditional utility rate                          occur, given that most States continue to operate           this section (Section VII. 2), assume full pass-
                                                     regulation but attempts to capture price effects as                       under traditional utility regulation. Likewise, the         through of compliance costs as increased electricity
                                                     though they occur in competitive, deregulated                             proposed rule’s impact on electric generators’ net          prices, which may more closely approximate the
                                                     markets. As a result, the price effects estimated in                      income may be overstated. In contrast, the                  price effect in regulated markets, but could
                                                     IPM may be less than those that would actually                            electricity rate impact analyses presented earlier in       overstate the price effect in deregulated markets.



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                                                                                    Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                                 22233

                                                             EXHIBIT VII–13—IMPACT OF MARKET MODEL ANALYSIS OPTIONS ON IN-SCOPE FACILITIES, AT THE YEAR 2028—
                                                                                                       Continued
                                                                                                                                                                                           Incremental closures                Change in
                                                                                                                                                                                                                                 variable
                                                                                                                                                              Baseline capacity
                                                                                             NERC region                                                                                                  Percent of         production cost
                                                                                                                                                                    (MW)               Capacity            baseline             per MWh
                                                                                                                                                                                        (MW)               capacity             (percent)

                                                     MRO .................................................................................................              29,131                 298                 1.0                 ¥0.3
                                                     NPCC ...............................................................................................               33,618                 859                 2.6                 ¥1.2
                                                     RFC ..................................................................................................            138,519                 ¥95                ¥0.1                  0.1
                                                     SERC ...............................................................................................              151,806                 198                 0.1                  0.0
                                                     SPP ..................................................................................................             23,879                ¥102                ¥0.4                 ¥0.2
                                                     WECC ..............................................................................................                38,906                   9                 0.0                 ¥0.1

                                                           Total ..........................................................................................            479,054                1,056                    0.2             ¥0.1

                                                                                                              Option 2—IM Everywhere and EM for Facilities With DIF 125 MGD

                                                     ERCOT ............................................................................................                 35,985                5,486               15.2                 ¥4.3
                                                     FRCC ...............................................................................................               27,210                ¥336                ¥1.2                  0.1
                                                     MRO .................................................................................................              29,131                  969                3.3                  2.6
                                                     NPCC ...............................................................................................               33,618                4,415               13.1                 ¥8.8
                                                     RFC ..................................................................................................            138,519                3,329                2.4                  1.9
                                                     SERC ...............................................................................................              151,806                  433                0.3                  2.1
                                                     SPP ..................................................................................................             23,879                2,285                9.6                 ¥1.2
                                                     WECC ..............................................................................................                38,906                  234                0.6                  0.7

                                                           Total ..........................................................................................            479,054               16,815                    3.5                0.5

                                                                                                                                       Option 3—I&E Mortality Everywhere

                                                     ERCOT ............................................................................................                 35,985                5,528               15.4                 ¥4.9
                                                     FRCC ...............................................................................................               27,210                ¥336                ¥1.2                  0.0
                                                     MRO .................................................................................................              29,131                1,016                3.5                  2.7
                                                     NPCC ...............................................................................................               33,618                4,415               13.1                 ¥9.0
                                                     RFC ..................................................................................................            138,519                3,329                2.4                  2.0
                                                     SERC ...............................................................................................              151,806                  699                0.5                  2.1
                                                     SPP ..................................................................................................             23,879                2,259                9.5                 ¥2.3
                                                     WECC ..............................................................................................                38,906                  234                0.6                  0.8

                                                           Total ..........................................................................................            479,054               17,144                    3.6                0.4



                                                       The market model analysis results for                                    assessed as closing, or avoiding closure,                    have little impact at the level of national
                                                     in-scope facilities show a greater degree                                  in the post-compliance case). Overall,                       and regional electricity markets.
                                                     of adverse impact than that observed                                       39 generating units close (approximately                        Finally, at the national level, variable
                                                     over all generating units. These more                                      9,874 MW) and 30 generating units                            production costs decline by
                                                     substantial adverse impacts among the                                      avoid closure (approximately 8,819                           approximately 0.1 percent as older, less-
                                                     directly affected in-scope units are offset                                MW) in the post-compliance case,                             efficient plants close and are replaced
                                                     by generally positive changes in                                           resulting in net closure of 9 generating                     by newer plants in the IPM model.
                                                     capacity and energy production at the                                      units (approximately 1,055 MW). The 39                       These effects vary by region, with some
                                                     facilities that are not directly by the                                    generating unit closures reflect full
                                                                                                                                                                                             regions experiencing slight increases,
                                                     proposed rule’s requirements, and                                          closure of 20 units in 13 facilities (5,647
                                                                                                                                                                                             while other regions experience slight
                                                     which are not included in this section’s                                   MW) and partial closure of 19 units in
                                                                                                                                                                                             decreases. These findings of very small
                                                     analysis.                                                                  16 facilities (4,227 MW). The largest
                                                                                                                                capacity loss occurs in NPCC (859 MW                         national and regional effects in these
                                                       Under Option 1, today’s preferred                                                                                                     impact metrics confirm EPA’s
                                                     option, looking over all in-scope                                          or 2.6 percent of baseline capacity).
                                                                                                                                                                                             assessment, stated in the preceding
                                                     facilities, the total capacity loss from                                     As described in the preceding section,                     paragraph, that the assessed capacity
                                                     early retirements is 1,056 MW at the                                       these net losses of capacity due to early                    closures among in-scope facilities are of
                                                     national level, or 0.2 percent of baseline                                 retirements among in-scope facilities are
                                                                                                                                                                                             little economic consequence in national
                                                     capacity in the in-scope units. The                                        offset at the total market level by
                                                                                                                                                                                             and regional electricity markets.
                                                     impact on capacity retirements varies                                      capacity increases among other
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                                                     across NERC regions with 4 out of 8                                        facilities. These capacity increases                            Again, the findings for the more
                                                     regions recording capacity closures and                                    typically occur through ‘‘earlier’’                          expensive Option 2 (IM Everywhere and
                                                     the remaining 4 experiencing avoided                                       construction of new generating units or                      EM for Facilities with DIF > 125MGD)
                                                     capacity closures. Some closures (or                                       repowering of existing units. These new                      are of greater consequence, as some
                                                     avoided closures) are full facility                                        units also typically operate with higher                     facilities would be required to incur the
                                                     closures (i.e., all generating units at the                                energy efficiency and lower electricity                      cost of cooling tower installation. The
                                                     facility close or avoid closure), while                                    production cost. As a result, the early                      total loss in capacity in 2028 is assessed
                                                     others are partial closures (i.e., at least                                retirements among in-scope facilities                        at 16,815 MW, with the largest capacity
                                                     one generating unit at the facility is                                     under the proposed regulatory option                         loss of 15.2 percent occurring in NPCC.


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                                                     22234                      Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                       In the same way as reported for                                 generating units. Under Option 2, 162               of fixed and variable O&M costs, fuel
                                                     Option 1, the capacity loss of 16,815                             generating units close (37,255 MW) and              costs, and capital costs.
                                                     MW under Option 2 also reflects a                                 88 generating units avoid closure                     Exhibit VII–14 presents the estimated
                                                     combination of early retirements and                              (20,258 MW), leading to an estimated                number of in-scope facilities with
                                                     avoided retirements of generating units.                          net closure of 74 generating units                  specific degrees of change in operations
                                                     Under Option 2, 149 generating units                              (16,997 MW). Out of the 162 closed                  and financial performance as a result of
                                                     close (36,163 MW) and 86 generating                               units, 79 units (23,262 MW) are in 39               today’s regulatory options. This exhibit
                                                     units avoid closure (19,186 MW),                                  fully closed facilities and 83 units                excludes in-scope facilities with
                                                     leading to an estimated net closure of 63                         (13,992 MW) are in 50 partially closed              estimated significant status changes in
                                                     generating units (16,977 MW). Out of                              facilities.                                         2028 that render these metrics of change
                                                     the 149 closed units, 72 units (22,976                              The impact on variable production
                                                                                                                                                                           not meaningful—i.e., under the
                                                     MW) are in 35 fully closed facilities and                         costs observed for Option 3 is similar in
                                                                                                                                                                           analyzed Option, a facility that is
                                                     77 units (13,186 MW) are in 46 partially                          magnitude to that observed for Option 2.
                                                                                                                                                                           assessed as either a full or partial
                                                     closed facilities.                                                At the national level, variable
                                                                                                                                                                           closure between the base case and the
                                                       Under Option 2, the findings for the                            production costs decline by
                                                     change in variable production cost are                                                                                post-compliance case. This is done
                                                                                                                       approximately 0.4 percent. Under
                                                     also considerably larger compared to                                                                                  because the measures presented in
                                                                                                                       Option 3, this effect also varies
                                                     Option 1. At the national level, Option                                                                               Exhibit VII–11 such as change in
                                                                                                                       considerably by region, with NPCC,
                                                     2 results in a 0.5 percent increase in                                                                                revenue would not be meaningful for
                                                                                                                       again, recording the largest decrease in
                                                     variable production cost. This effect                                                                                 these facilities. For example, for a
                                                                                                                       variable production costs (9.0 percent)
                                                     varies considerably by region, with                                                                                   facility that is projected to close in the
                                                                                                                       and MRO incurring the largest increase
                                                     NPCC recording the largest decrease in                                                                                post-compliance case, the reduction in
                                                                                                                       (2.7 percent).
                                                     variable production costs (8.8 percent)                                                                               revenue would be 100 percent. On this
                                                     and MRO incurring the largest increase                            (3) Impact on Individual In-Scope                   basis, 118 facilities are excluded from
                                                     (2.6 percent).                                                    Facilities                                          assessment under Option 1, 159
                                                       The analysis results for Option 3 are                             Results for the group of in-scope                 facilities under Option 2, and 165
                                                     similar to those for Option 2, and again                          facilities as a whole may mask shifts in            facilities under Option 3.
                                                     show a greater degree of impact on                                economic performance among                            In addition, the change in variable
                                                     capacity and electricity generation                               individual facilities subject to today’s            production cost per MWh of generation
                                                     among in-scope facilities compared to                             proposed rule. To assess potential                  could not be developed for facilities that
                                                     the degree of impact observed at the                              facility-level effects, EPA analyzed                have zero generation in either the
                                                     market level. At the national level,                              facility-specific changes between the               baseline or post-compliance cases. For
                                                     Option 3 results in 17,144 MW of retired                          base case and the post-compliance cases             these facilities—28, 21, and 18 facilities
                                                     capacity (compared to 16,815 MW                                   for the following metrics: (1) Capacity             under Options 1, 2, or 3, respectively—
                                                     under Option 2), which is                                         utilization (defined as annual generation           variable production cost per MWh
                                                     approximately 3.6 percent of total                                (MWh) divided by [capacity (MW) times               cannot be calculated for one or other of
                                                     baseline in-scope capacity (compared to                           8,760 hours]), (2) electricity generation,          the two cases (because the divisor,
                                                     3.5 percent under Option 2). As is the                            (3) revenue, (4) variable production                MWh, is zero), and therefore the change
                                                     case for Options 1 and 2, the net                                 costs per MWh, defined as variable                  in variable production cost per MWh
                                                     capacity reduction of 17,144 MW                                   O&M cost plus fuel cost divided by net              cannot be meaningfully determined.
                                                     reported for Option 3 includes early                              generation, and (5) pre-tax income,                 Facilities excluded from this assessment
                                                     retirement and avoided retirement of                              defined as total revenues minus the sum             are recorded in the ‘‘N/A’’ column.

                                                          EXHIBIT VII–14—IMPACT OF MARKET MODEL ANALYSIS OPTIONS ON INDIVIDUAL IN-SCOPE FACILITIES AT THE YEAR
                                                                                    2028—NUMBER OF FACILITIES BY IMPACT MAGNITUDE
                                                                                                                                   Reduction                                             Increase
                                                                                                                                                                  No
                                                                      Economic measures                                                                                                                        N/A b
                                                                                                                                                                change
                                                                                                                        > 3%          1–3%         < 1%                      < 1%           1–3%    > 3%

                                                                                                                                  Option 1—IM Everywhere

                                                     Change   in   Capacity Utilization a ......................              0            1            23          398             41          5          3      118
                                                     Change   in   Generation ......................................          6            7            39          391             26          0          2      118
                                                     Change   in   Revenue .........................................          5            3           164            4            282         13          0      118
                                                     Change   in   Variable Production Costs/MWh ....                         0            2            91           22            319          6          3      146
                                                     Change   in   Pre-Tax Income ..............................             40          126           243            0             55          4          3      118

                                                                                                      Option 2—IM Everywhere and EM for Facilities With DIF > 125 MGD

                                                     Change   in   Capacity     Utilization a ......................         13           18           102          147            104         24      22         159
                                                     Change   in   Generation ......................................        154           89             6          146              8         12      15         159
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                                                     Change   in   Revenue .........................................        139          103            51            0             73         54      10         159
                                                     Change   in   Variable Production Costs/MWh ....                         3            5            24           14            107         55     201         180
                                                     Change   in   Pre-Tax Income ..............................            267           33            55            0             28         23      24         159

                                                                                                                          Option 3—I&E Mortality Everywhere

                                                     Change   in   Capacity Utilization a ......................             10           16           132            96           118         25      27         165
                                                     Change   in   Generation ......................................        184          110             6            95             9         10      10         165
                                                     Change   in   Revenue .........................................        158          127            44             0            49         38       8         165
                                                     Change   in   Variable Production Costs/MWh ....                         4            8            15             9            74         63     233         183



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                                                                                  Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                       22235

                                                          EXHIBIT VII–14—IMPACT OF MARKET MODEL ANALYSIS OPTIONS ON INDIVIDUAL IN-SCOPE FACILITIES AT THE YEAR
                                                                              2028—NUMBER OF FACILITIES BY IMPACT MAGNITUDE—Continued
                                                                                                                                            Reduction                                           Increase
                                                                                                                                                                          No
                                                                       Economic measures                                                                                                                                 N/A b
                                                                                                                              > 3%           1–3%          < 1%         change        < 1%          1–3%      > 3%

                                                     Change in Pre-Tax Income ..............................                       315            12            41               0         24           11        21         165
                                                        a The change in capacity utilization is the difference between the capacity utilization percentages in the base case and post-compliance cases.
                                                     For all other measures, the change is expressed as the percentage change between the base case and post-compliance values.
                                                        b Facilities with status changes in either base case or post-compliance scenario have been excluded from these calculations. In addition, the
                                                     change in variable production cost per MWh could not be developed for 28, 21, and 18 facilities with zero generation in either base case or Op-
                                                     tions 1, 2, or 3 post-compliance scenarios, respectively.


                                                        For Option 1, which corresponds to                                 with 33 facilities expected to incur                      compliance technology would manifest
                                                     EPA’s proposed option, the analysis of                                reductions in pre-tax income of 1–3                       as increased electricity production costs
                                                     changes in individual facilities indicates                            percent and 267 facilities, greater than                  resulting from the dispatch of higher
                                                     that most facilities experience very                                  3 percent.                                                production cost generating units during
                                                     slight effects—no change, or less than a                                 As in the preceding discussions, the                   the periods when units are taken offline
                                                     1 percent reduction or 1 percent                                      findings for Option 3 are slightly more                   to install compliance technologies.
                                                     increase—in all of the impact metrics                                 consequential than those estimated for                    Because these effects are of most
                                                     except Change in Pre-Tax Income. Only                                 Option 2. For 294 facilities, the                         concern in terms of potential impact on
                                                     1 facility is estimated to incur a                                    reduction in generation is estimated to                   national and regional electricity
                                                     reduction in capacity utilization                                     exceed 1 percent; for 285 facilities, the                 markets, this section presents results
                                                     exceeding 1 percent; 13 facilities incur                              reduction in revenue is estimated to                      only for the total set of facilities
                                                     a reduction in generation exceeding 1                                 exceed 1 percent; for 296 facilities, the                 analyzed in IPM (Exhibit VII–15) and
                                                     percent; and 8 facilities incur a                                     increase in variable production costs is                  does not present results for the subset of
                                                     reduction in revenue exceeding 1                                      estimated to exceed 1 percent. The                        only in-scope facilities.
                                                     percent. Only 9 facilities incur an                                   change in pre-tax income is more
                                                                                                                           substantial, with 12 facilities expected                    For the assessment of compliance
                                                     increase in variable production costs                                                                                           technology installation downtime
                                                     exceeding one percent. The estimated                                  to incur reductions in pre-tax income of
                                                                                                                           1–3 percent and 315 facilities, greater                   impacts at the national level, EPA
                                                     change in pre-tax income is more                                                                                                considered five output metrics from IPM
                                                     consequential as 126 facilities are                                   than 3 percent.
                                                                                                                                                                                     V3.02: (1) Changes in electricity
                                                     projected to incur reductions in pre-tax                              b. Analysis Results for the Years 2015,                   generation, (2) changes in revenue, (3)
                                                     income of 1–3 percent and 40 facilities                               2020, and 2025—To Capture the Effect                      cost changes, including changes in fuel
                                                     are projected to incur reductions in pre-                             of Installation Downtime                                  costs, variable O&M costs, fixed O&M
                                                     tax income exceeding 3 percent of the                                    This section presents market-level                     costs, and capital costs, (4) changes in
                                                     baseline value.                                                       results for today’s proposed rule options                 pre-tax income, and (5) changes in
                                                        The findings for Option 2 are                                      for model run years 2015, 2020, and                       variable production costs per MWh. For
                                                     substantially more consequential                                      2025. As discussed above, run year 2015                   each measure of concern, Exhibit VII–15
                                                     compared to those estimated for Option                                captures the period when in-scope                         presents the results for the base case and
                                                     1. For 243 facilities, the reduction in                               facilities install IM technologies, while                 the existing facilities rule options for
                                                     generation is estimated to exceed 1                                   run years 2020 and 2025 capture the                       each downtime year, i.e., 2015, 2020,
                                                     percent; for 242 facilities, the reduction                            period when fossil fuel and nuclear                       and 2025 and the percentage difference
                                                     in revenue is estimated to exceed 1                                   facilities install cooling towers,                        between the two. This section of the
                                                     percent; for 256 facilities, the increase                             respectively, and may incur installation                  preamble discusses downtime impact at
                                                     in variable production costs is estimated                             downtime. Of particular importance as                     the national level only; for regional-
                                                     to exceed 1 percent. Again, the change                                a potential impact, the additional unit                   level results see Appendix 6.A of EBA
                                                     in pre-tax income is more substantial,                                downtime from installation of                             report.

                                                          EXHIBIT VII–15—IMPACT OF MARKET MODEL ANALYSIS OPTIONS DURING THE PERIOD OF INSTALLATION DOWNTIME
                                                                                                                                                                Option 1                   Option 2              Option 3
                                                                                Economic measures                                           Baseline
                                                                            (all dollar values in $2009)                                     value                       %                         %                      %
                                                                                                                                                           Value                      Value                   Value
                                                                                                                                                                       Change                    Change                 Change

                                                                                                                                              2015 (2013–2017)

                                                     Generation (TWh) ................................................................         4,320        4,320           0.0         4,320          0.0      4,320        0.0
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                                                     Revenue ($Millions) .............................................................      $212,857     $212,883           0.0      $214,124          0.6   $214,201        0.6
                                                     Costs ($Millions) ..................................................................   $144,212     $144,764           0.4      $144,251          0.0   $144,244        0.0
                                                         Fuel Cost ......................................................................    $81,076      $81,080           0.0       $80,896         ¥0.2    $80,895       ¥0.2
                                                         Variable O&M ...............................................................        $12,034      $12,080           0.4       $12,056          0.2    $12,054        0.2
                                                         Fixed O&M ....................................................................      $43,697      $44,140           1.0       $43,683          0.0    $43,680        0.0
                                                         Capital Cost ..................................................................      $7,405       $7,463           0.8        $7,616          2.8     $7,614        2.8
                                                     Pre-Tax Income ($Millions) ..................................................           $68,646      $68,119          ¥0.8       $69,873          1.8    $69,957        1.9
                                                     Variable Production Cost ($/MWh) ......................................                  $21.55       $21.57           0.1        $21.52         ¥0.2     $21.52       ¥0.2




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                                                        EXHIBIT VII–15—IMPACT OF MARKET MODEL ANALYSIS OPTIONS DURING THE PERIOD OF INSTALLATION DOWNTIME—
                                                                                                    Continued
                                                                                                                                                                   Option 1                          Option 2              Option 3
                                                                                Economic measures                                           Baseline
                                                                            (all dollar values in $2009)                                     value                              %                            %                      %
                                                                                                                                                            Value                                Value                  Value
                                                                                                                                                                              Change                       Change                 Change

                                                                                                                                             2020 (2018–2022)

                                                     Generation (TWh) ................................................................         4,530     ................    ................      4,530         0.0      4,530        0.0
                                                     Revenue ($Millions) .............................................................      $261,531     ................    ................   $270,507         3.4   $270,709        3.5
                                                     Costs ($Millions) ..................................................................   $160,340     ................    ................   $167,450         4.4   $167,719        4.6
                                                         Fuel Cost ......................................................................    $83,418     ................    ................    $82,295        ¥1.3    $82,295       ¥1.3
                                                         Variable O&M ...............................................................        $13,349     ................    ................    $13,661         2.3    $13,673        2.4
                                                         Fixed O&M ....................................................................      $46,160     ................    ................    $50,888        10.2    $51,016       10.5
                                                         Capital Cost ..................................................................     $17,413     ................    ................    $20,605        18.3    $20,736       19.1
                                                     Pre-Tax Income ($Millions) ..................................................          $101,191     ................    ................   $103,057         1.8   $102,990        1.8
                                                     Variable Production Cost ($/MWh) ......................................                  $21.36     ................    ................     $21.18        ¥0.8     $21.18       ¥0.8

                                                                                                                                             2025 (2023–2027)

                                                     Generation (TWh) ................................................................         4,746     ................    ................      4,746         0.0      4,746        0.0
                                                     Revenue ($Millions) .............................................................      $280,613     ................    ................   $282,363         0.6   $282,381        0.6
                                                     Costs ($Millions) ..................................................................   $174,856     ................    ................   $184,900         5.7   $185,148        5.9
                                                         Fuel Cost ......................................................................    $86,633     ................    ................    $86,812         0.2    $86,834        0.2
                                                         Variable O&M ...............................................................        $13,907     ................    ................    $14,295         2.8    $14,299        2.8
                                                         Fixed O&M ....................................................................      $47,561     ................    ................    $53,500        12.5    $53,625       12.7
                                                         Capital Cost ..................................................................     $26,755     ................    ................    $30,294        13.2    $30,390       13.6
                                                     Pre-Tax Income ($Millions) ..................................................          $105,757     ................    ................    $97,463        ¥7.8    $97,233       ¥8.1
                                                     Variable Production Cost ($/MWh) ......................................                  $21.18     ................    ................     $21.30         0.6     $21.31        0.6



                                                        Because in-scope facilities would be                               Option 2, although larger than those                                 MWh or approximately 0.6 percent.
                                                     required to meet compliance                                           under Option 1, remain small. Variable                               Although variable production cost
                                                     requirements not later than 5 years                                   production costs decline by a very                                   increases during this period (while
                                                     following rule promulgation, Option 1                                 minor amount, 0.2 percent, as the                                    declining during the preceding two five-
                                                     has downtime effects during only the                                  market begins to adjust overall in                                   year periods), annual revenue increases
                                                     five-year period of 2013–2017. Results                                anticipation of the larger effects on                                by a smaller amount, $1.8 billion, or a
                                                     for the year 2015 are indicative of                                   capacity availability as the result of                               0.6 percent increase above baseline. The
                                                     annual effects during each of these                                   cooling tower installation in later years.                           smaller increase in revenue, and by
                                                     years. With few facilities having an                                  Total market-level revenue increases by                              inference in consumer prices, results
                                                     increase in net downtime under Option                                 $1.2 billion, or 0.6 percent, indicating                             from the ongoing market adjustment
                                                     1, the estimated effects of downtime are                              small effects on consumer prices.                                    with replacement of less efficient,
                                                     relatively minor. Variable production                                   During the second five-year period                                 higher fuel cost generation with more
                                                     costs increase by less than 0.1 percent.                              (2018–2022), downtime effects are more                               efficient, lower fuel cost capacity. The
                                                     Another potential market level impact                                 pronounced under Option 2. At the                                    effects at the national level vary at the
                                                     due to the incurrence of downtime is                                  market level, variable production costs                              regional level (see Appendix 6.A of the
                                                     the possible increase in electricity                                  decline again, by 0.8 percent, but                                   EBA).
                                                     prices and, consequently, revenue. At                                 revenue increases by nearly $9.0 billion,                               Like Option 2, Option 3 would be
                                                     the market level, the change in total                                 or 3.4 percent. Thus, the impact on                                  expected to have downtime effects
                                                     revenue is nearly zero, indicating very                               consumer prices is greater during this                               during each of the three five-year
                                                     small overall effects on consumer                                     period than during the preceding five                                periods. During the first five-year period
                                                     prices. While these effects vary at the                               years. Again, the reduction in variable                              (2012–2017), impacts are nearly
                                                     regional level, these effects are overall                             production costs and revenue reflect                                 identical to those of Option 2 at the
                                                     very small (see Appendix 6.A of the                                   replacement of generation from older,                                national and regional level. At the
                                                     EBA).                                                                 less efficient and higher fuel cost                                  national level, variable production costs
                                                        Unlike Option 1, Option 2 would be                                 capacity, with generation from more                                  decline by 0.2 percent, and total
                                                     expected to have downtime effects                                     energy efficient, lower production cost                              revenue increases by $1.2 billion, or 0.6
                                                     during each of the three five-year                                    capacity.                                                            percent, indicating small effects on
                                                     periods, as IM-only facilities comply                                   The greatest impact on variable                                    consumer prices. While under Option 2,
                                                     during the first five years (2012–2017)                               production cost under Option 2 occurs                                revenue declines by 0.2 percent, under
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                                                     following rule promulgation, fossil fuel                              during the third five-year period (2023–                             Option 3 it increases by 0.5 percent.
                                                     facilities installing cooling tower                                   2027), when nuclear facilities incur                                 Further, under Option 3, the decline in
                                                     technology comply during the second                                   downtime during technology                                           variable production costs as well as the
                                                     five years (2018–2022), and nuclear                                   installation. Net downtime for cooling                               drop in electricity prices are slightly
                                                     facilities installing cooling tower                                   tower installation at nuclear facilities is                          more significant.
                                                     technology comply during the third five                               estimated at 24 weeks compared to 0.3–                                  During the second five-year period
                                                     years (2023–2027).                                                    4 weeks for installations at fossil fuel                             (2018–2022), downtime effects of
                                                        During the first five-year period                                  facilities. During this period, variable                             Option 3 are again similar to, but
                                                     (2012–2017), downtime effects under                                   production costs increase by $0.12 per                               slightly higher than, those of Option 2.


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                                                     At the national level, variable                         VIII. Benefits Analysis                                Further, because IPM does not predict
                                                     production costs decline by 0.8 percent,                                                                       where new capacity occurs, and EPA
                                                                                                             A. Introduction
                                                     while revenue increases by $9.2 billion,                                                                       has not identified any other information
                                                     or 3.4 percent. Again, the impact on                       This section presents EPA’s estimates               projecting where new units would be
                                                     consumer prices under Option 3 is                       of the national environmental benefits                 located, EPA did not estimate benefits
                                                     greater during this period than during                  of the options analyzed for 316(b)                     associated with new capacity (i.e. new
                                                     the preceding five years.                               facilities. In this section, EPA describes             units at an existing facility). As noted
                                                                                                             how it calculated values for those                     above, EPA also did not include costs
                                                       As with Option 2, under Option 3 the                  benefits it could monetize. It also                    for these new units in its social cost
                                                     greatest impact on variable production                  presents descriptive information for                   analysis. This is consistent with EPA’s
                                                     cost occurs during the third five-year                  those benefits for which it could not                  treatment of new facilities, such as new
                                                     period (2023–2027). During this period,                 develop a monetary value. The benefits                 offshore oil and gas facilities in the
                                                     market-level variable production costs                  assessed occur because of reductions in                Phase III rule.
                                                     increase by $0.13 per MWh or                            impingement, where fish and other                         The methodologies used to estimate
                                                     approximately 0.6 percent. Although                     aquatic life are trapped on equipment at               benefits of proposed options are largely
                                                     variable production cost increases                      the entrance to the CWIS, and                          built upon those used to estimate
                                                     during this period (while declining                     entrainment, where aquatic organisms,                  benefits for the suspended Phase II
                                                     during the preceding two five-year                      eggs, and larvae are taken into the                    regulation and the remanded rule for
                                                     periods), annual revenue increases by a                 cooling system, passed through the heat                316(b) Phase III existing facilities. In
                                                     smaller amount, $1.8 billion, or a 0.6                  exchanger, and then discharged back                    addition to updating these analyses,
                                                     percent increase above baseline.                        into the source water body, (I&E                       EPA more fully investigated the effects
                                                                                                             mortality) at cooling water intake                     of I&E mortality on threatened and
                                                       At the regional level, as is the case for             structures (CWIS) affected by the                      endangered (T&E) species, and
                                                     Option 2, under Option 3, these effects                 proposed rulemaking. I&E mortality                     improved its estimation of nonuse
                                                     vary across regions. For all three                      kills or injures large numbers of aquatic              benefits. The 2011 Environmental and
                                                     analyzed five-year periods, the direction               organisms at all life stages. Based on                 Economic Benefits Analysis document
                                                     of the change in variable production                    impingement mortality and entrainment                  for the proposed 316(b) Existing Facility
                                                     costs, revenue, and electricity prices                  data presented in I&E mortality facility               rule (hereafter EEBA) provides detailed
                                                     under Option 3 is the same as that                      studies, EPA assumes a mortality rate of               descriptions of the these new
                                                     under Option 2 for all NERC regions; the                100% for both impinged and entrained                   methodologies used to analyze the
                                                     difference in the magnitude of change is                individuals. Mortality rates are then                  benefits of proposed regulatory options,
                                                     not very pronounced either (see                         adjusted based on the efficiency of                    and provides references to (i) Part A of
                                                     Appendix 6.A of the EBA).                               technology in place.90 By reducing I&E                 the 2004 Regional Benefits Analysis for
                                                                                                             mortality rates, the proposed options are              the suspended Final Section 316(b)
                                                     5. Summary of Economic Impacts                          likely to increase the number of fish,                 Phase II Rule, and (ii) Part A of the 2006
                                                                                                             shellfish, and other aquatic organisms in              Regional Benefits Analysis Document
                                                        EPA performed cost and economic
                                                                                                             affected water bodies. In turn, this                   for the Final Section 316(b) Phase III
                                                     impact assessment in two parts. The                     increased number of aquatic organisms                  Existing Facilities Rule for analyses
                                                     first set of cost and economic impact                   directly improves welfare for                          using similar methodologies.
                                                     analyses—entity level impacts (at both                  individuals using the affected aquatic                    The EEBA document provides EPA’s
                                                     the facility and parent company levels),                resources, generating so-called ‘‘use                  benefit estimates for the proposed
                                                     an assessment of the potential electricity              benefits’’ such as increases to the value              options. EPA relied on information on
                                                     rate impact of compliance costs to the                  of recreational and commercial                         cooling water systems and intake
                                                     residential sector, and across sectors—                 fisheries. Reductions to I&E mortality                 structures already in place collected in
                                                     reflects baseline operating                             also improve welfare for individuals                   the Section 316(b) Industry Surveys (the
                                                     characteristics of in-scope facilities and              absent any use of the affected resources,              Industry Screener Questionnaire (SQ)
                                                     assumes no changes in those baseline                    so-called ‘‘nonuse benefits,’’ such as                 and the Detailed Industry Questionnaire
                                                     operating characteristics—e.g., level of                improved ecosystem function and                        (DQ)) to estimate the number of
                                                     electricity generation and revenue—as a                 resource bequest values. Section VIII.D                manufacturing facilities that would
                                                     result of the requirements of the                       provides an overview of the types and                  potentially be in-scope of the regulatory
                                                     proposed regulatory options. The                        sources of benefits anticipated, how                   options considered for the Proposed
                                                     second set of analyses look at broader                  these benefits are estimated, the level of             Existing Facilities Rule. Because the
                                                     electricity market impacts—taking into                  benefits that the proposed options                     DQs were sent to a sample of the
                                                     account the interconnection of regional                 would achieve, and how monetized                       manufacturing industries that use
                                                                                                             benefits compare to costs.                             cooling water, the respondents were
                                                     and national electricity markets, for the
                                                                                                                EPA derived national benefit                        assigned sample weights designed to
                                                     full industry, for in-scope facilities only,
                                                                                                             estimates for the proposed options from                represent other facilities that were not
                                                     and as the distribution of impacts at the                                                                      covered in the survey. For the analysis
                                                                                                             a series of regional studies representing
                                                     facility level. No single metric or impact                                                                     of in-scope Electric Generators, EPA
                                                                                                             a range of water body types and aquatic
                                                     level definitively measures economic                                                                           used information on cooling water
                                                                                                             resources. Section VIII.B provides detail
                                                     impacts. Rather, EPA has considered the
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                                                                                                             on the regional study design. Sections                 systems and intake structures already in
                                                     totality of these measures of economic                  VIII.C through VIII.E briefly describe the             place, from 656 in-scope facilities that
                                                     impacts in concluding that there are no                 methods EPA used to evaluate I&E                       responded to the 2000 Section 316(b)
                                                     significant economic impacts associated                 mortality impacts at Section 316(b)                    Surveys (the Industry Short Technical
                                                     with Option 1 (the preferred option) or                 facilities, and to derive an economic                  Questionnaire (STQ) and the Detailed
                                                     Option 4, while there are considerably                  value associated with these losses.                    Industry Questionnaire (DQ)). All in-
                                                     greater economic impacts associated                                                                            scope facilities have design intake flow
                                                     with Options 2 and 3.                                    90 See discussion in Section III on entrainment       of at least 2 million gallons per day
                                                                                                             mortality data and assumptions.                        (MGD). Regional benefits are estimated


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                                                     22238                          Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules

                                                     from the sample of facilities for which                                    (e.g. similar communities of aquatic                           118(a)(3)(b). The Inland region includes
                                                     there is sufficient DQ information to                                      species), and on characteristics of                            all remaining facilities that withdraw
                                                     estimate the environmental impacts of                                      commercial and recreational fishing                            water from freshwater lakes, rivers, and
                                                     regulatory options. The environmental                                      activities. The five coastal regions                           reservoirs. Notably, of the 521 facilities
                                                     impacts from the set of explicitly                                         identified (California, North Atlantic,                        that are located on freshwater streams or
                                                     analyzed facilities are then extrapolated                                  Mid-Atlantic, South Atlantic, and Gulf                         rivers, 31 percent (164) of these facilities
                                                     to the universe of facilities within a                                     of Mexico) correspond to those of the                          have average intake greater than 5
                                                     region using statistical weights                                           National Oceanic and Atmospheric                               percent of the mean annual flow of the
                                                     developed for this analysis. National                                      Administration’s National Marine                               source waters. During periods of low
                                                     benefits are estimated as the sum of all
                                                                                                                                Fisheries Service (NMFS). The Great                            river flow, or during periods of higher
                                                     regional benefits.
                                                                                                                                Lakes region includes Lake Ontario,                            than average withdrawals of cooling
                                                     B. Regional Study Design                                                   Lake Erie, Lake Huron (including Lake                          water, the proportionate withdrawal of
                                                       EPA evaluated the benefits of today’s                                    St. Clair), Lake Michigan, Lake Superior,                      source waters may be much higher.
                                                     rule in seven study regions (California,91                                 and the connecting channels (Saint                             Thus, the potential for adverse
                                                     North Atlantic, Mid Atlantic, South                                        Mary’s River, Saint Clair River, Detroit                       environmental impacts may increase.
                                                     Atlantic, Gulf of Mexico, Great Lakes,                                     River, Niagara River, and Saint                                The number and total operational intake
                                                     and Inland). Regions were defined based                                    Lawrence River to the Canadian border)                         flow of all 316(b) facilities by study
                                                     on ecological similarities within regions                                  as defined in 33 U.S.C. 1268, Sec.                             region is presented in Exhibit VIII–1.
                                                                          EXHIBIT VIII–1—NUMBER OF FACILITIES AND TOTAL MEAN OPERATIONAL FLOW (BGD), BY REGION
                                                                                                                                                                  Number of
                                                                                                                                                                  potentially          Once-through
                                                                                                  Region                                                                                                 Closed-cycle flow         Total flow
                                                                                                                                                                  regulated                flow
                                                                                                                                                                  facilities a

                                                     California b ........................................................................................                        8               1.2                    0.0                  1.2
                                                     Great Lakes .....................................................................................                           67              18.8                    0.2                 19.0
                                                     Inland c .............................................................................................                     669             134.9                    3.9                138.8
                                                     Mid-Atlantic ......................................................................................                         54              28.1                    0.1                 28.2
                                                     Gulf of Mexico ..................................................................................                           30              12.9                    0.0                 12.9
                                                     North Atlantic ...................................................................................                          26               7.0                    0.0                  7.0
                                                     South Atlantic ...................................................................................                          17               7.4                  < 0.1                  7.5

                                                            All Regions ...............................................................................                         871             210.3                    4.2                214.5
                                                        a This table presents the unweighted number of facilities because weighted facilities counts are not estimated separately by benefits region.
                                                     The estimated total weighted number of potentially regulated facilities is 1152 (including baseline closures).
                                                        b The California region includes manufacturing facilities in the state of California and four facilities in Hawaii. It excludes coastal electric gener-
                                                     ating facilities in the state of California due to state regulation of cooling water intakes for these facilities. There are no coastal facilities in Oregon
                                                     and a single facility in Washington classified as a baseline closure.
                                                        c A facility in Texas has intakes located in both the Inland and Gulf of Mexico regions. It is included within the Inland region in the current table
                                                     to prevent double-counting.


                                                       To estimate regional I&E mortality,                                      the goal of the analysis was to provide                        stages. Sampling protocols were not
                                                     EPA extrapolated loss data from 97                                         estimates of I&E mortality losses at                           standardized across facilities.
                                                     facilities that conducted I&E mortality                                    regional and national scales, EPA                              Differences among facility protocols
                                                     studies (model facilities) to all in-scope                                 recognizes that there may be substantial                       included sampling methods and
                                                     facilities within the same region. EPA                                     variability in the number of actual                            equipment used, the number of samples
                                                     judged these 97 studies include the                                        losses (and benefits) of individual                            taken, sampling duration, and the unit
                                                     most representative studies with the                                       facilities. However, EPA concludes that                        of time and volume of intake flow used
                                                     best available data. EPA used regions to                                   extrapolation is a reasonable basis for                        to express I&E mortality losses. To
                                                     account for differences in ecosystems,                                     developing estimates of regional- and                          standardize estimates across facilities,
                                                     aquatic species, and characteristics of                                    national-level benefits for the purposes                       EPA converted sampling counts into
                                                     commercial and recreational fishing                                        of this proposed rulemaking.                                   annual I&E mortality losses. Using
                                                     activities. Extrapolation was conducted                                                                                                   standard fishery modeling techniques,92
                                                                                                                                C. Physical Impacts of I&E Mortality
                                                     on the basis of actual intake flow                                                                                                        EPA constructed models that combined
                                                     reported for the period 1996–1998 by                                         EPA’s benefits analysis is based on                          facility-derived I&E mortality counts
                                                     facilities in response to EPA’s Section                                    facility-provided I&E mortality                                with life history data from the scientific
                                                     316(b) Detailed Questionnaire and Short                                    monitoring data. Facility data consist of                      literature to derive annual estimates of:
                                                     Technical Questionnaire. Chapter 3 of                                      records of impinged and entrained                                 • Age-one equivalent losses (A1Es)—
                                                     the EEBA document provides details of                                      organisms sampled at intake structures                         the number of individuals of different
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                                                     the extrapolation procedure. Because                                       and cover organisms of all ages and life                       ages impinged and entrained by facility
                                                       91 The California region includes manufacturing                            92 Ricker, W.E. 1975. Computation and                        University Press, Oxford and New York; Dixon,
                                                     facilities in the state of California and four facilities                  interpretation of biological statistics of fish                D.A. 1999. Catalog of Assessment Methods for
                                                     in Hawaii. It excludes coastal electric generating                         populations. Fisheries Research Board of Canada,               Evaluating the Effects of Power Plant Operations on
                                                     facilities in the state of California due to state                         Bulletin 191; Hilborn, R. and C.J. Walters. 1992.              Aquatic Communities. Final Report. Report number
                                                     regulation of cooling water intakes for these                              Quantitative Fisheries Stock Assessment, Choice,
                                                                                                                                                                                               TR_112013.
                                                     facilities. There are no coastal facilities in Oregon                      Dynamics and Uncertainty. Chapman and Hall,
                                                     and a single facility in Washington classified as a                        London and New York.; Quinn, T.J., II. and R.B.
                                                     baseline closure.                                                          Deriso. 1999. Quantitative Fish Dynamics. Oxford



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                                                                                     Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules                                                      22239

                                                     intakes, standardized to equivalent                                        impinged and entrained species that are               natural variability in populations,
                                                     numbers of 1-year old fish. A                                              harvested. Indirect losses represent the              because of other anthropogenic effects
                                                     conversion rate between all life history                                   yield of harvested species lost due to                (i.e., pollution, over-harvesting, etc.), or
                                                     stages and age 1 is calculated using                                       reductions in prey availability based on              because of competition from invasive
                                                     species-specific survival tables. The loss                                 a simple trophic transfer model (i.e.                 species. In such cases, the use of these
                                                     of an individual younger than age 1                                        forage species).93 A detailed                         data may overestimate the magnitude of
                                                     results in a conversion rate less than 1                                   methodology for these analyses is                     current I&E mortality losses.
                                                     while the loss of an individual older                                      provided in Chapter 3 of the EEBA                        The use of linear methods for
                                                     than age 1 results in a conversion rate                                    document.                                             projecting losses to fish and shellfish in
                                                     greater than 1.                                                               Studies from individual facilities may             the waterbody may also overstate or
                                                        • Foregone fishery yield—pounds of                                      under or overestimate I&E mortality                   understate impacts. Nevertheless, EPA
                                                     commercial harvest and numbers of                                          rates. For example, facility studies                  believes that the data from facility
                                                     recreational fish and shellfish that are                                   typically focus on a subset of fish                   studies were sufficient to estimate the
                                                     not harvested due to I&E mortality. EPA                                    species impacted by I&E mortality,                    relative magnitude of I&E mortality
                                                     used the Thompson-Bell equilibrium                                         resulting in some species being ignored,              losses nationwide. Exhibit VIII–2
                                                     yield model (Ricker, 1975) to convert                                      and thereby number of individuals lost                presents EPA’s estimates of baseline
                                                     I&E mortality losses to forgone fishery                                    to I&E mortality being underestimated.                annual I&E mortality losses, and
                                                     yield assuming that (1) I&E mortality                                      Due to the low number of replicate                    reductions to annual I&E mortality
                                                     losses reduce the future yield of                                          studies, estimating the magnitude of this             losses estimated to occur under various
                                                     harvested adults, and (2) reductions in                                    underestimate is not possible. Moreover,              regulatory options. Option 3 results in
                                                     I&E mortality rates will lead to an                                        studies often do not count early life                 the greatest reduction in I&E mortality,
                                                     increase in harvested biomass. The                                         stages of organisms that are difficult to             followed by Option 2, Option 1, and
                                                     general procedure involves multiplying                                     identify. In addition, many of the I&E                Option 4, respectively. EPA did not
                                                     age-specific harvest rates by age-specific                                 mortality studies used by the Agency                  model the entrainment reductions for
                                                     weights to calculate an age-specific                                       were conducted over 30 years ago, prior               Option 1 and Option 4 because these are
                                                     expected yield.                                                            to the improvement to aquatic                         based on site-specific determinations of
                                                        • Biomass Production Foregone—                                          conditions that have resulted from                    BTA, which are impossible to predict.
                                                     biomass that would have been produced                                      implementation of the Clean Water Act.                While EPA does estimate potential
                                                     had individuals not been impinged or                                       In locations where water quality was                  ranges of costs for these site-specific
                                                     entrained (Rago, 1984), calculated for all                                 degraded at the time of I&E mortality                 determinations in section VII (though
                                                     forage species from species- and age-                                      sampling relative to current conditions,              not as part of the primary cost
                                                     specific growth rates and survival                                         the abundance and diversity of fish                   estimates), EPA cannot estimate
                                                     probabilities. It refers to the weight of                                  populations may have been depressed,                  comparable ranges of monetized
                                                     impinged and entrained forage species                                      resulting in low I&E mortality estimates.             benefits because benefits are location
                                                     that are not commercial or recreational                                    Therefore, use of these data may                      specific and EPA has no way of
                                                     fishery targets but serve as valuable                                      underestimate the magnitude of current                predicting what entrainment technology
                                                     components of aquatic food webs,                                           I&E mortality losses. Alternatively,                  would be adopted at any specific
                                                     particularly as an important food supply                                   studies may have occurred in locations                facility. However, EPA believes the
                                                     to other aquatic species, including                                        where local fish populations are                      entrainment reductions resulting from
                                                     commercial and recreational species.                                       currently lower than they were when                   site-specific BTA determinations could
                                                        Estimates of foregone fishery yield                                     the study occurred. Such a shift in fish              be significant, depending on the
                                                     include direct and indirect losses of                                      populations may have occurred due to                  technologies adopted.

                                                         VIII–2—BASELINE I&E MORTALITY LOSSES AND REDUCTIONS FOR ALL IN-SCOPE FACILITIES BY REGULATORY OPTION
                                                                                                                                                                          Reduction in losses by regulatory option
                                                                                                                                 Baseline I&E
                                                                                Loss mode                                          losses                  Option 1             Option 2              Option 3       Option 4

                                                                                                                                           Individuals (millions)

                                                     IM .....................................................................            517.46                 421.62                500.44               504.14          413.70
                                                     EM ....................................................................         527,968.21                   0.00            400,351.83           407,417.58            0.00
                                                     E Mortality ........................................................            528,485.67                 421.62            400,852.27           407,921.72          413.70

                                                                                                                                      Age-One Equivalents (millions)

                                                     IM .....................................................................            747.40                 614.97                722.53                728.35         602.42
                                                     EM ....................................................................           1,441.52                   0.00              1,259.02              1,285.20           0.00
                                                     I&E Mortality .....................................................               2,188.92                 614.97              1,981.55              2,013.55         602.42
mstockstill on DSKH9S0YB1PROD with PROPOSALS2




                                                                                                                                    Forgone Fishery Yield (million lbs)

                                                     IM .....................................................................             15.21                   11.99                14.86                14.93           11.86
                                                     EM ....................................................................              56.30                    0.00                43.66                44.31            0.00
                                                     I&E Mortality .....................................................                  71.50                   11.99                58.52                59.24           11.86




                                                       93 Indirect losses account for about 9 percent of

                                                     commercial and recreational harvest reductions at
                                                     baseline.

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                                                     22240                           Federal Register / Vol. 76, No. 76 / Wednesday, April 20, 2011 / Proposed Rules