Effluent Limitations Guidelines and Pretreatment Standards for the Industrial Laundries Point Source Category

Note: EPA no longer updates this information, but it may be useful as a reference or resource.

[Federal Register: August 18, 1999 (Volume 64, Number 159)]
[Proposed Rules]
[Page 45071-45087]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18au99-24]

[[Page 45071]]

_______________________________________________________________________

Part IV

Environmental Protection Agency

_______________________________________________________________________

40 CFR Part 441

Effluent Limitations Guidelines and Pretreatment Standards for the
Industrial Laundries Point Source Category; Proposed Rule

[[Page 45072]]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 441

[FRL-6373-5]
RIN 2040-AB97

Effluent Limitations Guidelines and Pretreatment Standards for
the Industrial Laundries Point Source Category

AGENCY: Environmental Protection Agency (EPA).

ACTION: Withdrawal of proposed rule.

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SUMMARY: On December 17, 1997 (62 FR 66182), EPA published proposed
pretreatment standards for the control of wastewater pollutants from
the industrial laundries industry. After careful consideration of all
of the information in the record for this rulemaking, EPA has decided
not to promulgate national categorical pretreatment standards for the
industrial laundries point source category because industrial laundry
discharges to publicly owned treatment works (POTWs) do not present a
national problem warranting national regulation. EPA is not issuing
effluent limitations guidelines and new source performance standards
for direct dischargers since there are no direct dischargers and no
means to evaluate performance to determine the appropriate level of
control for national rulemaking purposes. For this action, EPA
considered many regulatory technology options as well as the no
regulation option. EPA has determined that indirect discharges from
industrial laundries do not warrant national regulation because of the
small amount of pollutants removed by pretreatment options determined
to be economically achievable. For existing sources, EPA estimates that
a rule for this industry would remove less than 650 pounds of pollutant
per facility per year (which, on a toxic-weighted basis, is only 32
pound equivalents). For new sources, EPA estimates that a rule for this
industry would remove less than 1,040 pounds of pollutant per facility
per year (which, on a toxic-weighted basis, is only 51 pound
equivalents). These pollutant reductions represent much smaller
removals than any other categorical pretreatment standards promulgated
by EPA. EPA's record does not demonstrate that Publicly Owned Treatment
Works (POTWs) are generally experiencing problems with discharges from
this industry, and EPA believes that such discharges will rarely, if
ever, present a problem. To the extent that isolated problem discharges
occur, existing pretreatment authority is available to control these
isolated discharges. EPA believes that for this industry, the best way
to control effluent discharges of certain organic pollutants is to
remove the pollutants which are contained on the laundry items before
they are washed. EPA's Office of Solid Waste (OSW) plans to address the
amount of certain waste solvents being sent to laundries in a future
rulemaking (the first quarter of the year 2000) with an aim toward
decreasing the amount of solvent based organics on towels.

DATES: In accordance with 40 CFR Part 23, this final action shall be
considered issued for the purposes of judicial review at 1 pm Eastern
time on September 1, 1999. Under section 509(b)(1) of the CWA, judicial
review of the Administrator's final action regarding effluent
limitations guidelines and pretreatment standards can only be had by
filing a petition for review in the United States Court of Appeals
within 120 days after the decision is considered issued for purposes of
judicial review.

ADDRESSES: For additional technical information write to Ms. Marta E.
Jordan, Engineering and Analysis Division (4303), U.S. EPA, 401 M
Street SW, Washington, DC 20460 or send e-mail to: Jordan.
Marta@epa.gov or call at (202) 260-0817. For additional economic
information contact Mr. George Denning at the address above or by
calling (202) 260-7374.
The complete administrative record (excluding confidential business
information) for this action is available for review at EPA's Water
Docket at EPA Headquarters at Waterside Mall, room EB-57, 401 M Street,
SW, Washington, DC 20460. For access to docket materials, call (202)
260-3027 between 9:00 am and 3:30 pm for an appointment. A reasonable
fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: Ms. Marta E. Jordan, (202) 260-0817.

SUPPLEMENTARY INFORMATION:

Supporting Documentation

The basis for this final action is detailed in four documents, each
of which is supported in turn by additional information and analyses in
the rulemaking record. EPA's technical foundation for this final action
is presented in the Technical Development Document for the Final Action
Regarding Pretreatment Standards for the Industrial Laundries Point
Source Category (hereafter, ``Technical Development Document''; EPA
Report No. 821-R-99-010. EPA's economic analysis is presented in the
Economic Assessment for the Final Action Regarding Pretreatment
Standards for the Industrial Laundries Point Source Category
(hereafter, ``Economic Assessment''; EPA Report No. EPA-821-R-99-011.)
and in the Cost-Effectiveness Analysis for the Final Action Regarding
Pretreatment Standards for the Industrial Laundries Point Source
Category (hereafter, ``Cost-Effectiveness Analysis''; EPA Report No.
EPA-821-R-99-009). EPA's environmental benefits analysis is presented
in the Water Quality Benefits Analysis for the Final Action Regarding
Pretreatment Standards for the Industrial Laundries Point Source
Category (hereinafter, ``WQBA''). EPA's responses to comments on the
proposal and a Notice of Data Availability (NODA) which are part of
this action are presented in the Comment Response Document for the
Final Action Regarding Pretreatment Standards for the Industrial
Laundries Point Source Category (hereinafter, ``Comment Response
Document'').

Organization of this Document

I. Legal Authority
II. Background
A. Clean Water Act
B. Pollution Prevention Act
C. Profile of the Industry
D. Proposed Rule
E. Notice of Data Availability
1. Towel Only Option
2. Total Petroleum Hydrocarbons (TPH)
3. Pollution Prevention Program
F. Changes Since Proposal
1. Cost Changes
2. Pollutant Loading and Reduction Changes
3. Economic Analysis Changes
III. Decision Not to Regulate Industrial Laundries
A. Summary of Options Considered
B. Pretreatment Standards for Existing Sources (PSES)
1. Selected Option
2. Rationale for Selected Option
C. Pretreatment Standards for New Sources (PSNS)
IV. Costs and Economic Impacts for the Regulatory Options
A. Introduction
B. Economic Impact Methodology
1. Introduction
2. Methodology Overview
C. Summary of Costs and Economic Impacts
1. Number of Facilities and Costs of the Regulatory Options
2. Economic Impacts of the Regulatory Options
a. Impacts from Regulatory Options for Existing Sources
b. Impacts from Regulatory Options for New Sources
3. Small Business Analysis

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4. Cost-Benefit Comparison
V. Total Toxic and Nonconventional Pounds Reduced By Options
Considered for the Final Action
VI. Pass Through Analysis
VII. Cost-Effectiveness Analysis
VIII. Environmental Benefits Analysis
A. Summary
B. Changes Since the Proposal
C. Benefits of Action
1. Reduced Pollutant Discharges
2. Reduced Human Health Risk
3. Improved Recreational Fishing Opportunities
4. Reduced Impacts on POTWs
a. Modeled POTW Impacts
b. Discussion with POTW Operators and Pretreatment Coordinators
IX. Non-Water Quality Environmental Impacts
A. Air Pollution
B. Solid Waste Generation
C. Energy Requirements
X. Related Acts of Congress and Executive Orders
Appendix A to the Notice--Lists of Abbreviations, Acronyms,
Definitions and Other Terms Used in this Notice

I. Legal Authority

This final action withdraws the proposed pretreatment standards for
the industrial laundries point source category. EPA takes this action
pursuant to sections 301, 304, 306, 307, 308, 402, and 501 of the Clean
Water Act, 33 U.S.C. 1311, 1314, 1316, 1317, 1318, 1342, and 1361.

II. Background

A. Clean Water Act

The Federal Water Pollution Control Act Amendments of 1972 (Clean
Water Act) established a comprehensive program to ``restore and
maintain the chemical, physical, and biological integrity of the
Nation's waters,'' (section 101 (a)). To implement the Act, EPA is to
issue effluent limitations guidelines, pretreatment standards and new
source performance standards for industrial dischargers. These types of
effluent guidelines and standards are summarized in the proposed
regulation at 62 FR 66182 (December 17, 1997).
Section 304(m) of the Clean Water Act (33 U.S.C. 1314(m)), added by
the Water Quality Act of 1987, requires EPA to establish schedules for
(1) reviewing and revising existing effluent limitations guidelines and
standards (``effluent guidelines''), and (2) promulgating new effluent
guidelines. On January 2, 1990 EPA published an Effluent Guidelines
Plan (55 FR 80), in which schedules were established for developing new
and revised effluent guidelines for several industry categories. One of
the industries for which the Agency established a schedule was the
Industrial Laundries Point Source Category.
Natural Resources Defense Council, Inc. (NRDC) and Public Citizen,
Inc., challenged the Effluent Guidelines Plan in a suit filed in U.S.
District Court for the District of Columbia (NRDC et al v. Reilly, Civ.
No. 89-2980). The plaintiffs charged that EPA's plan did not meet the
requirements of section 304(m). A Consent Decree in this litigation was
entered by the Court on January 31, 1992. The terms of the Consent
Decree are reflected in the Effluent Guidelines Plan most recently
published on September 4, 1998 (63 FR 47285). This plan states, among
other things, that EPA proposed effluent limitations guidelines and
standards for the industrial laundries point source category in
November 1997 and that EPA would take final action by June 1999. This
notice serves to inform the public of EPA's final action pursuant to
the decree.

B. Pollution Prevention Act

The Pollution Prevention Act of 1990 (PPA) (42 U.S.C. 13101 et
seq., Pub. L. 101-508, November 5, 1990) declares it to be the national
policy of the United States that pollution should be prevented or
reduced whenever feasible; pollution that cannot be prevented should be
recycled in an environmentally safe manner, whenever feasible;
pollution that cannot be prevented or recycled should be treated in an
environmentally safe manner whenever feasible; and disposal or release
into the environment should be employed only as a last resort (Section
6602; 42 U.S.C. 13101(b)). In short, preventing pollution before it is
created is preferable to trying to manage, treat or dispose of it after
it is created.

C. Profile of the Industry

An industrial laundry is any facility that launders industrial
textile items from off-site as a business activity (i.e., launder
industrial textile items for other business entities for a fee or
through a cooperative arrangement). Either the industrial laundry or
the off-site customer may own the industrial laundered textile items.
This definition includes textile rental companies that perform
laundering operations. For this action, laundering means washing with
water, including water washing following dry cleaning. Laundering does
not include laundering exclusively through dry cleaning. Industrial
textile items include, but are not limited to, industrial: shop towels,
printer towels, furniture towels, rags, mops, mats, rugs, tool covers,
fender covers, dust control items, gloves, buffing pads, absorbents,
uniforms and filters.
Industrial laundry facilities are located in all 50 states and all
10 EPA regions. By state, the largest number of industrial laundries
are in California. By EPA region, the largest concentration of
industrial laundries is in Region V. Most of the industrial laundering
facilities are in large urban areas. Industrial laundries vary in size
from one-or two-person facilities to large corporations that operate
many facilities with hundreds of employees nationwide. Annual laundry
production per facility ranges from approximately 44,000 to over 32
million pounds, with a total annual industry production of over 9
billion pounds. At proposal, EPA estimated that the industrial laundry
industry consisted of approximately 1,747 facilities nationwide.
In analyzing data submitted as part of the comment period of the
proposed rule, EPA decided to eliminate clean room items (i.e., items
used in particle-and static-free environments by computer
manufacturing, pharmaceutical, biotechnology, aerospace, and other
customers to control contamination in production areas) from the
industrial textile items list. EPA compared data of pollutant
concentrations in clean room items to pollutant concentrations in
linens and industrial textile items. EPA found the clean room item
pollutant concentrations lower than the linen concentrations and
excluded the clean room items from the list. Since EPA excluded clean
room items from the definition of industrial laundry textile items the
number of facilities affected by this action decreased by five
facilities. Thus, EPA's current estimate of industrial laundries
consists of 1,742 facilities nationwide.

D. Proposed Rule

On December 17, 1997 (62 FR 66182), EPA published proposed
pretreatment standards for the control of wastewater pollutants from
the industrial laundries industry. The proposed rule covered facilities
that launder industrial textile items from off-site as a business
activity (i.e., launders industrial textile items for other business
entities for a fee or through a cooperative arrangement). EPA proposed
an exclusion for existing facilities processing less than one million
pounds of incoming laundry and less than 255,000 pounds of shop and/or
printer towels per calendar year to eliminate unacceptable
disproportionate adverse economic impacts on the smaller facilities. By
excluding these facilities, EPA's

[[Page 45074]]

proposed rule would have applied to 1,606 facilities nationwide.
EPA proposed pretreatment standards based on chemical precipitation
technology for 11 parameters (3 metals, 7 organics, and one bulk
parameter known as silica gel treated-hexane extracted material (SGT-
HEM)). SGT-HEM was formerly called total petroleum hydrocarbon (TPH)
under a previously used analytical method. The analytical method used
for measuring SGT-HEM, EPA's Method 1664, was approved in a final
rulemaking in the Federal Register on May 14, 1999 (64 FR 26315); the
parameter is now called Non-polar material (NPM).
EPA received comments on the proposed exclusion and on the
technology basis used in calculating limits. Other comments related to
the necessity of a national rule, costs of compliance, benefits, cost-
effectiveness, the toxic weighting factor and the POTW percent removal
or SGT-HEM (TPH). EPA evaluated all of the issues based on the
additional information gathered by EPA or received during the comment
period following the proposal. EPA then discussed the results of most
of these evaluations in a notice of data availability discussed below.

E. Notice of Data Availability

EPA published a notice of data availability (NODA) on December 23,
1998 (63 FR 71054). The NODA presented a summary of the data gathered
or received from commenters since the proposal, an assessment of the
usefulness of the data in EPA's analyses; a description and evaluation
of a modified technology option suggested by commenters; and a
discussion of a voluntary industry program, along with certain other
specific issues raised by commenters.
1. Towel Only Option
In response to comments received on the proposal, EPA evaluated an
option covering only facilities laundering shop and/or printer towels
(``towel only''). EPA provided information on the towel only option in
the NODA. This option was a modified version of the ``heavy'' options
presented in the proposal. This towel only alternative would have
applied to 1,333 facilities nationwide. Based on comments on the NODA,
EPA decided that the towel only options were complicated to implement
and enforce and could result in significantly increased monitoring
costs for compliance with both the categorical standards for one
portion of the facility's discharge, as well as with local limits
applied to the remainder of the facility's discharge. In addition,
there was limited data identifying performance of the control
technologies treating the towel only wastewater. Thus, EPA decided not
to pursue the towel only options.
2. Total Petroleum Hydrocarbons (TPH)
In the NODA, EPA also discussed issues related to how TPH was used
for two different analyses--the pass through analysis and the cost-
effectiveness analysis. As part of the analyses conducted for the NODA,
EPA incorporated data submitted on the POTW removal of the bulk
parameter SGT-HEM (TPH). The new data showed nondetects for TPH in the
POTW effluent. Thus, for the pass through analysis conducted for the
NODA, EPA estimated a POTW removal of greater than 74 percent for SGT-
HEM (TPH) based on the highest influent measurement of SGT-HEM (see
NODA, 63 FR 71054).
In the NODA, EPA also discussed the new data collected related to
constituents of TPH and modifications made to improve both the pass
through and cost-effectiveness analyses based on this new data.
Following the proposal, EPA conducted a study to evaluate the bulk
parameter SGT-HEM (TPH) in order to identify more accurately the
constituents comprising the SGT-HEM (TPH) measurement. The study was
conducted by sampling the influents and effluents of the Dissolved Air
Flotation (DAF) and Chemical Precipitation (CP) treatment units at the
same facilities EPA sampled prior to and soon after proposal. EPA
analyzed these samples for SGT-HEM (TPH) and total oil and grease using
Method 1664 and evaluated the sample extracts using gas chromatography
and mass spectroscopy (GC/MS) methods. Based on these analyses, EPA was
able to identify several constituents measured as part of the SGT-HEM
(TPH) parameter. Most of the constituents identified in the influent
samples were n-alkanes, as well as naphthalene, bis(2-ethylhexyl)
phthalate and 2-methylnaphthalene. The identified constituents,
however, represent only a very small portion of the total SGT-HEM (TPH)
measurement.
In the NODA, EPA solicited additional information on influent and
effluent pollutant concentrations from POTWs operating secondary
treatment. EPA did not receive any additional data in response to the
NODA that was useful in revising POTW percent removals for individual
constituents, including the identified constituents of SGT-HEM (TPH).
As part of EPA's analysis for the rule, EPA also conducted a cost-
effectiveness analysis. This analysis, in part, compares for various
technology options the cost of removing toxic and nonconventional
pollutants that would otherwise pass through the POTW. EPA expresses
these pollutant removals as ``pound equivalents'' which EPA estimates
by multiplying pounds of a pollutant removed by an assigned toxic
weighting factor. The assigned toxic weighting factor for each
pollutant is based on the pollutant's relative toxicity to copper. At
proposal, EPA included the bulk parameter TPH in the cost-effectiveness
calculations. Following the TPH study, EPA used a revised toxic
weighting factor for TPH based on the toxic weighting factors for the
individual constituents of SGT-HEM (TPH). Based on the identified
constituents of SGT-HEM (TPH), EPA revised its average toxic weighting
factor for the bulk parameter TPH from 0.10 (used at proposal) to
0.009. EPA used this value, as discussed in the NODA, to identify the
``total toxic pound equivalents'' of SGT-HEM (TPH) removed by the rule.
EPA also calculated cost-effectiveness based on removals of the
individual constituents of SGT-HEM (TPH) rather than on removals of the
bulk parameter SGT-HEM (TPH). The results of the analyses using both
the individual constituents only and the bulk parameter TPH can be
found in the record and supporting documents.
3. Pollution Prevention Program
In comments on the proposal and NODA, the industrial laundries
trade associations, Uniform and Textile Service Association and Textile
Rental Services Association of America, (UTSA and TRSA) submitted a
description of a voluntary multi-media environmental stewardship and
pollution prevention program as an alternative approach to a national
pretreatment standard. The centerpiece of the voluntary program is a
series of initiatives seeking to achieve an annual reduction of
pollutants being discharged of 20,000 toxic pound equivalents and an
annual reduction of up to 25 percent in industry water, energy, and
washroom chemical usage (on a per pound of textiles laundered basis) by
the year 2002. The program would be initiated by UTSA and TRSA
surveying the industry to develop a 1997 ``benchmark'' against which
progress towards these reduction goals will be measured. EPA supports
industry efforts to reduce pollution at the source, and believes that
the environment would benefit from this pollution prevention program
whether or not categorical pretreatment standards are established.

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F. Changes Since Proposal

1. Cost Changes
Engineering cost changes have been made based on supplementary data
and comments. These changes, which are reflected in the economic impact
analyses, cost-effectiveness analysis, and small business analyses, are
discussed more fully in the Technical Development Document (TDD),
Economic Assessment (EA), and Cost-Effectiveness documents. The major
changes since the proposal resulted from the following:

--EPA removed three model clean room facilities (equivalent to five
facilities in the industry) from the scope of the rule, based on the
raw wastewater loadings for their items. This change had minor effects
on the overall industry costs.
--EPA added a cost for facilities that currently (based on 1993 data)
operate dissolved air flotation (DAF) and chemical precipitation in
order to upgrade performance to meet the projected standards. This
change increased the capital and O & M costs for all options.
--EPA revised the labor costs associated with the operation and
maintenance of the option treatment equipment. The labor costs are now
calculated as one full-time equivalent operator per treatment system,
which generally increased the costs for all options.
--EPA increased the required square footage and the cost per square
foot of buildings that were included in the option costs to house the
treatment systems, thus increasing the costs for all options.
--EPA changed the sludge generation rates of the treatment technologies
based on available treatment system data. This change had a minor
effect on the option costs (some model facility costs increased, while
others decreased).
2. Pollutant Loading and Reduction Changes
Pollutant loading and reduction changes have been made based on
supplementary data and comments. These changes, which are reflected in
the pass through and cost-effectiveness analyses, are discussed more
fully in the Technical Development Document and Cost-Effectiveness
documents. The major changes since the proposal resulted from the
following:

--EPA removed three model clean room facilities (equivalent to five
facilities in the industry) from the scope of the rule, based on the
raw wastewater loadings for their items. This change had minor effects
on the overall industry pollutant loadings and removals.
--For the primary assessment, EPA removed the toxic weighting factor
(TWF) for total petroleum hydrocarbon (TPH) and included the TWFs for
the identified constituents of TPH in the pollutant loadings and
removals calculations. EPA also evaluated pollutant loadings and
removals using the adjusted TWF for TPH as described in the NODA. Under
either analysis, this greatly decreased the pound-equivalent loadings
and removals for all options.
--EPA incorporated new sampling data collected since proposal for the
chemical precipitation technology option, which modified the long term
averages for those options. This change had minimal effects on the
loadings calculations for the options.
--For calculating pollutant loadings, EPA used a revised pass through
analysis. At proposal, EPA performed the pass through analyses on TPH
(and not the individual pollutants that comprise TPH) using the average
percent removal of three individual n-alkanes. For this final action,
as discussed in the NODA, EPA performed the pass through analysis on
the individual pollutants that comprise TPH (i.e., n-alkanes and
others).
--Further, for all pollutants EPA looked at Henry's Law Constants to
see if the individual pollutants were volatile. If the pollutants were
volatile, EPA determined POTW percent removal based on the POTW removal
model for the pollutant with the most similar Henry's Law Constant, as
presented in the development document for the pharmaceutical
manufacturing industry effluent limitations guidelines and standards
(63 FR 50388) using a combination of POTW empirical data and the Water
8 biodegradation model.
--Finally, for the n-alkanes that were not volatile, EPA used the
average POTW percent removal of two n-alkanes that were used for the
proposal to represent the SGT-HEM (TPH) POTW percent removal. EPA did
not use the percent removal from a third n-alkane because the percent
removal is reported simply as ``greater than 9 percent''; and therefore
the actual removal based on this data could be anywhere between 9 and
99 percent. However, the two n-alkanes are volatile, under the Henry's
Law Constant approach above, and EPA believes their removal by POTWs
may overstate the POTW removal of all n-alkanes that are not volatile.
To evaluate POTW removal of non-volatile n-alkanes, EPA conducted two
analyses. One used the average percent removal of the two n-alkanes,
the other used the 74 percent removal identified in NODA as the basis
for POTW removal of TPH, of which the non-volatile n-alkanes are
constituents. EPA also evaluated pass through of the n-alkanes based on
another method which used the POTW removal for the individual n-alkanes
based on the 94 percent average of the same two n-alkanes used in the
first method, regardless of their volatility. Both changes increased
the pollutant removals of n-alkanes by POTWs and decreased the
pollutant removals that would occur under the technology options
considered.
3. Economic Analysis Changes
Based on comments, EPA made three changes to the economic impact
methodology. These are discussed more fully in the EA.

--The main analysis assumes that costs of compliance cannot or will not
be passed through to customers, but are absorbed by the affected
facilities, as was done in an appendix to the EA for the proposal. EPA
is using this assumption in its primary impact analyses because it is
possible that some facilities or firms might not be able to pass
through as much of their costs as would other facilities. This could
happen where there is regional or local competition between industrial
laundries and between industrial laundries and disposable product
vendors or other providers of substitutes. Given that EPA believes that
this is a competitive industry, EPA believed this conservative
assumption was appropriate. A cost passthrough approach is discussed as
a sensitivity analysis in an appendix in the EA.
--Minor refinements to the cash flow analysis and firm failure analysis
addressed several issues. For example, depreciation is no longer
annualized in the Altman's Z'' analysis. These changes do not affect
the economic results in any significant way. See the Comment Response
Document for additional detail on these changes.
--Based on public comment describing industry experience with buyouts,
EPA now estimates 75 percent of a facility's employees will lose their
jobs if that facility's parent company is predicted to be a firm
failure. EPA believes this estimate reflects a reasonable upper-bound
estimate of

[[Page 45076]]

short-term potential employment losses due to firm failure.

III. Decision Not To Regulate Industrial Laundries

A. Summary of Options Considered

EPA considered various options prior to taking this final action.
Among the final options EPA considered were ``no regulation'' and a
number of regulatory options.
For the regulatory options, EPA evaluated various options using two
major technologies as bases for the standards: chemical precipitation
and dissolved air flotation. EPA also evaluated several exclusions
within the towel only option discussed in detail in the NODA and
mentioned above. In evaluating these options, EPA considered the total
pounds and toxic pound equivalents removed by any economically
achievable option, the degree to which these pollutants pass through
the POTW and the extent to which POTWs can adequately treat these
pollutants. To mitigate disproportionately adverse economic impacts of
a rule, EPA considered excluding the following facilities from the
scope of the regulation:
<bullet> Option CP-1: facilities that launder less than one million
pounds of incoming laundry (total) and less than 255,000 pounds of shop
and/or printer towels per calendar year (i.e., the exclusion in the
proposed rule);
<bullet> Option CP-2: facilities that launder between one and three
million pounds of incoming laundry (total) and less than 120,000 pounds
of shop and/or printer towels per calendar year, in addition to those
facilities that launder less than one million pounds of incoming
laundry (total) and less than 255,000 pounds of shop and/or printer
towels per calendar year; or
<bullet> Option CP-3: facilities that launder less than five
million pounds of incoming laundry (total) and less than 255,000 pounds
of shop and/or printer towels per calendar year.
EPA also considered and analyzed additional exclusions;
descriptions and results are discussed in further detail in the
Economic Assessment.

B. Pretreatment Standards for Existing Sources (PSES)

1. Selected Option
After considering all of the information collected and analyzed,
EPA has selected the ``no additional regulation'' option as its final
action. In other words, EPA has decided not to establish categorical
pretreatment standards for existing dischargers in this industry.
2. Rationale for Selected Option
After careful consideration of all of the information in the record
for this rulemaking, EPA has decided not to promulgate national
categorical pretreatment standards for the industrial laundries point
source category because industrial laundry discharges to publicly owned
treatment works (POTWs) do not present a national problem warranting
additional national regulation under the Clean Water Act. In making a
final decision, EPA identified various technologies as candidate PSES
technologies. EPA determined that some of these technology options are
not economically achievable due to the number of plant closures and
firm failures estimated. After determining what options would be
economically achievable, EPA estimated the total pounds of pollutant
discharges that would be removed by the rule. One measure of the toxic
and nonconventional pounds of pollutant discharges that would be
removed by the rule results from assigning pollutants a ``toxic
weighting factor'' based on the pollutant's relative toxicity to
copper. Measured this way, EPA determined that the rule would remove
only 32 toxic pound equivalents per facility per year, depending on the
option. This is a relatively small total amount of toxic and
nonconventional pollutant reductions, as confirmed by comparison with
other industries for which effluent limitations guidelines have been
promulgated. The details of this assessment are found in the Technical
Development Document and EA and are summarized below.
EPA examined the economic achievability of a wide array of options
for the rule. This included varying the technology basis for the rule,
i.e., chemical precipitation (CP), dissolved air flotation (DAF);
requiring treatment of only shop and/or printer towels; and various
regulatory exclusions or ``cutoffs'' based on total production and
amount of shop and/or printer towels laundered. For the reasons noted
in Section II.E., EPA decided not to pursue the towel only options. In
evaluating the options based upon DAF, EPA found that these options
removed fewer toxic pound equivalents than the comparable options based
upon CP, but at higher cost and comparable impact. For this reason, EPA
focuses on the CP options only in this preamble, but makes the same
conclusions for the comparable DAF options.
EPA determined that looking at impacts on the industry as a whole,
an economically achievable option (referred to as CP-2) is based on CP
with production cutoffs that exclude facilities with between one and
three million total pounds of incoming laundry and less than 120,000
pounds of shop and/or printer towels and facilities with up to 1
million total pounds of incoming laundry and less than 255,000 pounds
of shop and/or printer towels. This option would result in 44 facility
closures (2.5 percent of the total industry) and no firm failures, with
resulting direct employment losses of 2,261 jobs. The exclusion is
justified because the facilities excluded would have suffered a
disproportionate closure rate of 12 percent and disproportionate
failure rate of 20 percent under the rule.
EPA rejected Option CP-1 (i.e., CP with production cutoffs only to
1 million total pounds of incoming laundry and less than 255,000 pounds
of shop and/or printer towels) due not only to the number of facility
closures (61) and employment losses (2,684 jobs) that would result, but
also due to the number of firm failures (72) and resulting employment
losses (1,721 jobs) under this option. The 61 facility closures
represent about 3.5 percent of all facilities and the 72 firm failures
represent 8 percent of firms. These firm failures are in addition to
the facility closures. Firm failures would result in additional
employment loss because in the industrial laundry industry, when a
facility is bought by a firm already in the industry, it is likely that
the facility would no longer be a production facility, but instead be
turned into a depot or transfer station which based on examples of
recent buyouts, results in an estimated 75 percent loss of employment.
Thus, under this option, that EPA rejects as not economically
achievable, the closures and firm failures would have resulted in
direct employment losses of 4,405 jobs, or 3.4 percent of the
industry's employment. While EPA does not have a bright line for
determining what level of impact is economically achievable for the
industry as a whole, EPA looked for a breakpoint that would mitigate
adverse economic impacts without greatly affecting the toxic pound
equivalents being removed under a rule. Here, by moving from the first
option to the second option, that is, by adding an additional
production cut-off of one to three million total pounds of incoming
laundry and less than 120,000 pounds of shop and/or printer towels, EPA
was able to reduce employment losses by almost half, from 4,405 to
2,261 while only losing about 8.7 percent toxic pound equivalents that
would be removed under the first option. Thus, EPA rejected the first
option (option

[[Page 45077]]

CP-1) that would result in 61 facility closures and 72 additional firm
failures as not economically achievable.
If EPA had chosen a greater exclusion (Option CP-3 with production
cutoffs of up to five million total pounds of incoming laundry and less
than 255,000 pounds of shop and/or printer towels) there would be two
closures and no firm failures. Under this option, EPA projected only
235 job losses, but would have lost a greater percentage of toxic pound
equivalents. Although EPA identified both option 2 and option 3 as the
economically achievable options, EPA rejected option 3 as not the
``best'' technology since EPA believes that for BAT or PSES the term
``economic achievability'' contemplates acceptance of some adverse
economic impacts.
For Option CP-2, which EPA found to be economically achievable for
the industry as a whole, EPA estimates average removals of only 32
toxic pound equivalents per facility per year. These reductions are
much lower than any other categorical pretreatment standards
promulgated by EPA. For example, for Organic Chemicals, Plastics, and
Synthetic Fibers (OCPSF), Electroplating, Battery Manufacturing, and
Porcelain Enameling, toxic pound equivalents removed per facility per
year range from 6,747 to 14,960. For some of the more recently proposed
rules the reductions are lower, but not nearly as low as projected for
industrial laundries. For example, for Transportation Equipment
Cleaning and Metal Products and Machinery Proposals the toxic pound
equivalents removed per facility per year would range from 492 to 693.
POTWs are effective at treating industrial laundry effluent. EPA
estimates POTW removal efficiency of SGT-HEM (TPH) to be greater than
74 percent. Because the actual percent removal could not be calculated
and could be much higher (i.e., 95-99 percent), EPA believes that SGT-
HEM (TPH) does not pass through. Although EPA does not have data
showing how much greater than 74 percent is the treatment efficiency,
EPA expects that the treatment is significantly more effective because
all of the POTW effluent data are below the analytical detection limit.
For the individual toxic and nonconventional pollutants, EPA determined
that POTW removal efficiencies ranged from 18 to 99 percent. A rule
based on the economically achievable option would remove only a total
of 39,000 toxic pound equivalents nationwide per year; or 32 toxic
pounds per facility per year on average. With respect to conventional
pollutants, POTWs are designed to treat and can effectively treat these
pollutants. Thus, EPA has determined that there is insignificant pass
through of total pounds or toxic pound equivalents of pollutants
discharged to POTWs by industrial laundries such that national
categorical pretreatment standards are not warranted. EPA also examined
the total pounds and total pound equivalents removed under a rule with
the first cutoff and determined that the amount of pounds removed is
also insignificant and does not warrant national regulation. This
analysis is discussed in the Development Document for the final action.
EPA has little, if any, record evidence that POTWs are currently
having pass through or interference problems due to industrial laundry
effluent. In the event that a particular industrial laundry could
create a local problem, EPA believes the existing pretreatment program
is fully adequate to control these discharges at the local level.
The small total removals achieved by the rule are reflected in the
cost-effectiveness results. Cost-effectiveness is expressed as the
ratio of costs to toxic pound equivalent pollutant removals achieved by
a regulatory option. While EPA is not required to consider cost-
effectiveness in establishing BAT, new source standards or pretreatment
standards, EPA typically estimates the cost-effectiveness of its
options particularly to determine which option along a spectrum of
options is most efficient. For this rule, all of the regulatory options
considered have high average cost-effectiveness values ($2,360/toxic
pound equivalent for the economically achievable option) resulting from
the very small removals that occur under that option.
EPA further believes that the most effective way to address organic
wastes from certain solvents in the discharges to POTWs is reduce their
use or toxicity in the customer facilities in the first place or to
remove them before washing, either at the customer's facility or at the
laundry. EPA's Office of Solid Waste (OSW) is planning to conduct
rulemaking to address certain organic solvents found mainly in shop
and/or printer towels before they are washed. EPA expects to propose
this rulemaking in the Federal Register in the first quarter of the
year 2000.
EPA believes that the decision not to promulgate national
categorical pretreatment standards for industrial laundries is the most
reasonable decision based on the record. While EPA has broad discretion
to promulgate such standards, EPA retains discretion not to do so where
the total pounds removed do not warrant national regulation and there
is not a significant concern with pass through and interference at the
POTW. Further, although not a decision factor for the final action, EPA
expects that the industry's commitment to a pollution prevention
program will be beneficial. The program projects reductions of 20,000
toxic pound equivalents per year to water, and includes non-water
quality benefits, as well. For example, EPA estimates that a 10-25
percent reduction in energy use would save 3.1 trillion to 7.8 trillion
BTUs, reducing air emissions of carbon dioxide by up to 900 million
pounds per year, if natural gas is the fuel source. Reduced use of
other fuels would also result in reduced emissions of sulfur dioxide
and particulates. (See Section 16 of the record for EPA's assessment of
the environmental benefits of the pollution prevention goals).
EPA recognizes this final decision reflects a significant shift
from the preferred option at proposal. As described in the preceding
paragraphs, this shift reflects the new information and revised
analysis that EPA presented in the notice of data availability, 63 FR
71054, and discussed above. First, POTW removal of SGT-HEM (TPH) is
greater than thought at proposal. Second, the constituents of TPH that
have been identified are not as toxic as previously believed. Both of
these factors have resulted in reduced projections of the toxic pound
equivalents annually removed by the rule from about 407,000 down to
less than 39,000 toxic pound equivalents. In addition, the projected
economic impacts of the proposal option are greater than originally
estimated. Finally, EPA's record demonstrates that the occurrence of
individual local problems from laundry discharges are not as prevalent
as EPA thought at the time of proposal.

C. Pretreatment Standards for New Sources (PSNS)

The options considered for PSNS are similar to those considered for
PSES. After considering all of the information in the record, EPA has
determined not to require pretreatment standards for new sources
because as is the case for existing sources, discharges from new
sources do not present a national problem warranting national
regulation.
EPA estimates that there will be at most 27 new sources each year.
(In fact the number is likely to be lower since it is based on the
number of new entities that started in a three year period, some of
which likely were existing facilities with new ownership.) Under a rule
with

[[Page 45078]]

the same small production threshold as would have been chosen for
existing sources, EPA estimates that new sources would discharge about
1,040 pounds of pollutants and 51 toxic pound equivalents per facility
per year, or a total of about 19,740 total pounds of pollutant and 945
toxic pounds per year. Because the total pounds and pound equivalents
per facility that would be removed by PSES are comparable to those for
existing sources, the same reasons for not issuing pretreatment
standards for existing sources also apply to new sources. This is true
not only for the option selected as economically achievable, but also
under a rule that would apply the first cutoff. This analysis is
discussed in the Development Document for the final action.
In developing estimates of total pounds of pollutants that would be
reduced by the rule, EPA determined what option would not present a
barrier to entry for new sources. Here, EPA considered whether a small
production exclusion should apply for new sources equivalent to the one
that would have applied to existing sources. EPA determined that it
would be appropriate to apply the same production threshold for PSNS
because for this industry, the costs of the rule are similar regardless
of whether a facility is a new source or an existing source and thus
new smaller facilities would likely suffer the same disproportionate
impacts that existing smaller facilities would suffer under a rule. For
example, under the costs of a rule, all of the new sources projected to
close would have been under the threshold for the exclusion. This
represents a disproportionate impact on those smaller facilities. Also,
EPA was concerned that it would not provide a level playing field to
require a new smaller facility to compete with an existing smaller
facility that would be excluded under the production threshold for the
rule, and this competitive disadvantage could be a barrier to entry if
the production threshold for new and existing sources were not the
same.

IV. Costs and Economic Impacts for the Regulatory Options

A. Introduction

This section describes the capital investment and annualized costs
of compliance of the three regulatory options outlined in Section III
and the potential economic impacts of these compliance costs on current
and future facilities and firms in the industry. EPA's economic
assessment is presented in detail in the Economic Assessment for the
Final Action Regarding Pretreatment Standards for the Industrial
Laundries Point Source Category (EA). The EA estimates the economic
effect of compliance costs on facilities, firms, employment, domestic
and international markets, inflation, distribution, industry
consolidation, environmental justice and industrial laundries
customers. The EA covers various regulatory options in addition to the
three summarized in this notice. EPA also conducted an analysis
equivalent to a Final Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (RFA) as amended by the Small Business
Regulatory Enforcement Act (SBREFA), which estimates effects on small
entities. EPA also prepared an analysis of pollutant removals and
average cost-effectiveness of all options.

B. Economic Impact Methodology

1. Introduction
Section IV.B.2 (and, in more detail, the EA and record) summarizes
the methodology EPA used to estimate the economic impacts that result
from compliance costs associated with the regulatory options. The
analysis in the EA consists of eight major components: (1) An
assessment of the number of facilities that could have been affected by
pretreatment standards; (2) an estimate of the annual aggregate cost
for these facilities to comply with pretreatment standards using
facility-level capital and operating and maintenance (O&M) costs; (3)
an evaluation of potential facility closures, using a financial model
that projects impacts on facilities' cash flow (closure analysis); (4)
an evaluation of potential firm failures; (5) an evaluation of
potential secondary impacts such as those on employment, markets,
inflation, distribution, industry consolidation, environmental justice
and industrial laundry customers; (6) an assessment of the potential
for impact on new sources (barrier to entry); (7) an analysis of the
effects of potential compliance costs on small entities; and (8) a
cost-benefit analysis.
All costs in today's notice are reported in 1998 dollars, with the
exception of average cost-effectiveness results, which, by convention,
are reported in 1981 dollars. The EA presents costs in 1993 dollars.
The Engineering News Record Construction Cost Index was used to inflate
costs to 1998 dollars. The sources of data for the economic analysis
are the same as reported in the preamble to the proposed rule (62 FR
66182) with updates to the profile, costs, and removals as reported in
the Technical Development Document. The primary source of data for the
economic analysis is the 1994 Industrial Laundries Industry Detailed
Questionnaire (Section 308 Survey). Other sources include comments to
the proposal and NODA, government data from the Bureau of the Census,
industry trade journals, and several preliminary surveys of the
industry, including the 1989 Preliminary Data Summary for Industrial
Laundries, the 1993 Industrial Laundries Industry Screener
Questionnaire, and the 1994 Industrial Laundries Supplemental Screener
Questionnaire.
2. Methodology Overview
Central to the EA is the cost annualization model, which uses
facility-specific cost data and other inputs (discussed in Chapter 11
of the Technical Development Document) to determine the annualized
capital and operating and maintenance (O&M) costs of improved
wastewater treatment. This model uses these costs along with an annual
compliance monitoring cost with the facility-specific real cost of
capital (discount rate) over a 16-year analytic time frame to generate
the annual cost of compliance for each option. EPA chose the 16-year
time frame for analysis based on the depreciable life for equipment of
this type, 15 years according to Internal Revenue Service (IRS) rules,
plus approximately one year for purchasing and installing the
equipment. As an alternative to installing wastewater treatment, the
cost model also generates the annualized cost of hauling wastewater
offsite. The cost model compares the treatment costs to the hauling
costs (where this alternative is available), and selects the lower of
the two.
EPA then converts the annual cost for each facility into a present
value change in cash flow, which is subtracted from the estimated
baseline present value of facility cash flow. EPA estimated baseline
present value of facility cash flow based on the average of three years
of financial data from each facility in the Section 308 survey under an
assumed no-growth scenario (i.e., the annual cash flow, calculated as
the 3-year average, is expected to remain the same over the 16-year
period of analysis). If the change in present value of cash flow (which
is derived from the annualized costs of compliance of a regulatory
option) causes a facility's estimated cash flow to change from positive
in the baseline to zero or negative, over the 16-year period of
analysis, EPA considers the facility likely to close (i.e., liquidate)
as a result

[[Page 45079]]

of that regulatory option. Salvage value, as at proposal, was not used
in the closure analysis, although EPA did perform sensitivity analyses,
which are presented in an appendix in the EA. For reasons discussed in
the EA and the Comment Response Document, salvage value was either
considered inappropriate or did not substantially change the outcome of
the analysis.
Note that facilities that reported negative cash flow over the 3-
year period of the survey are considered baseline closures and are not
considered affected by the regulatory options for several reasons: (1)
Many of these facilities are owned by multifacility firms. These
facilities may be transferring production (laundering services at or
near cost) from other facilities owned by the same parent company, or
otherwise not expected to be self-supporting by the parent. EPA
analyzes the parent firms of these facilities in the firm-level
analysis. (2) OMB guidance suggests that agencies develop a baseline
that is ``the best assessment of the way the world would look absent
the proposed regulation. That assessment may consider a wide range of
factors, including the likely evolution of the market * * *.'' EPA's
best assessment is that some facilities currently operating may not
remain in business to install and operate the pollution control
equipment. EPA cannot say for certain which facilities these may be,
but can assert that those facilities that are currently considered not
financially viable because their cash flow is zero or negative (among
those not owned by multifacility firms) are the likeliest facilities to
close without ever installing and operating pollution control
equipment. It is possible that a facility estimated to be a baseline
closure may remain open, but the converse is also true--a facility
projected to remain open until it is subject to a regulatory option may
actually close independently of the effects of the regulatory options.
Thus, EPA believes it is consistent with OMB guidance to estimate
postcompliance closures by counting closures that are projected to
close solely due to the effect of compliance costs.
In the firm failure analysis, EPA uses the capital costs, O&M
costs, and an early-year depreciation figure to compute a change in
earnings, assets, liabilities, and working capital at the firm level
(accounting for costs for multiple facilities, where applicable). These
postcompliance financial figures are used in a computerized model of
financial health on a firm-by-firm basis. The model uses an equation
known as Altman's Z'', which was developed based on empirical data to
characterize the financial health of firms. This equation calculates
one number, based on the financial data, that can be compared to index
numbers that define ``good'' financial health, ``indeterminate''
financial health, and ``poor'' financial health. All firms whose
Altman's Z'' number changes such that the firm goes from a ``good'' or
``indeterminate'' baseline category to a ``poor'' postcompliance
category are classified as likely to have significant difficulties
raising the capital needed to comply with a regulatory option, which
can indicate the likelihood of firm bankruptcy, or loss of financial
independence.
EPA estimated direct employment impacts associated with both the
facility closure and firm failures. In addition, EPA took the extra
steps to consider and estimate national and regional level employment
impacts. These extra steps provide EPA with additional information and
analysis about the potential effects on the national economy. For
example, closures and failures of industrial laundry facilities or
firms could lead to economic and financial impacts in other sectors of
the economy. These economic impacts could potentially affect suppliers
or customers that are in other sectors of the economy. Moreover, these
impacts could be positive or negative, e.g., jobs could be created for
installing pollution control equipment or jobs could be lost with a
decrease in business from the industrial laundries industry. This
additional comprehensive analysis of impacts at the national level
relied upon procedures known as input-output analysis. These analyses
are discussed fully in the EA.
Another key analysis EPA performs is an analysis to determine
impacts on new sources, which is primarily a ``barrier-to-entry
analysis'' to determine whether the compliance costs would have
prevented a new source from entering the market. This analysis also
looks at whether new industrial laundries would have been at a
competitive disadvantage compared with existing sources. Market effects
and barriers to entry associated with the small source exclusion also
are qualitatively investigated.

C. Summary of Costs and Economic Impacts

1. Number of Facilities and Costs of the Regulatory Options
This section presents the costs for the three regulatory options
outlined in Section III. The costs for other options are presented in
the EA. EPA estimates that there are 1,742 industrial laundries
facilities. Of these, 136 to 953 facilities would have been excluded
from the regulation, depending on the production cutoff. As described
in Section III, EPA considered three primary exclusions in addition to
analyzing the impacts with no cutoff. To summarize, the exclusions are
(1) All facilities laundering less than 1 million pounds of incoming
laundry per calendar year and less than 255,000 pounds of shop and/or
printer towels per calendar year (abbreviated as the 1MM/255K cutoff,
which was the cutoff originally proposed by EPA, and which would have
excluded 136 facilities or 8 percent of all facilities), (2) all
facilities laundering between 1 and 3 million pounds of total laundry
per year and less than 120,000 pounds of shop towels, in addition to
those excluded above under the 1MM/255K cutoff (abbreviated as the 3MM/
120K cutoff, which would exclude 518 facilities or 30 percent of all
facilities), and (3) all facilities laundering less than 5 million
pounds of total laundry and less than 255,000 pounds of shop towels
(abbreviated as the 5MM/255K cutoff, which would have excluded 953
facilities or 55 percent of all facilities). There are 903 firms owning
the 1,742 facilities. A total of 837 of the 903 firms (93 percent) are
``small businesses'' according to SBA definitions (revenues less than
$10.5 million per year). The analysis looks separately at single-
facility firms (those firms where the firm and the facility are a
single entity) and multifacility firms (firms that own more than one
facility; generally, these firms are larger than single facility
firms). There are a total of 830 single-facility firms in the industry
(92 percent), the vast majority of which meet the SBA definition of
small.
The total cost of each regulatory option is based on engineering
cost estimates. The Technical Development Document describe EPA's
development of these cost estimates (EPA 821-R-99-010). Briefly, EPA
developed cost equations for capital and O&M costs (including
monitoring and recordkeeping) for the wastewater treatment
technologies. For the CP options, the components of the cost estimates
include screen, stream splitting, equalization, chemical precipitation,
pH adjustment, sludge dewatering, building and monitoring.
Table IV.C.2.1. presents a summary of the total annualized costs
for the various production cutoffs associated with CP. A parallel set
of results for DAF is presented in the EA. The costs of the regulatory
options are estimated to range from $61.3 million for the option with
the 5MM/255K cutoff to $145.8

[[Page 45080]]

million under the option with no cutoff. The 3MM/120K cutoff is
estimated to cost $103.2 million per year.

Table IV.C.2.1.--Costs of Regulatory Options Considered
[$1998]
------------------------------------------------------------------------
Total
annualized
post tax
Option and cutoff considered (Production/Shop Towels) cost
($millions,
1998)
------------------------------------------------------------------------
CP Options
------------------------------------------------------------------------
No cutoff.................................................. 145.8
1MM/255K................................................... 137.4
3MM/120K................................................... 103.2
5MM/255K................................................... 61.3
------------------------------------------------------------------------

2. Economic Impacts of the Regulatory Options
a. Impacts From Regulatory Options for Existing Sources
Table IV.D.2.2 summarizes the closure and employment impacts of the
CP options. Closure and firm failure impacts from the DAF options are
identical and are reported in an Appendix to the EA. EPA estimates that
the CP options would have resulted in closures of from 2 facilities
under the
5MM/255K cutoff to 106 facilities under no cutoff (0.1 to 6.1 percent
of all 1,742 facilities). Under the 3MM/120K cutoff, EPA estimates that
44 facilities would have closed (2.5 percent of all facilities). In
addition to these closures, EPA predicts firm failures for 72 firms
under no cutoff and under the 1MM/255K cutoff. EPA estimated no firm
failures for the 3MM/120K cutoff and the
5MM/255K cutoff .
EPA estimates that a total direct job loss of 235 to 3,318 full-
time equivalents (1 FTE=2,080 hours of labor) would have occurred as a
result of the facility closures projected under the various CP options,
depending on cutoff. The 3MM/120K cutoff is associated with a loss of
2,261 FTEs due to closures. These losses would have contributed to
losses elsewhere in the economy, because a closure can affect other
parts of the economy as inputs to the closed facility are no longer
needed and demand for products by laid off workers is reduced. The sum
of the direct losses from closures and these other indirect and induced
losses range from 404 to 5,707 FTEs, depending on cutoff. The 3MM/120K
cutoff is associated with nationwide losses of 3,889 FTEs due to
closures. The employment losses associated with closures overstate
actual net losses to the industry and to the economy, because some
employment gains in the industry and throughout the economy would have
occurred (although the gains might not have occurred in the same
geographic location or at the same time as the losses). The gains to
the industrial laundries industry would have included operators of
pollution control systems that might be hired by facilities and
additional workers hired to expand some production at facilities
located in market areas with facility closures. In the economy as a
whole, gains due to increased production and installation of pollution
control devices would have occurred.
Employment losses from closures might not be the only losses that
could occur. Employment losses might have occurred as a result of firm
failures. When 75 percent of the employment at these failing firms are
added to the employment losses that might have occurred under the
various cutoffs, EPA estimates that the direct employment losses
associated with the CP option would have been 235 FTEs (note that no
failures were estimated under the
5MM/255K cutoff) to as high as 5,039 FTEs under no cutoff. The
3MM/120K cutoff is associated with no additional losses of employment
due to failures. When direct and indirect employment effects are
estimated, total losses associated with both closures and failures are
estimated to be as high as 404 to 8,667 FTEs, depending on cutoff. The
3MM/120K cutoff is associated with total nationwide losses of 3,889
FTEs due to both closures and failures.

Table IV.D.2.2--Summary of Option Impacts
----------------------------------------------------------------------------------------------------------------
Impact No cutoff 1MM/255K 3MM/120K 5MM/255K
----------------------------------------------------------------------------------------------------------------
Facility Closures........................................... 106 61 44 2
Direct Employment Losses from Closures...................... 3,318 2,684 2,261 235
Economy-Wide Employment Losses Due To Closures.............. 5,707 4,617 3,889 404
Firm Failures............................................... 72 72 0 0
Direct Employment Losses from Closures Plus Failures........ 5,039 4,405 2,261 235
Economy-Wide Employment Losses from Closures Plus Failures.. 8,667 7,576 3,889 404
----------------------------------------------------------------------------------------------------------------

Losses due to closures are not the only losses to the national
economy, nor are those losses net losses (after accounting for gains).
EPA predicts employment impacts to the national-level economy on the
basis of the output losses calculated for the U.S. economy using the
input-output analysis described in Section IV.A.2. Based on this
analysis, which estimates both national employment losses stemming from
decreased output in the industrial laundries industry and offsetting
gains stemming from increased output of pollution control equipment,
the CP options would have resulted in a net loss of employment at the
national level in all industry sectors of 3,389 to 7,900 FTEs, which is
less than 0.01 percent of the U.S. labor force in 1998. Net output loss
would have been $62.6 million to $149.9 million per year at most, which
is about 0.001 percent of Gross Domestic Product in 1998. Thus EPA
expects, at the national level, that the CP options would have had
negligible impact on U.S. employment and output.
EPA also investigated employment impacts driven by output
reductions in the industrial laundries industry alone. Within the
industrial laundries industry, nonclosing facilities could have
experienced gains in production (and thus gains in output and
employment) or losses in production, depending on how many facilities
were expected to close and whether the loss of production to the
economy represented by closing facilities exceeded or fell short of
production losses that would have occurred when market equilibrium was
achieved. Although the CP options are estimated to have produced a
short-term employment loss to the industrial laundries industry of 235
to 5,039 FTEs based on closures and failures, this is less than the
long-term net direct employment losses that would be calculated on the
basis of output losses assuming no costs could be passed through to
customers. Assuming no cost passthrough, as many as 2,884 to 6,692 FTEs
(2.2 percent to 5.2 percent of total employment in the industry) might
have been lost over the long term (inclusive of closure- and failure-
based losses, but net of gains in employment due to hiring of pollution
control system operators) in the industrial laundries

[[Page 45081]]

industry under the CP option, depending on cutoff. The 3MM/120k cutoff
is associated with a loss of 4,897 FTEs. This worst-case estimate shows
greater losses than those estimated using the production losses
calculated using EPA's market model (and assuming costs are passed
through to customers), which projects that, in fact, very small net
gains might have occurred over time (from 30 to 87 FTEs gained,
depending on cutoff). Thus, the 3MM/120K cutoff would be expected to
result in net employment losses ranging from 2,520 to 4,897 FTEs.
For the community-level analysis, under the conservative approach
for estimating community employment impacts described above, EPA
determined that closures and failures would have resulted in a maximum
change in a community's unemployment rate of less than one percent
under all cutoffs considered.
EPA considers the options likely to have had a minimal impact on
international markets. Under the higher cutoffs such as the 5MM/255K
cutoff (which would have excluded 55 percent of the 1,742 facilities,
the options might have had some effect on the ability of larger
facilities to compete. These larger facilities generally, however, have
a competitive advantage over the smaller excluded facilities. Most are
owned by large multifacility firms that benefit from economies of scale
not available to the smaller, single-facility firms. For the most part,
the nonexcluded facilities have greater financial resources and could
have better absorbed the costs of compliance. All analyses have been
run under the assumption that no costs are passed through to customers,
thus the analysis shows that the vast majority of these larger
facilities would have been able to compete on the basis of price.
Furthermore, as discussed below in the Small Business Analyses section,
EPA believes that any potential adverse impacts to the facilities not
excluded under the various options would have been far outweighed by
the benefits of reducing adverse economic impacts on the most
vulnerable firms in the industry.
EPA also estimates that the options considered would have had
minimal impacts on inflation and insignificant distributional effects.
The no regulation decision will not change the status quo and this will
not affect industrial laundry competitors, such as the disposable
industry. The options also would have had minimal impacts on industrial
laundries customers. EPA investigated the impact on customers in the
unlikely event that most costs of the options considered could have
been passed through to customers. A realistic estimate of the cost
increase at a typical medium size printer (a key industrial laundry
customer industry) would be about $200 per year, or about a 0.6 percent
increase in laundry costs. EPA believes this level of impact is
representative at most sizes and types of industrial laundry customers.
Therefore, EPA does not expect price increases, should they have
occurred, to have had a major impact on customers.
EPA also investigated the likelihood that customers might
substitute disposable items for laundered items or begin operating on-
site laundries under the various regulatory options. Both the
substitution of disposable items for laundered items and the
installation and operation of on-site laundries are associated with
potential negative impacts on customers that might deter them from
choosing these potential substitutes. Disposable items can be more
expensive to use than laundered items, may not meet quality
requirements (e.g., disposable printer towels tend to be linty) and
are, in certain circumstances, regulated under other environmental
statutes. Lint-free disposable wipers (such as those used in clean
rooms) are very expensive, and currently are only used in situations
where even reusable wipers provided by industrial laundries are not
sufficiently lint-free. Meanwhile because of the high initial costs to
install equipment on-site and the likelihood that any price increase
associated with industrial laundry service would have been small, on-
site laundries could have required years before any cost savings might
be realized. Given the disincentives towards those substitutes
indicated above, particularly under the higher cutoffs (e.g., the 5MM/
255K cutoff), prices would have been unlikely to rise noticeably. EPA
does not believe that the options considered would have had a
substantial effect on substitution of disposable items for laundered
items or caused an increase in industrial laundering on-site for
industrial laundries services in any major way as a result of price
increases. Furthermore, since EPA has assumed for these analyses that
no costs are passed through to customers, under the cutoffs considered,
most firms and facilities would have been able to absorb the cost of
the options if they felt their customers would have switched to
substitutes had price increased.
Any cost of compliance that is not passed through to customers,
however, would have resulted in some reduction in production (assuming
no other factors in the industrial market changed) as firms attempted
to maximize profits, but this reduction must be compared to the
approximate 6 percent per year growth in revenues seen in recent years.
This growth in revenues appears to be driven by increasing production
(to meet new demands for industrial laundry services), while increasing
productivity and declining costs of production (in the baseline),
combined with revenue growth, have contributed to higher profitability.
EPA expects that the options would have had a one-time effect on
revenue and profit growth, but in actuality, with a continuing economic
boom, the overall effect might have been only a reduction in the
increase in production. In a downturn, however, EPA recognizes that
output losses due to a downturn might have been greater than they would
be without a regulation.
b. Impacts From Regulatory Options for New Sources
EPA's decision not to promulgate pretreatment standards applies to
new sources as well. This section presents EPA's assessment of what
impacts on new sources might have been had EPA decided to promulgate
pretreatment standards for new sources under the same option and
exclusion selected for existing sources (CP-IL under the 3MM/120K
cutoff). EPA assessed impacts on new sources by determining whether the
regulatory options would have resulted in a barrier to entry into the
market.
EPA has found that overall impacts from either the CP-IL or DAF-IL
options would not have been any more severe on new sources than those
on existing sources as long as both are subject to the same cutoff,
since the costs faced by new sources generally will be similar to those
faced by existing sources. Because most new sources and existing
sources would have faced similar costs, EPA has determined that the CP-
IL option under the 3MM/120K cutoff for new sources would not have
posed a barrier to entry on the basis of competitiveness.
EPA also examined whether there would be a barrier to entry for
small new sources based on disproportionate impacts measured as
closures or failures. EPA investigated facilities in the Section 308
Survey that indicated they were new or relatively new at the time of
the survey. Using the Section 308 Survey data, EPA expects that new
sources would generally have exceeded most of the threshold size
cutoffs that EPA considered for existing sources. Sixty percent of
facilities identified as new exceed the 5MM/255K cutoff. The number of
new source facilities coming on line each year is extremely small.

[[Page 45082]]

Over a three year period (1991, 1992, and 1993), according to Section
308 Survey data, laundry operations began at about only 80 facilities
(and it is not absolutely clear from the data whether these facilities
were actually new dischargers or were existing dischargers acquired in
that year by a different firm). Over the 3-year period, this amounts to
27 new sources a year at most, or only 1.5 percent of existing
facilities. Given the small level of growth in the industrial laundries
industry, EPA believes that new sources are primarily replacing
production from closing facilities that exit the market.
Of these facilities identified as new or relatively new facilities,
EPA determined that the average revenues of this group exceeded $4
million per year, and the amount of laundry processed averaged over 5
million pounds per year. Only 24 to 32 facilities out of 80 total newer
facilities (weighted), or 30 to 40 percent, would meet the size
threshold for the exclusions EPA investigated for existing sources. On
a yearly basis (given that these facilities started up over the 3 years
of the survey) EPA estimates that 8 to 11 facilities of the size, on
average, that would meet an exclusion similar to those investigated for
existing sources might be started up each year. Under the 3MM/120K
cutoff, 30 facilities total, or 10 per year, on average, would meet
this exclusion. Overall, in the group of 80 facilities, 6 facilities
(weighted), or 7.5 percent, were identified as postcompliance closures
(based on a closure by one surveyed nonindependent facility). These
facilities would have been exempted under all cutoffs considered. Given
the above results, EPA finds that had new sources been regulated under
the 3MM/120K cutoff, the rule for new sources would have been
economically achievable and no barriers to entry would have occurred.
Furthermore, because both new sources and existing sources would
have been provided the same exclusion, EPA avoids a situation where a
level playing field would not be provided for new sources relative to
existing sources. This could occur when a new smaller facility that was
not excluded from the rule must compete with an existing smaller
facility that was excluded under the production threshold for the rule.
This competitive disadvantage could be a barrier to entry if the
production threshold for new and existing source were not the same.
3. Small Business Analysis
There are 903 firms owning the 1,742 facilities. A total of 837 out
of the 903 firms or 93 percent are ``small business'' according to SBA
Guidelines (revenues less than $10.5 million per year). The analysis
looks separately at single-facility firms (those firms where the firm
and the facility are a single entity) and multifacility firms (firms
that own more than one facility; generally, these firms are larger than
single facility firms). There are a total of 830 single-facility firms
out of 903 total firms in the industry (92 percent), the vast majority
of which (812) meet the SBA definition of small. Only 25 multifacility
firms meet this definition. Under the 3MM/120K cutoff, 363 small,
single-facility firms (45 percent of small, single facility firms)
would have been excluded.
Had EPA promulgated a rule, no small firms would have closed or
failed under the 5MM/255K cutoff, but 126 small, single-facility firms
would have closed or failed under the 1MM/255K cutoff (54 closures and
72 failures, or 18.4 percent of all small firms in the postcompliance
analysis). Under the 3MM/120K cutoff, 39 small, single-facility firms
would have closed or failed (39 closures and no failures, or 5.7
percent of the 684 small firms in the postcompliance analyses).
4. Cost-Benefit Comparison
EPA estimates that the pretax costs of compliance, as can be seen
in the EA for the proposal, generally make up nearly all of the
monetizable social costs of pretreatment standards. Additional very
small costs are associated with costs to permitting authorities and the
administrative costs of providing unemployment benefits.
EPA thus approximates the social costs of a rule using the pretax
compliance costs of the option and cutoff. EPA would have selected had
the Agency promulgated a rule. The pretax cost of the CP-IL option
under the 3MM/120K cutoff is $149.1 million per year in 1998 dollars.
This figure can be compared with the monetized benefits of $0.16 to
$0.79 million in 1998 dollars. The components of these benefits and
their value are summarized in detail in Section VIII of this final
action.

V. Total Toxic and Nonconventional Pounds Reduced by Options
Considered for the Final Action

In addition to the foregoing analyses, EPA has estimated toxic and
nonconventional pollutant reductions for all options and cutoffs
considered for the final action. These results are expressed in terms
of the ``pound equivalent'' (PE) removed. PE is a measure that
addresses differences in the toxicity of pollutants removed. Total PEs
are derived by taking the number of pounds of a pollutant removed and
multiplying this number by a toxic weighting factor (TWF). EPA
calculates TWFs for priority pollutants and some additional
nonconventional pollutants using ambient water quality criteria and
toxicity values. The TWFs are then standardized by relating them to a
particular pollutant at a certain point in time, in this case, copper.
As of 1985 the water quality criterion for copper was revised, thus the
TWF for copper also has been revised. PEs are calculated only for
pollutants for which TWFs have been estimated, thus they do not reflect
potential toxicity of some nonconventional and, to date, any
conventional pollutants. EPA does not include pollutant removals to the
extent that those pollutants are reliably removed at the POTW, but only
includes the removal of pollutants that would not be removed by the
POTW.
As noted earlier, based on new data and as discussed in the NODA,
EPA estimated toxic weighting factors for the individual components of
SGT-HEM (TPH), such as certain alkanes and naphthalene, bis(2-
ethylhexyl) phthalate and 2-methylnaphthalene to estimate toxic pound
equivalent removals for the decision.

Table IV.E.1.--Pollutant Removals of CP Options and Cutoffs Considered
------------------------------------------------------------------------
Toxic pound
Option/ Cutoff Pounds equivalents
removed removed
------------------------------------------------------------------------
CP
------------------------------------------------------------------------
No Cutoff..................................... 891,572 43,013
1MM/255K...................................... 871,422 42,249
3MM/120K...................................... 794,448 38,566
5MM/255K...................................... 636,660 31,469
------------------------------------------------------------------------

As noted above, EPA also estimated the toxic pound equivalent
removed by the rule using a toxic weighting factor for the bulk
parameter TPH (SGT-HEM). This analysis was not EPA's primary analysis
because EPA historically assigns TWFs to the individual constituents
and because EPA only identified a very small percentage (approximately
two percent) of the constituents comprising TPH (SGT-HEM). To derive a
toxic weighting factor for the bulk parameter TPH (SGT-HEM) in this
case, EPA extrapolated the toxic weighting factor from the identified
constituents to all of the TPH pounds. While EPA thinks that this
approach for estimating the toxic pound equivalents for a bulk
parameter may be reasonable where a large percentage of constituents
can be identified, EPA was not able to do so here. The uncertainty
inherent in

[[Page 45083]]

extrapolating the toxicity of so minuscule a fraction of TPH
constituents to the entire TPH parameter is too great for EPA to use
for its primary analysis. Nevertheless, EPA would not have made a
different decision based on this alternative analysis.

VI. Pass Through Analysis

Categorical pretreatment standards are technology-based standards
for indirect dischargers in an industrial category. Pretreatment
Standards for Existing Sources (PSES) and Pretreatment Standards for
New Sources (PSNS) are analogous to the BAT (Best Available Technology
Economically Achievable) and best available demonstrated technology
(BADT for NSPS) for existing and new source direct dischargers,
respectively. For the development of the national categorical
pretreatment standards, EPA determines whether pollutants discharged to
POTWs pass through to waters of the U.S. by comparing the percentage of
the pollutant removed by well-operated POTWs achieving secondary
treatment with the percentage of the pollutant removed by the candidate
BAT or pretreatment technologies. For this industry, there is no
candidate BAT technology because there are no known direct dischargers
in the industry so EPA has based the pass through analysis on a
comparison of the candidate pretreatment technologies to POTW removals.
EPA believes that the comparison of well-operated POTWs to the
candidate pretreatment technologies instead of BAT is appropriate,
since there are no direct dischargers in the industry. In addition, EPA
looks at the engineering design aspects of the candidate technologies
and the ability of the POTW to treat pollutants to determine if certain
pollutants pass through (e.g., soluble organic compounds exhibiting
some degree of volatility).
By contrast, General Pretreatment Standards authorize POTWs to set
local limits for individual indirect dischargers in order to prevent
pass through or interference, or what is necessary for the POTW to meet
its NPDES permit limit. Under the General Pretreatment Standards, pass
through is defined as a discharge that exits the POTW into waters of
the U.S. in quantities or concentrations, which alone or in conjunction
with a discharge or discharges from other sources, cause a violation of
any requirement of the POTW's NPDES permit.
Results of the pass through analysis show that there is not
significant pass through, while pretreatment using CP would produce
some additional removal of some pollutants, the removals associated
with these pollutants are small in absolute pounds and toxic pound
equivalents. For the economically achievable option (see sections IV
and V) the removals for the pollutants would be 794,448 lbs/yr (38,566
pound equivalents) or 649 pounds (32 pound equivalents) per year per
facility. A full description of the pass through analysis results is
shown in the Technical Development Document.
Results of alternative methods for conducting the pass through
analysis can be found in the record. The results of conducting the pass
through analysis using the other methodologies show only minor
differences in pollutant removals.

VII. Cost-Effectiveness Analysis

In addition to calculating pound equivalent (PE) removals, the
Agency also calculated the average cost-effectiveness of the various
options and cutoffs considered. EPA calculates average cost-
effectiveness on the basis of cost per toxic pound equivalent removed.
For this rule, EPA did not perform an incremental cost-effectiveness
analysis, which evaluates cost-effectiveness incrementally between
options along the same treatment train. Average cost-effectiveness,
which evaluates an option or cutoff relative to a baseline, or no
regulation option, was calculated. The average cost-effectiveness ratio
is calculated as the costs of an option at that cutoff in 1981 dollars
(the standard year for all cost-effectiveness studies) divided by the
total removals calculated under that option and cutoff. Costs evaluated
include the pretax direct compliance costs, such as capital
expenditures and O&M costs, including compliance monitoring. Table
IV.E.1 shows the pollutant removals in pound equivalents and average
cost-effectiveness of each regulatory option under each cutoff
considered. EPA is showing the average cost-effectiveness results for
the DAF options as well as the CP options to illustrate that these
options removed less pound equivalents at greater cost than the
comparable CP options.

Table IV.E.1.--Pollutant Removals and Average Cost-Effectiveness of Options and Cutoffs Considered
----------------------------------------------------------------------------------------------------------------
Total annual
-------------------------------- Average C-E
Option/Cutoff Cost ($mil. (1981$/lb.
PE removed 1981) eq.)
----------------------------------------------------------------------------------------------------------------
CP
----------------------------------------------------------------------------------------------------------------
No Cutoff....................................................... 43,013 121.5 2,824
1MM/255K........................................................ 42,249 115.7 2,739
3MM/120K........................................................ 38,566 88.3 2,290
5MM/255K........................................................ 31,469 52.7 1,674
----------------------------------------------------------------------------------------------------------------
DAF
----------------------------------------------------------------------------------------------------------------
No Cutoff....................................................... 35,345 132.1 3,885
1MM/255K........................................................ 34,640 126.5 3,652
3MM/120K........................................................ 31,665 98.4 3,108
5MM/255K........................................................ 25,844 60.1 2,327
----------------------------------------------------------------------------------------------------------------

As the table shows, the difference between the no cutoff scenario
and the most inclusive cutoff (5MM/255K) is only 11,844 PEs under the
CP option, representing a 27 percent drop in removals (the results for
DAF are similar). EPA considers the options and their cutoffs to be
generally cost-ineffective. EPA would expect this to be the case given
the ability of POTWs to effectively treat industrial laundry effluent
and the resulting small total

[[Page 45084]]

number of pound equivalents removed by the rule. Thus, while EPA does
not base its decision regarding PSES or PSNS on cost-effectiveness,
this analysis confirms that EPA's decision not to issue national
categorical pretreatment standards is reasonable.

VIII. Environmental Benefits Analysis

A. Summary

Since EPA is not promulgating national categorical standards for
the industrial laundries point source category, EPA estimates that
there will be no environmental benefits associated with this action. If
EPA were to promulgate national standards based upon the economically
achievable CP treatment option presented above, the monetized human
health benefits would be nominal. Projected cancer cases would be
reduced by far less than one cancer case per year. (0.06 cancer cases
from a baseline of 0.17 cancer cases.) EPA's use of a hazard ranking
score to evaluate non-cancer effects found no non cancer effects would
occur. In terms of other benefits, EPA estimates based on computer
modeling, that a rule would remove 16 out of 38 exceedences of Ambient
Water Quality Criteria (AWQC) for the protection of aquatic life and/or
human health at 12 reaches nationwide, and biosolid quality at eight
POTWs would be improved.
This section presents the estimated benefits due to implementation
of the economically achievable CP and DAF options. For more details,
see the Water Quality Benefits Analysis (WQBA). EPA estimates the
monetized CP benefits, which consist of reduced cancer cases and
improved biosolid quality to be small, from $0.16 million to $0.79
million ($1998). These benefits are de minimis, and therefore,
reinforce EPA's decision made above. Taken in context across all stream
reaches nationwide, EPA does not believe that the benefits analysis
indicates that industrial laundry discharges present a nationwide
problem. Further, EPA expects that the benefits realized from the rule
could be realized under the existing pretreatment program, where EPA
will work with any POTW that is not meeting its water quality-based
permit limit to impose controls as necessary to meet that permit limit.
EPA also notes that efforts that would prevent pollution at the source,
such as the voluntary program or the efforts of OSW could achieve these
same benefits.
Thus, while EPA does not base its decision regarding PSES or PSNS
on the benefits described above, EPA does not believe that the benefits
of national categorical pretreatment standards for this industry would
justify their costs.

B. Changes Since the Proposal

In response to numerous comments received pertaining to the
benefits analysis conducted for the Proposed Rule, for the NODA, EPA
revised its analysis in two ways: (1) The aquatic life chronic toxicity
value of TPH (1,145 <greek-m>g/L), used to develop a recommended AWQC
for TPH and also used to develop a toxic weighting factor for TPH, is
based on a weighted average of the toxicity of 13 identified
constituents of TPH (as compared to the 56 <greek-m>g/L based on
soluble hydrocarbons used for the proposal); (2) the POTW removal
percentage of TPH was increased to 74% from 65%; and (3) the POTW
removal percentages of other pollutants were updated.
The overall impact of the changes related to TPH is a decrease in
the number of reaches with modeled baseline water quality criterion
toxicity exceedences in the baseline from 78 at proposal to 12 at
final. The water quality exceedences predicted for the final action are
for five Pollutants Of Concern (POCs) (mercury, silver,
tetrachloroethene, chloroform and bis (2-ethylhexyl) phthalate) rather
than for TPH. These pollutants from industrial laundries are modeled to
be present in POTW effluent in concentrations above recommended Water
Quality Criteria (WQC) for either chronic toxicity to aquatic organisms
or human health at baseline conditions for three sample reaches that
represents 12 reaches nationwide.

C. Benefits of Action

1. Reduced Pollutant Discharges
EPA considered the benefits that could result from reductions in
industrial laundry pollutant discharges to POTWs, including: improved
quality of freshwater, estuarine, and marine ecosystems; reduced risks
to human health through consumption of fish or water taken from
affected waterways; reduced cost of disposal or use of municipal sewage
sludge that is affected by industrial laundry pollutant discharges; and
reduced occurrence of biological inhibition of activated sludge at
POTWs.
For the industrial laundry industry, EPA evaluated the effects of
POTW wastewater discharges of 72 pollutants on receiving stream water
quality at current levels of treatment and at a number of proposed PSES
limits. EPA assessed the benefits from the modeled pollutant reductions
in three broad classes: human health, ecological, and economic
productivity benefits. However, because of data limitations and the
understanding of how society values some of these benefit categories,
EPA was not able to analyze all of these categories with the same level
of rigor. At the highest level of analysis, EPA was able to quantify
the expected effects for some benefit categories and attach monetary
values to them, such as a nominal value for reduction in cancer risk
from fish consumption and reduced costs of managing and disposing of
POTW sewage sludge. For other benefit categories, EPA was able to
quantify expected effects but not able to estimate monetary values for
them. These benefit categories include reduced exceedences of
biological inhibition criteria at POTWs and changes in human health and
aquatic life risk indicators. Finally, non-quantified, non-monetized
benefit categories include enhanced water-dependent recreation other
than fishing.
2. Reduced Human Health Risk
EPA projects that the CP and DAF options would eliminate far less
than 1 cancer case per year (0.06 cancer cases from a baseline of 0.17
cancer cases). This translates into $0.15 million to $0.78 million
($1998) in benefits. Further, based on risk reference doses in
conjunction with in-stream pollutant concentrations, EPA modeled no
non-cancer human health effects. Both of these analyses are based on
exposure of recreational and subsistence anglers and their families to
fish. With respect to ambient water quality criteria for human health,
EPA modeled exceedences for three pollutants at 12 reaches nationwide.
To estimate the reduced risk of non-cancer health effects (e.g.,
systemic effects, reproductive toxicity, and developmental toxicity)
from fish and water consumption for each option, EPA used risk
reference doses, in conjunction with in-stream pollutant
concentrations, to calculate a hazard score. A value of one or greater
for a hazard score indicates the potential for non-cancer hazards to
occur. The hazard score, which EPA calculated by summing over all
pollutants, was less than one for baseline conditions as well as for
all treatment options.
At current discharge levels, in-stream concentrations of bis(2-
ethylhexyl)phthalate, chloroform, and tetrachloroethene are projected
to exceed human health criteria (developed for consumption of water and
organisms) in 12 receiving streams nationwide for a total of 21
exceedences. The CP (and DAF) option(s) would eliminate the occurrence
of bis(2-ethylhexyl)

[[Page 45085]]

phthalate concentrations in excess of the human health-based AWQC in
eight of the 12 affected streams.
3. Improved Recreational Fishing Opportunities
Although the rule would eliminate 16 out of 38 AWQC exceedences for
the protection of human health and/or aquatic life, the rule would not
eliminate all AWQC at any one reach. Currently EPA has no methodology
to monetize the elimination of these AWQC unless they are entirely
eliminated for a waterbody and thus EPA was not able to monetize these
benefits.
4. Reduced Impacts on POTWs
EPA expects that reduced effluent discharges from the industrial
laundries industry would have a minimal impact on POTWs. EPA estimates
a $0.006 million to 0.01 million ($1998) annual benefit due to improved
biosolids quality. Discussion with POTW operators support EPA's
position that industrial laundry discharges usually are not problematic
to POTWs.
a. Modeled POTW Impacts
EPA evaluated whether industrial laundry pollutants may interfere
with POTWS by impairing their treatment effectiveness or causing them
to violate applicable CWA sewage sludge requirements for their chosen
sludge disposal method. For the POTW impact analysis, EPA analyzed two
benefit categories: (1) Reduced costs to public sewage systems for
managing and disposing of the sewage sludge that result from treatment
of effluent discharges from industrial laundries; and (2) a reduction
in risk of biological inhibition of activated sludge.
EPA has promulgated regulations establishing standards for sewage
sludge when it is applied to the land, disposed of at dedicated sites
(surface disposal), and incinerated (40 CFR Part 503). For a discussion
of these requirements see the final WQBA.
EPA estimated sewage sludge concentrations of ten metals for sample
facilities under baseline discharge levels. EPA compared these
concentrations with the relevant metal concentration limits for the
following sewage sludge management options: Land Application-High
(Concentration Limits), Land Application-Low (Ceiling Limits), and
Surface Disposal. In the cutoff 2 (3 mm/120K) baseline case, EPA
estimated that concentrations of one pollutant (lead) at 10 POTWs would
fail the Land Application-High limits while meeting the Land
Application-Low limits. EPA estimated that no POTWs would fail any of
the Surface Disposal limits.
EPA estimated that both the CP and DAF options would permit 10
POTWs to meet the Land Application-High limits and that an estimated
6,100 dry metric tons (DMT) of annual disposal of sewage sludge would
newly qualify for beneficial use under the Land Application-High
limits. EPA estimated the reduced time required for record-keeping for
sewage sludge meeting the more stringent Land Application-High
Criteria, and, on this basis, developed a partial estimate of monetary
benefits from reduced metals contamination of sewage sludge. For all
options, the regulation is expected to result in benefits from sewage
sludge quality improvements of $0.006 to $0.01 million ($1998)
annually.
EPA estimated potential inhibition of POTW operations by comparing
predicted POTW influent concentrations to available inhibition levels
for 45 pollutants. EPA based the POTW inhibition and sludge values upon
engineering and health estimates contained in guidance or guidelines
published by EPA and other sources. At current discharge levels, EPA
estimates POTW concentrations of lead exceed biological inhibition
criteria at two POTWs. Under both treatment options, these potential
inhibition problems would not be eliminated. Note, however, that these
are modeled potential instances of inhibiting, not actual documented
cases. Whether inhibition at either of these facilities would actually
occur depends on a variety of site specific factors.
b. Discussions with POTW Operators and Pretreatment Coordinators
To better understand the frequency and characteristics of problems
to POTWs resulting from industrial laundry discharges, EPA obtained
information from discussions with EPA regional staff and POTW
operators. Of 37 operators at POTWs that receive discharges from
industrial laundries, 11 POTW operators described their facilities as
having encountered some difficulty in the past resulting from
industrial laundry discharges, while the remaining 26 reported no
problems from industrial laundry discharges. All the POTWs with
reported past difficulties have solved their problems by setting local
discharge limits.

IX. Non-Water Quality Environmental Impacts

EPA has considered the non-water quality environmental impacts
associated with the various technology options considered as well as
the environmental improvement that could be realized through the
industry voluntary program. Non-water quality environmental impacts are
impacts (both good and bad) of the technology options on the
environment that are not directly associated with wastewater. Non-water
quality environmental impacts include changes in energy consumption,
air emissions, and solid waste generation of oil and sludge. Based on
these analyses, EPA finds that the non-water quality environmental
impacts resulting from the regulatory options are acceptable.

A. Air Pollution

Industrial laundry facilities generate wastewater that contains
significant concentrations of organic compounds, some of which are on
the list of Hazardous Air Pollutants (HAPs) in Title 3 of the Clean Air
Act Amendments (CAAA) of 1990. Atmospheric exposure of the organic-
containing wastewater may result in volatilization of both volatile
organic compounds (VOCs) and HAPs from the wastewater. VOCs and HAPs
are emitted from the wastewater beginning at the point where the
wastewater first contacts ambient air. Thus, VOCs and HAPs may be of
concern immediately as the wastewater process is discharged from the
process unit. Emissions occur from wastewater collection units such as
process drains, manholes, trenches, and sumps, and from wastewater
treatment units such as screens, equalization basins, DAF and CP units,
and any other units where the wastewater is in contact with the air.
EPA believes that air emissions from industrial laundry wastewater
would have been similar before and after implementation of a rule based
on DAF or chemical precipitation technologies because the wastewater
from all industrial laundries currently has contact with ambient air as
it flows to the POTW. At facilities that do not currently have
treatment on site, the wastewater typically flows from the washers to
an open or partially open catch basin, then to the sewer and on to the
POTW, where the wastewater is typically treated in open aerated basins
or lagoons. Air emissions from the wastewater occur as the wastewater
flows from the facility to the POTW. At a facility with treatment, the
wastewater would have more contact with air while still at the
facility, as it is treated in open units such as equalization basins
and DAF or chemical precipitation units prior to flowing through the
sewer to the POTW. Air emissions from the treated wastewater occur at
the treatment units at the facility, as well as while the

[[Page 45086]]

wastewater flows to the POTW. Thus, EPA expects that the location of a
portion of air emissions from industrial laundry wastewater would shift
from the POTW collection and treatment system to the facility treatment
system, but EPA believes that the overall amount of air emissions from
industrial laundries wastewater would not change. Air emissions
resulting from increased energy use are discussed in the Technical
Development Document.
EPA believes that no adverse air impacts would have been expected
to occur due to a rule based on CP or DAF. Thus, because EPA would not
have expected an overall increase in the amount of air emissions as a
result of an implemented rule and based on EPA's determination of the
total emissions from one industrial laundry's untreated wastewater, EPA
finds that the air emissions impacts of all of the regulatory options
under consideration would not have been unacceptable.

B. Solid Waste Generation

EPA considered regulatory options based on DAF and chemical
precipitation technologies followed by dewatering of the sludge
generated from these technologies. Based on information collected in
the industrial laundries detailed questionnaires and from data
submitted in comments, most industrial laundry sludge from CP or DAF
treatment systems is disposed of in nonhazardous landfills.
EPA estimates that the incremental increase in sludge generation
from the CP technology options (not including savings in the volume of
sludge generated at POTWs that would have resulted from the
implementation of the technology options) would have been a maximum of
173,000 tons per year of wet sludge, or 60,600 tons per year of dry
solids. EPA estimates that the incremental increase in sludge
generation from the DAF technology option would have been a maximum of
128,000 tons per year of wet sludge, or 70,600 tons per year of dry
solids. For more details, see Chapter 10 of the Technical Development
Document. Approximately 430 million tons (dry basis) of industrial
nonhazardous waste was sent to landfills in the U.S. in 1986 (Subtitle
D Study Phase I: Report EPA No. 530SW86-054). Implementation of these
technology options would have resulted in at most only a 0.014%
increase in sludge generation for CP and 0.016% for DAF. Data from the
Waste Treatment Industry Phase II: Landfills effluent guidelines
project suggest that current landfill capacity can accept this increase
in solid waste generation. Further, the estimates presented here are
likely to significantly overstate any net increase in sludge generation
since they do not factor in decreases in sludge generation at POTWs. In
general, EPA would expect these decreases to partially offset increases
at individual pretreatment locations. Therefore, EPA believes the solid
waste impacts of all of the regulatory options under consideration
would have been acceptable.

C. Energy Requirements

EPA estimates that implementation of a rule would have resulted in
a net increase in energy consumption for the industrial laundries
industry. The incremental increase is based on electricity used to
operate wastewater treatment equipment at facilities that are not
currently operating either DAF or chemical precipitation treatment
systems.
EPA estimates that the incremental increase in electricity use for
the industrial laundries industry as a result of an implemented rule
would have been a maximum of 69.5 million kilowatt hours per year for
CP and 82.8 million kilowatt hours per year for DAF. Based on a 1996
survey of industrial laundries conducted by industry, industrial
laundries use 31.2 trillion BTUs per year, or 9.1 billion kilowatt
hours per year. EPA estimates that the incremental energy increase for
CP and DAF, respectively, would have been 0.76% and 0.91% of
electricity currently used by the industrial laundries industry to
operate all washing, drying, and treatment equipment. In addition,
Approximately 2,805 billion kilowatt hours of electric power were
generated in the U.S. in 1990.
The incremental increase in energy use for the industrial laundries
industry for CP and DAF, respectively, would have corresponded to
0.0025% and 0.0030% of the total national energy use. For these
reasons, EPA believes that the energy impacts of all of the regulatory
options under consideration would have been acceptable.

X. Related Acts of Congress and Executive Orders

EPA's final action not to establish national categorical
pretreatment standards does not constitute a rule under section 551 of
the Administrative Procedure Act. 5 U.S.C. Sec. 551. Hence,
requirements of other regulatory statutes and Executive Orders that
generally apply to rulemakings (e.g., the Unfunded Mandate Reform Act)
do not apply to this final action.

Dated: June 30, 1999.
Carol M. Browner,
Administrator.

Appendix A to the Notice--Lists of Abbreviations, Acronyms,
Definitions and Other Terms Used in This Notice

Administrator--The Administrator of the U.S. Environmental
Protection Agency
Agency--The U.S. Environmental Protection Agency
BAT--Best Available Technology Economically Achievable
BMPs--Best Management Practices--As authorized by sections 304 (e)
and 402 of the CWA. Gives the Administrator the authority to publish
regulations to control plant site runoff, spillage or leaks, sludge
or waste disposal, and drainage from raw material storage.
CBI--Confidential Business Information
C-E--Cost-Effectiveness Analysis
Cooperative--An enterprise or organization owned by and operated for
the benefit of those using its services. For purposes of this rule,
a laundry service like facilities owned by and/or operated for the
benefit of those facilities.
CP--Chemical Precipitation.
CWA--Clean Water Act. The Federal Water Pollution Act, 33 U.S.C.
1251 et seq.
DAF--Dissolved Air Flotation
Dry Cleaning--The cleaning of fabrics using an organic-based solvent
rather than water-based detergent solution.
EA--Economic Assessment.
Effluent--Wastewater discharges.
EPA--The U.S. Environmental Protection Agency.
E.O.--Executive Order.
Facility--A facility is all contiguous property owned, operated,
leased or under the control of the same person, or corporate or
business entity. The contiguous property may be divided by public or
private right-of-way.
FTE--Full-time Equivalent.
HEM--N-Hexane Extractable Material.
Indirect Discharger--A facility that discharges or may discharge
pollutants into a publicly owned treatment works.
IL--Industrial Laundry.
Industrial laundry facility--any facility that launders industrial
textile items from off-site as a business activity. Either the
industrial laundry facility or the off-site customer is may own the
industrial laundered textile items. This includes textile rental
companies that perform laundering operations.
Industrial textile items--items such as, but are not limited to:
shop towels, printer towels, furniture towels, rags, mops, mats,
rugs, tool covers, fender covers, dust-control items, gloves,
buffing pads, absorbents, uniforms, and filters.
Laundering--washing items with water, including water washing
following dry cleaning.

[[Page 45087]]

Linens--items such as sheets, pillow cases, blankets, bath towels
and washcloths, hospital gowns and robes, tablecloths, napkins,
tableskirts, kitchen textile items, continuous roll towels,
laboratory coats, family laundry, executive wear, mattress pads,
incontinence pads, and diapers. This list is intended to be an
inclusive list.
LTA--Long Term Average. For purposes of the pretreatment standards,
average pollutant levels achieved over a period of time by a
facility , subcategory, or technology option.
NTTAA--National Technology Transfer and Advancement Act.
New Source--``New source'' is defined in section 306 of the CWA and
at 40 CFR 122.12 and 122.29(b).
NODA--Notice of Data Availability
Nonconventional pollutants--Pollutants that are neither conventional
pollutants nor priority pollutants listed at 40 CFR part 401.
Non-detect value--A concentration-based measurement reported below
the sample specific detection limit that can reliably be measured by
the analytical method for the pollutant.
Non-water quality environmental impact--An environmental impact of a
control or treatment technology, other than to surface waters
(including energy requirements) or an environment improvement of a
decision not to regulate.
NPDES--The National Pollutant Discharge Elimination System
authorized under section 402 of the CWA. NPDES requires permits for
discharge of pollutants from any point source into waters of the
United States.
O&G--Oil and Grease
OMB--Office of Management and Budget.
Off-site--``Off-site'' means outside the boundaries of a facility.
On-site--``On-site'' means within the boundaries of a facility.
OSW--USEPA Office of Solid Waste.
POTW/POTWs--Publicly owned treatment works, as defined at 40 CFR
403.3(o).
Pretreatment standard--a regulation that establishes industrial
wastewater effluent quality required for discharge to a POTW.
Priority pollutants--The toxic pollutants designated by EPA as
priority in 40 CFR part 423, Appendix A.
PSES--Pretreatment Standards for Existing Sources on indirect
discharges, under section 307(b) of the CWA.
PSNS--Pretreatment Standards for New Sources of indirect discharges,
under section 307(b) and (c) of the CWA.
RFA--Regulatory Flexibility Act.
SBA--Small Business Administration.
SBREFA--Small Business Regulatory Enforcement Fairness Act.
SGT-HEM--Silica Gel Treated N-Hexane Extractable Material.
SIC--Standard Industrial Classification.
Small Business--Businesses with annual revenues less than $10.5
million. This is the higher of the two Small Business Administration
definition of small business for SIC codes 7218 and 7213.
TPH--Total Petroleum Hydrocarbons.
TRSA--Textile Rental Services Association of America.
TSS--Total suspended solids.
TWF--Toxic weighting factor.
UMRA--Unfunded Mandates Reform Act (PL 104-4), establishes
requirements for Federal agencies to assess the effects of their
regulatory actions on State, local and tribal governments and the
private sector.
UTSA--Uniform and Textile Service Association.

[FR Doc. 99-17206 Filed 8-17-99; 8:45 am]
BILLING CODE 6560-50-F

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Effluent Limitations Guidelines and Pretreatment Standards for the Industrial Laundries Point Source Category

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