National Pollutant Discharge Elimination System--Proposed Regulations to Establish Requirements for Cooling Water Intake Structures at Phase II Existing Facilities

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

[Federal Register: April 9, 2002 (Volume 67, Number 68)]
[Proposed Rules]
[Page 17121-17170]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ap02-28]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 122, 123, 124, and 125
[FRL-7154-7]
RIN 2040-AD62

National Pollutant Discharge Elimination System--Proposed
Regulations to Establish Requirements for Cooling Water Intake
Structures at Phase II Existing Facilities

AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.

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SUMMARY: Today's proposed rule would implement section 316(b) of the
Clean Water Act (CWA) for certain existing power producing facilities
that employ a cooling water intake structure and that withdraw 50
million gallons per day (MGD) or more of water from rivers, streams,
lakes, reservoirs, estuaries, oceans, or other waters of the U.S. for
cooling purposes. The proposed rule constitutes Phase II in EPA's
development of section 316(b) regulations and would establish national
requirements applicable to the location, design, construction, and
capacity of cooling water intake structures at these facilities. The
proposed national requirements, which would be implemented through
National Pollutant Discharge Elimination System (NPDES) permits, would
minimize the adverse environmental impact associated with the use of
these structures.
Today's proposed rule would establish location, design,
construction, and capacity requirements that reflect the best
technology available for minimizing adverse environmental impact from
the cooling water intake structure based on water body type, and the
amount of water withdrawn by a facility. The Environmental Protection
Agency (EPA) proposes to group surface water into five categories--
freshwater rivers and streams, lakes and reservoirs, Great Lakes,
estuaries and tidal rivers, and oceans--and establish requirements for
cooling water intake structures located in distinct water body types.
In general, the more sensitive or biologically productive the
waterbody, the more stringent the requirements proposed as reflecting
the best technology available for minimizing adverse environmental
impact. Proposed requirements also vary according to the percentage of
the source waterbody withdrawn, and facility utilization rate.
A facility may choose one of three options for meeting best
technology available requirements under this proposed rule. These
options include demonstrating that the facility subject to the proposed
rule currently meet specified performance standards; selecting and
implementing design and construction technologies, operational
measures, or restoration measures that meet specified performance
standards; or demonstrating that the facility qualifies for a site-
specific determination of best technology available because its costs
of compliance are either significantly greater than those considered by
the Agency during the development of this proposed rule, or the
facility's costs of compliance would be significantly greater than the
environmental benefits of compliance with the proposed performance
standards. The proposed rule also provides that facilities may use
restoration measures in addition to or in lieu of technology measures
to meet performance standards or in establishing best technology
available on a site-specific basis.
EPA expects that this proposed regulation would minimize adverse
environmental impact, including substantially reducing the harmful
effects of impingement and entrainment, at existing facilities over the
next 20 years. As a result, the Agency anticipates that this proposed
rule would help protect ecosystems in proximity to cooling water intake
structures. Today's proposal would help preserve aquatic organisms,
including threatened and endangered species, and the ecosystems they
inhabit in waters used by cooling water intake structures at existing
facilities. EPA has considered the potential benefits of the proposed
rule and in the preamble discusses these benefits in both quantitative
and non-quantitative terms. Benefits, among other factors, are based on
a decrease in expected mortality or injury to aquatic organisms that
would otherwise be subject to entrainment into cooling water systems or
impingement against screens or other devices at the entrance of cooling
water intake structures. Benefits may also accrue at population,
community, or ecosystem levels of ecological structures.

DATES: Comments on this proposed rule and Information Collection
Request (ICR) must be received or postmarked on or before midnight July
8, 2002.

ADDRESSES: Public comments regarding this proposed rule should be
submitted by mail to: Cooling Water Intake Structure (Existing
Facilities: Phase II) Proposed Rule Comment Clerk--W-00-32, Water
Docket, Mail Code 4101, EPA, Ariel Rios Building,1200 Pennsylvania
Avenue, NW., Washington, DC 20460. Comments delivered in person
(including overnight mail) should be submitted to the Cooling Water
Intake Structure (Existing Facilities: Phase II) Proposed Rule Comment
Clerk--W-00-32, Water Docket, Room EB 57, 401 M Street, SW.,
Washington, DC 20460. You also may submit comments electronically to
ow-docket@epa.gov. Please submit any references cited in your comments.
Please submit an original and three copies of your written comments and
enclosures. For additional information on how to submit comments, see
``SUPPLEMENTARY INFORMATION, How May I Submit Comments?''
EPA has prepared an Information Collection Request (ICR) under the
Paperwork Reduction Act for this proposed rule (EPA ICR number
2060.01). For further information or a copy of the ICR contact Susan
Auby by phone at (202) 260-4901, e-mail at auby.susan@epamail.epa.gov
or download off the internet at http://www.epa.gov/icr. Send comments
on the Agency's need for this information, the accuracy of the burden
estimates, and any suggested methods for minimizing respondent burden
(including the use of automated collection techniques) to the following
addresses. Please refer to EPA ICR Number 2060.01 in any
correspondence.

Ms. Susan Auby, U.S. Environmental Protection Agency, OP Regulatory
Information Division (2137), 401 M Street, SW., Washington, DC 20460.
and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Attention: Desk Officer for EPA 725 17th Street, NW,
Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: For additional technical information
contact Deborah G. Nagle at (202) 566-1063. For additional economic
information contact Lynne Tudor, Ph.D. at (202) 566-1043. For
additional biological information contact Dana A. Thomas, Ph.D. at
(202) 566-1046. The e-mail address for the above contacts is
``rule.316b@epa.gov.''

SUPPLEMENTARY INFORMATION:

What Entities Are Potentially Regulated by This Action?

This proposed rule would apply to ``Phase II existing facilities,''
i.e., existing facilities that both generate and transmit electric
power or that generate electric power for sale to another entity for
transmission; use one or more cooling water intake structures to
withdraw water from waters of the U.S.;

[[Page 17123]]

have or require a National Pollutant Discharge Elimination System
(NPDES) permit issued under section 402 of the CWA; and meet proposed
flow thresholds. \1\ Existing electric power generating facilities
subject to this proposal would include those that use cooling water
intake structures to withdraw fifty (50) million gallons per day (MGD)
or more and that use at least twenty-five (25) percent of water
withdrawn solely for cooling purposes. If a facility that otherwise
would be subject to the proposed rule does not meet the fifty (50) MGD
design intake flow or twenty-five (25) percent cooling water threshold,
the permit authority would implement section 316(b) on a case-by-case
basis, using best professional judgment. EPA intends to address such
facilities in a future rulemaking effort. This proposal defines the
term ``cooling water intake structure'' to mean the total physical
structure and any associated constructed waterways used to withdraw
water from waters of the U.S. The cooling water intake structure
extends from the point at which water is withdrawn from the surface
water source up to, and including, the intake pumps. The category of
facilities that would meet the proposed cooling water intake structure
criteria for existing facilities are electric power generation
utilities and nonutility power producers.
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\1\ Proposed Sec. 125.93 defines ``existing facility'' as any
facility that commenced construction before January 17, 2002 and
certain modifications and additions to such facilities.
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The following exhibit lists the types of entities that EPA is now
aware potentially could be subject to this proposed rule. This exhibit
is not intended to be exhaustive, but rather provides a guide for
readers regarding entities likely to be regulated by this action. Types
of entities not listed in the exhibit could also be regulated. To
determine whether your facility would be regulated by this action, you
should carefully examine the applicability criteria proposed at
Sec. 125.91 of the proposed rule. If you have questions regarding the
applicability of this action to a particular entity, consult one of the
persons listed for technical information in the preceding FOR FURTHER
INFORMATION CONTACT section.

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North American
Examples of regulated Standard Industrial Industry
Category entitles Classification (SIC) Classification System
codes (NAICS) codes
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Federal, State, and Local Operators of steam electric 4911 and 493.......... 221112, 221113,
Government. generating point source 221119, 221121,
dischargers that employ 221122.
cooling water intake
structures.
Industry........................... Steam electric generating 4911 and 493.......... 221112, 221113,
(this includes utilities 221119, 221121,
and nonutilities). 221122.
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Supporting Documentation

The proposed Phase II regulation is supported by three major
documents:
1. Economic and Benefits Analysis for the Proposed Section 316(b)
Phase II Existing Facilities Rule (EPA-821-R-02-001), hereafter
referred to as the EBA. This document presents the analysis of
compliance costs, closures, energy supply effects and benefits
associated with the proposed rule.
2. Case Study Analysis for the Proposed Section 316(b) Phase II
Existing Facilities Rule (EPA-821-R-02-002), hereafter referred to as
the Case Study Document. This document presents the information
gathered from the watershed and facility level case studies and
methodology used to determine baseline impingement and entrainment
losses.
3. Technical Development Document for the Proposed Section 316(b)
Phase II Existing Facilities Rule (EPA-821-R-02-003), hereafter
referred to as the Technical Development Document. This document
presents detailed information on the methods used to develop unit costs
and describes the set of technologies that may be used to meet the
proposed rule's requirements.

How May I Review the Public Record?

The record (including supporting documentation) for this proposed
rule is filed under docket number W-00-32 (Phase II Existing Facility
proposed rule). The record is available for inspection from 9 a.m. to 4
p.m. on Monday through Friday, excluding legal holidays, at the Water
Docket, Room EB 57, USEPA Headquarters, 401 M Street, SW, Washington,
DC 20460. For access to docket materials, please call (202) 260-3027 to
schedule an appointment during the hours of operation stated above.

How May I Submit Comments?

To ensure that EPA can read, understand, and therefore properly
respond to comments, the Agency requests that you cite, where possible,
the paragraph(s) or sections in the preamble, rule, or supporting
documents to which each comment refers. You should use a separate
paragraph for each issue you discuss.
If you want EPA to acknowledge receipt of your comments, enclose a
self-addressed, stamped envelope. No faxes will be accepted. Electronic
comments must be submitted as a WordPerfect 5.1, 6.1, 8, or 9 format,
or an ASCII file or file avoiding the use of special characters and
forms of encryption. Electronic comments must be identified by the
docket number W-00-32. EPA will accept comments and data on disks in
WordPerfect 5.1, 6.1, 8 or 9 format or in ASCII file format. Electronic
comments on this notice may be filed on-line at many Federal depository
libraries.

Organization of This Document

I. Legal Authority, Purpose of Today's Proposal, and Background
A. Legal Authority
B. Purpose of Today's Proposal
C. Background
II. Scope and Applicability of the Proposed Rule
A. What Is an ``Existing Facility'' for Purposes of the Section
316(b) Proposed Phase II Rule?
B. What Is a ``Cooling Water Intake Structure''?
C. Is My Facility Covered If It Withdraws From Waters of the
U.S.?
D. Is My Facility Covered If It Is a Point Source Discharger
Subject to an NPDES Permit?
E. Who Is Covered Under the Thresholds Included in This Proposed
Rule?
F. When Must a Phase II Existing Facility Comply With the
Proposed Requirements?
G. What Special Definitions Apply to This Proposal
III. Summary of Data Collection Activities
A. Existing Data Sources
B. Survey Questionnaires
C. Site Visits
D. Data Provided to EPA by Industrial, Trade, Consulting,
Scientific or Environmental Organizations or by the General Public

[[Page 17124]]

IV. Overview of Facility Characteristics (Cooling Water Systems &
Intakes) for Industries Potentially Subject to Proposed Rule
V. Environmental Impacts Associated With Cooling Water Intake
Structures
VI. Best Technology Available for Minimizing Adverse Environmental
Impact at Phase II Existing Facilities
A. What Is the Best Technology Available for Minimizing Adverse
Environmental Impact at Phase II Existing Facilities?
B. Other Technology Based Options Under Consideration
C. Site-Specific Based Options Under Consideration
D. Why EPA Is Not Considering Dry Cooling Anywhere?
E. What is the Role of Restoration and Trading?
VII. Implementation
A. When Does the Proposed Rule Become Effective?
B. What Information Must I Submit to the Director When I Apply
for My Reissued NPDES Permit?
C. How Would the Director Determine the Appropriate Cooling
Water Intake Structure Requirements?
D. What Would I Be Required To Monitor?
E. How Would Compliance Be Determined?
F. What Are the Respective Federal, State, and Tribal Roles?
G. Are Permits for Existing Facilities Subject to Requirements
Under Other Federal Statutes?
H. Alternative Site-Specific Requirements
VIII. Economic Analysis
A. Proposed Rule
B. Alternative Regulatory Options
IX. Benefit Analysis
A. Overview of Benefits Discussion
B. The Physical Impacts of Impingement and Entrainment
C. Impingement and Entrainment Impacts and Regulatory Benefits
Are Site-Specific
D. Data and Methods Used to Estimate Benefits
E. Summary of Benefits Findings: Case Studies
F. Estimates of National Benefits
X. Administrative Requirements
A. E.O. 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Unfunded Mandates Reform Act
D. Regulatory Flexibility Act as Amended by SBREFA (1996)
E. E.O. 12898: Federal Actions to Address Environmental Justice
in Minority Populations and Low-Income Populations
F. E.O. 13045: Protection of Children From Environmental Health
Risks and Safety Risks
G. E.O. 13175: Consultation and Coordination With Indian Tribal
Governments
H. E.O. 13158: Marine Protected Areas
I. E.O. 13211: Energy Effects
J. National Technology Transfer and Advancement Act
K. Plain Language Directive

I. Legal Authority, Purpose of Today's Proposal, and Background

A. Legal Authority

Today's proposed rule is issued under the authority of sections
101, 301, 304, 306, 308, 316, 401, 402, 501, and 510 of the Clean Water
Act (CWA), 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342,
1361, and 1370. This proposal partially fulfills the obligations of the
U.S. Environmental Protection Agency (EPA) under a consent decree in
Riverkeeper Inc., et al. v. Whitman, United States District Court,
Southern District of New York, No. 93 Civ. 0314 (AGS).

B. Purpose of Today's Proposal

Section 316(b) of the CWA provides that any standard established
pursuant to section 301 or 306 of the CWA and applicable to a point
source must require that the location, design, construction, and
capacity of cooling water intake structures reflect the best technology
available (BTA) for minimizing adverse environmental impact. Today's
proposed rule would establish requirements, reflecting the best
technology available for minimizing adverse environmental impact,
applicable to the location, design, construction, and capacity of
cooling water intake structures at Phase II existing power generating
facilities that withdraw at least fifty (50) MGD of cooling water from
waters of the U.S. Today's proposal would define a cooling water intake
structure as the total physical structure, including the pumps, and any
associated constructed waterways used to withdraw water from waters of
the U.S. Cooling water absorbs waste heat rejected from processes
employed or from auxiliary operations on a facility's premises. Single
cooling water intake structures might have multiple intake bays. In
1977 EPA issued draft guidance for determining the best technology
available to minimize adverse environmental impact from cooling water
intake structures. In the absence of section 316(b) regulations or
final guidance, the 1977 draft guidance has served as applicable
guidance for section 316(b) determinations. See Draft Guidance for
Evaluating the Adverse Impact of Cooling Water Intake Structures on the
Aquatic Environment: Section 316(b) Pub. L. 92-500 (U.S. EPA, 1977).
Administrative determinations in several permit proceedings also have
served as de facto guidance.
Today, EPA proposes a national framework that would establish
certain minimum requirements for the location, design, capacity, and
construction of cooling water intake structures for large cooling water
intake structures at Phase II existing facilities. In doing so, the
Agency is proposing to revise the approach adopted in the 1977 draft
guidance which was based on the judgment that ``[t]he decision as to
best technology available for intake design location, construction, and
capacity must be made on a case-by-case basis.'' Other important
differences from the 1977 draft guidance include today's proposed
definition of a ``cooling water intake structure.'' Today's proposal
also would establish a cost-benefit test that is different from the
``wholly disproportionate'' cost-benefit test that has been in use
since the 1970s.
Although EPA's judgment is that the requirements proposed today
would best implement section 316(b) at Phase II existing facilities,
the Agency is also inviting comment on a broad array of other
alternatives, including, for example, more stringent technology-based
requirements and a framework under which Directors would continue to
evaluate adverse environmental impact and determine the best technology
available for minimizing such impact on a wholly site-specific basis.
Because the Agency is inviting comment on a broad range of alternatives
for potential promulgation, today's proposal is not intended as
guidance for determining the best technology available to minimize the
adverse environmental impact of cooling water intake structures at
potentially regulated Phase II existing facilities. Until the Agency
promulgates final regulations based on today's proposal, Directors
should continue to make section 316(b) determinations with respect to
existing facilities, which may be more or less stringent than today's
proposal, on a case-by-case basis applying best professional judgment.
Today's proposal would not apply to existing manufacturing
facilities or to power generating facilities that withdraw less than
fifty (50) MGD of cooling water. These facilities will be addressed in
a separate rulemaking, referred to as the Phase III rule (see section
I.C.2., below). In the interim, these facilities are subject to section
316(b) requirements established by permitting authorities on a case-by-
case basis, using best professional judgment. Upon promulgation of
final regulations based on today's proposal, the Agency will address
the extent to which the final regulations and preamble should serve as
guidance for developing section 316(b) requirements for Phase III
facilities prior to the promulgation of the Phase III regulations.

[[Page 17125]]

EPA and State permitting authorities should use existing guidance
and information to form their best professional judgment in issuing
permits to existing facilities. EPA's draft Guidance for Evaluating the
Adverse Impact of Cooling Water Intake Structures on the Aquatic
Environment: Section 316(b) (May 1, 1977), continues to be applicable
for existing facilities pending EPA's issuance of final regulations
under section 316(b). Two background papers that EPA prepared in 1994
and 1996 to describe cooling water intake technologies being used or
tested for minimizing adverse environmental impact also contain
information that could be useful to permit writers. (Preliminary
Regulatory Development, Section 316(b) of the Clean Water Act,
Background Paper Number 3: Cooling Water Intake Technologies (1994) and
Draft Supplement to Background Paper Number 3: Cooling Water Intake
Technologies.) Fact sheets from recent 316(b) State and Regional
permits are another source of potentially relevant information. The
evaluations of the costs and efficacies of technologies presented in
the Technical Development Document for the Final Regulations Addressing
Cooling Water Intake Structures for New Facilities, EPA-821-R-01-036,
November 2001 may also be relevant on some cases, although costs for
some technologies will differ between new and existing facilities. EPA
and State decision-makers retain the discretion to adopt approaches on
a case-by-case basis that differ from applicable guidance where
appropriate. Any decisions on a particular facility should be based on
the requirements of section 316(b).

C. Background

1. The Clean Water Act
The Federal Water Pollution Control Act, also known as the Clean
Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to ``restore and
maintain the chemical, physical, and biological integrity of the
nation's waters.'' 33 U.S.C. 1251(a). The CWA establishes a
comprehensive regulatory program, key elements of which are (1) a
prohibition on the discharge of pollutants from point sources to waters
of the U.S., except as authorized by the statute; (2) authority for EPA
or authorized States or Tribes to issue National Pollutant Discharge
Elimination System (NPDES) permits that regulate the discharge of
pollutants; and (3) requirements for EPA to develop effluent
limitations guidelines and standards and for States to develop water
quality standards that are the basis for the limitations required in
NPDES permits.
Today's proposed rule would implement section 316(b) of the CWA as
it applies to ``Phase II existing facilities'' as defined in this
proposal. Section 316(b) addresses the adverse environmental impact
caused by the intake of cooling water, not discharges into water.
Despite this special focus, the requirements of section 316(b) are
closely linked to several of the core elements of the NPDES permit
program established under section 402 of the CWA to control discharges
of pollutants into navigable waters. For example, section 316(b)
applies to facilities that withdraw water from the waters of the United
States for cooling through a cooling water intake structure and are
point sources subject to an NPDES permit. Conditions implementing
section 316(b) are included in NPDES permits and would continue to be
included in such permits under this proposed rule.
Section 301 of the CWA prohibits the discharge of any pollutant by
any person, except in compliance with specified statutory requirements.
These requirements include compliance with technology-based effluent
limitations guidelines and new source performance standards, water
quality standards, NPDES permit requirements, and certain other
requirements.
Section 402 of the CWA provides authority for EPA or an authorized
State or Tribe to issue an NPDES permit to any person discharging any
pollutant or combination of pollutants from a point source into waters
of the U.S. Forty-four States and one U.S. territory are authorized
under section 402(b) to administer the NPDES permitting program. NPDES
permits restrict the types and amounts of pollutants, including heat,
that may be discharged from various industrial, commercial, and other
sources of wastewater. These permits control the discharge of
pollutants primarily by requiring dischargers to meet effluent
limitations and other permit conditions. Effluent limitations may be
based on promulgated federal effluent limitations guidelines, new
source performance standards, or the best professional judgment of the
permit writer. Limitations based on these guidelines, standards, or
best professional judgment are known as technology-based effluent
limits. Where technology-based effluent limits are inadequate to ensure
compliance with water quality standards applicable to the receiving
water, more stringent effluent limits based on applicable water quality
standards are required. NPDES permits also routinely include monitoring
and reporting requirements, standard conditions, and special
conditions.
Sections 301, 304, and 306 of the CWA require that EPA develop
technology-based effluent limitations guidelines and new source
performance standards that are used as the basis for technology-based
minimum discharge requirements in wastewater discharge permits. EPA
issues these effluent limitations guidelines and standards for
categories of industrial dischargers based on the pollutants of concern
discharged by the industry, the degree of control that can be attained
using various levels of pollution control technology, consideration of
various economic tests appropriate to each level of control, and other
factors identified in sections 304 and 306 of the CWA (such as non-
water quality environmental impacts including energy impacts). EPA has
promulgated regulations setting effluent limitations guidelines and
standards under sections 301, 304, and 306 of the CWA for more than 50
industries. See 40 CFR parts 405 through 471. Among these, EPA has
established effluent limitations guidelines that apply to most of the
industry categories that use cooling water intake structures (e.g.,
steam electric power generation, iron and steel manufacturing, pulp and
paper manufacturing, petroleum refining, chemical manufacturing).
Section 306 of the CWA requires that EPA establish discharge
standards for new sources. For purposes of section 306, new sources
include any source that commenced construction after the promulgation
of applicable new source performance standards, or after proposal of
applicable standards of performance if the standards are promulgated in
accordance with section 306 within 120 days of proposal. CWA section
306; 40 CFR 122.2. New source performance standards are similar to the
technology-based limitations established for Phase II existing sources,
except that new source performance standards are based on the best
available demonstrated technology instead of the best available
technology economically achievable. New facilities have the opportunity
to install the best and most efficient production processes and
wastewater treatment technologies. Therefore, Congress directed EPA to
consider the best demonstrated process changes, in-plant controls, and
end-of-process control and treatment technologies that reduce pollution
to the maximum extent feasible. In addition, in establishing new source
performance standards, EPA is required to take into consideration the
cost of achieving the effluent reduction

[[Page 17126]]

and any non-water quality environmental impacts and energy
requirements.
2. Consent Decree
Today's proposed rule partially fulfills EPA's obligation to comply
with an Amended Consent Decree. The Amended Consent Decree was filed on
November 22, 2000, in the United States District Court, Southern
District of New York, in Riverkeeper Inc., et al. v. Whitman, No. 93
Civ 0314 (AGS), a case brought against EPA by a coalition of
individuals and environmental groups. The original Consent Decree,
filed on October 10, 1995, provided that EPA was to propose regulations
implementing section 316(b) by July 2, 1999, and take final action with
respect to those regulations by August 13, 2001. Under subsequent
interim orders and the Amended Consent Decree, EPA has divided the
rulemaking into three phases and is working under new deadlines. As
required by the Amended Consent Decree, on November 9, 2001, EPA took
final action on a rule governing cooling water intake structures used
by new facilities (Phase I). 66 FR 65255 (December 18, 2001). The
Amended Consent Decree also requires that EPA issue this proposal by
February 28, 2002, and take final action by August 28, 2003 (Phase
II).\2\ The decree requires further that EPA propose regulations
governing cooling water intake structures used, at a minimum, by
smaller-flow power plants and factories in four industrial sectors
(pulp and paper making, petroleum and coal products manufacturing,
chemical and allied manufacturing, and primary metal manufacturing) by
June 15, 2003, and take final action by December 15, 2004 (Phase III).
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\2\ Under the Amended Consent Decree, EPA is to propose
reuglations in Phase II that are ``applicable to, at a minimum: (i)
Existing utilities (i.e., facilities that both generate and transmit
electric power) that employ a cooling water intake structure, and
whose intake flow levels exceed a minimum threshold to be determined
by EPA during the Phase II rulemaking process; and (ii) existing
non-utility power producers (i.e., facilities that generate electric
power but sell it to another entity for transmission) that employa
cooling water intake structure, and whose intakeflow levels exceed a
minimum threshold to be determined by EPA during the Phase II
rulemaking process.''
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3. What Other EPA Rulemakings and Guidance Have Addressed Cooling Water
Intake Structures?
In April 1976 EPA published a rule under section 316(b) that
addressed cooling water intake structures. 41 FR 17387 (April 26,
1976), proposed at 38 FR 34410 (December 13, 1973). The rule added a
new Sec. 401.14 to 40 CFR Chapter I that reiterated the requirements of
CWA section 316(b). It also added a new part 402, which included three
sections: (1) Sec. 402.10 (Applicability), (2) Sec. 402.11 (Specialized
definitions), and (3) Sec. 402.12 (Best technology available for
cooling water intake structures). Section 402.10 stated that the
provisions of part 402 applied to ``cooling water intake structures for
point sources for which effluent limitations are established pursuant
to section 301 or standards of performance are established pursuant to
section 306 of the Act.'' Section 402.11 defined the terms ``cooling
water intake structure,'' ``location,'' ``design,'' ``construction,''
``capacity,'' and ``Development Document.'' Section 402.12 included the
following language:

The information contained in the Development Document shall be
considered in determining whether the location, design,
construction, and capacity of a cooling water intake structure of a
point source subject to standards established under section 301 or
306 reflect the best technology available for minimizing adverse
environmental impact.

In 1977, fifty-eight electric utility companies challenged these
regulations, arguing that EPA had failed to comply with the
requirements of the Administrative Procedure Act (APA) in promulgating
the rule. Specifically, the utilities argued that EPA had neither
published the Development Document in the Federal Register nor properly
incorporated the document into the rule by reference. The United States
Court of Appeals for the Fourth Circuit agreed and, without reaching
the merits of the regulations themselves, remanded the rule.
Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later
withdrew part 402. 44 FR 32956 (June 7, 1979). 40 CFR 401.14 remains in
effect.
Since the Fourth Circuit remanded EPA's section 316(b) regulations
in 1977, NPDES permit authorities have made decisions implementing
section 316(b) on a case-by-case, site-specific basis. EPA published
draft guidance addressing section 316(b) implementation in 1977. See
Draft Guidance for Evaluating the Adverse Impact of Cooling Water
Intake Structures on the Aquatic Environment: Section 316(b) P.L. 92-
500 (U.S. EPA, 1977). This draft guidance describes the studies
recommended for evaluating the impact of cooling water intake
structures on the aquatic environment and recommends a basis for
determining the best technology available for minimizing adverse
environmental impact. The 1977 section 316(b) draft guidance states,
``The environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake
design, location, construction, and capacity must be made on a case-by-
case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4).
This case-by-case approach also is consistent with the approach
described in the 1976 Development Document referenced in the remanded
regulation.
The 1977 section 316(b) draft guidance suggests a general process
for developing information needed to support section 316(b) decisions
and presenting that information to the permitting authority. The
process involves the development of a site-specific study of the
environmental effects associated with each facility that uses one or
more cooling water intake structures, as well as consideration of that
study by the permitting authority in determining whether the facility
must make any changes for minimizing adverse environmental impact.
Where adverse environmental impact is present, the 1977 draft guidance
suggests a stepwise approach that considers screening systems, size,
location, capacity, and other factors.
Although the draft guidance describes the information that should
be developed, key factors that should be considered, and a process for
supporting section 316(b) determinations, it does not establish uniform
technology-based national standards for best technology available for
minimizing adverse environmental impact. Rather, the guidance leaves
the decisions on the appropriate location, design, capacity, and
construction of cooling water intake structures to the permitting
authority. Under this framework, the Director determines whether
appropriate studies have been performed and whether a given facility
has minimized adverse environmental impact.
4. New Facility Rule
On November 9, 2001, EPA took final action on regulations governing
cooling water intake structures at new facilities. 66 FR 65255
(December 18, 2001). The final new facility rule (Phase I) established
requirements applicable to the location, design, construction, and
capacity of cooling water intake structures at new facilities that
withdraw at least two (2) million gallons per day (MGD) and use at
least twenty-five (25) percent of the water they withdraw solely for
cooling purposes. EPA adopted a two-track approach. Under Track I, for
facilities with a design intake flow more than 10 MGD, the capacity of
the cooling water intake structure is restricted, at a minimum, to a
level commensurate with that which could be attained by use of a
closed-cycle recirculating system. For facilities

[[Page 17127]]

with a design intake flow more than 2 MGD, the design through-screen
intake velocity is restricted to 0.5 ft/s and the total quantity of
intake is restricted to a proportion of the mean annual flow of a
freshwater river or stream, or to maintain the natural thermal
stratification or turnover patterns (where present) of a lake or
reservoir except in cases where the disruption is determined to be
beneficial to the management of fisheries for fish and shellfish by any
fishery management agency(ies), or to a percentage of the tidal
excursions of a tidal river or estuary. In addition, an applicant with
intake capacity greater than 10 MGD must select and implement an
appropriate design and construction technology for minimizing
impingement mortality and entrainment if certain environmental
conditions exist. (Applicants with 2-10 MGD flows are not required to
reduce capacity but must install technologies for reducing entrainment
at all locations.) Under Track II, the applicant has the opportunity to
demonstrate that impacts to fish and shellfish, including important
forage and predator species, within the watershed will be comparable to
these which it would achieve were it to implement the Track I
requirements for capacity and design velocity. This demonstration can
include the use of restoration measures such as habitat enhancement or
fish restocking programs. Proportional flow requirements also apply
under Track II.
With the new facility rule, EPA promulgated a national framework
that establishes minimum requirements for the design, capacity, and
construction of cooling water intake structures for new facilities. EPA
believes that the final new facility rule establishes a reasonable
framework that creates certainty for permitting of new facilities,
while providing some flexibility to take site-specific factors into
account.
5. Public Participation
EPA has worked extensively with stakeholders from the industry,
public interest groups, state agencies, and other federal agencies in
the development of this proposed rule. These public participation
activities have focused on various section 316(b) issues, including
general issues, as well as issues relevant to development of the Phase
I rule and issues relevant to the proposed Phase II rule.
In addition to outreach to industry groups, environmental groups,
and other government entities in the development, testing, refinement,
and completion of the 316(b) survey,\3\ which has been used as a source
of data for the Phase II proposal, EPA conducted two public meetings on
316(b) issues. In June 1998, in Arlington, Virginia (63 FR 27958) EPA
conducted a public meeting focused on a draft regulatory framework for
assessing potential adverse environmental impacts from impingement and
entrainment. In September, 1998, in Alexandria, Virginia (63 FR 40683)
EPA conducted a public meeting focused on technology, cost, and
mitigation issues. In addition, in September 1998 and April 1999, EPA
staff participated in technical workshops sponsored by the Electric
Power Research Institute on issues relating to the definition and
assessment of adverse environmental impact. EPA staff have participated
in other industry conferences, met upon request on numerous occasions
with industry representatives, and met on a number of occasions with
representatives of environmental groups.
---------------------------------------------------------------------------

\3\ U.S. EPA, Information Collection Request, Detailed Industry
Questionnaires: Phase II Cooling Water Intake Structures & Watershed
Case Study Short Questionnaires, Section 3, 1999.
---------------------------------------------------------------------------

In the months leading up to publication of the proposed Phase I
rule, EPA conducted a series of stakeholder meetings to review the
draft regulatory framework for the proposed rule and invited
stakeholders to provide their recommendations for the Agency's
consideration. EPA managers have met with the Utility Water Act Group,
Edison Electric Institute, representatives from an individual utility,
and with representatives from the petroleum refining, pulp and paper,
and iron and steel industries. EPA conducted several meetings with
environmental groups attended by representatives from 15 organizations.
EPA also met with the Association of State and Interstate Water
Pollution Control Administrators (ASIWPCA) and, with the assistance of
ASIWPCA, conducted a conference call in which representatives from 17
states or interstate organizations participated. After publication of
the proposed Phase I rule, EPA continued to meet with stakeholders at
their request. These meetings are summarized in the record.
EPA received many comments from industry stakeholders, government
agencies and private citizens on the Phase I proposed rule 65 FR 49059
(August 10, 2000). EPA received additional comments on the Notice of
Data Availability (NODA) 66 FR 28853 (May 25, 2001). These comments
have informed the development of the Phase II proposal.
In January, 2001, EPA also attended technical workshops organized
by the Electric Power Research Institute and the Utilities Water Act
Group. These workshops focused on the presentation of key issues
associated with different regulatory approaches considered under the
Phase I proposed rule and alternatives for addressing 316(b)
requirements.
On May 23, 2001, EPA held a day-long forum to discuss specific
issues associated with the development of regulations under section
316(b) of the Clean Water Act. 66 FR 20658. At the meeting, 17 experts
from industry, public interest groups, States, and academia reviewed
and discussed the Agency's preliminary data on cooling water intake
structure technologies that are in place at existing facilities and the
costs associated with the use of available technologies for reducing
impingement and entrainment. Over 120 people attended the meeting.
In August 21, 2001, EPA staff participated in a technical symposium
sponsored by the Electric Power Research Institute in association with
the American Fisheries Society on issues relating to the definition and
assessment of adverse environmental impact under section 316(b) of the
CWA.
Finally, EPA has coordinated with the staff from the Nuclear
Regulatory Commission (NRC) in the development of this proposed rule to
ensure that the proposal does not conflict with NRC safety
requirements. NRC staff have reviewed the proposed 316(b) rule and did
not identify any apparent conflict with nuclear plant safety. NRC
licensees would continue to be obligated to meet NRC requirements for
design and reliable operation of cooling systems. NRC staff recommended
that EPA consider adding language which states that in cases of
conflict between an EPA requirement under this proposed rule and an NRC
safety requirement, the NRC safety requirement take precedence. EPA has
added language to address this concern to the proposed rule. These
coordination efforts and all of the meetings described above are
documented or summarized in the record.

II. Scope and Applicability of the Proposed Rule

This proposed rule would apply to existing facilities as defined
below, that use a cooling water intake structure to withdraw water for
cooling purposes from waters of the U.S. and that have or are required
to have a National Pollutant Discharge Elimination System (NPDES)
permit issued under section 402 of the

[[Page 17128]]

CWA. Specifically, the rule applies to you if you are the owner or
operator of an existing facility that meets all of the following
criteria:
Your facility both generates and transmits electric power
or generates electric power but sells it to another entity for
transmission;
Your facility is a point source and uses or proposes to
use a cooling water intake structure or structures, or your facility
obtains cooling water by any sort of contract or arrangement with an
independent supplier who has a cooling water intake structure;
Your facility's cooling water intake structure(s)
withdraw(s) cooling water from waters of the U.S. and at least twenty-
five (25) percent of the water withdrawn is used solely for contact or
non-contact cooling purposes;
Your facility has an NPDES permit or is required to obtain
one; and
Your facility has a design intake flow of 50 million
gallons per day (MGD) or greater;
In the case of a cogeneration facility that shares a
cooling water intake structure with another facility, only that portion
of the cooling water flow that is used in the cogeneration process
shall be considered when determining whether the 50 MGD and 25 percent
criteria are met.

Facilities subject to the proposed rule are referred to as ``Phase II
existing facilities.'' Existing facilities with design flows below the
50 MGD threshold, as well as certain existing manufacturing facilities,
and offshore and coastal oil and gas extraction facilities, would not
be subject to this proposed rule, but will be addressed in Phase III.
If an existing facility that would otherwise be a Phase II existing
facility has or requires an NPDES permit but does not meet the twenty-
five percent cooling water use threshold, it would not be subject to
permit conditions based on today's proposed rule; rather, it would be
subject to permit conditions implementing section 316(b) of the CWA set
by the permit director on a case-by-case basis, using best professional
judgment.

A. What Is an ``Existing Facility'' for Purposes of the Section 316(b)
Proposed Phase II Rule?

EPA is proposing to define the term ``existing facility'' as any
facility that commenced construction before January 17, 2002 and (1)
any modification of such a facility; (2) any addition of a unit at such
a facility for purposes of the same industrial operation; (3) any
addition of a unit at such a facility for purposes of a different
industrial operation, if the additional unit uses an existing cooling
water intake structure and the design capacity of intake structure is
not increased; or (4) any facility constructed in place of such a
facility if the newly constructed facility uses an existing cooling
water intake structure whose design intake flow is not increased to
accommodate the intake of additional cooling water.
The term commence construction is defined in 40 CFR 122.29(b)(4)
and January 17, 2002 is the effective date of the new facility rule.
EPA has specified that any modification of a facility that commenced
construction before January 17, 2002 remains an existing facility for
purposes of this rule to clarify that significant changes to such a
facility would not, absent other conditions, cause the facility to be a
``new facility'' subject to the Phase I rule. In addition, the proposed
definition specifies that any addition of a unit at a facility that
commenced construction before January 17, 2002 for purposes of the same
industrial operation as the existing facility would continue to be
defined as an existing facility. Further, any addition of a unit at a
facility that commenced construction before January 17, 2002 for
purposes of a different industrial operation would remain an existing
facility provided the additional unit uses an existing cooling water
intake structure and the design capacity of intake structure is not
increased. Finally, under the proposed definition, any facility
constructed in place of a facility that commenced construction before
January 17, 2002, would remain defined as an existing facility if the
newly constructed facility uses an existing cooling water intake
structure whose design intake flow is not increased to accommodate the
intake of additional cooling water.
Under this proposed rule certain forms of repowering could be
undertaken by an existing power generating facility that uses a cooling
water intake structure and it would remain subject to regulation as a
Phase II existing facility. For example, the following scenarios would
be existing facilities under the proposed rule:
An existing power generating facility undergoes a
modification of its process short of total replacement of the process
and concurrently increases the design capacity of its existing cooling
water intake structures;
An existing power generating facility builds a new process
for purposes of the same industrial operation and concurrently
increases the design capacity of its existing cooling water intake
structures;
An existing power generating facility completely rebuilds
its process but uses the existing cooling water intake structure with
no increase in design capacity.

Thus, in most situations, repowering an existing power generating
facility would be addressed under this proposed rule.
The proposed definition of ``existing facility'' is sufficiently
broad that it covers facilities that will be addressed under the Phase
III rule (e.g., existing power generating facilities with design flows
below the 50 MGD threshold, certain existing manufacturing facilities,
and offshore and coastal oil and gas extraction facilities). These
facilities are not covered under this proposal because they do not meet
the requirements of proposed Sec. 125.91.

B. What Is a ``Cooling Water Intake Structure?''

Today's proposal would adopt for Phase II existing facilities the
same definition of a ``cooling water intake structure'' that is part of
the new facility rule, i.e., 40 CFR 125.83, the total physical
structure and any associated constructed waterways used to withdraw
cooling water from waters of the U.S. The cooling water intake
structure extends from the point at which water is withdrawn from the
surface water source up to, and including, the intake pumps. Today's
proposal also would adopt the new facility rule's definition of
``cooling water,'' i.e., water used for contact or noncontact cooling,
including water used for equipment cooling, evaporative cooling tower
makeup, and dilution of effluent heat content. The definition specifies
that the intended use of cooling water is to absorb waste heat from
production processes or auxiliary operations. The definition also
specifies that water used for both cooling and non-cooling purposes
would not be considered cooling water for purposes of determining
whether 25% or more of the flow is cooling water.
This definition differs from the definition of ``cooling water
intake structure'' that is included in the 1977 Draft Guidance. The
proposed definition clarifies that the cooling water intake structure
includes the physical structure and technologies that extend up to and
include the intake pumps. Inclusion of the term ``associated
constructed waterways'' is intended to clarify that the definition
includes those canals, channels, connecting waterways, and similar
structures that may be built or modified to facilitate the withdrawal
of cooling water. The explicit inclusion of the intake pumps in the
definition reflects the key role pumps play in determining the capacity
(i.e., dynamic capacity) of the intake. These pumps,

[[Page 17129]]

which bring in water, are an essential component of the cooling water
intake structure since without them the intake could not work as
designed.
In addition, the definition would apply to structures that bring
water in for both contact and noncontact cooling purposes. This
clarification is necessary because cooling water intake structures
typically bring water into a facility for numerous purposes, including
industrial processes; use as circulating water, service water, or
evaporative cooling tower makeup water; dilution of effluent heat
content; equipment cooling; and air conditioning.
Finally, at Sec. 125.91(b), consistent with the new facility rule,
this proposed rule provides that use of a cooling water intake
structure includes obtaining cooling water by any sort of contract or
arrangement with an independent supplier (or multiple suppliers) of
cooling water if the supplier or suppliers withdraw(s) water from
waters of the United States. This provision is intended to prevent
circumvention of these requirements by creating arrangements to receive
cooling water from an entity that is not itself a point source. It also
provides that use of cooling water does not include obtaining cooling
water from a public water system or the use of treated effluent that
otherwise would be discharged to a water of the U.S.

C. Is My Facility Covered If It Withdraws From Waters of the U.S.?

The requirements proposed today would apply to cooling water intake
structures that withdraw amounts of water greater than the proposed
flow threshold from ``waters of the U.S.'' Waters of the U.S. include
the broad range of surface waters that meet the regulatory definition
at 40 CFR 122.2, which includes lakes, ponds, reservoirs, nontidal
rivers or streams, tidal rivers, estuaries, fjords, oceans, bays, and
coves. These potential sources of cooling water may be adversely
affected by impingement and entrainment.
Some facilities discharge heated water to cooling ponds, then
withdraw water from the ponds for cooling purposes. EPA does not intend
this proposal to change the regulatory status of cooling ponds. Cooling
ponds are neither categorically included nor categorically excluded
from the definition of ``waters of the United States'' at 40 CFR 122.2.
EPA interprets 40 CFR 122.2 to give permit writers discretion to
regulate cooling ponds as ``waters of the United States'' where cooling
ponds meet the definition of ``waters of the United States.'' The
determination whether a particular cooling pond is or is not ``waters
of the United States'' is to be made by the permit writer on a case-by-
case basis, informed by the principles enunciated in Solid Waste Agency
of Northern Cook County v. US Army Corps of Engineers, 531 U.S. 159
(2001). Therefore, facilities that withdraw cooling water from cooling
ponds that are ``waters of the U.S.'' and that meet today's other
proposed criteria for coverage (including the requirement that the
facility have or be required to obtain an NPDES permit) would be
subject to today's proposed rule.

D. Is My Facility Covered If It Is a Point Source Discharger Subject to
an NPDES Permit?

Today's proposed rule would apply only to facilities that have an
NPDES permit or are required to obtain one because they discharge or
might discharge pollutants, including storm water, from a point source
to waters of the U.S. This is the same requirement EPA included in the
new facility rule. 40 CFR 125.81(a)(1). Requirements for minimizing the
adverse environmental impact of cooling water intake structures would
continue to be applied through NPDES permits.
Based on the Agency's review of potential Phase II existing
facilities that employ cooling water intake structures, the Agency
anticipates that most existing power generating facilities that would
be subject to this rule will control the intake structure that supplies
them with cooling water, and discharge some combination of their
cooling water, wastewater, and storm water to a water of the U.S.
through a point source regulated by an NPDES permit. In this scenario,
the requirements for the cooling water intake structure would be
specified in the facility's NPDES permit. In the event that a Phase II
existing facility's only NPDES permit is a general permit for storm
water discharges, the Agency anticipates that the Director would write
an individual NPDES permit containing requirements for the facility's
cooling water intake structure. The Agency invites comment on this
approach for applying cooling water intake structure requirements to
the facility. Alternatively, requirements applicable to cooling water
intake structures could be incorporated into general permits. The
Agency also invites comment on this approach.
The Agency also recognizes that some facilities that have or are
required to have an NPDES permit might not directly control the intake
structure that supplies their facility with cooling water. For example,
facilities operated by separate entities might be located on the same,
adjacent, or nearby property; one of these facilities might take in
cooling water and then transfer it to other facilities prior to
discharge of the cooling water to a water of the U.S. Proposed
Sec. 125.91(c) addresses such a situation. It provides that use of a
cooling water intake structure includes obtaining cooling water by any
sort of contract or arrangement with an independent supplier (or
multiple suppliers) of cooling water if the supplier or suppliers
withdraw(s) water from waters of the United States. This provision is
intended to prevent circumvention of the proposed requirements by
creating arrangements to receive cooling water from an entity that is
not itself a point source discharger. It is the same as in the final
new facility rule. 40 CFR 125.81(b).
Proposed Sec. 125.91(c) also provides, as in the new facility rule,
that facilities that obtain cooling water from a public water system or
use treated effluent that otherwise would be discharged to a water of
the U.S. would not be subject to this proposed rule.
In addition, as EPA stated in the preamble to the final new
facility rule, the Agency would encourage the Director to closely
examine scenarios in which a potential Phase II existing facility
withdraws significant amounts of cooling water but does not have an
NPDES permit. As appropriate, the Director should apply other legal
requirements, such as section 404 or 401 of the Clean Water Act, the
Coastal Zone Management Act, the National Environmental Policy Act, or
similar State authorities to address adverse environmental impact
caused by cooling water intake structures at those existing facilities.

E. Who Is Covered Under the Thresholds Included in This Proposed Rule?

This proposed rule applies to facilities that (1) withdraw cooling
water from water of the U.S. and use at least twenty-five (25) percent
of the water withdrawn for cooling purposes and (2) have at least one
cooling water intake structure with a design intake capacity of 50 MGD
or more. Proposed Sec. 125.91.
EPA is proposing to include a provision, like that specified in the
new facility rule, that facilities that use less than twenty-five (25)
percent of the water withdrawn for cooling purposes are not subject to
this rule. This threshold ensures that nearly all cooling water and the
most significant facilities using cooling water intake structures are
addressed by these requirements to minimize adverse environmental
impact (see 66 FR 65338). Phase II existing

[[Page 17130]]

facilities typically use far more than 25 percent of the water they
withdraw for cooling. As in the new facility rule, water used for both
cooling and non-cooling purposes would not count towards the 25 percent
threshold.
In addition, at Sec. 125.91, EPA is proposing that this rule would
apply to facilities that have a cooling water intake structure with a
design intake capacity of 50 million gallons per day (MGD) or greater
of source water. EPA chose the 50 MGD threshold to focus the proposed
rule on the largest existing power generating facilities. Existing
power generating facilities with design flows below this threshold, as
well as certain existing manufacturing facilities, and offshore and
coastal oil and gas extraction facilities, would not be subject to this
proposed rule but will be addressed under the Phase III rule. To
clarify that manufacturing and commercial facilities are not subject to
the Phase II rule as a result of their relationship as a host plant to
a cogeneration facility, only that portion of the cooling water intake
flow that is used in the cogeneration process would be considered in
determining whether the 50 MGD and 25 percent criteria are met. EPA
estimates that the 50 MGD threshold would subject approximately 539 of
942 (57 percent) of existing power generating facilities to the
proposal and would address 99.04 percent of the total flow withdrawn by
existing steam electric power generating facilities.\4\ EPA believes
the regulation of existing facilities with flows of 50 MGD or greater
in Phase II will address those existing power generating facilities
with the greatest potential to cause or contribute to adverse
environmental impact. In addition, EPA has limited data on impacts at
facilities withdrawing less than 50 MGD. Deferring regulation of such
facilities to Phase III provides additional opportunity for the Agency
to collect impingement and entrainment data for these smaller
facilities. EPA requests comment on both the 50 MGD and 25 percent
cooling water thresholds.
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\4\ Source: Initial SBREFA Analysis, 6/01.
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F. When Must a Phase II Existing Facility Comply With the Proposed
Requirements?

If your facility is subject to the rule, proposed Sec. 125.92 would
require that you must comply when an NPDES permit containing
requirements consistent with this subpart is issued to you.

G. What Special Definitions Apply to This Proposal?

Definitions specific to this proposal are set forth in proposed
Sec. 125.93. Except for the definitions of ``cooling water'' and
``existing facility,'' which are separately defined for Phase II
facilities in proposed Sec. 125.93, the definitions in the new facility
rule, 40 CFR 125.83, also apply to this proposed rule. The definitions
in the new facility rule that would apply to Phase II existing
facilities are as follows:
Annual mean flow means the average of daily flows over a calendar
year. Historical data (up to 10 years) must be used where available.
Closed-cycle recirculating system means a system designed, using
minimized makeup and blowdown flows, to withdraw water from a natural
or other water source to support contact and/or noncontact cooling uses
within a facility. The water is usually sent to a cooling canal or
channel, lake, pond, or tower to allow waste heat to be dissipated to
the atmosphere and then is returned to the system. (Some facilities
divert the waste heat to other process operations.) New source water
(make-up water) is added to the system to replenish losses that have
occurred due to blowdown, drift, and evaporation.
Cooling water intake structure means the total physical structure
and any associated constructed waterways used to withdraw cooling water
from waters of the U.S. The cooling water intake structure extends from
the point at which water is withdrawn from the surface water source up
to, and including, the intake pumps.
Design intake flow means the value assigned (during the facility's
design) to the total volume of water withdrawn from a source waterbody
over a specific time period.
Design intake velocity means the value assigned (during the design
of a cooling water intake structure) to the average speed at which
intake water passes through the open area of the intake screen (or
other device) against which organisms might be impinged or through
which they might be entrained.
Entrainment means the incorporation of all life stages of fish and
shellfish with intake water flow entering and passing through a cooling
water intake structure and into a cooling water system.
Estuary means a semi-enclosed body of water that has a free
connection with open seas and within which the seawater is measurably
diluted with fresh water derived from land drainage. The salinity of an
estuary exceeds 0.5 parts per thousand (by mass) but is typically less
than 30 parts per thousand (by mass).
Freshwater river or stream means a lotic (free-flowing) system that
does not receive significant inflows of water from oceans or bays due
to tidal action. For the purposes of this rule, a flow-through
reservoir with a retention time of 7 days or less will be considered a
freshwater river or stream.
Hydraulic zone of influence means that portion of the source
waterbody hydraulically affected by the cooling water intake structure
withdrawal of water.
Impingement means the entrapment of all life stages of fish and
shellfish on the outer part of an intake structure or against a
screening device during periods of intake water withdrawal.
Lake or reservoir means any inland body of open water with some
minimum surface area free of rooted vegetation and with an average
hydraulic retention time of more than 7 days. Lakes or reservoirs might
be natural water bodies or impounded streams, usually fresh, surrounded
by land or by land and a man-made retainer (e.g., a dam). Lakes or
reservoirs might be fed by rivers, streams, springs, and/or local
precipitation. Flow-through reservoirs with an average hydraulic
retention time of 7 days or less should be considered a freshwater
river or stream.
Maximize means to increase to the greatest amount, extent, or
degree reasonably possible.
Minimum ambient source water surface elevation means the elevation
of the 7Q10 flow for freshwater streams or rivers; the conservation
pool level for lakes or reservoirs; or the mean low tidal water level
for estuaries or oceans. The 7Q10 flow is the lowest average 7
consecutive day low flow with an average frequency of one in 10 years
determined hydrologically. The conservation pool is the minimum depth
of water needed in a reservoir to ensure proper performance of the
system relying upon the reservoir. The mean low tidal water level is
the average height of the low water over at least 19 years.
Minimize means to reduce to the smallest amount, extent, or degree
reasonably possible.
Natural thermal stratification means the naturally-occurring
division of a waterbody into horizontal layers of differing densities
as a result of variations in temperature at different depths.
New facility means any building, structure, facility, or
installation that meets the definition of a ``new source'' or ``new
discharger'' in 40 CFR 122.2

[[Page 17131]]

and 122.29(b)(1), (2), and (4) and is a greenfield or stand-alone
facility; commences construction after January 17, 2002; and uses
either a newly constructed cooling water intake structure, or an
existing cooling water intake structure whose design capacity is
increased to accommodate the intake of additional cooling water. New
facilities include only ``greenfield'' and ``stand-alone'' facilities.
A greenfield facility is a facility that is constructed at a site at
which no other source is located, or that totally replaces the process
or production equipment at an existing facility (see 40 CFR
122.29(b)(1)(i) and (ii)). A stand-alone facility is a new, separate
facility that is constructed on property where an existing facility is
located and whose processes are substantially independent of the
existing facility at the same site (see 40 CFR 122.29(b)(1)(iii)). New
facility does not include new units that are added to a facility for
purposes of the same general industrial operation (for example, a new
peaking unit at an electrical generating station).
(1) Examples of ``new facilities'' include, but are not limited to
the following scenarios: (i) A new facility is constructed on a site
that has never been used for industrial or commercial activity. It has
a new cooling water intake structure for its own use. (ii) A facility
is demolished and another facility is constructed in its place. The
newly-constructed facility uses the original facility's cooling water
intake structure, but modifies it to increase the design capacity to
accommodate the intake of additional cooling water. (iii) A facility is
constructed on the same property as an existing facility, but is a
separate and independent industrial operation. The cooling water intake
structure used by the original facility is modified by constructing a
new intake bay for the use of the newly constructed facility or is
otherwise modified to increase the intake capacity for the new
facility.
(2) Examples of facilities that would NOT be considered a ``new
facility'' include, but are not limited to, the following scenarios:
(i) A facility in commercial or industrial operation is modified and
either continues to use its original cooling water intake structure or
uses a new or modified cooling water intake structure. (ii) A facility
has an existing intake structure. Another facility (a separate and
independent industrial operation), is constructed on the same property
and connects to the facility's cooling water intake structure behind
the intake pumps, and the design capacity of the cooling water intake
structure has not been increased. This facility would not be considered
a ``new facility'' even if routine maintenance or repairs that do not
increase the design capacity were performed on the intake structure.
Ocean means marine open coastal waters with a salinity greater than
or equal to 30 parts per thousand (by mass).
Source water means the waterbody (waters of the U.S.) from which
the cooling water is withdrawn.
Thermocline means the middle layer of a thermally stratified lake
or reservoir. In this layer, there is a rapid decrease in temperatures.
Tidal excursion means the horizontal distance along the estuary or
tidal river that a particle moves during one tidal cycle of ebb and
flow.
Tidal river means the most seaward reach of a river or stream where
the salinity is typically less than or equal to 0.5 parts per thousand
(by mass) at a time of annual low flow and whose surface elevation
responds to the effects of coastal lunar tides.

III Summary of Data Collection Activities

EPA focused its data collection activities on traditional utilities
and nonutility power producers. Based on the 1982 Census of
Manufacturers, these industries account for more than 90 percent of
cooling water use in the United States. Traditional utilities and
nonutility power producers that use cooling water were further limited
to those plants that generate electricity by means of steam as the
thermodynamic medium (steam electric) because they are associated with
large cooling water needs. Other power producers generate electricity
by means other than steam (e.g., gas turbines) and typically require
only small amounts of cooling water, if any.
Facilities in the traditional steam electric utility category are
classified under Standard Industrial Classification (SIC) codes 4911
and 493, while nonutility power producers are classified under the
major code that corresponds to the primary purpose of the facility.
Nonutility facilities are classified under SIC codes 4911 and 493 if
the primary purpose of the facility is to generate electricity, and it
is these nonutility facilities that are potentially subject to this
rule.

A. Existing Data Sources

EPA collected data from multiple sources, both public and
proprietary, in order to compile an accurate profile of the potentially
regulated community. EPA reviewed information collected by other
Federal agencies, as well as data compiled by private companies. In
those instances where databases are considered confidential, or where
raw data was unavailable for review, EPA did not consider the
information. Summaries of the reviewed data sources are listed below.
1. Traditional Steam Electric Utilities
Federal Energy Regulatory Commission Data Sources. The Federal
Energy Regulatory Commission (FERC) is an independent agency that
oversees America's natural gas industry, electric utilities, nonfederal
hydroelectric projects, and oil pipeline transportation system. FERC
requires that utilities, companies, or individuals subject to its
regulations periodically file data or information relating to such
matters as financial operations, energy production or supply, and
compliance with applicable regulations. Following are brief
descriptions of the relevant FERC data collection forms associated with
traditional steam electric utilities:
FERC Form 1, the Annual Report for Major Electric
Utilities, Licensees and Others, collects extensive accounting,
financial, and operating data from major privately-owned electric
utilities. A privately-owned electric utility is considered ``major''
if its sales and transmission services, in each of the three previous
calendar years, exceeded one of the following: (1) One million megawatt
hours of total annual sales; (2) 100 megawatt hours of annual sales for
resale; (3) 500 megawatt hours of annual power exchanges delivered; or
(4) 500 megawatt hours of annual wheeling for others. Utility-level
information (e.g., number of employees, detailed revenue and expense
information, balance sheet information, and electricity generation
information) and plant-level information (e.g., production expenses,
balance sheet information, and electricity generation information) was
used in the economic analysis of the proposed regulation. EPA used FERC
Form 1 data as compiled and distributed by other organizations than
FERC (see below). (Note that FERC Form 1 applies only to privately-
owned utilities. Publicly-owned utilities and rural electric
cooperatives are discussed below.)
FERC Form 1-F, the Annual Report of Nonmajor Public
Utilities and Licensees, collects accounting, financial, and operating
data from nonmajor privately-owned electric utilities. A privately-
owned electric utility is considered ``nonmajor'' if it had total
annual sales of 10,000 megawatt hours or more in the previous calendar
year but is not classified as ``major'' under the FERC Form 1
definition. FERC Form

[[Page 17132]]

1-F collects utility- and plant-level data similar to that on FERC Form
1, albeit less detailed.
Energy Information Administration Data Sources. The Energy
Information Administration (EIA) is an independent statistical and
analytical agency within the U.S. Department of Energy (DOE). In
support of its analytic activities, the EIA administers a series of
data collection efforts including extensive surveys of electric
utilities' financial operations, and their production and disposition
of electricity. Following are brief descriptions of the EIA data
collection forms associated with traditional steam electric utilities
that EPA has used as data sources:
Form EIA-412, the Annual Report of Public Electric
Utilities, collects accounting, financial, and operating data from
publicly-owned electric utilities. The information collected in Form
EIA-412 is similar to, but less detailed than data collected from major
privately-owned electric utilities in FERC Form 1. EPA use of Form EIA-
412 data included both utility-level information (e.g., number of
employees, detailed revenue and expense information, balance sheet
information, and electricity generation information) and plant-level
information (e.g., production expenses, balance sheet information, and
electricity generation information).
Form EIA-767, the Steam-Electric Plant Operation and
Design Report, collects data on air and water quality from steam-
electric power plants with generating capacity of 100 megawatts or
greater. A subset of these data are provided for steam-electric power
plants with generating capacity between 10 and 100 megawatts. EPA use
of Form EIA-767 data included unit-level information on net electricity
generation, hours in operation, and the quantity of fuel burned.
Form EIA-860, the Annual Electric Generator Report, collects data
on the status of electric generating plants and associated equipment in
operation and those scheduled to be in operation within the next 10
years of filing the report. Each utility that operates or plans to
operate a power plant in the United States is required to file Form
EIA-860. EPA use of Form EIA-860 data included unit-level information
on operating status, nameplate capacity, and ownership percentage.
Form EIA-861, the Annual Electric Utility Report, collects data on
generation, wholesale purchases, and sales and revenue by class of
consumer and State. Respondents include each electric utility that is
engaged in the generation, transmission, distribution, or sale of
electric energy primarily for use by the public. Data used from Form
EIA-861 included sales and revenue by consumer class, the utility's
NERC region, and address information. In addition, EPA used data on
utility ownership to classify each utility as either a privately-owned
utility, a publicly-owned utility, or a rural electric cooperative.
In addition to data from the EIA data collection forms outlined
above, EPA used EIA's database of FERC Form 1 data, containing the
majority of utility-level financial and operating data submitted on the
FERC Form 1. While these data are directly available from FERC, the EIA
database is published in an electronic format that is more convenient
to use than the FERC data. Because EIA conducts basic quality assurance
activities, EPA expects that the EIA data is more reliable than the
FERC data.
Rural Utility Service Data Sources. The Rural Utility Service (RUS)
is a Federal agency that provides rural infrastructure assistance in
electricity, water and telecommunications. As a Federal credit agency
in the U.S. Department of Agriculture, RUS plays a leadership role in
financial lending and technical guidance for the rural utilities
industries. Rural utilities that borrow from RUS are subject to annual
reporting requirements administered by RUS. Following are brief
descriptions of the relevant RUS data collection forms associated with
traditional steam electric utilities:
RUS Form 12, the Electric Operating Report, collects
accounting, financial, and operating data from rural electric
cooperatives \7\. The information collected in RUS Form 12 is similar
to data collected from major privately-owned electric utilities in FERC
Form 1. EPA use of RUS Form 12 data included utility-level information
(e.g., number of employees, detailed revenue and expense information,
balance sheet information, and electricity generation information),
plant-level information (e.g., production expenses, balance sheet
information, and electricity generation information), as well as unit-
level information (e.g., fuel consumption, operating hours, and
electricity generation).
---------------------------------------------------------------------------

\7\ Note that this data collection form only applies to rural
electric cooperatives. Corresponding data collection forms for
privately-owned and publicly-owned utilities are discussed in other
parts of this section.
---------------------------------------------------------------------------

U.S. Nuclear Regulatory Commission Data Sources. The U.S. Nuclear
Regulatory Commission (NRC) is an independent agency established to
ensure the protection of the public health and safety, the common
defense and security, and the environment in the use of nuclear
materials in the United States. In carrying out its responsibilities of
regulating commercial nuclear power reactors, the NRC compiles and
publishes data and reports regarding the operation and maintenance of
commercial nuclear power plants around the country. EPA collected
information from the NRC regarding the configuration of cooling water
intake structures to assist in estimating the capacities of condenser
flows.
Opri Data Sources. Opri is a private firm located in Boulder,
Colorado, that has compiled extensive databases related to the
traditional steam electric utility industry. Opri's Electric Generating
Plant Database includes plant-level data for privately-owned utilities,
publicly-owned utilities, and cooperatives for 1988-1997. While these
data are available from FERC, EIA, and RUS, these agencies do not make
the information available in an easily accessible electronic format. As
a consequence, EPA purchased plant-level data from Opri to support its
economic analyses. Because the compilation of data in the Electric
Generating Plant Database is proprietary, EPA has included a summary of
the data utilized in its analyses in the public record.
2. Steam Electric Nonutility Power Producers
Energy Information Administration Data Sources. Form EIA-867, the
Annual Nonutility Power Producer Report, collects data on electricity
generation, installed capacity, and energy consumption from nonutility
power producers that own or plan on installing electric generation
equipment with a total capacity of one megawatt or more. The form does
not collect any economic or financial data. EPA did not utilize
company-level data from the Form EIA-867 because the confidential
nature of this data prevented EIA from releasing it. EPA did use Form
EIA-867 to assess the population of potentially affected facilities and
to identify survey recipients.
Utility Data Institute Data Sources. The UDI Directory of U.S.
Cogeneration, Small Power, and Industrial Power Plants contains data
for more than 4,300 nonutility power producer plants. The database,
however, is not exclusive to facilities that have steam electric
generators. The database also contains nonutility power producers with
turbines that do not use cooling water such as gas turbines, geothermal
units, wind and solar installations, and a

[[Page 17133]]

variety of other plant types. The primary focus of the UDI nonutility
database is on facilities that provide at least some electricity for
sale to utilities. EPA used the UDI database to compare the names and
addresses of steam electric plants with those in the Form EIA-867
database to ensure comprehensive coverage of nonutility power
producers.
Edison Electric Institute Data Sources. EEI conducts an annual
survey and presents statistics on nonutility power producers in a
document entitled, Capacity and Generation of Nonutility Sources of
Energy. However, the data are considered confidential and EEI will only
disseminate data in an aggregated form. Because EPA must have the raw
data on a facility-specific basis for this rulemaking, EPA was unable
to use this database.
3. Repowering of Steam Electric Power Generating Facilities (Utility
and Nonutility)
As discussed in part B of this Section, the section 316(b) Survey
acquired technological and economic information from facilities for the
years 1998 and 1999. With this information, the Agency established a
subset of facilities potentially subject to this rule. Since 1999, some
existing facilities have proposed and/or enacted changes to their
facilities in the form of repowering that could potentially affect the
applicability of today's proposal or a facility's compliance costs. The
Agency therefore conducted research into repowering facilities for the
section 316(b) existing facility rule and any information available on
proposed changes to their cooling water intake structures. The Agency
defines repowering as existing facilities either undertaking
replacement of existing generating capacity or making additions to
existing capacity. The Agency used two separate databases to assemble
available information for the repowering facilities: RDI's NEWGen
Database, November 2001 version and the Section 316(b) Survey.
In January 2000, EPA conducted a survey of the technological and
economic characteristics of 961 steam-electric generating plants. Only
the detailed questionnaire, filled out by 283 utility plants and 50
nonutility plants, contains information on planned changes to the
facilities' cooling systems (Part 2, Section E). Of the respondents to
the detailed questionnaire, only six facilities (three utility plants
and three nonutility plants) indicated that their future plans would
lead to changes in the operation of their cooling water intake
structures.
The NEWGen database is a compilation of detailed information on new
electric generating capacity proposed over the next several years. The
database differentiates between proposed capacity at new (greenfield)
facilities and additions/modifications to existing facilities. To
identify repowering facilities of interest, the Agency screened the
1,530 facilities in the NEWGen database with respect to the following
criteria: Facility status, country, and steam electric additions. The
Agency then identified 124 NEWGen facilities as potential repowering
facilities.
Because the NEWGen database provides more information on repowering
than the section 316(b) survey, the Agency used it as the starting
point for the analysis of repowering facilities. Of the 124 NEWGen
facilities identified as repowering facilities, 85 responded to the
section 316(b) survey. Of these 85 facilities, 65 are in-scope and 20
are out of scope of this proposal. For each of the 65 in scope
facilities, the NEWGen database provided an estimation of the type and
extent of the capacity additions. The Agency found that 36 of the 65
facilities would be combined-cycle facilities after the repowering
changes. Of these, 34 facilities are projected to decrease their
cooling water intake after repowering (through the conversion from a
simple steam cycle to a combined-cycle plant). The other 31 facilities
within the scope of the rule would increase their cooling water intake.
The Agency examined the characteristics of these facilities projected
to undergo repowering and determined the waterbody type from which they
withdraw cooling water. The results of this analysis are presented in
Exhibit 1.

Exhibit 1.--In-Scope Existing Facilities Projected to Enact Repowering
Changes
------------------------------------------------------------------------
Number of
Number of plants
plants projected
projected to
Waterbody type to decrease or
increase maintain
cooling cooling
water water
withdrawal withdrawal
------------------------------------------------------------------------
Ocean......................................... N/A N/A
Estuary/Tidal River........................... 3 17
Freshwater River/Stream....................... 14 10
Freshwater Lake/Reservoir..................... 10 1
Great Lake.................................... 0 1
------------------------------------------------------------------------

Of the 65 in-scope facilities identified as repowering facilities
in the NEWGen database, 24 received the detailed questionnaire, which
requested information about planned cooling water intake structures and
changes to capacity. Nineteen of these 24 facilities are utilities and
the remaining five are nonutilities. The Agency analyzed the section
316(b) detailed questionnaire data for these 24 facilities to identify
facilities that indicated planned modifications to their cooling
systems which will change the capacity of intake water collected for
the plant and the estimated cost to comply with today's proposal. Four
such facilities were identified, two utilities and two nonutilities.
Both utilities responded that the planned modifications will decrease
their cooling water intake capacity and that they do not have any
planned cooling water intake structures that will directly withdraw
cooling water from surface water. The two nonutilities, on the other
hand, indicated that the planned modifications will increase their
cooling water intake capacity and that they do have planned cooling
water intake structures that will directly withdraw cooling water from
surface water.
Using the NEWGen and section 316(b) detailed questionnaire
information on repowering facilities, the Agency examined the extent to
which planned and/or enacted repowering changes would effect cooling
water withdrawals and, therefore, the potential costs of compliance
with this proposal. Because the Agency developed a cost estimating
methodology that primarily utilizes design intake flow as the
independent variable, the Agency examined the extent to which
compliance costs would change if the repowering data summarized above
were incorporated into the cost analysis of this rule. The Agency
determined that projected compliance costs for facilities withdrawing
from estuaries could be lower after incorporating the repowering
changes. The primary reason for this is the fact that the majority of
estuary repowering facilities would change from a full-steam cycle to a
combined-cycle, thereby maintaining or decreasing their cooling water
withdrawals (note that a combined-cycle facility generally will
withdraw one-third of the cooling water of a comparably sized full-
steam facility). Therefore, the portion of compliance costs for
regulatory options that included flow reduction requirements or
technologies would significantly decrease if the Agency incorporated
repowering changes into the analysis. As shown in Exhibit 1 the

[[Page 17134]]

majority of facilities projected to increase cooling water withdrawals
due to the repowering changes use freshwater sources. In turn, the
compliance costs for these facilities would increase if the Agency
incorporated repowering for this proposal.
For the final rule, the Agency intends to continue its research
into repowering at existing facilities. The Agency will consider the
results of its repowering research and any comments provided on this
subject for the final rule. The Agency therefore requests comment on
planned and enacted repowering activities and the above summary of its
repowering research to date. The Agency is especially interested in
information from facilities that have enacted repowering changes and
the degree to which these changes have changed their design intake
flow.

B. Survey Questionnaires

EPA's industry survey effort consists of a two-phase process. EPA
administered a screener questionnaire focused on nonutility and
manufacturing facilities as the first phase of this data collection
process. The screener questionnaire provides information on cooling-
water intake capacity, sources of the water, intake structure types,
and technologies used to minimize adverse environmental impacts. It
also provides data on facility and parent-firm employee numbers and
revenues. This information was used to design a sampling plan for the
subsequent detailed questionnaire. Following the screener survey, the
Agency sent out and collected either a short technical or a detailed
questionnaire to utility, nonutility, and manufacturing facilities, as
described below. The two-phase survey was designed to collect
representative data from a sample group of those categories of
facilities potentially subject to section 316(b) regulation for use in
rule development.
In 1997, EPA estimated that over 400,000 facilities could
potentially be subject to a cooling water intake regulation. Given the
large number of facilities potentially subject to regulation, EPA
decided to focus its data collection efforts on six industrial
categories that, as a whole, are estimated to account for over 99
percent of all cooling water withdrawals. These six sectors are:
Utility Steam Electric, Nonutility Steam Electric, Chemicals & Allied
Products, Primary Metals Industries, Petroleum & Coal Products, and
Paper & Allied Products. There are about 48,500 facilities in these six
categories. EPA believes that this approach provides a sound basis for
assessing best technologies available for minimizing adverse
environmental impacts.
The screener survey focused on nonutility and manufacturing
facilities. EPA developed the sample frame (list of facilities) for the
screener questionnaire using public data sources as described in the
Information Collection Request (DCN 3-3084-R2 in Docket W-00-03).
Facilities chosen for the screener questionnaire represented a
statistical sample of the entire universe of nonutility and
manufacturing facilities potentially subject to cooling water intake
regulations. EPA did not conduct a census of all facilities (i.e. send
a survey to all facilities) for the screener questionnaire because of
the burden associated with surveying a large number of facilities.
Rather, EPA refined the industry data using industry-specific sources
to develop sample frames and mailing lists. EPA believes the sample
frame was sufficient to characterize the operations of each industrial
category. EPA sent the screener questionnaire to 2600 facilities
identified in the sample frame as follows: (1) All identified steam
electric nonutility power producers, both industrial self-generators
and nonindustrial generators (1050 facilities, of which 853 responded);
(2) and a sample of manufacturers that fell under four other industrial
categories: Paper and allied products, chemical and allied products,
petroleum and coal products, and primary metals (1550 facilities, of
which 1217 responded). EPA adjusted the sample frame for the screener
questionnaire to account for several categories of non-respondents,
including facilities with incorrect address information, facilities no
longer in operation, and duplicate mailings. Through follow-up phone
calls and mailings, EPA increased the response rate for the screener
questionnaire to 95 percent. The screener questionnaire was not sent to
utilities, all of which were believed to be identified accurately using
the publically-available data described above.
A sample of manufacturing and nonutility facilities identified as
in-scope (subject to regulation) with the screener questionnaire, and
all utilities then were sent either a short technical or a detailed
questionnaire. A total of 878 utility facilities, 343 nonutility
facilities and 191 manufacturing facilities received one of the two
questionnaires (short technical or detailed) during the second phase of
the survey. For utilities, nonutilities, and other manufacturing
facilities, EPA selected a random sample of these eligible facilities
to receive a detailed questionnaire. The sample included 282 utility
facilities and 181 nonutility facilities. All 191 manufacturing
facilities received a detailed questionnaire. For nonutilities and
utilities, those facilities not selected to receive a detailed
questionnaire were sent a Short Technical Questionnaire. EPA's approach
in selecting a sample involved the identification of population strata,
the calculation of sample sizes based on desired levels of precision,
and the random selection of sites given the sample size calculations
within each stratum. More detail is provided in a report, Statistical
Summary for Cooling Water Intakes Structures Surveys (See DCN 3-3077 in
Docket W-00-03).
Five questionnaires were distributed to different industrial
groups. They were: (1) Detailed Industry Questionnaire: Phase II
Cooling Water Intake Structures--Traditional Steam Electric Utilities,
(2) Short Technical Industry Questionnaire: Phase II Cooling Water
Intake Structures--Traditional Steam Electric Utilities, (3) Detailed
Industry Questionnaire: Phase II Cooling Water Intake Structures--Steam
Electric Nonutility Power Producers, (4) Detailed Industry
Questionnaire: Phase II Cooling Water Intake Structures--Manufacturers,
(5) Watershed Case Study Short Questionnaire.
The questionnaires provided EPA with technical and financial data
necessary for developing this proposed regulation. Specific details
about the questions may be found in EPA's Information Collection
Request (DCN 3-3084-R2 in Docket W-00-03) and in the questionnaires
(see DCN 3-0030 and 3-0031 in Docket W-00-03 and Docket for today's
proposal); these documents are also available on EPA's web site (http:/
/www.epa.gov/waterscience/316b/question/).

C. Site Visits

From 1993 to the present, EPA has conducted site visits to numerous
power generating stations around the country to observe cooling water
intake structure design and operations and document examples of
different cooling water intake structure configurations. EPA has
visited the plants (each with either a once-through or closed-cycle,
recirculating cooling system, except as noted) listed below:

California: Moss Landing Power Plant and Pittsburg Power Plant
Florida: Big Bend Power Station, St. Lucie Plant, Martin
Plant, and Riviera Beach Power Plant
Illinois: Will County Station and Zion Nuclear Power Station

[[Page 17135]]

Indiana: Clifty Creek Station and Tanners Creek Plant
Maryland: Calvert Cliffs Nuclear Power Plant and Chalk Point
Generating Station
Massachusetts: Pilgrim Nuclear Power Station
Nevada: El Dorado Energy Power Plant (dry cooling)
New York: Indian Point Nuclear Power Plant and Lovett
Generating Station
New Jersey: Salem Generating Station
Ohio: Cardinal Plant, W.H. Zimmer Plant, and W.C. Beckjord
Station
Wisconsin: Valley Power Plant and Pleasant Prairie Power Plant

D. Data Provided to EPA by Industrial, Trade, Consulting, Scientific or
Environmental Organizations or by the General Public

1. Public Participation
EPA has worked extensively with stakeholders from industry, public
interest groups, state agencies, and other Federal agencies in the
development of this proposed rule. These public participation
activities have focused on various section 316(b) issues, including
general issues, as well as issues relevant to development of the Phase
I rule and issues relevant to the proposed Phase II rule. See section
I.C.5 of this preamble for a discussion of key public participation
activities.
2. Data and Documents Collected by EPA
Since 1993, EPA has developed cooling water regulations as part of
a collaborative effort with industry and environmental stakeholders,
other Federal agencies, the academic and scientific communities as well
as the general public. As such, EPA has reviewed and considered the
many documents, demonstration studies, scientific analyses and
historical perspectives offered in support of each phase of the
regulatory process. For example, during the early stages of data
gathering EPA created an internal library of reference documents
addressing cooling water intake structure issues. This library
currently holds over 2,800 documents, many of which were referenced in
the rulemaking process and are contained in the record (see below for
further information on the record). The library contains a thorough
collection of a wide variety of documents, including over 80 316(b)
demonstration documents, over 300 impingement and entrainment studies,
over 100 population modeling studies, over 500 fish biology and stock
assessment documents, over 350 biological studies commissioned by power
generators, over 80 NPDES decisions and NPDES or SPDES-related
documents, over 120 intake technology reports, over 10 databases on the
electric power industry, and documents from interagency committees such
as the Ohio River Valley Water Sanitation Commission (ORSANCO).
The record for the new facility rule contains nearly 1,000
documents (research articles, databases, legal references, memorandums,
meeting notes, and other documents), consisting of approximately 47,000
pages of supporting material available for public review. The record
for this proposed rule contains over 40 additional documents.
For a more complete list of reference and technical documents, see
the record for this proposed rule.

IV. Overview of Facility Characteristics (Cooling Water Systems &
Intakes) for Industries Potentially Subject to Proposed Rule

As discussed above, today's proposed rule would apply to Phase II
existing facilities, which include any existing facility that both
generates and transmits electric power, or generates electric power but
sells it to another entity existing for transmission and that meets the
other applicability criteria in Sec. 125.91: (1) They are a point
source that uses or proposes to use a cooling water intake structure;
(2) they have at least one cooling water intake structure that uses at
least 25 percent of the water it withdraws for cooling purposes; (3)
they have a design intake flow of 50 million gallons per day (MGD) or
greater; and (4) they have an NPDES permit or are required to obtain
one. Today's rule does not apply to facilities whose primary business
activity is not power generation, such as manufacturing facilities that
produce electricity by co-generation.
Based on data collected from the Short Technical Industry
Questionnaire and Detailed Questionnaire, and compliance requirements
in today's proposed rule, EPA has identified 539 facilities to which
today's rule will apply, and estimates that the total number could be
549. The Agency has identified 420 plants owned by utilities that are
potentially subject to proposed rule. The Agency estimates that 129
nonutilities may potentially be subject to the proposed rule. This
number, however, is subject to some uncertainty. The Agency has
identified 119 plants owned by nonutilities that are potentially
subject to the proposed rule, and after taking into account a small
non-response rate to the survey among nonutilities, the Agency's best
estimate of the total number is 129.
Sources of Surface Water. The source of surface water withdrawn for
cooling is an important factor in determining potential environmental
impacts. An estimated 8 nonutility facilities and 15 utility facilities
withdraw all cooling water from an ocean. An estimated 55 nonutility
facilities and 50 utility facilities withdraw all cooling water from an
estuary or tidal river. An estimated 50 nonutility facilities and 203
utility facilities withdraw all cooling water from a freshwater stream
or river. An estimated 12 or 13 nonutility facilities and 136 utility
facilities withdraw all cooling water from a lake or reservoir,
including 15 utilities on the Great Lakes. Fewer than 20 plants
withdraw cooling water from a combination of these sources.
Average Daily Cooling Water Intake in 1998. Of the estimated 129
nonutility plants that are potentially subject to this proposed rule,
EPA estimates that in 1998, 4 plants had an average intake of not more
than 10 million gallons per day (MGD), 12 had an average intake more
than 10 MGD and not over 50 MGD, 20 had an average intake more than 50
MGD but not over 100 MGD, and 90 had an average intake over 100 MGD
(three had zero or unreported intake). Note that coverage under the
rule is based on design intake, not average intake flow. Of the 420
utility plants that are potentially subject to this proposed rule, EPA
found that in 1998, 8 plants had an average intake of not more than 10
million gallons per day (MGD), 59 had an average intake more than 10
MGD and not over 50 MGD, 58 had an average intake more than 50 MGD but
not over 100 MGD, and 288 had an average intake over 100 MGD (seven had
zero or unreported intake).
Cooling Water Systems. Facilities may have more than one cooling
water system. Therefore, in providing the information on cooling water
systems, a plant may be counted multiple times (as many times as it has
distinct cooling water systems). Thus, of the plants that are
potentially subject to this proposed rule, the 129 nonutility plants
are counted 165 times; the 420 utility plants are counted 599 times. As
a consequence, the percentages reported sum to more than 100 percent.
Among nonutility plants, 110 plants (85 percent) use once-through
cooling systems, 16 plants (12 percent) use closed-cycle, recirculating
cooling systems, and an estimated 6 plants (5 percent) use another type
of system. Of the estimated 599 utility plants, 314 plants (75 percent)
use once-through cooling systems, 65 plants (15 percent)

[[Page 17136]]

use closed-cycle, recirculating cooling systems, and 49 plants (12
percent) use another type of system.
Cooling Water Intake Structure Configurations. Facilities may have
more than one cooling water intake structure configuration. Therefore,
in providing the information on cooling water systems, a plant may be
counted multiple times (as many times as it has distinct cooling water
intake structure configurations). Thus, of the plants that are
potentially subject to this proposed rule, the 129 nonutility plants
are counted 194 times and the 420 utility plants are counted 690 times.
As a consequence, the percentages reported sum to more than 100
percent. Of the estimated 129 nonutility plants that are potentially
subject to this proposed rule, 30 (23 percent) withdraw cooling water
through a canal or channel, 13 (10 percent) have an intake structure
situated in a natural or constructed bay or cove, 96 (74 percent) have
an intake structure (surface or submerged) that is flush with the
shoreline, and 16 (12 percent) have a submerged offshore intake
structure. Of the 420 utility plants that are potentially subject to
this proposed rule, 142 (34 percent) withdraw cooling water through a
canal or channel, 41 (10 percent) have an intake situated in a bay or
cove, 251 (60 percent) have a shoreline intake, 59 (14 percent) have a
submerged offshore intake, and 6 (1 percent) have another type of
configuration or reported no information.

V. Environmental Impacts Associated With Cooling Water Intake
Structures

The majority of environmental impacts associated with intake
structures are caused by water withdrawals that ultimately result in
aquatic organism losses. This section describes the general nature of
these biological impacts; discusses specific types of impacts that are
of concern to the Agency; and presents examples of documented impacts
from a broad range of facilities. EPA believes that in light of the
national scope of today's proposed rule, it is important to present the
variety of impacts observed for facilities located on different
waterbody types, under high and low flow withdrawal regimes, and
operating with and without technologies designed to reduce
environmental impacts.
Based on preliminary estimates from the questionnaire sent to more
than 1,200 existing power plants and factories, industrial facilities
in the United States withdraw more than 279 billion gallons of cooling
water a day from waters of the U.S.\8\ The withdrawal of such large
quantities of cooling water affects large quantities of aquatic
organisms annually, including phytoplankton (tiny, free-floating
photosynthetic organisms suspended in the water column), zooplankton
(small aquatic animals, including fish eggs and larvae, that consume
phytoplankton and other zooplankton), fish, crustaceans, shellfish, and
many other forms of aquatic life. Aquatic organisms drawn into cooling
water intake structures are either impinged on components of the
cooling water intake structure or entrained in the cooling water system
itself.
---------------------------------------------------------------------------

\8\ EPA 2000. Detailed Industry Questionnaire: Phase II Cooling
Water Intake Structures. U.S. Environmental Protection Agency,
Office of Wastewater Management, Washington, DC. OMB Control No.
2040-0213.
---------------------------------------------------------------------------

Impingement takes place when organisms are trapped against intake
screens by the force of the water passing through the cooling water
intake structure. Impingement can result in starvation and exhaustion
(organisms are trapped against an intake screen or other barrier at the
entrance to the cooling water intake structure), asphyxiation
(organisms are pressed against an intake screen or other barrier at the
entrance to the cooling water intake structure by velocity forces that
prevent proper gill movement, or organisms are removed from the water
for prolonged periods of time), and descaling (fish lose scales when
removed from an intake screen by a wash system) as well as other
physical harms.
Entrainment occurs when organisms are drawn through the cooling
water intake structure into the cooling system. Organisms that become
entrained are normally relatively small benthic,\9\ planktonic,\10\ and
nektonic \11\ organisms, including early life stages of fish and
shellfish. Many of these small organisms serve as prey for larger
organisms that are found higher on the food chain. As entrained
organisms pass through a plant's cooling system they are subject to
mechanical, thermal, and/or toxic stress. Sources of such stress
include physical impacts in the pumps and condenser tubing, pressure
changes caused by diversion of the cooling water into the plant or by
the hydraulic effects of the condensers, sheer stress, thermal shock in
the condenser and discharge tunnel, and chemical toxemia induced by
antifouling agents such as chlorine. The mortality rate of entrained
organisms varies by species; mortality rates for fish can vary from 2
to 97 percent depending on the species and life stage entrained.\12,\
\13\ Naked goby larvae demonstrated mortality rates as low as 2 percent
whereas bay anchovy larvae mortality rates were as high as 97
percent.\14\ Macroinvertebrate mortality ranged from 0 to 84 percent
for several species evaluated, but rates were usually less than 29
percent.\15,\ \16\
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\9\ Refers to bottom dwellers that are generally small and
sessile (attached) such as mussels and anemones, but can include
certain large motile (able to move) species such as crabs and
shrimp. These species can be important members of the food chain.
\10\ Refers to free-floating microscopic plants and animals,
including the egg and larval stages of fish and invertebrates that
have limited swimming abilities. Plankton are also an important
source of food for other aquatic organisms and an essential
component of the food chain in aquatic ecosystems.
\11\ Refers to free-swimming organisms (e.g., fish, turtles,
marine mammals) that move actively through the water column and
against currents.
\12\ Mayhew, D.A., L.D. Jensen, D.F. Hanson, and P.H. Muessig.
2000. A comparative review of entrainment survival studies at power
plants in estuarine environments. Environmental Science and Policy
3:S295-S301.
\13\ EPRI. 2000. Review of entrainment survival studies: 1970-
2000. Prepared by EA Engineering Science and Technology for the
Electric Power Research Institute, Palo Alto, CA.
\14\ Ibid.
\15\ Mayhew, D.A., L.D. Jensen, D.F. Hanson, and P.H. Muessig.
2000. A comparative review of entrainment survival studies at power
plants in estuarine environments. Environmental Science and Policy
3:S295-S301.
\16\ EPRI. 2000. Review of entrainment survival studies: 1970-
2000. Prepared by EA Engineering Science and Technology for the
Electric Power Research Institute, Palo Alto, CA.
---------------------------------------------------------------------------

In addition to impingement and entrainment losses associated with
the operation of the cooling water intake structure, EPA is concerned
about the cumulative overall degradation of the aquatic environment as
a consequence of (1) multiple intake structures operating in the same
watershed or in the same or nearby reaches and (2) intakes located
within or adjacent to an impaired waterbody. Historically, impacts
related to cooling water intake structures have been evaluated on a
facility-by-facility basis. The potential cumulative effects of
multiple intakes located within a specific waterbody or along a coastal
segment were not typically assessed and thus are largely unknown. (One
relevant example is provided for the Hudson River; see discussion
below. Also see recently completed case studies for the Delaware
Estuary and Ohio River in the Case Study Document). There is concern,
however, about the effects of multiple intakes on fishery stocks. As an
example, the Atlantic States Marine Fisheries Commission has been
requested by its member States to investigate the cumulative impacts on
commercial fishery stocks, particularly overutilized stocks,
attributable to

[[Page 17137]]

cooling water intakes located in coastal regions of the Atlantic.\17\
Specifically, the study will focus on revising existing fishery
management models so that they accurately consider and account for fish
losses from multiple intake structures.
---------------------------------------------------------------------------

\17\ Personal communication, D. Hart (EPA) and L. Kline (ASMFC),
2001.
---------------------------------------------------------------------------

Further, the Agency believes that cooling water intakes potentially
contribute additional stress to waters already showing aquatic life
impairment from other sources such as industrial discharges and urban
stormwater. EPA notes that the top four leading causes of waterbody
impairment (siltation, nutrients, bacteria, and metals) affect the
aquatic life uses of a waterbody. Thus, the Agency is concerned that
many of the aquatic organisms subject to the effects of cooling water
withdrawals reside in impaired waterbodies and are therefore
potentially more vulnerable to cumulative impacts from an array of
physical and chemical anthropogenic stressors.
When enough individual aquatic organisms are subject to lethal or
function-impairing stressors, whether from cooling water intake
structures or water pollutants, the structure of their ecosystem can
change significantly in response. Changes in ecosystem structure can
then affect all organisms within the ecosystem, including those
organisms a cooling water intake structure does not directly impact.
Decreased numbers of aquatic organisms can have any or several of
the following ecosystem-level effects: (1) Disruption of food webs,\18\
(2) disruption of nutrient, carbon, and energy transfers among the
physical and biological ecosystem compartments,\19\ (3) alteration of
overall aquatic habitat,\20\ and (4) alteration of species composition
and overall levels of biodiversity.\21\
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\18\ Food webs are modified by cooling water intake structure
impacts because (1) some species within the ecosystem suffer heavier
mortality impacts than others, and (2) cooling water intake
structures convert living organisms to various forms of organic
matter, thereby removing food resources from consumers of living
organisms, and increasing food resources for scavengers and
decomposers.
\19\ Cooling water intake structures can transfer large amounts
of nutrients, carbon, and energy from living organisms (in some
cases highly mobile or migratory organisms) to the physical
environment. Nutrients, carbon, and energy may re-enter the
biological compartment, but they will do so via different pathways
than those used prior to cooling water intake structures operation
(see alteration of food webs).
\20\ In addition to altering the physical nature of aquatic
habitat directly (e.g., current modification and water withdrawal),
cooling water intake structure may modify habitat by reducing
numbers of habitat-modifying organisms (e.g., Pacific salmon).
\21\ Species may disappear from a site in response to cooling
water intake structure impacts. Threatened and endangered or
otherwise rare or sensitive species may be at greater risk. New
species (including invasive species), may establish themselves
within the disrupted area if they are able to withstand cooling
water intake structure impacts.
---------------------------------------------------------------------------

The nature and extent of the ecosystem-level effect depends on the
characteristics of the aquatic organism and its interactions with other
members of the ecosystem. Some species, known as ``keystone species,''
have a larger impact on ecosystem structure and function than other
species. Examples of keystone species from cooling water intake
structure-impacted water bodies include menhaden, Pacific salmon, and
Eastern oysters.
As discussed above, structural changes at the ecosystem level are
influenced by a large number of forces at work within the ecosystem.
Because of the large number of these forces and the complexity of their
interactions, ecologists can find it difficult to determine the
contribution of any one stressor to a structural change in an
ecosystem. Much work remains to be done to determine the extent to
which cooling water intake structures induce structural change in their
host ecosystems through impingement and entrainment of aquatic
organisms. Nevertheless, EPA believes that many cooling water intake
structures clearly have a significant negative impact on aquatic
organisms at the individual level. The studies discussed below suggest
that these individual-level impacts can lead to negative impacts at
higher organizational levels.
In addition to ecosystem-level impacts, EPA is concerned about the
potential impacts of cooling water intake structures located in or near
habitat areas that support threatened, endangered, or other protected
species. Although limited information is available on locations of
threatened or endangered species that are vulnerable to impingement or
entrainment, such impacts do occur. For example, EPA is aware that from
1976 to 1994, approximately 3,200 threatened or endangered sea turtles
entered enclosed cooling water intake canals at the St. Lucie Nuclear
Generating Plant in Florida.\22\ The plant developed a capture-and-
release program in response to these events. Most of the entrapped
turtles were captured and released alive; however, approximately 160
turtles did not survive. More recently, the number of sea turtles being
drawn into the intake canal increased to approximately 600 per year.
Elevated numbers of sea turtles found within nearshore waters are
thought to be part of the reason for the rising numbers of turtles
entering facility waters. In response to this increase, Florida Power
and Light Co. proposed installation of nets with smaller size mesh (5-
inch square mesh rather than 8-inch square mesh) at the St. Lucie
facility to minimize entrapment.\23\
---------------------------------------------------------------------------

\22\ Florida Power and Light Company. 1995. Assessment of the
impacts at the St. Lucie Nuclear Generating Plant on sea turtle
species found in the inshore waters of Florida.
\23\ Ibid.
---------------------------------------------------------------------------

Finally, EPA is concerned about environmental impacts associated
with re-siting or modification of existing cooling water intake
structures. Three main factors contribute to the environmental impacts:
Displacement of biota and habitat resulting from the physical siting or
modification of a cooling water intake structure in an aquatic
environment, increased levels of turbidity in the aquatic environment,
and effects on biota and habitat associated with aquatic disposal of
materials excavated during re-siting or modification activities.
Existing programs, such as the CWA section 404 program, National
Environmental Policy Act (NEPA) program, and programs under State/
Tribal law, include requirements that address many of the environmental
impact concerns associated with the intake modifications (see Section X
for applicable Federal statutes).

A. Facility Examples

The following discussion provides a number of examples of
impingement and entrainment impacts that can be associated with
existing facilities. It is important to note that these examples are
meant to illustrate the range of impacts that can occur nationally at
facilities sited at diverse geographic locations, differing waterbody
types, and with a variety of control technologies in place. In some
cases, the number of organisms impinged and entrained by a facility can
be substantial and in other examples impingement and entrainment may be
minimal due to historical impacts from anthropogenic activities such as
stream or river channelization. EPA notes that these examples are not
representative of all sites whose facilities use cooling water intake
structures and that these examples may not always reflect subsequent
action that may have been taken to address these impacts on a site-
specific basis. (Facility reports documenting the efficacy of more
recently installed control technologies are not always available to the
Agency.) With this background, EPA provides the following examples,
illustrating that the impacts attributable to impingement

[[Page 17138]]

and entrainment at individual facilities may result in appreciable
losses of early life stages of fish and shellfish (e.g., three to four
billion individuals annually \24\), serious reductions in forage
species and recreational and commercial landings (e.g., 23 tons lost
per year \25\), and extensive losses over relatively short intervals of
time (e.g., one million fish lost during a three-week study
period).\26\
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\24\ EPA Region IV. 1979. Brunswick Nuclear Steam Electric
Generating Plant of Carolina Power and Light Company, historical
summary and review of section 316(b) issues.
\25\ EPA Region IV. 1986. Findings and determination under 33
U.S.C. 1326, In the Matter of Florida Power Corporation Crystal
River Power Plant Units 1, 2, and 3, NPDES permit no. FL0000159.
\26\ Thurber, N.J. and D.J. Jude. 1985. Impingement losses at
the D.C. Cook Nuclear Power Plant during 1975-1982 with a discussion
of factors responsible and possible impact on local populations.
Special report no. 115 of the Great Lakes Research Division, Great
Lakes and Marine Waters Center, University of Michigan.
---------------------------------------------------------------------------

In addition, some studies estimating the impact of impingement and
entrainment on populations of key commercial or recreational fish have
predicted substantial declines in population size. This has led to
concerns that some populations may be altered beyond recovery. For
example, a modeling effort evaluating the impact of entrainment
mortality on a representative fish species in the Cape Fear estuarine
system predicted a 15 to 35 percent reduction in the species
population.\27\ More recent modeling studies of Mount Hope Bay,
Massachusetts, predicted 87 percent reductions in overall finfish
abundance (see Brayton Point Generating Station discussion below for
additional detail.) EPA acknowledges that existing fishery resource
baselines may be inaccurate.\28\ Further, according to one article,
``[e]ven seemingly gloomy estimates of the global percentage of fish
stocks that are overfished are almost certainly far too low.'' \29\
Thus, EPA is concerned that historical overfishing may have increased
the sensitivity of aquatic ecosystems to subsequent disturbance, making
them more vulnerable to human impact and potential collapse.
---------------------------------------------------------------------------

\27\ EPA Region IV. 1979. Brunswick Nuclear Steam Electric
Generating Plant of Carolina Power and Light Company, historical
summary and review of section 316(b) issues.
\28\ Watson, R. and D. Pauly. 2001. Systematic distortions in
world fisheries catch trends. Nature 414-534-536.
\29\ Jackson J.B.C., M.X. Kirby, W.H. Berger, K.A. Bjorndal,
L.W. Botsford, B.J. Bourque, R.H. Bradbury, R. Cooke, J. Erlandson,
J.A. Estes, T.P. Hughes, S. Kidwell, C.B. Lange, H.S. Lenihan, J.M.
Pandolfi, C.H. Peterson, R.S. Steneck, M.J. Tegner, and R.R. Warner,
2001. Historical overfishing and the recent collapse of coastal
ecosystems. Science 293(5530): 629-638.
---------------------------------------------------------------------------

Further, studies of entrainment at five Hudson River power plants
during the 1980s predicted year-class reductions ranging from six
percent to 79 percent, depending on the fish species.\30\ An updated
analysis completed in 2000 of entrainment at three of these power
plants predicted year-class reductions of up to 20 percent for striped
bass, 25 percent for bay anchovy, and 43 percent for Atlantic tom cod,
even without assuming 100 percent mortality of entrained organisms.\31\
The New York Department of Environmental Conservation concluded that
these reductions in year-class strength were ``wholly unacceptable''
and that any ``compensatory responses to this level of power plant
mortality could seriously deplete any resilience or compensatory
capacity of the species needed to survive unfavorable environmental
conditions.'' \32\
---------------------------------------------------------------------------

\30\ Boreman J. and P. Goodyear. 1988. Estimates of entrainment
mortality for striped bass and other fish species inhabiting the
Hudson River Estuary. American Fisheries Society Monograph 4:152-
160.
\31\ Consolidated Edison Company of New York. 2000. Draft
environmental impact statement for the state pollutant discharge
elimination system permits for Bowline Point, Indian Point 2 & 3,
and Roseton steam electric generating stations.
\32\ New York Department of Environmental Conservation (NYDEC).
2000. Internal memorandum provided to the USEPA on NYDEC's position
on SPDES permit renewals for Roseton, Bowline Point 1 & 2, and
Indian Point 2 & 3 generating stations.
---------------------------------------------------------------------------

In contrast, facilities sited on waterbodies previously impaired by
anthropogenic activities such as channelization may demonstrate limited
entrainment and impingement losses. The Neal Generating Complex
facility, located near Sioux City, Iowa, on the Missouri River is coal-
fired and utilizes once-through cooling systems. According to a ten-
year study conducted from 1972-82, the Missouri River aquatic
environment near the Neal complex was previously heavily impacted by
channelization and very high flow rates meant to enhance barge traffic
and navigation.\33\ These anthropogenic changes to the natural river
system resulted in significant losses of habitat necessary for
spawning, nursery, and feeding. At this facility, fish impingement and
entrainment by cooling water intakes were found to be minimal.
---------------------------------------------------------------------------

\33\ Morningside College. 1982. Missouri River aquatic ecology
studies. Prepared for Iowa Public Service Company, Sioux City, Iowa.
---------------------------------------------------------------------------

The following are summaries of other, documented examples of
impacts occurring at existing facilities sited on a range of waterbody
types. Also, see the Case Study Document and the benefits discussion in
Section IX of this notice.
Brayton Point Generating Station. The Brayton Point Generating
Station is located on Mt. Hope Bay, in Somerset, Massachusetts, within
the northeastern reach of Narragansett Bay. Because of problems with
electric arcing caused by salt drift from an open spray pod design
located near transmission wires, and lack of fresh water to replace the
salt water used for the closed-cycle recirculating spray pod cooling
water system, the company converted Unit 4 from a closed-cycle,
recirculating system to a once-through cooling water system in July
1984. The modification of Unit 4 resulted in a 41 percent increase in
coolant flow, amounting to a maximum average intake flow of
approximately 1.3 billion gallons per day and increased thermal
discharge to the bay.\34\ An analysis of fisheries data by the Rhode
Island Division of Fish and Wildlife using a time series-intervention
model showed an 87 percent reduction in finfish abundance in Mt. Hope
Bay coincident with the Unit 4 modification.\35\ The analysis also
indicated that, in contrast, finfish abundance trends have been
relatively stable in adjacent coastal areas and portions of
Narragansett Bay that are not influenced by the operation of Brayton
Point station. Thus, overall finfish biomass and finfish species
diversity declined in Mount Hope Bay but not in Narragansett Bay. There
appear to be multiple, interacting factors that influence these
declines including overfishing and climate change as well as
temperature increases from thermal discharges and impingement and
entrainment losses associated with the Brayton Point facility.
---------------------------------------------------------------------------

\34\ Metcalf & Eddy. 1992. Brayton Point station monitoring
program technical review. Prepared for USEPA.
\35\ Gibson, M. 1995 (revised 1996). Comparison of trends in the
finfish assemblages of Mt. Hope Bay and Narragansett Bay in relation
to operations of the New England Power Brayton Point station. Rhode
Island Division of Fish and Wildlife, Marine Fisheries Office.
---------------------------------------------------------------------------

San Onofre Nuclear Generating Station. The San Onofre Nuclear
Generating Station (SONGS) is located on the coastline of the Southern
California Bight, approximately 2.5 miles southeast of San Clemente,
California.\36\ The marine portions of Units 2 and 3, which are once-
through, open-cycle cooling systems, began commercial operation in
August 1983 and April 1984, respectively.\37\ Since

[[Page 17139]]

then, many studies evaluated the impact of the SONGS facility on the
marine environment.
---------------------------------------------------------------------------

\36\ Southern California Edison. 1988. Report on 1987 data:
marine environmental analysis and interpretation, San Onofre Nuclear
Generating Station.
\37\ Ibid.
---------------------------------------------------------------------------

In a normal (non-El Nino) year, an estimated 121 tons of midwater
fish (primarily northern anchovy, queenfish, and white croaker) may be
entrained at SONGS.\38\ The fish lost include approximately 350,000
juveniles of white croaker, a popular sport fish; this number
represents 33,000 adult individuals or 3.5 tons of adult fish. Within 3
kilometers of SONGS, the density of queenfish and white croaker in
shallow-water samples decreased by 34 and 36 percent, respectively.
Queenfish declined by 50 to 70 percent in deepwater samples.\39\ In
contrast, relative abundances of bottom-dwelling adult queenfish and
white croaker increased in the vicinity of SONGS.\40\ Increased numbers
of these and other bottom-dwelling species were believed to be related
to the enriching nature of SONGS discharges, which in turn support
elevated numbers of prey items for bottom fish.\41\
---------------------------------------------------------------------------

\38\ Swarbrick, S. and R.F. Ambrose. 1989. Technical report C:
entrapment of juvenile and adult fish at SONGS. Prepared for Marine
Review Committee.
\39\ Kastendiek, J. and K. Parker. 1988. Interim technical
report: midwater and benthic fish. Prepared for Marine Review
Committee.
\40\ Swarbrick, S. and R.F. Ambrose. 1989. Technical report C:
entrapment of juvenile and adult fish at SONGS. Prepared for Marine
Review Committee.
\41\ Kastendiek, J. and K. Parker. 1988. Interim technical
report: midwater and benthic fish. Prepared for Marine Review
Committee.
---------------------------------------------------------------------------

Pittsburg and Contra Costa Power Plants. The Pittsburg and Contra
Costa Power Plants are located in the San Francisco Bay-Delta Estuary,
California. Several local fish species (e.g., Delta smelt, Sacramento
splittail, chinook salmon, and steelhead) found in the vicinity of the
facilities are now considered threatened or endangered by Sate and/or
Federal authorities. EPA evaluated facility data on impingement and
entrainment rates for these species and estimated that potential losses
of special status fish species at the two facilities may reach 145,003
age 1 equivalents per year resulting from impingement and 269,334 age 1
equivalents per year due to entrainment \42\ Based on restoration costs
for these species, EPA estimates that the value of the potential
impingement losses of these species is $12.8 to 43.2 million per year
and the value of potential entrainment is $25.6 million to $83.2
million per year (all in $2001).
---------------------------------------------------------------------------

\42\ Impingement and entrainment data were obtained from the
2000 Draft Habitat Conservation Plan for the Pittsburg and Contra
Costa facilities. Please see EPA's Case Study Document for detailed
information on EPA's evaluation of impingement and entrainment at
these facilities.
---------------------------------------------------------------------------

Lovett Generating Station. The Lovett Generating Station is located
in Tompkins Cove, New York, on the western shore of the Hudson River.
As a method of reducing ichthyoplankton (free floating fish eggs and
larvae) entrainment at the Lovett station, the Gunderboom Marine Life
Exclusion System was installed in 1995 at the Unit 3 intake structure.
Gunderboom is a woven mesh material initially designed to prevent
waterborne pollutants from entering shoreline environments during
construction or dredging activities. Since its initial installation,
the Gunderboom system has undergone a series of tests and modifications
to resolve problems with fabric clogging, anchoring, and the boom
system. Data from testing in 1998 demonstrated that with the Gunderboom
system in place, entrainment of eggs, larvae, and juveniles was reduced
by 80 percent.\43\
---------------------------------------------------------------------------

\43\ Lawler, Matusky & Skelly Engineers. 1998. Lovett Generating
Station Gunderboom system evaluation program 1998.
---------------------------------------------------------------------------

Ohio River. EPA evaluated entrainment and impingement impacts at
nine in-scope facilities along a 500-mile stretch of the Ohio River as
one of its case studies. Results from these nine facilities were
extrapolated to 20 additional in-scope facilities. All in-scope
facilities spanned a stretch of the Ohio River that extended from the
western portion of Pennsylvania, along the southern border of Ohio, and
into eastern Indiana. Impingement losses for all in-scope facilities
were approximately 11.3 million fish (age 1 equivalents) annually;
entrainment losses totaled approximately 23.0 million fish (age 1
equivalents) annually.\44\ EPA believes that the results from this case
study may not be representative of entrainment and impingement losses
along major U.S. rivers because they are based on limited data
collected nearly 25 years ago. In addition, due to improvements in
water quality and implementation of fishery management plans, fish
populations near these facilities may have increased and therefore
these results may underestimate current entrainment and impingement at
Ohio River facilities.
---------------------------------------------------------------------------

\44\ Please see EPA's Case Study Document for more detailed
information on these facilities and the data and methods used by EPA
to calculate age 1 equivalent losses.
---------------------------------------------------------------------------

Power Plants with Flows Less Than 500 MGD. The following results
from the case studies conducted by EPA under this rulemaking effort
provide an indication of impingement and entrainment rates for
facilities with lower flows than the previous examples. Impingement and
entrainment rates are expressed as numbers of age 1 equivalents,
calculated by EPA from the impingement and entrainment data provided in
facility monitoring reports.\45\
---------------------------------------------------------------------------

\45\ Ibid.
---------------------------------------------------------------------------

The Pilgrim Nuclear Power Station, located on Cape Cod
Bay, Massachusetts, has an intake flow of 446 MGD.\46\ The average
annual number of age 1 equivalents impinged at Pilgrim from 1974-1999
was 52,800 fish. The average annual number entrained was 14.4 million
fish.
---------------------------------------------------------------------------

\46\ U.S. Department of Energy. 1999. Form EIA-767 (1999).
Steam-electric plant operation and design report. Edison Electric
Institute.
---------------------------------------------------------------------------

The Miami Fort Power Plant, located on the Ohio River
about 20 miles downstream of Cincinnati, has an intake flow of about
98.7 MGD \47\ and combined average impingement and entrainment of about
1.8 million age 1 equivalent fish per year (298,027 impinged and
1,519,679 entrained).
---------------------------------------------------------------------------

\47\ Ibid.
---------------------------------------------------------------------------

The JR Whiting Plant, located in Michigan on Lake Erie
has an intake flow of 308 MGD.\48\ The average annual number of age 1
equivalent fish entrained was 1.8 million. Before installation of a
deterrent net in 1980 to reduce impingement, some 21.5 million age 1
equivalents were lost to impingement at the facility each year. These
losses were reduced by nearly 90 percent with application of the
deterrent net.\49\
---------------------------------------------------------------------------

\48\ Ibid.
\49\ Consumers Power Company. 1984, 1988, and 1992 reports of
deterrent net performance, J.R. Whiting Plant. Prepared for the
Michigan Water Resources Commission.
---------------------------------------------------------------------------

Studies like those described in this section may provide only a
partial picture of the severity of environmental impact associated with
cooling water intake structures. Most important, the methods for
evaluating adverse environmental impact used in the 1970s and 1980s,
when most section 316(b) evaluations were performed, were often
inconsistent and incomplete, making detection and consideration of all
impacts difficult in some cases, and making cross-facility comparison
difficult for developing a national rule. For example, some studies
reported only gross fish losses; others reported fish losses on the
basis of species and life stage; still others reported percent losses
of the associated population or subpopulation (e.g., young-of-year
fish). Recent advances in environmental assessment techniques provide
new and in some cases better tools for monitoring impingement and
entrainment and detecting impacts associated with the

[[Page 17140]]

operation of cooling water intake structures.50 51
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\50\ Schmitt, R.J. and C.W. Osenberg. 1996. Detecting ecological
impacts. Academic Press, San Diego, CA.
\51\ EPRI. 1999. Catalog of assessment methods for evaluating
the effects of power plant operations on aquatic communities. TR-
112013, EPRI, Palo Alto, CA.
---------------------------------------------------------------------------

VI. Best Technology Available for Minimizing Adverse Environmental
Impact at Phase II Existing Facilities

A. What Is the Best Technology Available for Minimizing Adverse
Environmental Impact at Phase II Existing Facilities?

1. How Will Requirements Reflecting Best Technology Available for
Minimizing Adverse Environmental Impact Be Established for My Phase II
Existing Facility?
Today's proposed rule would establish national minimum performance
requirements for the location, design, construction, and capacity of
cooling water intake structures at Phase II existing facilities. These
requirements would represent best technology available for minimizing
adverse environmental impact based on the type of waterbody in which
the intake structure is located, the volume of water withdrawn by a
facility, and the facility's capacity utilization rate. Under this
proposal, EPA would set technology-based performance requirements, but
the Agency would not mandate the use of any specific technology.
A facility may use one of three different methods for establishing
the best technology available for minimizing adverse environmental
impact. Under the first method, a facility would demonstrate to the
Director issuing the permit that the facility's existing design and
construction technologies, operational measures, and/or restoration
measures already meet the national minimum performance requirements
that EPA is proposing.
Under the second method, a facility would select design and
construction technology, operational measures, restoration measures or
some combination thereof. The facility would then demonstrate to the
Director that its selected approach would meet the performance
requirements EPA is proposing.
Under the third method, a facility would calculate its cost of
complying with the presumptive performance requirements and compare
those costs either to the compliance costs EPA estimated in the
analysis for this proposed rule or to a site-specific determination of
the benefits of meeting the presumptive performance requirements. If
the facility's costs are significantly greater than EPA's estimated
costs or site-specific benefits, the facility would qualify for a site-
specific determination of best technology available.
The Agency discusses each of these three methods for compliance and
the proposed presumptive minimum performance requirements in greater
detail below. EPA invites comments on all aspects of this proposed
regulatory framework as well as the alternative regulatory approaches
discussed later in this section.
a. What Are the Performance Standards for the Location, Design,
Construction, and Capacity of Cooling Water Intake Structures To
Reflect Best Technology Available for Minimizing Adverse Environmental
Impact?
EPA is proposing four performance standards at Sec. 125.94(b), all
of which reflect best technology available for minimizing adverse
environmental impact from cooling water intake structures. Under
proposed Sec. 125.94(b)(1), any owner or operator able to demonstrate
that a facility employs technology that reduces intake capacity to a
level commensurate with the use of a closed-cycle, recirculating
cooling system would meet the performance requirements proposed in
today's rule. Use of this type of technology satisfies both impingement
and entrainment performance requirements for all waterbodies.
The performance standards at proposed Sec. 125.94(b)(2),(3), and
(4) are based on the type of waterbody in which the intake structure is
located, the volume of water withdrawn by a facility, the facility
capacity utilization rate, and the location of a facility's intake
structure in relation to fishery resources of concern to permit
authorities or fishery managers. Under the proposed rule, EPA would
group waterbodies into five categories: (1) Freshwater rivers or
streams, (2) lakes or reservoirs, (3) Great Lakes, (4) tidal rivers and
estuaries, and (5) oceans. The Agency considers location to be an
important factor in addressing adverse environmental impact caused by
cooling water intake structures. Because different waterbody types have
different potential for adverse environmental impact, the requirements
proposed to minimize adverse environmental impact would vary by
waterbody type. For example, estuaries and tidal rivers have a higher
potential for adverse impact because they contain essential habitat and
nursery areas for the vast majority of commercial and recreational
important species of shell and fin fish, including many species that
are subject to intensive fishing pressures. Therefore, these areas
require a higher level of control that includes both impingement and
entrainment controls. Organisms entrained may include small species of
fish and immature life stages (eggs and larvae) of many species that
lack sufficient mobility to move away from the area of the intake
structure. The reproductive strategies of many estuarine species
include pelagic or planktonic larvae, which are very susceptible to
entrainment.
EPA discussed these concepts in a Notice of Data Availability
(NODA) for the new facility rule (66 FR 28853, May 25, 2001) and
invited comment on a number of documents which may support a judgment
that the reproductive strategies of tidal river and estuarine species,
together with other physical and biological characteristics of those
waters, which make them more susceptible than other waterbodies to
impacts from cooling water intake structures. In addition to these
documents, the NODA presented information regarding the low entrainment
susceptibility of non-tidal freshwater rivers and streams to cooling
water intake structure impacts. This information also may be relevant
in determining whether tidal rivers and estuaries are more sensitive to
cooling water intake structures than some parts of other waterbodies.
In general, commenters on the NODA agreed that location is an
important factor in assessing the impacts of cooling water intake
structure, but that creating a regulatory framework to specifically
address locational issues would be extremely difficult. In the end, EPA
elected not to vary requirements for new facilities on the basis of
whether a cooling water intake structure is located in one or another
broad category of waterbody type. Instead, EPA promulgated the same
technology-based performance requirements for all new facilities,
regardless of the waterbody type after finding this approach to be
economically practicable.
For the Phase II existing facility rule, which would establish the
best technology available for minimizing adverse environmental impact
in all waterbody types, EPA is again proposing an approach that it
believes is economically practicable, but is proposing to require the
most control in areas where such controls would yield the greatest
reduction in impingement and entrainment. EPA believes that section
316(b) affords EPA such

[[Page 17141]]

discretion because unlike the sections authorizing technology-based
effluent limitations guidelines and new source performance standards
for the discharge of pollutants, section 316(b) expressly states that
its objective is to require best technology available for minimizing
adverse environmental impact. EPA believes this language affords the
Agency discretion to consider the environmental effects of various
technology options. Therefore, EPA is proposing to vary technology-
based performance requirements by waterbody type, requiring more
effective controls in waterbodies with higher overall productivity or
greater sensitivity to impingement and entrainment. (Appendix 1 to the
preamble presents the proposed regulatory framework in a flow chart).
Under this approach, facilities that operate at less than 15
percent capacity utilization would be required to have only impingement
control technology. This level of control was found to be the most
economically practicable given these facilities' reduced operating
levels. In addition, these facilities tend to operate most often in
mid-winter or late summer, times of peak energy demand but periods of
generally low abundance of entrainable life stages of fish and
shellfish. The flow or capacity of a cooling water intake structure is
also a primary factor affecting the entrainment of organisms. The lower
the intake flow at a site, the lesser the potential for entrained
organisms.
As in the Phase I (new facility) rule, EPA is proposing to set
performance standards for minimizing adverse environmental impact based
on a relatively easy to measure and certain metric-reduction of
impingement mortality and entrainment. EPA is choosing this approach to
provide certainty about permitting requirements and to streamline and
speed the issuance of permits.
Facilities with cooling water intake structures located in a
freshwater river or stream would have different requirements depending
on the proportion of the source waterbody that is withdrawn. If the
intake flow is 5 percent or less of the source water annual mean flow,
then the facility would be required to reduce fish and shellfish
impingement mortality by 80 to 95 percent. If the intake flow is 5
percent or more of the source water annual mean flow, then the facility
would be required to reduce fish and shellfish impingement mortality by
80 to 95 percent and reduce entrainment by 60 to 90 percent. As
described in the new facility proposed rule (65 FR 49060) and NODA (66
FR 28853), EPA believes that, absent entrainment control technologies
entrainment, at a particular site is proportional to intake flow at
that site. As we discuss above, EPA believes it is reasonable to vary
the suite of technologies by the potential for adverse environmental
impact in a waterbody type. EPA is therefore proposing to limit the
requirement for entrainment control in fresh waters to those facilities
that withdraw the largest proportion of water from freshwater rivers or
streams.
Facilities with cooling water intake structures located in a lake
or reservoir would have to implement impingement control technology to
reduce impingement mortality by 80 to 95 percent for fish and
shellfish, and, if they expand their design intake capacity, the
increase in intake flow must not disrupt the natural thermal
stratification or turnover pattern of the source water. Cooling water
intake structures withdrawing from the Great Lakes would be required to
reduce fish and shellfish impingement mortality by 80 to 95 percent and
to reduce entrainment by 60 to 90 percent. As described in the new
facility proposed rule (65 FR 49060) and NODA (66 FR 28853), EPA
believes that the Great Lakes are a unique system that should be
protected to a greater extent than other lakes and reservoirs. The
Agency is therefore proposing to specify entrainment controls as well
as impingement controls for the Great Lakes.
Facilities with cooling water intake structures located in a tidal
river or estuary would need to implement impingement control technology
to reduce impingement mortality by 80 to 95 percent and entrainment by
60 to 90 percent for fish and shellfish. As discussed above, estuaries
and tidal rivers are more susceptible than other water bodies to
adverse impacts from impingement and entrainment.
Facilities with cooling water intake structures located in an ocean
would have to implement impingement control technology to reduce
impingement mortality by 80 to 95 percent and entrainment by 60 to 90
percent for fish and shellfish. EPA is establishing requirements for
facilities withdrawing from oceans that are similar to those proposed
for tidal rivers and estuaries because the coastal zone of oceans
(where cooling water intakes withdraw) are highly productive areas.
(See the new facility proposed rule (65 FR 45060) and documents in the
record (Docket # W-00-03) such as 2-013A through O, 2-019A-R11, 2-019A-
R12, 2-019A-R33, 2-019A-R44, 2-020A, 3-0059.) EPA is also concerned
about the extent to which fishery stocks that rely upon tidal rivers,
estuaries and oceans for habitat are overutilized and seeks to minimize
the impact that cooling water intake structures may have on these
species or forage species on which these fishery stocks may depend.
(See documents 2-019A-R11, 2-019A-R12, 2-019A-R33, 2-019A-R44, 2-020A,
2-024A through O, and 3-0059 through 3-0063 in the record of the Final
New Facility Rule (66 FR 65256), Docket # W-00-03).
EPA is proposing a range of impingement mortality and entrainment
reduction in its requirements for facilities that are required to
select and implement design and construction technologies or
operational or restoration measures to minimize potential impact from
their cooling water intake structures. The calculation baseline against
which compliance with the performance standards should be assessed is a
shoreline intake with the capacity to support once-through cooling and
no impingement mortality or entrainment controls. In many cases
existing technologies at the site achieve some reduction in impingement
and entrainment when compared to this baseline. In such cases,
impingement mortality and entrainment reductions (relative to the
calculated baseline) achieved by these existing technologies should be
counted toward compliance with the performance standards.
EPA is proposing performance ranges rather than a single
performance benchmark because of the uncertainty inherent in predicting
the efficacy of a technology on a site-specific basis. The lower end of
the range is being proposed as the percent reduction that EPA, based on
the available efficacy data, has determined that all facilities could
achieve if they were to implement available technologies and
operational measures on which the performance standards are based. (See
Chapter 5, ``Efficacy of Cooling Water Intake Structure Technologies,''
of the Technical Development Document for the Final Rule for New
Facilities, EPA-821-R-01-036, November 2001). The baseline for
assessing performance is a Phase II existing facility with a shoreline
intake with the capacity to support once-through cooling and no
impingement or entrainment controls. The lower end of the range would
take into account sites where there may be more fragile species that
may not have a high survival rate after coming in contact with fish
protection technologies at the cooling water intake structure (i.e.,
fine mesh screens). The higher end of the range is being proposed as a
percent reduction that

[[Page 17142]]

available data show many facilities can and have achieved with the
available technologies on which the performance standards are based.
Some facilities may be able to exceed the high end of the performance
range, though they would not be required to do so by today's proposed
rule. In specifying a range, EPA anticipates that facilities will
select technologies or operational measures to achieve the greatest
cost-effective reduction possible (within today's proposed performance
range) based on conditions found at their site, and that Directors will
review the facility's application to ensure that appropriate
alternatives were considered. EPA also expects that some facilities may
be able to meet these performance requirements by selecting and
implementing a suite (i.e., more than one) of technologies and
operational measures and/or, as discussed below, by undertaking
restoration measures. EPA invites comment on whether the Agency should
establish regulatory requirements to ensure that facilities achieve the
greatest possible reduction (within the proposed ranges) that can be
achieved at their site using the technologies on which the performance
standards are based. EPA also invites comment on whether EPA should
leave decisions about appropriate performance levels for a facility to
the Director, provided that the facility will achieve performance that
is no lower than the bottom of the performance ranges in today's
proposal.
EPA based the presumptive performance standards specified at
125.94(b), (c), and (d) for impingement mortality reduction, compared
with conventional once-through systems, on the following technologies:
(1) Design and construction technologies such as fine and wide-mesh
wedgewire screens, as well as aquatic filter barrier systems, that can
reduce mortality from impingement by up to 99 percent or greater
compared with conventional once-through systems; (2) barrier nets that
may achieve reductions of 80 to 90 percent; and (3) modified screens
and fish return systems, fish diversion systems, and fine mesh
traveling screens and fish return systems that have achieved reductions
in impingement mortality ranging from 60 to 90 percent as compared to
conventional once-through systems. (See Chapter 5 of the Technical
Development Document for the Final Rule for New Facilities.)
Less full-scale performance data are available for entrainment
reduction. Aquatic filter barrier systems, fine mesh wedgewire screens,
and fine mesh traveling screens with fish return systems achieve 80 to
90 percent greater reduction in entrainment compared with conventional
once-through systems. EPA notes that screening to prevent organism
entrainment may cause impingement of those organisms instead. Questions
regarding impingement survival of relatively delicate fish, larvae, and
eggs would need to be considered by the Director and the facility in
evaluating the efficacy of the technology. In addition, all of these
screening-and-return technologies would need to be evaluated on a case-
by-case basis to determine if they are capable of screening and
protecting the specific species of fish, larvae and eggs that are of
concern at a particular facility.
Several additional factors suggest that the performance levels
discussed above and described in more detail in Chapter 5 of the
Technical Development Document for the Final New Facility Rule can be
improved. First, some of the performance data reviewed is from the
1970's and 1980's and does not reflect recent developments and
innovations (e.g., aquatic filter barrier systems, sound barriers).
Second, these conventional barrier and return system technologies have
not been optimized on a widespread level to date, as would be
encouraged by this rule. Third, EPA believes that many facilities could
achieve further reductions (estimated at 15-30 percent) in impingement
mortality and entrainment by providing for seasonal flow restrictions,
variable speed pumps, and other operational measures and innovative
flow reduction alternatives. For additional discussion, see section
5.5.11 in the Technical Development Document for the new facility rule.
EPA notes that available data described in Chapter 5 of the
Technical Development Document for the Final Rule for New Facilities
suggest that closed-cycle, recirculating cooling systems (e.g., cooling
towers or ponds) can reduce mortality from impingement by up to 98
percent and entrainment by up to 98 percent when compared with
conventional once-through systems. Therefore, although closed-cycle,
recirculating cooling is not one of the technologies on which the
presumptive standards are base, use of a closed-cycle, recirculating
cooling system would achieve the presumptive standards. The proposed
rule, at Sec. 124.94(b)(1) would thus establish the use of a closed-
cycle, recirculating cooling system as one method for meeting the
presumptive standards.
Based on an analysis of data collected through the detailed
industry questionnaire and the short technical questionnaire, EPA
believes that today's proposed rule would apply to 539 existing steam
electric power generating facilities. Of these, 53 facilities that
operate at less than 15 percent capacity utilization would potentially
require only impingement controls, with 34 of these estimated to
actually require such controls. (The remaining 19 facilities have
existing impingement controls). Of the remaining 486 facilities, the
proposed rule would not require any changes at approximately 69 large
existing facilities with recirculating wet cooling systems (e.g., wet
cooling towers or ponds).
Of the remaining 417 steam electric power generating facilities
(i.e., those that exceed 15 percent capacity utilization and have non-
recirculating systems), EPA estimates that 94 are located on freshwater
lakes or reservoirs, 13 are located on the Great Lakes, 109 are located
on oceans, estuaries, or tidal rivers, and 201 are located on
freshwater rivers or streams.
Of the 94 Phase II existing facilities located on freshwater lakes
or reservoirs, EPA estimates that 67 of these facilities would have to
install impingement controls and that 27 facilities already have
impingement controls that meet the proposed rule requirements. As for
existing steam electric power generating facilities located on the
Great Lakes, EPA estimates that the proposed rule would require all 13
such facilities to install impingement and entrainment controls.
Of the 109 facilities located on estuaries, tidal rivers, or
oceans, EPA estimates that 15 facilities would already meet today's
proposed impingement and entrainment controls. The remaining 94
facilities would need to install additional technologies to reduce
impingement, entrainment, or both.
For Phase II existing facilities located on freshwater river or
streams, the proposed rule would establish an intake flow threshold of
five (5) percent of the mean annual flow. Facilities withdrawing more
than this threshold would have to meet performance standards for
reducing both impingement mortality and entrainment. Facilities
withdrawing less than the threshold would only have to meet performance
standards for reducing impingement mortality. EPA estimates that of 201
facilities located on freshwater river or streams, 94 are at or below
the flow threshold, and that only 53 of these facilities would have to
install additional impingement controls (the remaining facilities have
controls in place to meet the proposed rule requirements). EPA
estimates that 107 facilities exceed the flow threshold. Twenty one
(21) of these facilities have

[[Page 17143]]

sufficient controls in place; 86 would require entrainment or
impingement and entrainment controls.
b. How Could a Phase II Existing Facility Use Existing Design and
Construction Technologies, Operational Measures, and/or Restoration
Measures To Establish Best Technology Available for Minimizing Adverse
Environmental Impact?
Under the first option for determination of best technology
available, as specified in proposed Sec. 125.94(a)(1), an owner or
operator of a Phase II existing facility may demonstrate to the permit-
issuing Director that it already employs design and construction
technologies, operational measures, or restoration measures that meet
the performance requirements proposed today. To do this the owner or
operator would calculate impingement mortality and entrainment
reductions of existing technologies and measures relative to the
calculation baseline and compare these reductions to those specified in
the applicable performance standards. EPA expects that owners and
operators of some facilities may be able to demonstrate compliance
through a suite of (i.e., multiple) existing technologies, operational
measures, and/or restoration measures.
To adequately demonstrate the efficacy of existing technologies,
operational measures, and/or restoration measures, a facility owner or
operator must conduct and submit for the Director's review a
Comprehensive Demonstration Study as specified in proposed
Sec. 125.95(b) and described in section VII of today's preamble. In
this Study, the owner or operator would characterize the impingement
mortality and entrainment due to the cooling water intake structure,
describe the nature and operation of the intake structure, and describe
the nature and performance levels of the existing technologies,
operational measures, and restoration measures for mitigating
impingement and entrainment impacts. Owners and operators may use
existing data for the Study as long as it adequately reflects current
conditions at the facility and in the waterbody from which the facility
withdraws cooling water.
c. How Could a Phase II Existing Facility Use Newly Selected Design and
Construction Technologies, Operational Measures, and/or Restoration
Measures To Establish Best Technology Available for Minimizing Adverse
Environmental Impact?
Under the second option for determination of best technology
available specified in proposed Sec. 125.94(a)(2), an owner or operator
of a Phase II existing facility that does not already employ sufficient
design and construction technologies, operational measures, or
restoration measures to meet the proposed performance standards must
select additional technologies and operational or restoration measures.
The owner or operator must demonstrate to the permit-issuing Director
that these additions will, in conjunction with any existing
technologies and measures at the site, meet today's proposed
performance standards. EPA expects that some facilities may be able to
meet their performance requirements by selecting and implementing a
suite (i.e., more than one) of technologies, operational, or
restoration measures.
To adequately demonstrate the efficacy of the selected
technologies, operational measures, and/or restoration measures, a
facility must conduct and submit for the Director's review a
Comprehensive Demonstration Study as specified in proposed
Sec. 125.95(b) and described in section VII of today's preamble. In
this Study, the owner or operator would characterize the impingement
mortality and entrainment due to the cooling water intake structure,
describe the nature and operation of the intake structure, and describe
the nature and performance levels of both the existing and proposed
technologies, operational measures, and restoration measures for
mitigating impingement and entrainment impacts. Owners and operators
may use existing data for the Study as long as it adequately reflects
current conditions at the facility and in the waterbody from which the
facility withdraws cooling water.
If compliance monitoring determines that the design and
construction, operating measures, or restoration measures prescribed by
the permit have been properly installed and were properly operated and
maintained, but were not achieving compliance with the applicable
performance standards, the Director could modify permit requirements
consistent with existing NPDES program regulations (e.g., 40 CFR
122.62, 122.63, and 122.41) and the provisions of this proposal. In the
meantime, the facility would be considered in compliance with its
permit as long as it was satisfying all permit conditions. EPA solicits
comment on whether the proposed regulation should specify that proper
design, installation, operation and maintenance would satisfy the terms
of the permit until the permit is reissued pursuant to a revised Design
and Construction Technology Plan. If EPA were to adopt this approach,
EPA would specify in the regulations that the Director should require
as a permit condition the proper design, installation, operation and
maintenance of design and construction technologies and operational
measures rather than compliance with performance standards.
d. How Could a Phase II Existing Facility Qualify for a Site-Specific
Determination of Best Technology Available for Minimizing Adverse
Environmental Impact?
Under the third option for determination of best technology
available, specified in proposed Sec. 125.94(a)(3), the owner or
operator of a Phase II existing facility may demonstrate to the
Director that a site-specific determination of best technology
available is appropriate for the cooling water intake structure(s) at
that facility if the owner or operator can meet one of the two cost
tests specified in proposed Sec. 125.94(c)(1). To be eligible to pursue
this approach, the facility must first demonstrate to the Director
either: (1) that its costs of compliance with the applicable
performance standards specified in Sec. 125.94(b) would be
significantly greater than the costs considered by the Administrator in
establishing such performance standards; or (2) that the facility's
costs would be significantly greater than the benefits of complying
with the performance standards at the facility's site. A discussion of
applying the cost test is provided in section VI.A.12 of this proposed
rule. A discussion of applying the test in which costs are compared to
benefits is provided in Section VI.A.8.
To adequately demonstrate the efficacy of the selected
technologies, operational measures, and/or restoration measures
considered in the site-specific cost tests, a facility must conduct and
submit for the Director's review a Comprehensive Demonstration Study as
specified in proposed Sec. 125.95(b) and described in section VII of
today's preamble. In this Study, the owner or operator would
characterize the impingement mortality and entrainment due to the
cooling water intake

[[Page 17144]]

structure, describe the nature and operation of the intake structure,
and describe the nature and performance levels of the existing
technologies, operational measures, and restoration measures for
mitigating impingement and entrainment impacts. Owners or operators
would also need to document the costs to the facility of any additional
technologies or measures that would be needed to meet the performance
standards and in the case of the site-specific cost to benefits test,
the monetized benefits of meeting the standards. Owners and operators
may use existing data for the Study as long as it adequately reflects
current conditions at the facility and in the waterbody from which the
facility withdraws cooling water.
Where a Phase II existing facility demonstrates that it meets
either of the cost tests, the Director is to make a site-specific
determination of best technology available for minimizing adverse
environmental impact. This determination would be based on less costly
design and construction technologies, operational measures, and/or
restoration measures proposed by the facility and approved by the
Director. The Director would approve less costly technologies to the
extent justified by the significantly greater cost.
Phase II Existing facilities that pursue this option would have to
assess the nature and degree of adverse environmental impact associated
with their cooling water intake structures, and then identify the best
technology available to minimize such impact. Owners and operators
would be required to submit to the Director for approval a Site-
Specific Technology Plan. This plan would be based on a Comprehensive
Cost Evaluation Study and a Valuation of Monetized Benefits of Reducing
Impingement and Entrainment, as required by proposed
Sec. 125.95(b)(6)(i) and (ii). (See section VII). The Plan would
describe the design and operation of all design and construction
technologies, operational measures, and restoration measures selected,
and provide information that demonstrates the effectiveness of the
selected technologies or measures for reducing the impacts on the
species of concern.
To document that its site-specific costs would be significantly
greater than those EPA considered, the facility would need to develop
engineering cost estimates as part of its Comprehensive Cost Evaluation
Study. The facility would then consider the model plants presented in
EPA's Technical Development Document, determine which model plant most
closely matches its fuel source, mode of electricity generation,
existing intake technologies, waterbody type, geographic location, and
intake flow and compare its engineering estimates to EPA's estimated
cost for this model plant .
2. What Available Technologies Are Proposed as Best Technology
Available for Minimizing Adverse Environmental Impact?
Currently, 14 percent of Phase II existing facilities potentially
subject to this proposal already have a closed-cycle recirculating
cooling water system (69 facilities operating at 15 percent capacity
utilization or more and 4 facilities operating at less than 15 percent
capacity utilization). In addition, 50 percent of the remaining
potentially regulated facilities have some other technology in place
that reduces impingement or entrainment. Thirty-three percent of these
facilities have fish handling or return systems that reduce the
mortality of impinged organisms.
EPA finds that the design and construction technologies necessary
to meet the proposed requirements are commercially available and
economically practicable, because facilities can and have installed
many of these technologies years after a facility began operation.
Typically, additional design and construction technologies such as fine
mesh screens, wedgewire screens, fish handling and return systems, and
aquatic fabric barrier systems can be installed during a scheduled
outage (operational shutdown). Referenced below are examples of
facilities that installed these technologies after they initially
started operating.
Lovett Generating Station. A 495 MW facility (nameplate, gas-fired
steam), Lovett is located in Tomkins Cove, New York, along the Hudson
River. The facility first began operations in 1949 and has 3 generating
units with once-through cooling systems. In 1994, Lovett began the
testing of an aquatic filter fabric barrier system to reduce
entrainment, with a permanent system being installed the following
year. Improvements and additions were made to the system in 1997, 1998,
and 1999, with some adjustments being accepted as universal
improvements for all subsequent installations of this vendor's
technology at other locations.
Big Bend Power Station. Situated on Tampa Bay, Big Bend is a 1998
MW (nameplate, coal-fired steam) facility with 4 generating units. The
facility first began operations in 1970 and added generating units in
1973, 1976, and 1985. Big Bend supplies cooling water to its once-
through cooling water systems via two intake structures. When the
facility added Unit 4 in 1985, regulators required the facility to
install additional intake technologies. A fish handling and return
system, as well as a fine-mesh traveling screen (used only during
months with potentially high entrainment rates), were installed on the
intake structure serving both the new Unit 4 and the existing Unit 3.
Salem Generating Station. A 2381 MW facility (nameplate, nuclear),
Salem is located on the Delaware River in Lower Alloways Creek
Township, New Jersey. The facility has two generating units, both of
which use once-through cooling and began operations in 1977. In 1995,
the facility installed modified Ristroph screens and a low-pressure
spray wash with a fish return system. The facility also redesigned the
fish return troughs to reduce fish trauma.
Chalk Point Generating Station. Located on the Patuxent River in
Price George's County, Maryland, Chalk Point has a nameplate capacity
of 2647 MW (oil-fired steam). The facility has 4 generating units and
uses a combination of once-through and closed cycle cooling (two once-
through systems serving two generating units and one recirculating
system with a tower serving the other two generating units). In 1983,
the facility installed a barrier net, followed by a second set of
netting in 1985, giving the facility a coarse mesh (1.25") outer net
and a fine mesh (.75") inner net. The barrier nets are anchored to a
series of pilings at the mouth of the intake canal that supplies the
cooling water to the facility and serve to reduce both entrainment and
the volume of trash taken in at the facility.
EPA believes that the technologies used as the basis for today's
proposal are commercially available and economically practicable (see
discussion below) for the industries affected as a whole, and have
negligible non-water quality environmental impacts, including energy
impacts. The proposed option would meet the requirement of section
316(b) of the CWA that the location, design, construction, and capacity
of cooling water intake structures reflect the best technology
available for minimizing adverse environmental impact.
3. Economic Practicability
EPA believes that the requirements of this proposal are
economically practicable. EPA examined the annualized post-tax
compliance costs of the proposed rule as a percentage of annual
revenues to determine whether

[[Page 17145]]

the options are economically practicable. This analysis was conducted
both at the facility and firm levels.
a. Facility Level
EPA examined the annualized post-tax compliance costs of the
proposed rule as a percentage of annual revenues, for each of the 550
facilities subject to this proposed rule. \52\ The revenue estimates
are facility-specific baseline projections from the Integrated Planning
Model (IPM) for 2008 (see Section VIII. Economic Analysis of this
document for a discussion of EPA's analyses using the IPM). The results
of this analysis show that the vast majority of facilities subject to
the proposed rule, 409 out of 550, or approximately 74 percent, would
incur annualized costs of less than 1 percent of revenues. Of these,
331 facilities would incur compliance costs of less than 0.5 percent of
revenues. Eighty-two facilities, or 15 percent, would incur costs of
between 1 and 3 percent of revenues, and 46 facilities, or 8 percent,
would incur costs of greater than 3 percent. Eleven facilities are
estimated to be baseline closures, and for one facility, revenues are
unknown. \53\ Exhibit 2 below summarizes these findings.
---------------------------------------------------------------------------

\52\ EPA's 2000 Section 316(b) Industry Survey identified 539
facilities that are subject to this proposed rule. EPA applied
sample weights to the 539 facilities to account for non-sampled
facilities and facilities that did not respond to the survey. The
539 analyzed facilities represent 550 facilities in the industry.
\53\ IPM revenues for 2008 were not available for 11 facilities
estimated to be baseline closures, 10 facilities not modeled by the
IPM, and 9 facilities projected to have zero baseline revenues. EPA
used facility-specific electricity generation and firm-specific
wholesale prices as reported to the Energy Information
Administration (EIA) to calculate the cost-to-revenue ratio for the
19 non-baseline closure facilities with missing information. The
revenues for one of these facilities remained unknown.

Exhibit 2.--Proposed Rule (Facility Level)
------------------------------------------------------------------------
Percent
Annualized cost-to-revenue ratio All of total
phase II phase II
------------------------------------------------------------------------
0.5%.............................................. 331 60
0.5-1.0%.......................................... 78 14
1.0-3.0%.......................................... 82 15
>3.0%............................................. 46 8
Baseline Closure.................................. 11 2
n/a............................................... 1 0
---------------------
Total........................................... 550 100
------------------------------------------------------------------------

b. Firm Level
Facility-leval compliance costs are low compared to facility-level
revenues. However, the firms owning the facilities subject to the
proposed rule may experience greater impacts if they own more than one
facility with compliance costs. EPA therefore also analyzed the
economic practicability of this proposed rule at the firm level. EPA
identified the domestic parent entity of each in-scope facility and
obtained their sales revenue from publicly available data sources (the
1999 Forms EIA-860A, EIA-860B, and EIA-861; and the Dun and Bradstreet
database) as well as EPA's 2000 Section 316(b) Industry Survey. This
analysis showed that 131 unique domestic parent entities own the
facilities subject to this proposed rule. EPA compared the aggregated
annualized post-tax compliance costs for each facility owned by the 131
parent entities to the firms' total sales revenue. Based on the results
from this analysis, EPA concludes that the proposed rule will be
economically practicable at the firm level.
EPA estimates that the compliance costs will comprise a very low
percentage of firm-level revenues. Of the 131 unique entities, 3 would
incur compliance costs of greater than 3 percent of revenues; 10
entities would incur compliance costs of between 1 and 3 percent of
revenues; 12 entities would incur compliance costs of between 0.5 and 1
percent of revenues; and the remaining 104 entities would incur
compliance costs of less than 0.5 percent of revenues.\54\ The
estimated annualized compliance costs represent between 0.002 and 5.3
percent of the entities' annual sales revenue. Exhibit 3 below
summarizes these findings.
---------------------------------------------------------------------------

\54\ Two entities only own Phase II facilities that are
projected to be baseline closures. EPA estimated that for both
entities, the compliance costs incurred would have been less than
0.5 percent of revenues.

Exhibit 3.--Proposed Rule (Facility Level)
------------------------------------------------------------------------
Number of Percentage
Annualized cost-to-revenue ratio phase II of total
entities phase II
------------------------------------------------------------------------
0.5%............................................. 104 79
0.5-1.0%......................................... 12 9
1.0%-3.0......................................... 10 8
>3.0%............................................ 3 2
Baseline Closures................................ 2 2
----------------------
Total.......................................... 131 100
------------------------------------------------------------------------

c. Additional Impacts
As described in Sections VIII and X.J below, EPA also considered
the potential effects of the proposed rule on installed electric
generation capacity, electrical production, production costs, and
electricity prices. EPA determined that the proposed rule would not
lead to the early retirement of any existing generating capacity, and
would have very small or no energy effects. After considering all of
these factors, EPA concludes that the costs of the proposed rule are
economically practicable.
d. Benefits
As described in Section IX., EPA estimates the annualized benefits
of the proposed rule would be $70.3 million for impingement reductions
and $632.4 million for reduced entrainment. For a more detailed
discussion, also see the Economic and Benefits Analysis for the
Proposed Section 316(b) Phase II Existing Facilities Rule.
4. Site-Specific Determination of Best Technology Available
Under today's proposed rule, the owner or operator of an Phase II
existing facility may demonstrate to the Director that a site-specific
determination of best technology available is appropriate for the
cooling water intake structures at that facility if the owner or
operator can meet one of the two cost tests specified under
Sec. 125.94(c)(1). To be eligible to pursue this approach, the facility
must first demonstrate to the Director either (1) that its costs of
compliance with the applicable performance standards specified in
Sec. 125.94(b) would be significantly greater than the costs considered
by the Administrator in establishing such performance standards, or (2)
that its costs of complying with such standards would be significantly
greater than the environmental benefits at the site.
The proposed factors that may justify a site-specific determination
of the best technology available requirements for Phase II existing
facilities differ in two major ways from those in EPA's recently
promulgated rule for new facilities. First, the new facility rule
required costs to be ``wholly disproportionate'' to the costs EPA
considered when establishing the requirement at issue rather than
``significantly greater'' as proposed today. EPA's record for the Phase
I rule shows that those facilities could technically achieve and
economically afford the requirements of the Phase I rule. New
facilities have greater flexibility than existing facilities in
selecting the location of their intakes and technologies for minimizing
adverse environmental impact so as to avoid potentially high costs.
Therefore, EPA believes it appropriate to push new facilities to a more
stringent economic standard. Additionally, looking at the question in
terms of its national effects on the economy, EPA notes that in
contrast to the Phase I rule, this rule would affect facilities
responsible for a

[[Page 17146]]

significant portion (about 55 percent) of existing electric generating
capacity, whereas the new facility rule only affects a small portion of
electric generating capacity projected to be available in the future
(about 5 percent). EPA believes it is appropriate to set a lower cost
threshold in this rule to avoid economically impracticable impacts on
energy prices, production costs, and energy production that could occur
if large numbers of Phase II existing facilities incurred costs that
are more than significantly greater than but not wholly
disproportionate to the costs in EPA's record. EPA invites comment on
whether a ``significantly greater'' cost test is appropriate for
evaluating requests for alternative requirements by Phase II existing
facilities.
Second, today's proposal includes an opportunity for a facility to
demonstrate significantly greater costs as compared to environmental
benefits at a specific site. As stated above, EPA's record for the
Phase I rule shows that new facilities could technically achieve and
economically afford the requirements of the Phase I rule. At the same
time, EPA was interested in expeditious permitting for these new
facilities, due to increased energy demand, and particular energy
issues facing large portions of the country. For this reason, EPA chose
not to engage in a site-specific analysis of costs and benefits,
because to do this properly would take time. Balancing the desire for
expeditious permitting with a record that supported the achievability
of the Phase I requirements, EPA believes it was reasonable not to
adopt a cost benefit alternative for the Phase I rule. By contrast,
Phase II existing facilities will be able to continue operating under
their existing permits pending receipt of a permit implementing the
Phase II regulations, even where their existing permit has expired
(Permits may be administratively continued under section 558(c) of the
Administrative Procedure Act if the facility has filed a timely
application for a new permit). Therefore, delay in permitting, which
could affect the ability of a new facility to begin operations while
such a site-specific analysis is conducted, is not an issue for
existing facilities. Also, EPA recognizes that Phase II existing
facilities have already been subject to requirements under section
316(b). EPA is not certain that it is necessary to overturn the work
done in making those determinations by necessarily requiring retrofit
of the existing system without allowing facilities and permit
authorities to examine what the associated costs and benefits. Once
again, because today's proposal would affect so many facilities that
are responsible for such a significant portion of the country's
electric generating capacity, EPA is interested in reducing costs where
it can do so without significantly impacting aquatic communities
(recognizing this could increase permitting work loads for the State
and Federal permit writers).
EPA invites comment on whether the standards proposed today might
allow for backsliding by facilities that have technologies or
operational measures in place that are more effective than in today's
proposal. EPA invites comment on approaches EPA might adopt to ensure
that backsliding from more effective technologies does not occur.
If a facility satisfies one of the two cost tests in the proposed
Sec. 125.94(c)(1), it must propose less costly design and construction
technologies, operational measures, and restoration measures to the
extent justified by the significantly greater costs. In some cases the
significantly greater costs may justify a determination that no
additional technologies or measures are appropriate. This would be most
likely in cases where either (1) the monetized benefits at the site
were very small (e.g., a facility with little impingement mortality and
entrainment, even in the calculated baseline), or (2) the costs of
implementing any additional technologies or measures at the site were
unusually high.
5. What Is the Role of Restoration Under Today's Preferred Option?
Under today's preferred option, restoration measures can be
implemented by a facility in lieu of or in combination with reductions
in impingement mortality and entrainment. Thus, should a facility
choose to employ restoration measures rather than reduce impingement
mortality or entrainment, the facility could demonstrate to the
Director that the restoration efforts will maintain the fish and
shellfish in the waterbody, including the community structure and
function, at a level comparable to that which would be achieved through
Sec. 125.94 (b) and (c). In those cases where it is not possible to
quantify restoration measures, the facility may demonstrate that such
restoration measures will maintain fish and shellfish in the waterbody
at a level substantially similar to that which would be achieved under
Sec. 125.94 (b) and (c).
Similarly, should a facility choose to implement restoration
measures in conjunction with reducing impingement mortality and
entrainment through use of design and construction technologies or
operational measures, the facility would demonstrate to the Director
that the control technologies combined with restoration efforts will
maintain the fish and shellfish, including the community structure and
function, in the waterbody at a comparable or substantially similar
level to that which would be achieved through Sec. 125.94 (b) and (c).
EPA invites comment on all aspects of this approach. EPA specifically
invites comment on whether restoration measures should be allowed only
as a supplement to technologies or operational measures. EPA also seeks
comment on the most appropriate spatial scale under which restoration
efforts should be allowed ``should restoration measures be limited to
the waterbody at which a facility's intakes are sited, or should they
be implemented on a broader scale, such as at the watershed or State
boundary level.
Under today's preferred option, any restoration demonstration must
address species of concern identified by the permit director in
consultation with Federal, State, and Tribal fish and wildlife
management agencies that have responsibility for aquatic species
potentially affected by a facility's cooling water intake structure(s).
EPA invites comment on the nature and extent of consultations with
Federal, State, and Tribal fish and wildlife management agencies that
would be appropriate in order to achieve the objectives of section
316(b) of the CWA. In general, EPA believes that consultations should
seek to identify the current status of species of concern located
within the subject waterbody and provide general life history
information for those species, including preferred habitats for all
life stages. Consultations also should include discussion of potential
threats to species of concern found within the waterbody other than
cooling water intake structures (i.e., identify all additional
stressors for the species of concern), appropriate restoration methods,
and monitoring requirements to assess the overall effectiveness of
proposed restoration projects. EPA believes that it is important that
the consultation occur because natural resource management agencies
typically have the most accurate information available and thus are the
most knowledgeable about the status of the aquatic resources they
manage. EPA seeks comment on the type of information that would be
appropriate to include in a written request for consultation submitted
to the State, Tribal, and Federal agencies

[[Page 17147]]

responsible for management of aquatic resources within the waterbody at
which the cooling water intake is sited. A copy of the request and any
agency responses would be included in the permit application.
Under the preferred option, an applicant who wishes to include
restoration measures as part of its demonstration of comparable
performance would submit the following information to the Director for
review and approval:
A list and narrative description of the proposed
restoration measures;
A summary of the combined benefits resulting from
implementation of technology and operational controls and/or
restoration measures and the proportion of the benefits that can be
attributed to these;
A plan for implementing and maintaining the efficacy of
selected restoration measures and supporting documentation that shows
that restoration measures or restoration measures in combination with
control technologies and operational measures will maintain the fish
and shellfish, including community structure, at substantially similar
levels to those specified at Sec. 125.94 (b) and (c);
A summary of any past or voluntary consultation with
appropriate Federal, State, and Tribal fish and wildlife management
agencies related to proposed restoration measures and a copy of any
written comments received as a result of consultations; and
Design and engineering calculations, drawings, and maps
documenting that proposed restoration measures will meet the
performance standard at Sec. 125.94 (d).
EPA believes this information is necessary and sufficient for the
proper evaluation of a restoration plan designed to achieve comparable
performance for species of concern identified by the Director in
consultation with fish and wildlife management agencies. EPA invites
comment on whether this information is appropriate and adequate or if
it should be augmented or streamlined. EPA invites comment on what
specific, additional information should be included in a facility's
restoration plan and/or which of the proposed information requirements
are unnecessary.
For restoration measures such as fish restocking programs, EPA
expects that applicants will be able to quantitatively demonstrate
increases in fish and shellfish that are comparable to the performance
that would be achieved by meeting the performance standards for
reducing impingement and entrainment. However, as it did in the
preamble to the final new facility rule, EPA recognizes that, due to
data and modeling limitations as well as the uncertainty associated
with restoration measures such as creation of new habitats to serve as
spawning or nursery areas, it may be difficult to establish
quantitatively that some restoration measures adequately compensate for
entrainment and impingement losses from cooling water withdrawals. The
success of many approaches to restoration depends on the functions,
behavior, and dynamics of complex biological systems that are often not
scientifically understood as well as engineered technologies.
There are, however, several steps that can be taken to increase the
certainty of attainment of performance levels by restoration measures.
Most of these steps require detailed planning prior to initiation of
restoration efforts. Under today's preferred option, restoration
planners would take care to incorporate allowances in their plans for
the uncertainties stemming from incomplete knowledge of the dynamics
underlying aquatic organism survival and habitat creation. Plans would
include provisions for monitoring and evaluating the performance of
restoration measures over the lifetime of the measures. Provisions
would also be made for mid-course corrections as necessary. Unexpected
natural forces can alter the direction of a restoration project.\55\ If
uncertainty regarding levels of performance is high enough, restoration
planners would consider restoration measures in addition to those
otherwise calculated as sufficient in order to ensure adequate levels
of performance. EPA invites comment on how to measure ``substantially
similar performance'' of restoration measures and methods that can be
used to reduce the uncertainty of restoration activities undertaken as
part of today's preferred option.
---------------------------------------------------------------------------

\55\ For a discussion of the extensive range of experience with
wetland restoration efforts, see Wetlands, Third Edition, William J.
Mitsch and James G. Gosselink, pp. 653-686.
---------------------------------------------------------------------------

EPA recognizes that substantial information exists regarding
wetlands mitigation and restoration. For example, tools and procedures
exist to assess wetlands in the context of section 404 of the Clean
Water Act.\56\ However, restoration of other aquatic systems such as
estuaries is complex and continues to evolve. EPA seeks comment on how
it may measure the success or failure of restoration activities given
the high degree of uncertainty associated with many areas of this
developing science and that many of these activities do not produce
measurable results for many months or years after they are implemented.
For these reasons, EPA requests comment on whether to require that a
facility using restoration measures restore more fish and shellfish
than the number subjected to impingement mortality or entrainment. EPA
believes that restoring or mitigating above the level that reflects
best technology available for minimizing adverse environmental impact
(e.g., restocking higher numbers of fish than those impinged or
entrained by facility intakes or restoring aquatic system acreages at
ratios greater than one-to-one) would help build a margin of safety,
particularly when the uncertainties associated with a particular
restoration activity are known to be high.
---------------------------------------------------------------------------

\56\ For a general discussion on different assessment procedures
see The Process of Selecting a Wetland Assessment Procedure: Steps
and Considerations, by Candy C. Bartoldus, Wetland Journal, Vol. 12,
No. 4, Fall 2000.
---------------------------------------------------------------------------

The concept of compensatory mitigation ratios being greater than
one-to-one is found in other programs. For example, under the CWA
section 404 program no set mitigation ratio exists, however, current
policies require no net loss of aquatic resources on a programmatic
basis. The permitting authority often requires permit applicants to
provide more than one-to-one mitigation on an acreage basis to address
the time lapse between when the permitted destruction of wetlands takes
place and when the newly restored or created wetlands are in place and
ecologically functioning. The permit may also require more than one-to-
one replacement to reflect the fact that mitigation is often only
partially successful. Alternatively, in circumstances where there is a
high confidence that the mitigation will be ecologically successful,
the restoration/creation has already been completed prior to permitted
impacts, or when the replacement wetlands will be of greater ecological
value than those they are replacing, the permitting authority may
require less than one-to-one replacement.
In the case of section 316(b), restocking numbers and restoration
ratios could be established either by the Director on a permit-by-
permit basis or by EPA in the final rule. EPA requests comment on
establishing margins of safety for restoration measures (particularly
for activities associated with outcomes having a high degree of
uncertainty) and identifying the appropriate authority for establishing
safety measures. EPA also seeks comment on an appropriate basis for

[[Page 17148]]

establishing safety margins (e.g., based exclusively on project
uncertainty, relative functional value or rareness of the system being
restored, or a combination of these) to ensure that restoration
measures achieve performance comparable to intake technologies.
EPA also recognizes that restoration measures may in some cases
provide additional environmental benefits that design and construction
technologies and operational measures focused solely on reducing
impingement and entrainment would not provide. For example, fish
restocking facilities may be able to respond, on relatively short
notice, to species-specific needs or threats, as identified by fish and
wildlife management agencies. Habitat restoration measures may provide
important benefits beyond direct effects on fish and shellfish numbers,
such as flood control, habitat for other wildlife species, pollution
reduction, and recreation. EPA requests comment on whether and how
additional environmental benefits should also be considered in
determining appropriate fish and shellfish rates for restoration
projects.
Assessing the full range of requirements necessary for the survival
of aquatic organisms requires understanding and use of knowledge from
multiple scientific disciplines (aquatic biology, hydrology, landscape
ecology) that together address the biological and physical requirements
of particular species. Under today's preferred option, restoration
planners would utilize the full range of disciplines available when
designing restoration measures for a facility. Plans utilizing an
insufficient range of knowledge are more likely to fail to account for
all aquatic organism survival requirements.
For some aquatic organisms, or for certain life stages of some
aquatic organisms, there may not be sufficient knowledge of the factors
required for that organism's survival and thus restoration planners
would be unable to address those factors directly in a restoration
plan. In such cases, it may be necessary for restoration planners to
plan to create habitat that replicates as closely as possible those
habitats in which the aquatic organisms are found to thrive naturally.
Suitable habitat can be created or restored, or existing habitats can
be enhanced in order to provide suitable habitat for the organisms of
concern. In this manner, appropriate conditions can be created even
without full understanding of an organism's requirements. Habitat
approaches also have the benefit, when properly designed, of
simultaneously providing suitable survival conditions for multiple
species. In contrast, measures such as stocking and fish ladders
provide benefits for much more limited number of species and life
stages.
In some cases, conservation of existing, functional habitats--
particularly conservation of habitats that are vulnerable to human
encroachment and other anthropogenic impacts--may be desirable as part
of a facility's restoration effort. In the case of conservation, the
functionality of the habitat would not be compromised, therefore
eliminating much of the uncertainty associated with measuring the
success of other restoration efforts such as habitat enhancement or
creation. However, because conserved habitat is already contributing to
the relative productivity and diversity of an aquatic system,
conservation measures would not necessarily ensure a net benefit to the
waterbody or watershed of concern. EPA seeks comment on whether habitat
conservation would be an appropriate component of a facility's
restoration efforts.
Restoration projects should not unduly compromise the health of
already-existing aquatic organisms in order to restore aquatic
organisms for purposes of section 316(b). Such alterations could negate
or detract from accomplishments under a restoration plan and produce an
insufficient net benefit. For example, fish stocking programs might
introduce disease or weaken the genetic diversity of an ecosystem.
Habitat creation programs should not alter well-functioning habitats to
better support species of concern identified in the restoration plan,
but rather should focus on restoring degraded habitats that
historically supported the types of aquatic organisms currently
impacted by a facility's cooling water intake.
Another issue to consider when relying on restoration projects that
involve habitat creation is that many such projects can take months or
years to reach their full level of performance. The performance of
these projects often relies heavily on establishment and growth of
higher vegetation and of the natural communities that rely on such
vegetation. Establishment and growth of both vegetation and natural
communities can take months to years depending on the type of habitat
under development. Restoration planners need to ensure that performance
levels are met at all points in a mitigation process. Where facilities
are depending in part on habitat creation, this may entail
supplementing habitat creation measures with other restoration measures
during the early stages of habitat creation in order to ensure all
facility impacts are properly mitigated.
Under the preferred option, restoration plans should be developed
in sufficient detail to address the issues above before significant
resources are committed or other actions taken that are difficult to
reverse. EPA invites comment on the role of restoration in addressing
the impact of cooling water intake structures. EPA invites commenters
to suggest alternative approaches to ensuring that restoration efforts
are successful.
6. Impingement and Entrainment Assessments
a. What Are the Minimum Elements of an Impingement Mortality and
Entrainment Characterization Study?
Today's proposal requires the permit applicant to conduct an
Impingement Mortality and Entrainment Characterization Study
Sec. 125.95(b)(3) to support many important analyses and decisions. The
data from this Study supports development of the calculation baseline
for evaluating reductions in impingement mortality and entrainment,
documents current impingement mortality and entrainment, and provides
the basis for evaluating the performance of potential technologies,
operational measures and/or restoration measures. Should a facility
request a site-specific determination of best technology available for
minimizing adverse environmental impact, the Study would provide the
critical biological data for estimating monetized benefits.
EPA invites comment on whether the narrative criteria at
Sec. 125.95(b)(1) are sufficiently comprehensive and specific to ensure
that scientifically valid, representative data are used to support the
various approaches for determining best technology available for
minimizing adverse environmental impact in today's proposal. EPA
recognizes the difficulties in obtaining accurate and precise samples
of aquatic organisms potentially subject to impingement and
entrainment. EPA also recognizes that biological activity in the
vicinity of a cooling water intake structure can vary to great degree,
both within and between years, seasons and intervals including time-of-
day. EPA invites comment on whether it should set specific, minimum
monitoring frequencies and/or whether it should specify requirements
for ensuring appropriate consideration of uncertainty in the
impingement mortality and entrainment estimates.

[[Page 17149]]

b. What Should Be the Minimum Frequencies for Impingement and
Entrainment Compliance Monitoring?
Today's proposal requires compliance monitoring as specified by the
Director in Sec. 125.96, but does not specify minimum sampling
frequencies or durations. EPA is considering specifying minimum
frequencies for impingement and entrainment sampling for determining
compliance. EPA invites comment on including minimum sampling
frequencies and durations as follows: for at least two years following
the initial permit issuance, impingement samples must be collected at
least once per month over a 24 hour period and entrainment samples must
be collected at least biweekly over a 24 hour period during the primary
period of reproduction, larval recruitment and peak abundance. These
samples would need to be collected when the cooling water intake
structure is in operation. Impingement and entrainment samples would be
sufficient in number to give an accurate representation of the annual
and seasonal impingement and entrainment losses for all commercial,
recreational and forage based fish and shellfish species and their life
stages at the Phase II existing facility as identified in the
Impingement Mortality and Entrainment Characterization Study required
under Sec. 125.95(b)(3). Sample sets would be of sufficient size to
adequately address inter-annual variation of impingement and
entrainment losses. Sampling would be planned to eliminate variation in
data due to changes in sampling methods. Data would also be collected
using appropriate quality assurance/quality control procedures.
EPA invites comment on whether more frequent sampling would be
appropriate to accurately assess diel, seasonal, and annual variation
in impingement and entrainment losses. EPA also invites comment on
whether less frequent compliance biological monitoring would be
appropriate (perhaps depending on the technologies selected and
implemented by a facility).
7. How Is Entrainment Mortality and Survival Considered in Determining
Compliance With the Proposed Rule?
Today's proposed rule sets a performance standard for reducing
entrainment rather than reducing entrainment mortality. EPA choose this
approach because EPA does not have sufficient data to establish
performance standards based on entrainment mortality for the
technologies used as the basis for today's proposal. Entrainment
mortality studies can be very difficult to conduct and interpret for
use in decisionmaking (see section VI.A.8.b.below). EPA invites comment
on regulatory approaches that would allow Phase II existing facilities
to incorporate estimates of entrainment mortality and survival when
determining compliance with the applicable performance standards
proposed in Sec. 125.94(b) of today's proposed rule. EPA invites
commenters to submit any studies that document entrainment survival
rates for the technologies used as the basis for today's performance
standards and for other technologies.
8. What Should Be Included in a Demonstration To Compare Benefits to
Costs?
As part of a Site-Specific Determination of Best Technology
Available specified proposed in Sec. 125.94(c) of today's proposed
rule, a Phase II existing facility can attempt to demonstrate to the
Director that the costs of compliance with the applicable performance
standards proposed in Sec. 125.94(b) would be significantly greater
than the benefits of complying with such performance standards at the
site. EPA is considering whether it should develop regulatory
requirements or guidance to outline appropriate methodologies to ensure
that a reliable and objective valuation of benefits is derived from the
best available information. The elements in the benefit assessment
guidance would, at a minimum, include standards for data quality,
acceptable methodologies, technical peer review, and public comment.
a. What Should Be the Appropriate Methodology for Benefits Assessment?
EPA believes that a rigorous environmental and economic analysis
should be performed when a facility seeks a site-specific determination
of best technology available due to significantly greater cost as
compared to the benefits of compliance with the applicable performance
standards. EPA invites comment on which of these methodologies, or any
other, is the most appropriate for determining a fair estimate of the
benefits that would occur should the Phase II existing facility
implement technology to comply with the applicable performance
standards. In addition, EPA invites comment on whether narrative
benefits assessments should supplement these methodologies to properly
account for those benefits which cannot be quantified and monetized.
(1) Quantified and Monetized Baseline Impingement and Entrainment
Losses
To evaluate the total economic impact to fisheries with regard to
impingement and entrainment losses at an existing facility, the impacts
on commercial, recreational, and forage species must be evaluated.
Commercial fishery impacts are relatively easy to value because
commercially caught fish are a commodity with a market price for the
individual species. Recreation fishery impacts are based on benefits
transfer methods, applying the results from nonmarket valuation
studies. Valuing recreational impacts involves the use of willingness-
to-pay values for increases in recreational catch rates. The analysis
of the economic impact of forage species losses can be determined by
estimating the replacement costs of these fish if they were to be
restocked with hatchery fish, or by considering the foregone biomass
production of forage fish resulting from impingement and entrainment
losses and the consequential foregone production of commercial and
recreation species that prey on the forage species. Trophic transfer
efficiency is used to estimate the value of forage fish in terms of the
foregone biomass production and the consequential foregone production
of commercial and recreational species that prey upon them. This
methodology can also incorporate nonuse or passive values. Nonuse or
passive use values include the concepts of existence (stewardship) and
bequest (intergenerational equity) motives to value environmental
changes. In Regulatory Impact Analyses, EPA values nonuse impacts at
50% of value of the recreational use impact. \57\ EPA invites comment
on the inclusion of this approach for estimating nonuse or passive
values. Examples of the use of this method for evaluating benefits are
provided in the Case Study Document.
---------------------------------------------------------------------------

\57\ Fisher, A. and R. Raucher. 1984. Intrinsic benefits of
improved water quality: Conceptual and empirical perspectives.
Advances in Applied Micro-Economics. 3:37-66.
---------------------------------------------------------------------------

EPA notes that in locations where fisheries have been depleted by
cumulative and long term impingement and entrainment losses from
cooling water intake structures, this methodology may not be the most
appropriate as it may have a tendency to underestimate the long term
benefits associated with technology implementation.
(2) Random Utility Model
The Random Utility Model (RUM) estimates the effect of improved
fishing opportunities to determine recreational

[[Page 17150]]

fishing benefits due to reduced impingement and entrainment. The main
assumption of this model is that anglers will get greater satisfaction,
and thus greater economic value, from sites where the catch rate is
higher. When anglers enjoy fishing trips with higher catch rates, they
may take more fishing trips resulting in a greater overall value for
fishing in the region. This method requires information on the
socioeconomic characteristics of anglers and their fishing preference
in terms of location and target species, information on site
characteristics that are important determinants of anglers' behavior,
and the estimated price of visiting the sites. Two models are used for
estimating the total economic value of recreational fish to anglers,
the discrete choice model which focuses on the choice of fishing site
by individual anglers and the trip participation model which estimates
the number of trips that an angler will take annually. A more thorough
description of the RUM can be found in Chapter A10 of the Case Study
Document. Examples of its use are provided in Chapter 5 of the case
studies for Delaware Bay (Part B), Ohio River (Part C) and Tampa Bay
(Part F).
The greatest strength of this model is that it is able to estimate
a theoretically defensible monetary value for recreational fishing
benefits. The weakness in the model is its dependence on the
availability of survey data on angler preferences, and the bias
associated with conducting a survey. This approach is also limited to
estimating recreational benefits only, and should be used in
conjunction with another methodology that values commercial and forage
species impacts and other benefit categories where these are
significant.
(3) Contingent Valuation Approach
Stated preference methods attempt to measure willingness-to-pay
values directly. Unlike the revealed preference methods, such as the
RUM described above, that determine values for environmental goods and
services from observed behavior, stated preference methods rely on data
from surveys that directly question respondents about their preferences
to measure the value of environmental goods and services. Contingent
valuation is one of the most well developed of the stated preference
methods. Contingent valuation surveys either ask respondents if they
would pay a specified amount for a described commodity (usually a
change in environmental quality) or ask their highest willingness-to-
pay for that commodity. For example, in the case of section 316(b), a
contingent valuation survey might ask how much individuals would be
willing to have their electricity bill increase from their utility's
power plants to avoid the impacts of impingement and entrainment on
fish and shellfish, as well as impacts on threatened and endangered
species. One strength of contingent valuation estimates is that they
include the nonuse values such as option, existence, and bequest
values, so adjustments to the estimates to cover these values are not
needed. A weakness of this approach is that respondents are asked to
value a hypothetical good and they do not have to back up their stated
willingness-to-pay with actual expenditures. However, this concern can
be minimized by placing the valuation questions in the context of
familiar economic transactions (e.g., increases in electricity bills).
b. Should Estimates of Entrainment Mortality and Survival Be Included
in Benefits Assessments?
The proposed rule language for Phase II existing facilities does
not preclude the use of estimates of entrainment mortality and survival
when presenting a fair estimation of the monetary benefits achieved
through the installation of the best technology available, instead of
assuming 100 percent entrainment mortality. In EPA's view, estimates of
entrainment mortality and survival used for this purpose should be
based on sound scientific studies. EPA believes such studies should
address times of both full facility capacity and peak abundance of
entrained organisms. EPA requests comment on whether it is appropriate
to allow consideration of entrainment mortality and survival in benefit
estimates, and if so, should EPA set minimum data quality objectives
and standards for a study of entrainment mortality and survival used to
support a site-specific determination of best technology available for
minimizing adverse environmental impact. EPA may decide to specify such
data quality objectives and standards either in the final rule language
or through guidance.
A more thorough discussion of entrainment survival is provided in
Chapter D7 of the EBA. In this chapter, EPA has reviewed a number of
entrainment survival studies (see DCN 2-017A-R7 in Docket W-00-03).
EPA's preliminary review of these studies has raised a number of
concerns regarding the quality of data used to develop some estimates
of entrainment survival. Specifically, the majority of studies reviewed
collected samples at times of low organismal abundance, at times when
the facility was not operating at full capacity, at times when biocides
were not in use, and at times which may not reflect current entrainment
rates at the facility. These sampling conditions may lead to
overestimation of entrainment survival. In addition, the majority of
studies reviewed had very low sample sizes and calculated survival for
only a few of all species entrained. EPA is also concerned that
entrainment survival estimates were based on mortal effects only and
did not address sub-lethal entrainment effects, which can include
changes to organismal growth, development, and reproduction. EPA
invites comment on its preliminary review of the data quality of
entrainment survival studies provided in Chapter D7. EPA also requests
that commenters submit additional entrainment survival or mortality
studies for review.
9. When Could the Director Impose More Stringent Requirements?
Proposed Sec. 125.94(e) provides that the Director could establish
more stringent requirements relating to the location, design,
construction, or capacity of a cooling water intake structure at a
Phase II existing facility than those that would be required based on
the proposed performance standards in the rule (Sec. 125.94(b)), or
based on the proposed site-specific determination of best technology
allowed under the rule (Sec. 125.94(c)), where compliance with the
proposed requirements of Sec. 125.94(b) or (c) would not meet the
requirements of applicable Tribal, State or other Federal law. The
relevant State law may include, but is not necessarily limited to,
State or Tribal water quality standards, including designated uses,
criteria, and antidegradation provisions; endangered or threatened
species or habitat protection provisions; and other resource protection
requirements. The term ``other Federal law'' is intended to denote
Federal laws others than section 316(b), and could include, but not be
limited to, the Endangered Species Act, 16 U.S.C. 1531 et seq., the
Coastal Zone Management Act, 16 U.S.C. 1451 et seq., the Fish and
Wildlife Coordination Act, 16 U.S.C. 661 et seq., the Wild and Scenic
Rivers Act, 16 U.S.C. 1273 et seq., and potentially the Magnuson-
Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq.
See 40 CFR 122.49 for a brief description of these and certain other
laws. Note that these laws may apply to federally issued NPDES permits
independent of this proposed rule.
EPA expects that Federal, State, and Tribal resource protection
agencies will work with Federal and State Directors and permittees to
identify and assess

[[Page 17151]]

situations where Federal, State, or Tribal law might be violated,
particularly where such violations involve impacts to species of
concern. For example, the U.S. Fish and Wildlife Service and the
National Marine Fisheries Service implement the Endangered Species Act.
Where a NPDES permit for a cooling water intake structure would comply
with the performance requirements of Sec. 125.94(b) or (c) but may harm
endangered species or critical habitat, EPA expects the resource
agencies to contribute their expertise to the evaluation and
decisionmaking process.
EPA is considering whether to establish additional criteria for
when the Director could establish more stringent requirements. EPA
requests comment on specifying that more stringent requirements would
be appropriate when compliance with the applicable requirements in
Sec. 125.94(b) and (c) would (1) result in unacceptable effects on
migratory and/or sport or commercial species of concern to the
Director; and (2) not adequately address cumulative impacts caused by
multiple intakes or multiple stressors within the waterbody of concern.
Unacceptable effects on sport or commercial species of concern might
include a significant reduction in one or more such species due to
direct or indirect effects of one or more cooling water intake
structures. Examples of unacceptable effects on migratory species of
concern might include the interference with or disruption of migratory
pathways, patterns, or behavior. Multiple stressors within the
waterbody of concern might include toxics, nutrients, low dissolved
oxygen, habitat loss, non-point source runoff, and pathogen
introductions. EPA is also concerned about the potential stress from
multiple intakes because demonstration studies are typically conducted
on an individual facility basis and do not consider the effects of
multiple intakes on local aquatic organisms.
EPA notes that under section 510 of the CWA, States already have
the authority to establish more stringent conditions in any permit in
accordance with State law. However, this provision does not apply in
cases where EPA is the permitting authority. EPA requests comment on
whether any explicit regulatory provision for more stringent
requirements is needed in light of section 510.
EPA also notes that States have designated many waterbodies for the
propagation of fish and shellfish that are not attaining such uses due
to pollution, and that, in these waters, aquatic communities may be
significantly stressed or under-populated. EPA also believes that in
some waterbodies, heavy fishing pressures have greatly altered and
reduced aquatic communities. EPA anticipates that studies valuing the
monetized benefits of reducing impingement and entrainment may not
identify significant site-specific benefits in such areas and, should
one or more permit applicants request site-specific determinations of
less-costly best technology available for minimizing adverse
environmental impact, a State may not have authority to deny such
requests. EPA requests comment on whether recovery of aquatic
communities in such waterbodies might be delayed by use of the
significantly greater cost-to-benefit test proposed today. EPA requests
comment on an regulatory alternative that would explicitly allow the
Director to require more stringent technologies or measures where not
doing so would delay recovery of an aquatic species or community that
fish and wildlife agencies are taking active measures to restore, such
as imposing significant harvesting restrictions.
10. Discussion of the 5% Flow Threshold in Freshwater Rivers
The withdrawal threshold is based on the concept that, absent any
other controls, withdrawal of a unit volume of water from a waterbody
will result in the entrainment of an equivalent unit of aquatic life
(such as eggs and larval organisms) suspended in that volume of the
water column. This, in turn, is related to the idea that, absent any
controls, the density of aquatic organisms withdrawn by a cooling water
intake structure is equivalent to the density of organisms in the water
column. Thus, if 5% of the mean annual flow is withdrawn, it would
generally result in the entrainment of 5% of the aquatic life within
the area of hydraulic influence of the intake. EPA believes that it is
unacceptable to impact more than 5% of the organisms within the area of
an intake structure. Hence, if the facility withdraws more than 5% of
the mean annual flow of a freshwater river or stream, the facility
would be required to reduce entrainment by 60-90%. EPA discussed these
concepts in more detail and invited comment on the use of this
threshold and supporting documents in its NODA for the New Facility
Rule (66 FR 28863). In today's proposed rule, EPA again invites comment
on use of this threshold for Phase II existing facilities and on the
supporting documents for this threshold that were referenced in the
NODA.
EPA also requests comment on the following alternative withdrawal
thresholds for triggering the requirement for entrainment controls: (1)
5% of the mean flow measured during the spawning season (to be
determined by the average of flows during the spawning season, but
remaining applicable to non-spawning time periods); (2) 10% or 15% of
the mean annual or spawning season flow; (3) 25% of the 7Q10; and (4) a
species-specific flow threshold that would use minimum flow
requirements of a representative species to determine allowable
withdrawals from the waterbody.
11. State or Tribal Alternative Requirements That Achieve Comparable
Environmental Performance to the Regulatory Standards Within a
Watershed
In Sec. 125.90, today's proposal includes an alternative where an
authorized State or Tribe may choose to demonstrate to the
Administrator that it has adopted alternative regulatory requirements
that will result in environmental performance within a watershed that
is comparable to the reductions in impingement mortality and
entrainment that would otherwise be achieved under Sec. 125.94. If a
State or Tribe can successfully make this demonstration, the
Administrator is to approve the State or Tribe's alternative regulatory
requirements.
EPA is proposing that such alternative requirements achieve
comparable performance at the watershed level, rather than at larger
geographic scales or at the individual facility-level, to allow States
and Tribes greater flexibility and, potentially, greater efficiency in
efforts to prevent or compensate for impingement mortality and
entrainment losses, while still coordinating those efforts within
defined ecological boundaries where the increased impacts are directly
offset by controls or restoration efforts. Requiring performance level
assessment to take place at the watershed level ensures that facility
mitigation efforts take the overall health of the waterbody in the
target watershed into account.
The Agency requests comment on all aspects of this approach,
including the appropriate definition of watershed. A watershed is
generally a hydrologically-delineated geographic area, typically the
area that drains to a surface waterbody or that recharges or overlays
ground waters or a combination of both. Watersheds can be defined at a
variety of geographic scales. The United States Geological Survey
(USGS) defines watersheds (hydrologic units) in the United States at
scales ranging from the drainage areas of major rivers, such as

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the Missouri, to small surface drainage basins, combinations of
drainage basins, or distinct hydrologic features. The USGS is currently
defining additional, more detailed subdivisions of currently existing
hydrologic units. (See http://water.usgs.gov/GIS/huc.html.) Watersheds
have been defined for other natural resource programs as well (e.g.,
the Total Maximum Daily Load program, actions under section 306 of the
Coastal Zone Management Act).
In general, the appropriate scale at which to define a watershed
depends on a program's goals. EPA believes that the watershed scale
selected for the purposes of determining comparability of a State or
Tribal alternative requirements should allow confident accounting of
impingement and entrainment levels at facilities within the watershed
and of the results of the actions taken to prevent or compensate for
impingement and entrainment losses. EPA invites comment on use of the
USGS eight-digit hydrologic unit (generally about the size of a county)
as the maximum geographic scale at which an authorized State or Tribe
could establish alternative regulatory requirements. A State or Tribe
could seek to establish the comparability of alternative regulatory
requirements for as many eight-digit hydrologic units as it saw fit,
but would need to demonstrate that its alternative requirements achieve
environmental performance comparable to the performance standards
proposed in today's rule within each such unit.
EPA believes that defining watersheds at too small a scale might
not allow sufficient flexibility. However, EPA is concerned that
defining watersheds at a very large scale increases the potential that
there will be no direct ecological connection between increased impacts
in one area and compensatory efforts in another.
EPA also recognizes that States sometimes assign higher priority to
protecting some waters over others. This may be due to the exceptional
environmental, historic, or cultural value of some waters, or
conversely to a concern with multiple stresses already occurring in a
watershed. It could also be based on the presence of individual species
of particular commercial, recreational, or ecological importance. For
these reasons, States with alternative requirements might choose to
provide more protection that would be achieved under Sec. 125.94 in
some watersheds and less protection in others. Under current language
in proposed Sec. 125.90, States could not use such an approach because
they would not be able to demonstrate comparable environmental
performance within each watershed. EPA requests comment on whether it
should instead allow States to demonstrate comparable environmental
performance at the State level, thus allowing States the flexibility to
focus protection on priority watersheds.
The standard provided in proposed Sec. 125.90 for evaluating
alternate State requirements is ``environmental performance that is
comparable to the reductions that would otherwise be achieved under
Sec. 125.94.'' EPA recognizes that it may not always be possible to
determine precisely the reductions in impingement and entrainment
associated with either Sec. 125.94 or the alternate State requirements,
particularly at the watershed level or State-wide. Furthermore,
alternate State requirements may provide additional environmental
benefits, beyond impingement and entrainment reductions, that the State
may wish to factor into its comparability demonstration. However, in
making this demonstration, the State should make a reasonable effort to
estimate impingement and entrainment reductions that would occur under
Sec. 125.94 and under its alternate requirements, and should clearly
identify any other environmental benefits it is taking into account and
explain how their comparability to impingement and entrainment
reduction under Sec. 125.94 is being evaluated. EPA invites comment on
the most appropriate scale at which to define a watershed to reflect
the variability of the nature of the ecosystems impacted by cooling
water intake structures within a State or Tribal area and on methods
for ensuring ecological comparability within watershed-level
assessments. EPA also invites comment on whether defined watershed
boundaries for the purpose of section 316(b) programs should lie
entirely within the political boundaries of a Tribe or State unless
adjoining States and/or Tribes jointly propose to establish alternative
regulatory requirements for shared watersheds.
12. Comprehensive Cost Evaluation Study
Section 125.94 of today's proposal allows a facility to request a
site-specific determination of best technology available for minimizing
adverse environmental impact based on costs significantly greater than
in EPA's record, or significantly greater than site-specific benefits.
Section 125.95(b)(6)(i) requires a facility seeking such a
determination to conduct a Comprehensive Cost Evaluation Study.
To adequately demonstrate site-specific compliance costs, EPA
believes that a facility would need to provide engineering cost
estimates that are sufficiently detailed to allow review by a third
party. The preferred cost estimating methodology, in the Agency's view,
is the adaption of empirical costs from similar projects tailored to
the facility's characteristics. The submission of generic costs relying
on engineering judgment should be verified with empirical data wherever
possible. In the cases where empirical demonstration costs are not
available, the level of detail should allow the costs to be reproduced
using standard construction engineering unit cost databases. These
costs should be supported by estimates from architectural and
engineering firms. Further, the engineering assumptions forming the
basis of the cost estimates should be clearly documented for the key
cost items.
The Agency and other regulatory entities have reviewed recent cost
estimates submitted by permittees for several section 316(b) and 316(a)
demonstrations. As discussed in Chapter X of the Technical Development
Document, in several cases where the level of detail provided by the
permittee was sufficient to afford a detailed review, EPA has some
concerns about the magnitude of these cost estimates. In other cases,
the engineering assumptions that formed the basis of the cost
submissions were insufficiently documented to afford a critical review.
Based in part on these examples, the Agency emphasizes the importance
of empirically verified and well documented engineering cost
submissions.
The Agency anticipates that the inclusion of a site-specific cost
to benefit test will continue to be of concern to local regulatory
entities and the regulated community in light of the associated burden
on permit writers. In two recent cases, significant burden was
associated with engineering cost reviews. In one case, a regional
authority utilized a significant portion of its annual permitting
budget (over $80,000) and significant man-hours (approximately 500
hours) to review the engineering cost estimates submitted in a single
permit demonstration. In another case, EPA conducted approximately 200
hours of senior-level review of a single engineering estimate that had
already undergone significant, and costly, local regulatory review. In
each of these cases, the reviewers identified areas where they believed
the

[[Page 17153]]

permit applicant had significantly overestimated costs of a potential
compliance option. The level of effort was sufficient to identify the
areas of concern, but not to develop counter proposals for cost
estimates.
However, EPA believes it is important to have a site-specific
option in the rule to cover cases of exceptionally high costs and/or
minimal benefits. By EPA's estimates, the costs for some of the
technologies on which the presumptive performance standards are based
may be several million dollars. In cases where, due to the site-
specific factors, an individual facility's costs are significantly
higher, or the benefits are minimal, the additional permitting burden
hours (upwards of several hundred hours) associated with the site-
specific estimate may be appropriate. EPA anticipates that many, if not
most, facilities will choose to comply with the presumptive standards,
but believes that for those facilities with exceptionally high costs or
exceptionally low benefits, the site-specific provisions provide an
important ``safety valve.''
EPA invites comment on whether the Agency should establish minimum
standards for a Comprehensive Cost Evaluation Study and on whether such
standards should be established by regulation or as guidance only. EPA
also invites comment on the above discussion of the burden that
reviewing site-specific cost studies poses for permitting authorities
and on its belief that site-specific provisions to address cases of
unusually high costs or unusually low benefits are necessary.
13. Cost-Benefit Test
EPA requests comment on the cost-benefit provision in Sec. 124.95.
EPA placed several documents in the docket for the new facilities final
rule (see docket items 2-034A and 2-034B) that summarized information
from several States on the burdens of site-specific decisionmaking. To
make section 316(b) determinations for large power plants in the
Southeast in the late 1970s and early 1980s, EPA estimates a workload
of as much as 650 person hours per permit and $25,000 contract dollars,
with an additional (and potentially larger) resource investment by
State permitting authorities. To reissue a permit to the Salem Nuclear
Generating Station, the New Jersey Department of Environment Protection
recently reviewed and considered a 36-volume permit application
supported by 137 volumes of technical and reference materials. The
facility filed its application in 1994; NJDEP made its decision in
2001. EPA invites comments on these burden estimates.
As noted above, however, while concerned about the burden of site-
specific section 316(b) determinations, EPA also recognizes the much
larger costs of complying with the presumptive performance standards
and believes that some provision for situations where costs are
significantly greater than benefits is appropriate. EPA notes that at
some sites, impingement and entrainment losses are minimal. In such
cases it may not make sense to require a facility to spend a lot of
dollars to comply with presumptive performance requirements. EPA is
also concerned about the potential for members of the public who object
to the authority's site-specific determinations to raise challenges
that must be resolved in administrative appeals that can be very
lengthy and burdensome, followed in some cases by judicial challenges.
An ongoing State study of permitting workloads estimates that appeals
of NPDES permits issued to major facilities require 40 hours to resolve
in a simple case and up to 240 hours for a very complex permit. \58\
EPA Region 1 estimates that one year is required to resolve a complex
administrative appeal, involving significant amounts of technical and
legal resources. Should the permit appeal be followed by a judicial
challenge, EPA Region 1 estimates an additional two years or more of
significant investment of technical and legal resources in one
decision, with additional time and resources needed if the initial
judicial decision is appealed. \59\ Again, however, EPA notes that
these burdens may be small compared to the potential costs of complying
with presumptive performance standards. EPA invites comments on ways to
incorporate site-specific consideration of costs and benefits without
undue burden on the Director. In particular, EPA invites comment on
decision factors and criteria for weighing and balancing these factors
that could be included in a regulation or guidance that would
streamline the workload for evaluating site-specific applications and
minimize the potential for legal challenges.
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\58\ State Water Quality Management Resource Model, ver.3.16 (9/
00). (See Docket for today's proposal.) This is an on-going joint
effort between states and EPA to develop information on the resource
``gap'' facing State water quality management programs. The
information included in the model reflects the consensus of the
participating states and is intended to reflect averages.
\59\ Communication from Mr. Mark Stein, Office of Regional
Counsel, US EPA Region I, Boston, MA, dated January 24, 2002. (See
Docket for today's proposal.)
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14. Capacity Utilization
In Sec. 125.94 (b)(2), the Agency proposes standards for reducing
impingement mortality but not entrainment when a facility operates less
than 15 percent of the available operating time over the course of
several years. Fifteen percent capacity utilization corresponds to
facility operation for roughly 55 days in a year (that is, less than
two months). The Agency refers to this differentiation between
facilities based on their operating time as a capacity utilization cut-
off. The Agency's record demonstrates that facilities operating at
capacity utilization factors of less than 15 percent are generally
facilities of significant age, including the oldest facilities within
the scope of the rule. Frequently, entities will refer to these
facilities as peaker plants, though the definition extends to a broader
range of facilities. These peaker plants are less efficient and more
costly to operate than other facilities. Therefore, operating companies
generally utilize them only when demand is highest and, therefore,
economic conditions are favorable. Because these facilities operate
only a fraction of the time compared to other facilities, such as base-
load plants, the peaking plants achieve sizable flow reductions over
their maximum design annual intake flows. Therefore, the concept of an
entrainment reduction requirement for such facilities does not appear
necessary. Additionally, the plants typically operate during two
specific periods: the extreme winter and the extreme summer demand
periods. Each of these periods can, in some cases, coincide with
periods of abundant aquatic concentrations and/or sensitive spawning
events. However, it is generally accepted that peak winter and summer
periods will not be the most crucial for aquatic organism communities
on a national basis.
Of the facilities exceeding the capacity utilization cut-off, the
median and average capacity utilization is 50 percent. As a general
rule, steam plants operate cyclically between 100 percent load and
standby. In turn, the intake flow rate of a typical steam plant cycles
between full design intake flow and standby. Facilities operating with
an average capacity utilization of 50 percent would generally withdraw
more than three times as much water over the course of time than a
facility with a capacity utilization of less than 15. Therefore, the
capacity utilization cut-off coincides with an approximate flow
reduction, and hence entrainment reduction, of roughly 70 percent as
compared to the average facility above

[[Page 17154]]

the cut-off, which is within the range of the performance standard for
entrainment reduction. Of the 539 facilities for which the Agency has
detailed intake flow information, 53 would fall under the capacity
utilization cut-off. Were the Agency to establish the cut-off at less
than 20 percent capacity utilization, an additional 18 facilities would
be subject to the reduced requirements and the comparable flow
reduction would be roughly 60 percent. However, the operating period
would extend to approximately 75 days (that is, 2.5 months). Were the
Agency to establish the cut-off at less than 25 percent capacity, 108
of the 539 facilities would be subject to the reduced standards, and
the comparable entrainment reduction would be roughly 54 percent. For a
hypothetical 25 percent capacity utilization cut-off, the operating
period would extend to approximately three months.
EPA invites comment on its proposed approach to regulating Phase II
existing facilities with limited capacity utilization. EPA specifically
invites comment on the above alternative thresholds for using capacity
utilization to establish performance standard that address impingement
mortality but not entrainment.

B. Other Technology-Based Options Under Consideration

EPA also considered a number of other technology-based options for
regulating Phase II existing facilities. As in the proposed option, any
technology-based options considered below would allow for voluntary
implementation of restoration measures by facilities that choose to
reduce their intake flow to a level commensurate with performance
requirements. Thus, under these options, facilities would be able to
implement restoration measures that would result in increases in fish
and shellfish if a demonstration of comparable performance is made for
species of concern identified by the Director in consultation with
national, State, and Tribal fish and wildlife management agencies with
responsibility for aquatic resources potentially affected by the
cooling water intake structure.
Similarly, any technology-based options considered also would allow
facilities to request alternative requirements that are less stringent
than those specified, but only if the Director determines that data
specific to the facility indicate that compliance with the relevant
requirement would result in compliance costs significantly greater than
those EPA considered in establishing the requirement at issue, or would
result in significant adverse impacts on local air quality or local
energy markets. The alternative requirement could be no less stringent
than justified by the significantly greater cost or the significant
adverse impacts on local air quality or local energy markets. EPA
invites comment on these provisions and on other factors that might
form the basis for alternative regulations.
The example regulatory language presented in section VI.B.3 below
does not include a provision similar to the 40 CFR 125.85 in the new
facility final rule for alternative requirements based on significant
adverse impact on local water resources other than impingement and
entrainment. In EPA's judgement, this provision would primarily be used
to address water allocation and quantity issues which do not arise in
tidal rivers, estuaries and oceans, where salinity limits competing
water uses.
1. Intake Capacity Commensurate with Closed-Cycle, Recirculating
Cooling System for All Facilities
EPA considered a regulatory option that would require Phase II
existing facilities having a design intake flow 50 MGD or more to
reduce the total design intake flow to a level, at a minimum,
commensurate with that which can be attained by a closed-cycle
recirculating cooling system using minimized make-up and blowdown
flows. In addition, facilities in specified circumstances (e.g.,
located where additional protection is needed due to concerns regarding
threatened, endangered, or protected species or habitat; migratory,
sport or commercial species of concern) would have to select and
implement design and construction technologies to minimize impingement
mortality and entrainment. This option does not distinguish between
facilities on the basis of the waterbody from which they withdraw
cooling water. Rather, it would ensure that the same stringent controls
are the nationally applicable minimum for all waterbody types. This is
the regulatory approach EPA adopted for new facilities.
Reducing the cooling water intake structure's capacity is one of
the most effective means of reducing entrainment (and impingement). For
the traditional steam electric utility industry, facilities located in
freshwater areas that have closed-cycle, recirculating cooling water
systems can, depending on the quality of the make-up water, reduce
water use by 96 to 98 percent from the amount they would use if they
had once-through cooling water systems, though many of these areas
generally contain species that are less susceptible to entrainment.
Steam electric generating facilities that have closed-cycle,
recirculating cooling systems using salt water can reduce water usage
by 70 to 96 percent when make-up and blowdown flows are minimized. \60\
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\60\ The lower range would be appropriate where State water
quality standards limit chloride to a maximum increase of 10 percent
over background and therefore require a 1.1 cycle of concentraction.
The higher range may be attained where cycles of concentration up to
2.0 are used for the design.
---------------------------------------------------------------------------

Of the 539 existing steam electric power generating facilities that
EPA believes would potentially be subject to the Phase II existing
facility proposed rule, 73 of these facilities already have a
recirculating wet cooling system (e.g., wet cooling towers or ponds).
These facilities would meet the requirements under this option unless
they are located in areas where the director or fisheries managers
determine that fisheries need additional protection. Therefore, under
this option, 466 steam electric power generating facilities would be
required to meet performance standards for reducing impingement
mortality and entrainment based on a reduction in intake flow to a
level commensurate with that which can be attained by a closed-cycle
recirculating system.
A closed-cycle recirculating cooling system is an available
technology for facilities that currently have once-through cooling
water systems. There are a few examples of existing facilities
converting from one type of cooling system to another (e.g., from once-
through to closed-cycle recirculating cooling system). Converting to a
different type of cooling water system, however, is significantly more
expensive than the technologies on which the proposed performance
standards are based (generally by a factor of 10 or greater) and
significantly more expensive that designing new facilities to run on
recirculating systems. EPA has identified four power plants that would
be regulated by today's proposal that have converted from once-through
to closed-cycle recirculating cooling systems. Three of these
facilities--Palisades Nuclear Plant in Michigan, Jefferies Coal in
South Carolina, and Canadys Steam in South Carolina-- converted from
once-through to closed-cycle recirculating cooling systems after
significant periods of operation utilizing the once-through system. The
fourth facility--Pittsburg Unit 7--is not a full conversion in that it
never operated with its once-through system. In this case, the
``conversion'' occurred just prior to construction, after initial
design of the once-through system design and power plant had

[[Page 17155]]

occurred. A brief description of these conversions follows. The
Technical Development Document for the Proposed Section 316(b) Phase II
Existing Facilities Rule provides additional detail.
The Palisades Nuclear Plant. Located in Covert, Michigan, the
Palisades Nuclear Plant is a 812 MW (nameplate, steam capacity)
facility with a pressurized water reactor, utilizing a mechanical draft
wood cooling tower to condense the steam load of the plant. The reactor
began operation in 1972 utilizing a once-through cooling system and
subsequently converted to a closed-cycle, recirculating system at the
beginning of 1974.
Canadys Steam Plant. This 490 MW (nameplate, steam capacity) coal-
fired facility with three generating units is located in Colleton
County, South Carolina. The first unit initially came online in 1962,
the second in 1964, and the third in 1967. All three units operated
with a once-through cooling water system for many years. The Canadys
Steam plant was converted from a once-through to a closed-cycle
recirculating cooling system in two separate projects. Unit 3 (218 MW)
was first converted in 1972. Units 1 and 2, both with nameplate
capacities of 136 MW, were converted from a once-through to a closed-
cycle, recirculating cooling system in 1992.
Jefferies Coal Units 3 & 4. Located in Moncks Corner, South
Carolina, this facility has a combined, coal-fired capacity of 346 MW
(nameplate, steam). The coal units came online in 1970 and operated for
approximately 15 years utilizing once-through cooling. After the Army
Corps of Engineers re-diverted the Santee Cooper River, thereby
limiting the plant's available water supply, the cooling system was
converted from once-through to recirculating towers. The plant
conducted an empirical energy-penalty study over several years to
determine the economic impact of the cooling system conversion.
Pittsburg Power Plant, Unit 7. Located in Contra Costa County,
California, this 750 MW (nameplate, gas-fired steam) unit was designed
and planned with a once-through cooling water system. However, late in
the construction process, the plant switched to a closed-cycle,
recirculating cooling system with a mechanical draft cooling tower. The
system utilizes the condenser, conduit system, and circulating pumps
originally designed for the once-through cooling water system.
EPA did not select closed-cycle, recirculating cooling systems as
the best technology available for existing facilities because of the
generally high costs of such conversions. According to EPA's cost
estimates, capital costs for individual high-flow plants to convert to
wet towers generally ranged from 130 to 200 million dollars, with
annual operating costs in the range of 4 to 20 million dollars. EPA
estimates that the total annualized post-tax cost of compliance for
this option is approximately $2.26 billion. Not included in this
estimate are 9 facilities that are projected to be baseline closures.
Including compliance costs for these 9 facilities would increase the
total cost of compliance with this option to approximately $2.32
billion. EPA also has serious concerns about the short term energy
implications of a massive concurrent conversion and the potential for
supply disruptions that it would entail. EPA requests comment on its
decision not to base best technology available for all Phase II
existing facilities on closed-cycle, recirculating technology.
The estimated annual benefits (in $2001) for requiring all Phase II
existing facilities to reduce intake capacity commensurate with the use
of closed-cycle, recirculating cooling systems are $83.9 million per
year and $1.08 billion for entrainment reductions.
2. Intake Capacity Commensurate with Closed-Cycle, Recirculating
Cooling Systems Based on Waterbody Type
EPA also considered an alternate technology-based option in which
closed-cycle, recirculating cooling systems would be required for all
facilities on certain waterbody types. Under this option, EPA would
group waterbodies into the same five categories as in today's proposal:
(1) Freshwater rivers or streams, (2) lakes or reservoirs, (3) Great
Lakes, (4) tidal rivers or estuaries; and (5) oceans. Because oceans,
estuaries and tidal rivers contain essential habitat and nursery areas
for the vast majority of commercial and recreational important species
of shell and fin fish, including many species that are subject to
intensive fishing pressures, these waterbody types would require more
stringent controls based on the performance of closed-cycle,
recirculating cooling systems. EPA discussed the susceptibility of
these waters in a Notice of Data Availability (NODA) for the new
facility rule (66 FR 28853, May 25, 2001) and invited comment on
documents that may support its judgment that these waters are
particularly susceptible to adverse impacts from cooling water intake
structures. In addition, the NODA presented information regarding the
low susceptibility of non-tidal freshwater rivers and streams to
impacts from entrainment from cooling water intake structures.
Under this alternative option, facilities that operate at less than
15 percent capacity utilization would, as in the proposed option, only
be required to have impingement control technology. Facilities that
have a closed-cycle, recirculating cooling system would require
additional design and construction technologies to increase the
survival rate of impinged biota or to further reduce the amount of
entrained biota if the intake structure was located within an ocean,
tidal river, or estuary where there are fishery resources of concern to
permitting authorities or fishery managers.
Facilities with cooling water intake structures located in a
freshwater (including rivers and streams, the Great Lakes and other
lakes) would have the same requirements as under the proposed rule. If
a facility chose to comply with Track II, then the facility would have
to demonstrate that alternative technologies would reduce impingement
and entrainment to levels comparable to those that would be achieved
with a closed-loop recirculating system (90% reduction). If such a
facility chose to supplement its alternative technologies with
restoration measures, it would have to demonstrate the same or
substantially similar level of protection. (For additional discussion
see the new facility final rule 66 FR 65256, at 65315 columns 1 and 2.)
EPA has estimated that there are 109 facilities located on oceans,
estuaries, or tidal rivers that do not have a closed cycle
recirculating system and would be required to meet performance
standards for reducing impingement mortality and entrainment based on a
reduction in intake flow to a level commensurate with that which can be
attained by a closed-cycle recirculating system. The other 430
facilities would be required to meet the same performance standards in
today's proposal.
The potential environmental benefits of this option have been
estimated at $87.8 million and $1.24 billion for entrainment reductions
annually. Although this option is estimated (a full cost analysis was
not done for this option) to be less expensive at a national level than
requiring closed-cycle, recirculating cooling systems for all Phase II
existing facilities, EPA is not proposing this option. Facilities
located on oceans, estuaries, and tidal rivers would incur high capital
and operating and maintenance costs for conversions of their cooling
water systems. Furthermore, since impacted facilities would be
concentrated in coastal

[[Page 17156]]

regions, there is the potential for short term energy impacts and
supply disruptions in these areas. EPA also invites comment on this
option.
3. Intake Capacity Commensurate With Closed-Cycle, Recirculating
Cooling System Based on Waterbody Type and Proportion of Waterbody Flow
EPA is also considering a variation on the above approach that
would require only facilities withdrawing very large amounts of water
from an estuary, tidal river, or ocean to reduce their intake capacity
to a level commensurate with that which can be attained by a closed-
cycle, recirculating cooling system.
For example, for facilities with cooling water intake structures
located in a tidal river or estuary, if the intake flow is greater than
1 percent of the source water tidal excursion, then the facility would
have to meet standards for reducing impingement mortality and
entrainment based on the performance of wet cooling towers. These
facilities would have the choice of complying with Track I or Track II
requirements. If a facility on a tidal river or estuary has intake flow
equal to or less than 1 percent of the source water tidal excursion,
the facility would only be required to meet the performance standards
in the proposed rule. These standards are based on the performance of
technologies such as fine mesh screens and traveling screens with well-
designed and operating fish return systems. The more stringent, closed-
cycle, recirculating cooling system based requirements would also apply
to a facility that has a cooling water intake structure located in an
ocean with an intake flow greater than 500 MGD.
Regulatory language implementing the Waterbody Type and Intake
Capacity Based Option could read as follows:

(a)(1) The owner or operator of an existing steam electric power
generating facility must comply with:
(i) The requirements of (b)(1) if your cooling water intake
structure has a utilization rate less than 15 percent;
(i) The requirements of (b)(2) if your cooling water intake
structure withdraws water for use in a closed-cycle, recirculating
system;
(ii) The requirements of (b)(3) if your cooling water intake
structure is located in a freshwater river or stream;
(iii) The requirements of (b)(4) if your cooling water intake
structure is located in a lake (other than one of the Great Lakes)
or reservoir;
(iv) The requirements of (b)(5) or (c) if your cooling water
intake structure is located in an estuary or tidal river;
(v) The requirements of (b)(6) if your cooling water intake
structure is located in one of the Great Lakes;
(vi) The requirements of (b)(7) or (c) if your cooling water
intake structure is located in an ocean.
(2) In addition to meeting the requirements of (b) or (c), the
owner or operator of an existing steam electric power generating
facility must meet any more stringent requirements imposed under
(d).
(b) Track I Requirements. Based on the design characteristics of
your facility and cooling water intake structure(s) you must meet
the requirements of paragraphs (b)(1) through (10).
(1) Requirements for Facilities With a Capacity Utilization
Rates Less Than 15 Percent. If you own or operate an existing
facility with a cooling water intake structure that has a capacity
utilization rate less than 15 percent, you must select and implement
design and construction technologies or operational measures to
reduce impingement mortality by 80 to 95% for fish and shellfish.
(2) Requirements for Cooling Water Intake Structures that
Withdraw Water for Closed-Cycle, Recirculating Systems Only. If you
own or operate a cooling water intake structure that withdraws water
from an estuary, tidal river, or ocean for a closed-cycle,
recirculating system only, you must comply with the requirements in
paragraphs (b)(2)(i) and (ii) as follows:
(i) Impingement Design and Construction Technologies or
Operational Measures. You must select and implement design and
construction technologies or operational measures to minimize
impingement mortality for fish and shellfish if:
(A) There are threatened or endangered or otherwise protected
Federal, State, or Tribal species, or critical habitat for these
species, within the hydraulic zone of influence of the cooling water
intake structure; or
(B) There are migratory and/or sport or commercial species of
impingement concern to the Director or any fishery management
agency(ies), which pass through the hydraulic zone of influence of
the cooling water intake structure; or
(C) It is determined by the Director or any fishery management
agency(ies) that the facility contributes unacceptable stress to the
protected species, critical habitat of those species, or species of
concern.
(ii) Entrainment Design and Construction Technologies or
Operational Measures. You must select and implement design and
construction technologies or operational measures to minimize
entrainment for entrainable life stages of fish and shellfish if:
(A) There are threatened or endangered or otherwise protected
Federal, State, or Tribal species, or critical habitat for these
species, within the hydraulic zone of influence of the cooling water
intake structure; or
(B) There are or would be undesirable cumulative stressors
affecting entrainable life stages of species of concern to the
Director or any fishery management agency(ies), and it is determined
by the Director or any fishery management agency(ies) that the
facility contributes unacceptable stress to these species of
concern.
(3) Requirements for Cooling Water Intake Structures Located in
Freshwater Rivers or Streams. If you own or operate an existing
facility with a cooling water intake structure located in a
freshwater river or stream, you must comply with paragraphs
(b)(3)(i) or (ii) as follows:
(i) If your total design intake flow is equal to or less than 5
percent of the source water annual mean flow, you must select and
implement design and construction technologies or operational
measures to reduce impingement mortality by 80 to 95% for all life
stages of fish and shellfish; or
(ii) If your total design intake flow is greater than 5 percent
of the source water annual mean flow, you must select and implement
design and construction technologies or operational measures to
reduce impingement mortality by 80 to 95% and entrainment by 60 to
90% for all life stages of fish and shellfish.
(4) Requirements for Cooling Water Intake Structures Located in
Lakes (Other Than one of the Great Lakes) or Reservoirs. If you own
or operate an existing facility with a cooling water intake
structure located in a lake (other than one of the Great Lakes) or
reservoir, you must comply with paragraphs (b)(4)(i) and (ii) as
follows:
(i) Your total design intake flow must not disrupt the natural
thermal stratification or turnover pattern (where present) of the
source water except in cases where the disruption is determined to
be beneficial to the management of fisheries for fish and shellfish
by any fisheries management agency(ies); and
(ii) You must select and implement design and construction
technologies or operational measures to reduce impingement mortality
by 80 to 95% for fish and shellfish.
(5) Requirements for Cooling Water Intake Structures Located in
Estuaries or Tidal Rivers. If you own or operate an existing
facility with a cooling water intake structure located in an estuary
or tidal river you must comply with paragraphs (b)(5)(i) or (ii) as
follows:
(i) If your total design intake flow over one tidal cycle of ebb
and flow is equal to or less than one (1) percent of the volume of
the water column within the area centered about the opening of the
intake with a diameter defined by the distance of one tidal
excursion at the mean low water level, you must select and implement
design and construction technologies or operational measures to
reduce impingement mortality by 80 to 95% and entrainment by 60 to
90% for all life stages of fish and shellfish; or
(ii) If your total design intake flow over one tidal cycle of
ebb and flow is greater than one (1) percent of the volume of the
water column within the area centered about the opening of the
intake with a diameter defined by the distance of one tidal
excursion at the mean low water level, you must meet the
requirements in paragraphs (b)(5)(ii)(A) or (B):
(A) Reduce your intake flow to a level commensurate with that
which can be attained by a closed-cycle recirculating system and
select and implement design and construction technologies or
operational measures as follows:
(1) Impingement Design and Construction Technologies or
Operational Measures. You must select and implement design and
construction technologies or operational

[[Page 17157]]

measures to minimize impingement mortality for fish and shellfish
if:
(i) There are threatened or endangered or otherwise protected
Federal, State, or Tribal species, or critical habitat for these
species, within the hydraulic zone of influence of the cooling water
intake structure; or
(ii) There are migratory and/or sport or commercial species of
impingement concern to the Director or any fishery management
agency(ies), which pass through the hydraulic zone of influence of
the cooling water intake structure; or
(iii) It is determined by the Director or any fishery management
agency(ies) that the facility contributes unacceptable stress to the
protected species, critical habitat of those species, or species of
concern.
(2) Entrainment Design and Construction Technologies or
Operational Measures. You must select and implement design and
construction technologies or operational measures to minimize
entrainment for entrainable life stages of fish and shellfish if:
(i) There are threatened or endangered or otherwise protected
Federal, State, or Tribal species, or critical habitat for these
species, within the hydraulic zone of influence of the cooling water
intake structure; or
(ii) There are or would be undesirable cumulative stressors
affecting entrainable life stages of species of concern to the
Director or any fishery management agency(ies), and it is determined
by the Director or any fishery management agency(ies) that the
facility contributes unacceptable stress to these species of
concern.
(B) Comply with the requirements of Track II in (c).
(6) Requirements for Cooling Water Intake Structures Located in
One of the Great Lakes. If you own or operate an existing facility
with a cooling water intake structure located in one of the Great
Lakes you must select and implement design and construction
technologies or operational measures to reduce impingement mortality
by 80 to 95% and entrainment by 60 to 90% for all life stages of
fish and shellfish.
(7) Requirements for Cooling Water Intake Structures Located in
an Ocean. If you own or operate an existing facility with a cooling
water intake structure located in an ocean you must comply with
paragraphs (b)(7)(i) or (ii) as follows:
(i) If your total design intake flow is less than 500 MGD, you
must select and implement design and construction technologies or
operational measures to reduce impingement mortality by 80 to 95%
and entrainment by 60 to 90% for all life stages of fish and
shellfish; or
(ii) If your total design intake flow is equal to, or greater
than 500 MGD, you must meet the requirements in paragraphs
(b)(7)(ii)(A) or (B):
(A) Reduce your intake flow to a level commensurate with that
which can be attained by a closed-cycle recirculating system and
select and implement design and construction technologies or
operational measures as follows:
(1) Impingement Design and Construction Technologies or
Operational Measures. You must select and implement design and
construction technologies or operational measures to minimize
impingement mortality for fish and shellfish if:
(i) There are threatened or endangered or otherwise protected
Federal, State, or Tribal species, or critical habitat for these
species, within the hydraulic zone of influence of the cooling water
intake structure; or
(ii) There are migratory and/or sport or commercial species of
impingement concern to the Director or any fishery management
agency(ies), which pass through the hydraulic zone of influence of
the cooling water intake structure; or
(iii) It is determined by the Director or any fishery management
agency(ies) that the facility contributes unacceptable stress to the
protected species, critical habitat of those species, or species of
concern.
(2) Entrainment Design and Construction Technologies or
Operational Measures. You must select and implement design and
construction technologies or operational measures to minimize
entrainment for entrainable life stages of fish and shellfish if:
(i) There are threatened or endangered or otherwise protected
Federal, State, or Tribal species, or critical habitat for these
species, within the hydraulic zone of influence of the cooling water
intake structure; or
(ii) There are or would be undesirable cumulative stressors
affecting entrainable life stages of species of concern to the
Director or any fishery management agency(ies), and it is determined
by the Director or any fishery management agency(ies) that the
facility contributes unacceptable stress to these species of
concern.
(B) Comply with the requirements of Track II in (c).
(8) You must submit the application information required;
(9) You must implement the monitoring requirements specified;
(10) You must implement the record-keeping requirements
specified;
(c) Track II Requirements. If you are an existing steam electric
power generating facility with a cooling water intake structure
located in an estuary, tidal river, or ocean that chooses to meet
the requirements of Track II in lieu of Track I in (b)(5)(ii) or
(b)(7)(ii), you must comply with the following:
(1) You must demonstrate to the Director that the technologies,
operational measures, and supplemental restoration measures employed
will reduce the level of adverse environmental impact from your
cooling water intake structures to a level comparable to that which
you would achieve were you to reduce your intake flow to a level
commensurate with that which can be attained by a closed-cycle
recirculating system.
(2) Except as specified in subparagraph (c)(4) below, your
demonstration must include a showing that the impacts to fish and
shellfish, including important forage and predator species, within
the watershed will be comparable to those which would result if you
were to reduce your intake flow to a level commensurate with that
which can be attained by a closed-cycle recirculating system. This
showing may include consideration of impacts other than impingement
mortality and entrainment.
(3) Restoration Measures. Phase II existing facilities complying
with the requirements of Track II may supplement technologies with
restoration measures that will result in increases in fish and
shellfish if you can demonstrate that they will result in a
comparable performance for species that the Director, in
consultation with national, State and Tribal fishery management
agencies with responsibility for fisheries potentially affected by
your cooling water intake structure, identifies as species of
concern.
(4) In cases where air emissions and/or energy impacts that
would result from reducing your intake flow to a level commensurate
with that which can be attained by a closed-cycle recirculating
system would result in significant adverse impacts on local air
quality, or significant adverse impact on local energy markets, you
may request alternative requirements.
(5) You must submit the application information required;
(6) You must implement the monitoring requirements specified;
(7) You must implement the record-keeping requirements
specified;

EPA notes that of these, some facilities would likely opt to comply
through Track II and estimates that 21 facilities would select this
option. These facilities would perform site-specific studies and
demonstrate compliance using alternative technologies, perhaps
supplemented by habitat enhancement or fishery restocking efforts.
Assuming as a high impact scenario that all 51 of these facilities
install wet cooling towers, the energy impacts associated with these 51
facilities would comprise 0.2 percent of total existing electric
generating capacity from facilities with an intake flow of 50 MGD or
more. The environmental impacts associated with increased air emissions
(SO₂, NO_X, CO₂, and Hg) associated
with this option would be a 0.1 percent increase of emissions of these
pollutants from the total existing electric generators.
The Nuclear Regulatory Commission estimates that a steam-electric
plant utilizing a once-through cooling system would consume
approximately 40 percent less water than a comparably sized plant
equipped with recirculating wet cooling towers because a wet cooling
tower uses a small amount of water many times and evaporates most of
this water to provide its cooling (which can sometimes be seen as a
white vapor plume). In contrast, a once-through cooling system uses a
much larger volume of water, one time. While no cooling water
evaporates directly to the air, once the heated water is discharged
back into the waterbody, some evaporation occurs. Thus, in some areas,
conversion to closed-cycle cooling could raise water quantity issues.

[[Page 17158]]

Based on an analysis of data collected through the detailed
industry questionnaire and the short technical questionnaire, EPA
estimates there are potentially 109 Phase II existing facilities
located on estuaries, tidal rivers, or oceans which may incur capital
cost under this option. Of these 109 facilities, EPA estimates that 51
would exceed the applicable flow threshold and be required to meet
performance standards for reducing impingement mortality and
entrainment based on a reduction in intake flow to a level commensurate
with that which can be attained by a closed-cycle recirculating system.
Of the 58 facilities estimated to fall below the applicable flow
threshold, 10 facilities already meet these performance standards and
would not require any additional controls, whereas 48 facilities would
require entrainment or impingement controls, or both. Because this
option would only require cooling tower-based performance standards for
facilities located on tidal rivers, estuaries or oceans where they
withdraw saline or brackish waters, EPA does not believe that this
option would raise any significant water quantity issues.
Total annualized post-tax cost of compliance for the waterbody/
capacity-based option is approximately $585 million. Not included in
this estimate are 9 facilities that are projected to be baseline
closures. Including compliance costs for these 9 facilities would
increase the total cost of compliance with this option to approximately
$595 million.
EPA also examined the annualized post-tax compliance costs of the
waterbody/capacity-based option as a percentage of annual revenues to
assess the economic practicability of this alternative option. This
analysis was conducted at the facility and firm levels. The revenue
estimates are the same as those used in the analysis in Section VI.A.3
above: facility-specific baseline projections from the Integrated
Planning Model (IPM) for 2008. The results at the facility level are
similar to those of the proposed rule: 355 out of 550 facilities, or 65
percent, would incur annualized costs of less than 0.5 percent of
revenues; 60 facilities would incur costs of between 0.5 and 1 percent
of revenues; 57 facilities would incur costs of between 1 and 3
percent; and 67 facilities would incur costs of greater than 3 percent.
Nine facilities are estimated to be baseline closures, and for one
facility, revenues are unknown. Exhibit 4 below summarizes these
findings.

Exhibit 4.--Waterbody/Capacity-based Option (Facility Level)
------------------------------------------------------------------------
Percent
Annualized cost-to-revenue ratio All of total
phase II phase II
------------------------------------------------------------------------
0.5 %............................................ 355 65
0.5-1.0........................................... 60 11
1.0-3.0%.......................................... 57 10
> 3.0 %........................................... 67 12
Baseline Closure.................................. 9 2
n/a............................................... 1 0
---------------------
Total........................................... 550 100
------------------------------------------------------------------------

Similar to the preferred option, EPA estimates that the compliance
costs for the waterbody/capacity-based option would also be low
compared to firm-level revenues. Of the 131 unique parent entities that
own the facilities subject to this rule, 108 entities would incur
compliance costs of less than 0.5 percent of revenues; 12 entities
would incur compliance costs of between 0.5 and 1 percent of revenues;
6 entities would incur compliance costs of between 1 and 3 percent of
revenues; and three entities would incur compliance costs of greater
than 3 percent of revenues. Two entities only own facilities that are
estimated to be baseline closures. The estimated annualized facility
compliance costs for this option represent between 0.001 and 5.4
percent of the entities' annual sales revenue. Exhibit 5 below
summarizes these findings.

Exhibit 5.--Waterbody/Capacity-based Option (Firm Level)
------------------------------------------------------------------------
Number of Percent
Annualized cost-to-revenue ratio phase II of total
entities phase II
------------------------------------------------------------------------
0.5 %............................................ 108 82
0.5-1.0 %......................................... 12 9
1.0-3.0%.......................................... 6 5
> 3.0 %........................................... 3 2
Baseline Closure.................................. 2 2
---------------------
Total........................................... 131 100
------------------------------------------------------------------------

The results of EPA's approach to estimating national benefits are
$79.86 million per year for impingement reduction and $769.0 million
annually for entrainment reduction. Additional details of EPA's
economic practicability and benefits analysis of this and other options
can be found in the Economic and Benefits Analysis for the Proposed
Section 316(b) Phase II Existing Facilities Rule and the Technical
Development Document for the Proposed Section 316(b) Phase II Existing
Facilities Rule.
While the national costs of this option are lower than those of
requiring wet cooling towers-based performance standard for all
facilities located on oceans, estuaries and tidal rivers, the cost for
facilities to meet these standards could be substantial if they
installed a cooling tower. Under this option, EPA would provide an
opportunity to seek alternative requirements to address locally
significant air quality or energy impacts. EPA notes that the
incremental costs of this option relative to the proposed option ($413
million) significantly outweigh the incremental benefits ($146
million). While EPA is not proposing this option, EPA is considering it
for the final rule. To facilitate informed public comment, EPA has
drafted sample rule language reflecting this option (see above). EPA
invites comment on this alternative technology based option for
establishing best technology available for minimizing adverse
environmental impacts from cooling water intake structures at Phase II
existing facilities.
4. Impingement Mortality and Entrainment Controls Everywhere
Under an additional alternative being considered, EPA would
establish national minimum performance requirements for the location,
design, construction, and capacity of cooling water intake structures
based on the use of design and construction technologies that reduce
impingement and entrainment at all Phase II existing facilities without
regard to waterbody type and with no site-specific compliance option
available. Under this alternative the Agency would set performance
requirements based on the use of design and construction technologies
or operational measures that reduce impingement and entrainment. EPA
would specify a range of impingement mortality and entrainment
reduction that is the same as the performance requirements proposed in
Sec. 125.94(b)(3) (i.e., Phase II existing facilities would be required
to reduce impingement mortality by 80 to 95 percent for fish and
shellfish, and to reduce entrainment by 60 to 90 percent for all life
stages of fish and shellfish). However, unlike the proposed option,
performance requirements under this alternative would apply to all
Phase II existing facilities regardless of the category of waterbody
used for cooling water withdrawals.
Like the proposed option, the percent impingement and entrainment
reduction under this alternative would be relative to the calculation
baseline. Thus, the baseline for assessing performance would be an
existing facility with a shoreline intake with the capacity to support
once-through

[[Page 17159]]

cooling water systems and no impingement or entrainment controls. In
addition, as proposed, a Phase II existing facility could demonstrate
either that it currently meets the performance requirements or that it
would upgrade its facility to meet these requirements. Further, under
this alternative, EPA would set technology-based performance
requirements, but the Agency would not mandate the use of any specific
technology.
Unlike the proposed option, this alternative would not allow for
the development of best technology available on a site-specific basis
(except on a best professional judgment basis). This alternative would
not base requirements on the percent of source water withdrawn or
restrict disruption of the natural thermal stratification of lakes or
reservoirs. It also would impose entrainment performance requirements
on Phase II existing facilities located on freshwater rivers or
streams, and lakes or reservoirs. Finally, under this alternative,
restoration could be used, but only as a supplement to the use of
design and construction technologies or operational measures.
This alternative would establish clear performance-based
requirements that are simpler and easier to implement that those
proposed and are based on the use of available technologies to reduce
adverse environmental impact. Such an alternative would be consistent
with the focus on use of best technology required under section 316(b).
Total annualized post-tax cost of compliance for the modified proposed
option is approximately $191 million. Not included in this estimate are
11 facilities that are projected to be baseline closures. Including
compliance costs for these 11 facilities would increase the total cost
of compliance with this option to approximately $195 million. The
benefits calculated for reduced impingement under this option were
$64.5 million per year; entrainment reduction benefits were estimated
to be $0.65 billion annually.

C. Site-Specific Based Options Under Consideration

1. Sample Site-Specific Rule
EPA also invites comment on site-specific approaches for
determining the best technology available for minimizing adverse
environmental impact at existing facilities. In general, a site-
specific option is a formal process for determining the best technology
available for minimizing adverse environmental impact at particular
facilities that focuses on the site-specific interactions between
cooling water intakes and the affected environment and the costs of
implementing controls. This approach would be based on the view that
the location of each power plant and the associated intake structure
design, construction, and capacity are unique, and that the optimal
combination of measures to reflect best technology available for
minimizing adverse environmental impact must be determined on a case-
by-case basis.
In order to focus public comment, EPA, in consultation with other
interested Federal agencies, has drafted sample regulatory text for a
site-specific approach, which is set forth below. The Site-Specific
Sample Rule omits regulatory text on two key subjects: (1) The
definition of adverse environmental impact; and (2) the components of
the analysis that is used to determine the best technology available
for minimizing adverse environmental impact. Instead, the Sample Rule
contains references to the preamble discussion of these subjects (see
Sec. 125.93, definition of ``adverse environmental impact'' and
Sec. 125.94(b)(2), concerning analysis of the best technology
available). Regulatory text is not offered on these subjects because
the various site-specific approaches described in the discussion
following the Sample Rule deal with them in significantly different
ways.

Site-Specific Alternative: Sample Rule

Sec.
125.90 What are the purpose and scope of this subpart?
125.91 Who is subject to this subpart?
125.92 When must I comply with this subpart?
125.93 What special definitions apply to this subpart?
125.94 As an owner or operator of an existing facility, what must I
do to comply with this subpart?
125.95 As an owner or operator of an existing facility, may I
undertake restoration measures to mitigate adverse environmental
impact?
125.96 Will alternate State requirements and methodologies for
determining the best technology available for minimizing adverse
environmental impact be recognized?
125.97 As an owner or operator of an existing facility, what must I
collect and submit when I apply for my reissued NPDES permit?
125.98 As an owner or operator of an existing facility, must I
perform monitoring?
125.99 As an owner or operator of an existing facility, must I keep
records and report?
125.100 As the Director, what must I do to comply with the
requirements of this subpart?

Section 125.90 What Are the Purpose and Scope of This Subpart?

(a) This subpart establishes requirements that apply to the
location, design, construction, and capacity of cooling water intake
structures at existing facilities that have a design intake flow of
equal to or greater than 50 million gallons per day (MGD). The
purpose of these requirements is to establish the best technology
available for minimizing any adverse environmental impact associated
with the use of cooling water intake structures. These requirements
are implemented through National Pollutant Discharge Elimination
System (NPDES) permits issued under section 402 of the Clean Water
Act (CWA).
(b) This subpart implements section 316(b) of the CWA for
existing facilities that have a design flow of equal to or greater
than 50 MGD. Section 316(b) of the CWA provides that any standard
established pursuant to sections 301 or 306 of the CWA and
applicable to a point source shall require that the location,
design, construction, and capacity of cooling water intake
structures reflect the best technology available for minimizing
adverse environmental impact. The process established in this
subpart for determining the best technology available for intake
design, location, construction, and capacity provides for a case-by-
case determination based on the unique, site-specific interactions
between intakes and the environment and the costs of implementing
controls at existing facilities.

Section 125.91 Who Is Subject to This Subpart?

(a) This subpart applies to an existing facility if it:
(1) Is a point source that uses or proposes to use a cooling
water intake structure;
(2) Has at least one cooling water intake structure that uses at
least 25 percent of the water it withdraws for cooling purposes as
specified in paragraph (c) of this section; and
(3) Has a design intake flow equal to or greater than 50 MGD;
(b) Use of a cooling water intake structure includes obtaining
cooling water by any sort of contract or arrangement with an
independent supplier (or multiple suppliers) of cooling water if the
supplier or suppliers withdraw(s) water from waters of the United
States. Use of cooling water does not include obtaining cooling
water from a public water system or use of treated effluent that
otherwise would be discharged to a water of the U.S. This provision
is intended to prevent circumvention of these requirements by
creating arrangements to receive cooling water from an entity that
is not itself a point source.
(c) The threshold requirement that at least 25 percent of water
withdrawn be used for cooling purposes must be measured on an
average monthly basis.

Section 125.92 When Must I Comply With This Subpart?

You must comply with this subpart when an NPDES permit
containing requirements consistent with this subpart is issued to
you.

[[Page 17160]]

Section 125.93 What Special Definitions Apply to This Subpart?

The definitions in Subpart I of Part 125 apply to this subpart.
The following definitions also apply to this subpart:
Adverse Environmental Impact [Reserved; see discussion at
V.C.5.a below.]
Existing facility means any facility that both generates and
transmits electric power and any facility that generates electric
power but sells it to another entity for transmission. This
definition specifically includes (1) any major modification of a
facility; (2) any addition of a new unit to a facility for purposes
of the same industrial operation; (3) any addition of a unit for
purposes of a different industrial operation that uses an existing
cooling water intake structure but does not increase the design
capacity of the cooling water intake structure; and (4) any facility
that is constructed in place of a facility that has been demolished,
but that uses an existing cooling water intake structure whose
design intake flow has not been increased to accommodate the intake
of additional cooling water.

Section 125.94 How Will Requirements Reflecting Best Technology
Available for Minimizing Adverse Environmental Impact Be Established
for My Existing Facility?

(a)(1) Except as provided in paragraph (a)(2) of this section,
an owner or operator of an existing facility covered by this subpart
must conduct a baseline biological survey and provide any other
information specified in Sec. 125.97 that the Director concludes is
necessary for determining the magnitude of any adverse environmental
impact occurring at the facility.
(2) A previously conducted section 316(b) demonstration may be
used to determine whether the location, design, construction and
capacity of the facility's cooling water intake structure reflect
best technology available for minimizing adverse environmental
impact if it reflects current biological conditions in the water
body and the current location and design of the cooling water intake
structure. A previously conducted section 316(b) demonstration
generally would reflect current conditions or circumstances if:
(i) The previous section 316(b) demonstration used data
collection and analytical methods consistent with guidance or
requirements of the permitting agency and/or the Administrator;
(ii) The available evidence shows that there have been no
significant changes in the populations of critical aquatic species;
and
(iii) The owner or operator can show there have been no
significant changes in the location, design, construction, and
capacity of the facility's cooling water intake structure that would
lead to a greater adverse environmental impact.
(b) The determination of best technology available for
minimizing adverse environmental impact required by paragraph (c) of
this section may be based on:
(1) A previously conducted section 316(b) demonstration that is
shown to be still valid in the current circumstances, as described
in paragraph (a)(2) of this section; or
(2) An analysis of best technology available based on the Design
and Construction Technology Plan, operational measures, and any
restoration measures allowed under Sec. 125.95, that are submitted
pursuant to Sec. 125.97. This analysis may include use of risk
assessment. [See V.C.5.c below for a discussion of possible
additional components of this analysis.]
(c) In determining the best technology available for minimizing
adverse environmental impact at an existing facility, the Director
shall :
(1) Minimize impingement mortality for fish and shellfish;
(2) Minimize entrainment mortality for entrainable life stages
of fish and shellfish;
(3) Take into account non-aquatic environmental impacts,
including energy requirements, and impacts on local air quality or
water resources; and
(4) Not require any technologies for location, design,
construction or capacity or operational and/or restoration measures
the costs of which would be significantly greater than the estimated
benefits of such technology or measures.
(d) The Director may establish more stringent requirements as
best technology available for minimizing adverse environmental
impact if the Director determines that your compliance with the
requirements of paragraph (c) would not ensure compliance with State
or other Federal law.
(e) The owner or operator of an existing facility must comply
with any permit requirements imposed by the Director pursuant to
Sec. 125.100(b) of this section.

Section 125.95 As an Owner or Operator of an Existing Facility, May I
Undertake Restoration Measures To Mitigate Adverse Environmental
Impact?

(a) An owner or operator of an existing facility may undertake
restoration measures (such as habitat improvement and fish stocking)
that will mitigate adverse environmental impact from the facility's
cooling water intake structure.
(b) In determining whether adverse environmental impact is
minimized, the Director must take into account any voluntary
restoration measures.

Section 125.96 Will Alternative State Requirements and Methodologies
for Determining the Best Technology Available for Minimizing Adverse
Environmental Impact Be Recognized?

Notwithstanding any other provisions of this subpart, if a State
demonstrates to the Administrator that it has adopted alternative
regulatory requirements that will result in environmental
performance within a watershed that is comparable to the reductions
of impingement mortality and entrainment that would otherwise be
achieved under this subpart, the Administrator shall approve such
alternative regulatory requirements.

Section 125.97 As an Owner or Operator of an Existing Facility, What
Must I Collect and Submit When I Apply for My Reissued NPDES Permit?

(a) As an owner or operator of an existing facility covered by
this part, you must submit the information required by Sec. 125.94
and this section to the Director when you apply for a reissued NPDES
permit in accordance with 40 CFR 122.21.
(b) Biological Survey. (1) The biological survey must include:
(i) A taxonomic identification and characterization of aquatic
biological resources including a determination and description of
the target populations of concern (those species of fish and
shellfish and all life stages that are most susceptible to
impingement and entrainment), and a description of the abundance and
temporal/spatial characterization of the target populations based on
the collection of a sufficient number of years of data to capture
the seasonal and diel variations (e.g., spawning, feeding and water
column migration) of all life stages of fish and shellfish found in
the vicinity of the cooling water intake structure; and
(ii) An identification of threatened or endangered or otherwise
protected Federal, state or tribal species that might be susceptible
to impingement and entrainment by the cooling water intake
structure(s); and
(iii) A description of additional chemical, water quality, and
other anthropogenic stresses on the source water body based on
available information.
(2) As provided in Sec. 125.94(a)(2) and (d)(1), biological
survey data previously produced to demonstrate compliance with
section 316(b) of the CWA may be used in the biological survey if
the data are representative of current conditions.
(c) Design and Construction Technology Plan. (1) The Design and
Construction Technology Plan must explain the technologies and
measures you have selected to minimize adverse environmental impact
based on information collected for the biological survey.
(2) In-place technologies implemented previously to comply with
section 316(b), and information regarding their effectiveness, may
be included in the Design and Construction Technology Plan for an
existing facility.
(3) Design and engineering calculations, drawings, maps, and
costs estimates supporting the technologies and measures you have
selected to minimize adverse environmental impact.
(d) Operational Measures. Operational measures that may be
proposed include, but are not limited to, seasonal shutdowns or
reductions in flow and continuous operation of screens.
(e) Restoration Measures. If you propose to use restoration
measures to minimize adverse environmental impact as allowed in
Sec. 125.95, you must provide the following information to the
Director for review:
(1) Information and data to show that you have coordinated with
the appropriate fish and wildlife management agency;
(2) A plan that provides a list of the measures you have
selected and will implement and how you will demonstrate that your
restoration measures will maintain the fish and shellfish in the
water body to the level required to offset mortality from
entrainment and impingement; and
(3) Design and engineering calculations, drawings, maps, and
costs estimates

[[Page 17161]]

supporting the proposed restoration measures.

Section 125.98 As an Owner or Operator of an Existing Facility, Must I
Perform Monitoring?

(a) Following issuance of an NPDES permit, an owner or operator
of an existing facility must submit to the Director a program for
monitoring that will be adequate to verify that the location,
design, construction, and capacity of the cooling water intake
structure reflect the best technology available for minimizing
adverse environmental impact.
(b) The Director may require modifications of the monitoring
program proposed by the owner or operator based on, but not limited
to, consideration of the following factors:
(1) Whether or not the facility has been determined to cause
adverse environmental impacts under Sec. 125.100;
(2) The types of modifications and restoration that are required
in the NPDES permit under Sec. 125.100;
(3) The amount and quality of the data or information available
on the water body health and quality of the fishery; and
(4) The stability or flux in the environmental factors that
influence biological response in the water body.
(c) The monitoring program for an existing facility that the
Director has determined is not causing adverse environmental impact
must provide for monitoring sufficient for the Director to make the
subsequent 5-year permit decision.
(d) The monitoring program for an existing facility that the
Director has determined to cause adverse environmental impact must
provide for monitoring sufficient to demonstrate that the
modifications to facility operations and intake technology and any
restoration measures included in the NPDES permit have been
effective for minimizing adverse environmental impact. The
monitoring must begin during the first year following implementation
of the modifications and restoration measures, and must continue
until the Director is satisfied that adverse environmental impact
caused by the facility's cooling water intake has been minimized.

Section 125.99 As an Owner or Operator of an Existing Facility, Must I
Keep Records and Report?

(a) As an owner or operator of an existing facility, you must
keep records of all the data used to complete the permit application
and show compliance with the requirements in the permit and any
compliance monitoring data for a period of at least three (3) years
from the date of permit issuance.
(b) The Director may require that these records be kept for a
longer period.

Section 125.100 As the Director, What Must I Do To Comply With the
Requirements of This Subpart?

(a) Permit Applications. As the Director, you must review
materials submitted by the applicant under 40 CFR 122.21(r)(3) and
Sec. 125.94 before each permit renewal or reissuance.
(1) After receiving the permit application from the owner or
operator of a new facility, the Director must determine if the
applicant is subject to the requirements of this subpart.
(2) For each subsequent permit renewal for a covered facility,
the Director must review the application materials and monitoring
data to determine whether requirements, or additional requirements,
for design and construction technologies or operational measures
should be included in the permit, as provided in paragraph (b) of
this section.
(b) Permitting Requirements. (1) Section 316(b) requirements are
implemented for a facility through an NPDES permit. As the Director,
you must:
(i) Determine whether the location, design, construction and
capacity of the cooling water intake structure at the existing
facility reflects best technology available for minimizing adverse
environmental impact, based on the information provided under
Sec. 125.94(a) and Sec. 125.97 and any other available, relevant
information; and
(ii) If the location, design, construction and capacity of the
cooling water intake structure at the existing facility does not
reflect best technology available for minimizing adverse
environmental impact, specify the requirements and conditions for
the location, design, construction, and capacity of the cooling
water intake structure(s) that must be included in the permit for
minimizing adverse environmental impact. This determination must be
based on information provided under Sec. 125.94 and Sec. 125.97 and
any other available, relevant information.
(2) (i) Before issuing an NPDES permit containing section 316(b)
requirements, the Director must consult with and consider the views
and any information provided by interested fish and wildlife
management agencies.
(ii) If any fish and wildlife management agency having
jurisdiction over the water body used for cooling water withdrawal
determines that the cooling water intake structure(s) of an existing
facility contributes to unacceptable stress to aquatic species or
their habitat, the fish and wildlife management agency may recommend
design, construction, or operational changes to the Director that
will minimize that stress.
(c) Monitoring Requirements. At a minimum, the Director must
ensure that the permit requires the permittee to perform the
monitoring required in Sec. 125.98. You may modify the monitoring
program when the permit is reissued and during the term of the
permit based on changes in the physical or biological conditions in
the vicinity of the cooling water intake structure.

The Agency invites comment on the above framework as an appropriate
approach for implementing section 316(b) as an alternative to today's
proposed requirements. The Agency also invites comments on the
following site-specific approaches for implementing section 316(b) on a
site-specific basis within the general framework set forth in the
Sample Rule.
2. Site-Specific Alternative Based on EPA's 1977 Draft Guidance
Since the Fourth Circuit remanded EPA's section 316(b) regulations
in 1977, decisions implementing section 316(b) have been made on a
case-by-case, site-specific basis. EPA published guidance addressing
section 316(b) implementation in 1977. See Draft Guidance for
Evaluating the Adverse Impact of Cooling Water Intake Structures on the
Aquatic Environment: Section 316(b) P.L. 92-500 (U.S. EPA, 1977). This
guidance describes the studies recommended for evaluating the impact of
cooling water intake structures on the aquatic environment, and it
establishes a basis for determining the best technology available for
minimizing adverse environmental impact. The 1977 Section 316(b) Draft
Guidance states, ``The environmental-intake interactions in question
are highly site-specific and the decision as to best technology
available for intake design, location, construction, and capacity must
be made on a case-by-case basis.'' (Section 316(b) Draft Guidance, U.S.
EPA, 1977, p. 4). This case-by-case approach also is consistent with
the approach described in the 1976 Development Document referenced in
the remanded regulation.
The 1977 Section 316(b) Draft Guidance recommends a general process
for developing information needed to support section 316(b) decisions
and presenting that information to the permitting authority. The
process involves the development of a site-specific study of the
environmental effects associated with each facility that uses one or
more cooling water intake structures, as well as consideration of that
study by the permitting authority in determining whether the facility
must make any changes to minimize adverse environmental impact. Where
adverse environmental impact is occurring and must be minimized by
application of best technology available, the 1977 guidance suggests a
``stepwise'' approach that considers screening systems, size, location,
capacity, and other factors.
Although the Draft Guidance describes the information to be
developed, key factors to be considered, and a process for supporting
section 316(b) determinations, it does not establish national standards
for best technology available to minimize adverse environmental impact.
Rather, the guidance leaves the decisions on the appropriate location,
design, capacity, and construction of each facility to the permitting
authority. Under this framework, the Director determines whether
appropriate studies have been performed and whether a given facility
has minimized adverse environmental impact.

[[Page 17162]]

3. The Utility Water Act Group (UWAG) Approach
The Utility Water Act Group (UWAG), an association of more than 100
individual electric utility companies and three national trade
associations of electric utilities, provided EPA with a recommended
site-specific regulatory framework, entitled ``316(b) Decision
Principles for Existing Facilities.'' UWAG's recommended approach for
decision making under section 316(b) includes the following components:
A definition of ``Adverse Environmental Impact;
Use of Representative Indicator Species (RIS) for the
assessment of adverse environmental impact;
Making decisions under section 316(b) that complement, but
do not duplicate, other Federal, state, and local regulatory programs;
Use of de minimis criteria to exempt small cooling water
users that pose no appreciable risk of causing adverse environmental
impact because only a small amount of cooling water is withdrawn from a
water body at a location that does not require special protection;
Determination of adverse environmental impact or its
absence using the facility's choice of three methods, either alone or
in combination: (1) Use of previously conducted section 316(b)
demonstrations that are still valid in light of current circumstances;
(2) use of ecological risk assessment by means of demonstration of no
appreciable risk of adverse environmental impact using conservative
decision criteria; or assessment of risk using a structured decision
making process consistent with EPA's Ecological Risk Assessment
Guidelines;
A ``maximize net benefits'' approach for selecting the
best technology available for minimizing adverse environmental impact;
At the option of the permittee, recognition of voluntary
enhancements such as fish stocking or habitat improvements; and
Providing data or information with NPDES permit renewal
applications if new information shows that previously conducted section
316(b) demonstrations are no longer scientifically valid.
These features of UWAG's recommended approach are discussed in the
Discussion of Site-Specific Approach Issues and Questions for Comment
that follows. UWAG's submission is included in the rulemaking record.
4. Site-Specific Alternative Suggested by PSEG
EPA also received a suggested site-specific regulatory framework
from the Public Service Electricity and Gas Company (PSEG). The
framework includes three alternative decision-making approaches that
would allow permittees and permit writers to utilize prior analyses and
data that may be appropriate and helpful, consider previous best
technology available determinations that were based on these analyses
and data, and take into account the benefits of prior section 316(b)
implementing actions. The following summary of the framework suggested
by PSEG closely tracks PSEG's submission, which is included in the
rulemaking record.
PSEG's submission states that EPA guidance and other precedents
have identified certain ecological criteria as relevant factors for
considering adverse environmental impact, including entrainment and
impingement; reductions of threatened, endangered, or other protected
species; damage to critical aquatic organisms, including important
elements of the food chain; diminishment of a population's compensatory
reserve; losses to populations, including reductions of indigenous
species populations, commercial fishery stocks, and recreational
fisheries; and stresses to overall communities or ecosystems as
evidenced by reductions in diversity or other changes in system
structure or function. Many existing section 316(b) decisions are based
upon extensive data and analyses pertaining to those factors. Those
factors would remain applicable for all existing facilities.
Under PSEG's recommended approach, permitting authorities would
have the authority to continue to place emphasis on the factors they
believe are most relevant to a given situation. For example, when long-
term data are available that meet appropriate data quality standards,
and when analyses using appropriate techniques such as models that
already have been developed to allow population-level analysis of the
potential for adverse environmental impact, permit writers would focus
on those adverse environmental impact factors related to population-
level impacts. In other situations, especially where permittees do not
wish to invest the time and financial resources necessary for
biological data gathering and analysis, permitting authorities would
have the discretion to focus on other factors by applying different
decision-making paths.
5. Discussion of Site-Specific Approach Issues and Associated Questions
for Comment
The following sections focus on several key aspects of any site-
specific approach, specifically requesting comment on an appropriate
definition of adverse environmental impact and associated decision-
making criteria.
a. Determination of Adverse Environmental Impact
EPA's 1977 Draft Guidance assumes there will be adverse
environmental impact whenever there is entrainment or impingement
``damage'' as a result of a cooling water intake structure, and focuses
study on the magnitude of the impact to determine the appropriate
technologies needed to minimize the impact. The evaluation criteria for
assessing the magnitude of an adverse impact are broad and recommend
consideration both in terms of absolute damage (e.g., numbers of fish)
and percentages of populations. Although the UWAG and PSEG site-
specific approaches contain different definitions of the term ``adverse
environmental impact,'' there is general agreement among them that the
focus should be on the health of critical aquatic populations or
ecosystems, rather than on absolute numbers of fish and other aquatic
organisms impinged or entrained by the cooling water intake structure.
UWAG offered the most detailed and specific recommendations for making
a determination of adverse environmental impact.
(1) EPA's 1977 Definition of Adverse Environmental Impact and Examples
of Its Current Use
In EPA's 1977 Draft Guidance, adverse environmental impact is
defined as follows:

Adverse environmental impact means the adverse aquatic
environmental impact that occurs whenever there will be entrainment
or impingement damage as a result of the operation of a specific
cooling water intake structure. The critical question is the
magnitude of any adverse impact which should be estimated both in
terms of short term and long term impact with respect to (1)
absolute damage (number of fish impinged or percentage of larvae
entrained on a monthly or yearly basis); (2) percentage damage
(percentage of fish or larvae in existing populations which will be
impinged or entrained, respectively); (3) absolute and percentage
damage to any endangered species; (4) absolute and percentage damage
to any critical aquatic organism; (5) absolute and percentage damage
to commercially valuable and/or sport species yield; and (6) whether
the impact would endanger (jeopardize) the protection and
propagation of a balanced population of shellfish and fish

[[Page 17163]]

in and on the body of water from which the cooling water is
withdrawn (long term impact).

Over the past 25 years, permitting agencies have interpreted this
definition in a variety of ways. Some agencies consider the absolute
number of organisms subjected to impingement and entrainment by
facility cooling water intakes. Permitting authorities that evaluate
adverse environmental impact by enumerating losses of numbers of fish
individuals find this approach removes much of the uncertainty
associated with evaluating effects to species at higher organizational
levels such as populations, communities, or ecosystems. Other
permitting authorities have focused on evaluating effects on
populations in determining whether an adverse environmental impact is
occurring.
(2) An Alternative Definition
EPA solicits comment on an alternative definition of ``adverse
environmental impact'' as follows:

Adverse environmental impact means one or more of the following:
entrainment and impingement of significant numbers of a critical
aquatic organisms or percentages of aquatic populations; adverse
impacts to threatened, endangered or other protected species, or
their designated critical habitat; significant losses to
populations, including reductions of indigenous species populations,
commercial fishery stocks, and recreational fisheries; and stresses
to overall communities or ecosystems as evidenced by reductions in
diversity or other changes in system structure or function.
(3) Discussion of UWAG Recommendation for Determining Adverse
Environmental Impact
UWAG offers the following definition:

Adverse environmental impact is a reduction in one or more
representative indicator species (RIS) \61\ that (1) creates an
unacceptable risk to a population's ability to sustain itself, to
support reasonably anticipated commercial or recreational harvests,
or to perform its normal ecological function and (2) is attributable
to operation of the cooling water intake structure.
---------------------------------------------------------------------------

\61\ Drawing on the concept of ``critical aquatic organisms''in
EPA's 1977 draft guidance, UWAG would define a representative
indicator species (RIS) as a species of commercial or recreational
importance, a Federal or state threatened or endangered or specially
designated species, an important species for ecological community
structure or function, or on the basis of species and life stage
vulnerability.

In UWAG's view, defining adverse environmental impact in terms of
``unacceptable risk'' combines science with the judgments society makes
about the value of different resources. UWAG argues that this
recommended definition is scientifically sound and environmentally
protective because it focuses on protecting populations or species that
are subject to impingement and entrainment by cooling water intake
structures and because it requires that the level of population
protection be adequate to ensure protection of the integrity of the
ecosystem (community structure and function). However, it notes that
this definition does not create a ``bright line'' test based on
engineering or science. In addition to use of a valid, previously
conducted section 316(b) demonstration, UWAG would allow facilities to
use two risk assessment approaches to make a demonstration of ``no
adverse environmental impact.'' The first approach involves
demonstrating that the facility meets one or more of a set of
conservative decision criteria. Under the second approach, a facility
would cooperate with regulators and stakeholders to determine the
benchmarks for a risk analysis to determine whether there is an
appreciable risk of adverse environmental impact.
(a) Protective Decision Criteria for Determining Adverse Environmental
Impact
UWAG recommends protective decision criteria that it believes are
conservative enough to eliminate the risk of adverse environmental
impact for all practical purposes. The recommended physical and
biological decision criteria are as follows:

Physical Criteria

Locational Criterion: An existing cooling water intake structure
would be considered not to create a risk of adverse environmental
impact if it withdraws water from a zone of a water body that does not
support aquatic life due to anoxia or other reasons, such as lack of
habitat, poor habitat, or water quality conditions.
Design Criterion: An existing cooling water intake structure would
not be considered to create a risk of adverse environmental impact if
it uses wet closed-cycle cooling or technologies that achieve a level
of protection reasonably consistent with that achieved by wet closed-
cycle cooling. However, wet closed-cycle cooling or reasonably
consistent protection would be considered insufficient if permit
writers or natural resource agencies identify special local
circumstances such as impacts to threatened, endangered, or otherwise
protected species or areas designated for special protection.
Proportion of Flow or Volume Criterion: On fresh water rivers,
lakes (other than the Great Lakes), and reservoirs, a cooling water
intake structure would be considered not to create a risk of adverse
environmental impact if it withdraws no more than 5% of either the
source water body or the ``biological zone of influence.'' This
criterion would apply only to entrainable life stages. Because it might
not be appropriate for many RIS to consider the entire source water
body in making this decision, determining the appropriate flow or
volume would be of critical importance. UWAG recommends how the
``biological zone of influence'' would be determined for different RIS.

Biological Criteria

Percent Population Loss Criterion: On freshwater rivers, lakes
(other than the Great Lakes), and reservoirs, a facility would be
considered not to create a risk of adverse environmental impact if the
cooling water intake structure causes the combined loss, from
entrainment and impingement, of (1) no more than 1% of the population
of any harvested RIS and (2) no more than 5% of the population of any
non-harvested RIS, with fractional losses summed over life stages for
the entire lake, reservoir, or river reach included in the evaluation.
UWAG explains that the 1%/5% population loss criteria are based in part
on the recognition that these percentages are small relative to the
inter-annual fluctuations typical of fish populations and also small
relative to the compensatory responses typical of many species.
No Significant Downward Trend: On freshwater rivers, lakes (other
than the Great Lakes), and reservoirs, a cooling water intake structure
would be considered to create no risk of adverse environmental impact
if adequate data collected over a representative period of years,
including preoperational data, show no statistically significant
downward trend in the population abundance of RIS.
The foregoing criteria would be applied independently. Passing a
single criterion could serve as the basis for a successful
demonstration of no risk of adverse environmental impact for a
facility. If population-based biological criteria are used, they would
be applied independently to each RIS species, and each species would
need to meet the criteria for the facility to demonstrate no risk of
adverse environmental impact.
UWAG states that most of these recommended criteria have
limitations on their use, such as being limited to certain water body
types or to use with either impingeable or entrainable organisms, but
not both. Some facilities, therefore, might use the criteria for only

[[Page 17164]]

some of their RIS and would address the remainder through the
structured adverse environmental impact decision making process
discussed below.
(b) The Structured Adverse Environmental Impact Decision Making
Process Consistent with EPA Ecological Risk Assessment Guidelines
Under this alternative for determining adverse environmental
impact, a facility would work with permit writers, resource managers,
other appropriate technical experts, and stakeholders to determine what
constitutes an ``unacceptable'' risk of adverse environmental impact in
a water body. The process would be based on EPA's 1998 Ecological Risk
Assessment Guidelines. The key steps would be as follows:
Stakeholders would be involved in identifying issues of
concern caused by the cooling water intake structure relative to RIS.
To focus the effort to identify RIS at risk, previous section 316
studies, the results of demonstrations using the criteria discussed
above, information on the design and operation of the facility, water
body fisheries management data and plans, and other relevant water body
information could be used.
The permit writer, with input from the facility, would
then determine what data collection and assessment studies are
necessary to address the RIS of concern. Decisions regarding the scope
of the assessment would include identification of RIS; study design,
sampling methods, locations, and durations; and analytical methods and/
or models to be employed.
The facility and regulators also would identify explicit
measurement endpoints and criteria for assessing adverse environmental
impact before any studies are conducted. If the studies demonstrate
that predetermined endpoints are not exceeded, the intake structure
would be considered not to cause adverse environmental impact. If not,
the facility would proceed to identify best technology available
alternatives or to identify enhancements that would eliminate adverse
environmental impact.
(4) Questions for Comment on the Determination of Adverse Environmental
Impact
(a) EPA invites public comment on all aspects of the foregoing
approaches to defining adverse environmental impact and for making the
preliminary determination on adverse environmental impact, and on which
approach should be included if the Agency adopts a site-specific
approach for the final rule.
(b) Should the final rule adopt the 1977 Draft Guidance approach to
defining adverse environmental impact as any entrainment or impingement
damage caused by a cooling water intake structure?
(c) Should the final rule state that any impingement and
entrainment is an adverse environmental impact and focus site-specific
assessment on whether that impact is minimized by technologies already
in place or potential changes in technology? Alternatively, should the
final rule define adverse environmental impact in terms of population-
level or community-level effects?
(d) Should EPA adopt an approach that makes more explicit use of
threshold determinations of whether adverse environmental impact is
occurring, If so, should EPA adopt any or all of the conservative
decision criteria suggested by UWAG in a final rule?
(e) Should the structured risk assessment decision process that
UWAG recommends for determining adverse environmental impact be
adopted?
b. Use of Previous Section 316(b) Demonstration Studies
The Sample Site-Specific Rule and the PSEG and UWAG approaches
would all give the permittee an opportunity to show that a previously
conducted section 316(b) demonstration study was conducted in
accordance with accepted methods and guidance, reflects current
conditions, and supports decisions regarding the existence of adverse
environmental impact and the best technology available for minimizing
adverse environmental impact.
(1) Sample Site-Specific Rule Approach for Using Previous Demonstration
Studies
Sections 125.94(a)(2) and 125.94(c)(1) of the Sample Rule would
permit use of a previously conducted section 316(b) demonstration if
the previous study was performed using data collection and analytical
methods that conformed to applicable guidance or requirements of the
permitting agency or EPA and there have been no significant changes to
either the aquatic populations affected by the cooling water intake
structure or to the design, construction, or operation of the facility.
The burden would be on the owner or operator of the facility to show
that these conditions were met.
(2) PSEG Recommendation for Using Previous Demonstration Studies
PSEG would permit use of previous section 316(b) determinations
that were based upon analysis deemed to be thorough and based on the
appropriate statutory factors and detailed, site-specific data and
information. In PSEG's view, such prior decisions need not be subject
to a complete re-evaluation in subsequent permit renewal proceedings
absent indications that the current cooling water intake structure is
allowing adverse environmental impacts to occur or that there have been
material changes in any of the key factors the agency relied upon in
reaching the prior determination.
Under PSEG's approach, if a cooling water intake structure at an
existing facility has previously been determined to employ best
technology available based upon a diligent review of a section 316(b)
demonstration that was conducted in conformance with the 1977 EPA
Guidance, then the existing intake would continue to be determined to
employ best technology available for the next permit cycle. The permit
renewal application would have to include information sufficient to
allow the permitting agency to determine that: (1) There has been no
material change in the operation of the facility that would affect
entrainment or impingement; (2) any in-place technologies have been
properly operated, maintained, and are not allowing losses to occur in
excess of the levels the agency considered in its prior determination;
(3) any conservation or mitigation measures included in prior permits
are in place and are producing the intended benefits; (4) the economics
of applying a different technology have not changed; and (5) data and/
or analyses show that fish species of concern are being maintained or
that any declines in those species are not attributable to the cooling
water intake structure.
In the Fact Sheet accompanying the draft permit, the permitting
agency would be required specifically to: (1) Make a finding of fact
that the prior section 316(b) determination had been based upon a
demonstration conducted in conformance with the Agency's 1977 Guidance;
and (2) identify the data and information that the permittee provided
in support of the reaffirmance of its prior section 316(b)
determination. Interested third parties as well as Federal, state and
interstate resource protection agencies (e.g., National Marine
Fisheries Service and the United States Fish and Wildlife Service)
would have an opportunity to comment on the draft section 316(b)
determination and to challenge the final determination if they were
aggrieved by the agency's final decision.

[[Page 17165]]

(3) UWAG Recommendation for Using Previous Demonstration Studies
UWAG also would permit use of a previously conducted section 316
demonstration if the past demonstration reflects current biological
conditions in the water body and the current location, design,
construction, and capacity of the cooling water intake structure. UWAG
argues that many States have developed section 316(b) regulatory
programs with significant information-gathering requirements and that
this information would provide, for many existing facilities, a
sufficient basis for determination of compliance with section 316(b).
More specifically, UWAG's approach would consider (1) Whether the RIS
used in past determinations are still the appropriate ones; (2) whether
the data collection and analytical tools used were adequate in light of
current circumstances; (3) whether water body biological conditions at
the time of the study reflect current conditions; (4) whether the
location, design, construction, or capacity of the cooling water intake
structure has been altered since the previous section 316(b)
demonstration; and (5) other factors that should be considered if there
is reason to believe that the previous demonstrations are inadequate.
(4) Questions for Comment on Using Previous Demonstration Studies
EPA invites public comment on whether a final rule should permit
the use of a previous section 316(b) demonstration for determining
whether there is adverse environmental impact and the best technology
available for minimizing adverse environmental impact. If such a
provision is included in the final rule, what criteria or conditions
should be included to ensure that the previously conducted
demonstration is an adequate basis for section 316(b) decisions?
c. Process for Determining the Best Technology Available for Minimizing
Adverse Environmental Impact and the Role of Costs and Benefits
Once it is determined that there is adverse environmental impact
attributable to a cooling water intake structure, the facility and
permitting agency must decide on a site-specific basis what changes to
the location, design, construction, or capacity of the intake or what
alternative voluntary measures, must be installed and implemented to
minimize the impact.
(1) EPA's Draft 1977 Guidance and Development Document
EPA's draft 1977 draft guidance and development document provide
guidance on how to select best technology for minimizing adverse
environmental impact but are silent on the role of costs and benefits
in determining best technology available for minimizing adverse
environmental impact. In 1979, the U.S. Court of Appeals for the First
Circuit found that cost is an acceptable consideration in section
316(b) determinations. Seacoast Anti-Pollution League v. Costle, 597
F.2d 306, 311 (1st Cir. 1979). Over the years, section 316(b)
determinations have focused on whether the costs of technologies
employed would be wholly disproportionate to the environmental gains to
be derived from their use. See e.g., Seacoast Anti-Pollution League v.
Costle; Decision of the General Counsel No. 63 (July 29, 1977);
Decision of the General Counsel No. 41 (June 1, 1976).
(2) Sample Site-Specific Rule
The Sample Rule would require that the analysis of best technology
available for minimizing adverse environmental impact be based on a
biological survey of the part of the water body affected by the cooling
water intake structure and a Design and Construction Technology Plan
submitted by the permittee, together with any voluntary operational
measures or restoration measures that would be implemented at the
facility. (See Sample Rule Secs. 125.94, 125.95 and 125.97.)
Examples of appropriate technologies a facility could propose in
the Design and Construction Technology Plan include wedgewire screens,
fine mesh screens, fish handling and return systems, barrier nets,
aquatic filter barrier systems, an increase in the opening of the
cooling water intake structure to reduce velocity and, if warranted by
site specific conditions, cooling tower technology. Under the Sample
Rule, in-place technologies implemented previously to comply with
section 316(b), and information regarding their effectiveness, may be
included in the Design and Construction Technology Plan. Operational
measures that may be proposed include seasonal shutdowns or reductions
in flow and continuous operation of screens.
The Sample Rule also would provide that the Director could exclude
any design or construction technology if the costs of such technology
would be significantly greater than the estimated benefits of the
technology (Sec. 125.94(f)(2)).
(3) Processes Structured on Incremental Cost-Benefit Assessment
EPA solicits comment on whether an evaluation of the cost-
effectiveness (i.e., the incremental cost to benefit ratio) of cooling
water intake structure technologies and any operational and/or
restoration measures offered by the owner or operator of a facility is
an appropriate component of the analysis that would be undertaken in a
site-specific approach to determining best technology available for
minimizing adverse environmental impact. The UWAG and PSEG
recommendations for selecting technologies and other measures based on
an evaluation of costs and benefits are discussed below.
(A) UWAG Recommendation for a Process
Under the UWAG approach, if the facility is not able to demonstrate
that its cooling water intake structure is not causing adverse
environmental impact, it would then select and implement the best
technology available. As the first step in choosing best technology
available, a facility would identify technology alternatives. It would
then estimate the costs and benefits of the alternatives. Relevant
benefits typically would include preservation of fish and other aquatic
life and economic benefits from recreational and commercial fisheries.
Relevant costs typically would include the capital cost of constructing
a technology, operation and maintenance costs (including energy
penalties), and adverse environmental effects such as evaporative loss,
salt drift, visible plumes, noise, or land use. For those facilities
for which the technologies will lower the generating output of the
facility, the cost of replacement power and the environmental effects
of increased air pollution and waste generation from generating the
replacement power also would be considered.
Facilities then would calculate the net benefits for each
technology and rank them by cost-effectiveness. Those with marginal
costs greater than marginal benefits would be rejected. The technology
with the greatest net benefit would be the ``best'' technology for the
site. UWAG believes use of existing EPA cost-benefit calculation
methodologies, such as those used for natural resource damage valuation
under CERCLA and under NEPA would be sufficient.
(B) PSEG Recommendation for a Process
PSEG suggests two options for determining best technology available
where prior section 316(b) determinations were not based upon

[[Page 17166]]

data and analyses sufficient to allow a permittee to seek renewal.
Under the first option, the permittee would provide the permit
writer with an assessment that would address: (1) The alternative
technologies or other measures that are available for addressing the
cooling water intake structure's effects, and (2) the incremental costs
and benefits of alternative technologies or other measures relative to
the existing cooling water intake structure's operation. The
application would include: an engineering report identifying the suite
of technologies potentially applicable to the facility; an analysis
describing the bases for the selection of technologies applicable to
the facility; an assessment of the issues associated with retrofitting
the facility to include each of the applicable technologies and their
costs; and an assessment of the reasonably likely reductions in
entrainment and impingement losses that would be achieved if the
facility were to be retrofitted to operate with the technology. The
application also would include a cost-benefit analysis that would
address and assess: the effects of the reductions in entrainment and
impingement losses on life stages of the species for which an economic
value can be determined utilizing readily available information, such
as market values of commercial species, and recreational costs based on
methods determined to be appropriate by the Director and the
appropriate fisheries management agencies. The Director would then
select the best alternative technology or other measures, the costs of
which are not wholly disproportionate to the benefits, unless the
proposed technology or other measures clearly would not result in any
substantial improvement to the species of concern.
In evaluating the benefits of alternative technologies, and in
determining whether there is likely to be a substantial improvement to
the species of concern, permittees and permitting authorities would
undertake the level of biological analysis that was appropriate to the
situation, supported by the applicable data, and commensurate with the
resources available for developing and reviewing the necessary studies.
PSEG's second option would be appropriate where the permittee
elects to undertake an in-depth analysis of the potential adverse
environmental impact attributable to its cooling water intake
structure, followed by a site-specific determination of the appropriate
best technology available to minimize that adverse environmental
impact. This path represents the most resource-intensive and
scientifically rigorous approach to implementing section 316(b). Under
this option, the permittee would provide the permit writer with a
detailed assessment that evaluates the effects of the existing cooling
water intake structure's operation, and demonstrates the extent to
which the operation may be jeopardizing the sustainability of the
populations of the species of concern, or assesses other appropriate
factors for determining adverse environmental impact. If the permitting
agency concurs in an assessment that no adverse environmental impact is
being caused by the existing operation, then the existing cooling water
intake structure would be deemed to be best technology available. If
the assessment demonstrates that the cooling water intake structure is
causing adverse environmental impact or the permitting authority
rejects the applicant's determination, then the permit applicant would
proceed to evaluate alternative technologies or other measures.
(4) Questions for Comment on a Process for Determining the Best
Technology Available for Minimizing Adverse Environmental Impact and
the Role of Costs and Benefits
EPA invites public comment on the standard that would be included
in any site-specific final rule for determining best technology
available for minimizing adverse environmental impact, including the
appropriate role for a consideration of costs and benefits. EPA invites
comment on whether the long-standing ``wholly disproportionate'' cost-
to-benefit test is an appropriate measure of costs and benefits in
determining best technology available for minimizing adverse
environmental impact. EPA also invites comment on the use of the
``significantly-greater'' cost to benefit test in today's sample site-
specific rule. EPA also invites comment on whether a test based on the
concept that benefits should justify costs would be more appropriate,
as is used in various other legal and regulatory contexts (see, e.g.,
Safe Drinking Water Act Section 1412(b)(6)(A) and Executive Order
12866, Section 1(b)(6)). EPA also invites public comment on whether
variances are appropriate and, if so, what test or tests should be used
for granting a variance.
d. Use of Voluntary Restoration Measures or Enhancements
The Sample Site-Specific Rule and the UWAG and PSEG approaches
would all permit the owner or operator of an existing facility to
voluntarily undertake restoration (or enhancement) measures in
combination with, or in lieu of, technologies to minimize adverse
environmental impact.
Section 125.95 of the Sample Rule provides that an owner or
operator of an existing facility may undertake restoration measures,
and the Director would be required to take into account the expected
benefits of those measures to fish and shellfish in determining whether
the facility has minimized adverse environmental impact. The permittee
would include in its section 316(b) plan a list of the measures it
proposed to implement and the methods for evaluating the effectiveness
of the restoration measures.
UWAG gives the following as examples of potential enhancements: (1)
Stocking fish to replace impaired RIS; (2) creating or restoring
spawning or nursery habitat for RIS; (3) raising the dissolved oxygen
in anoxic areas to expand the carrying capacity of the RIS in a water
body; and (4) removing obstructions to migratory species. UWAG would
require the objectives of particular enhancements to be established in
advance, and appropriate monitoring and/or reporting obligations would
be included in the facility's permit to confirm that enhancement
objectives have been achieved. UWAG argues that using enhancements
might lower compliance costs, might possibly be of more benefit to RIS
than technologies, and might provide a longer-term benefit to RIS.
EPA invites public comment on whether a final site-specific rule
should permit voluntary restoration or enhancement measures to be taken
into account in determining compliance with section 316(b) and, if so,
what criteria should be included for evaluating the effectiveness of
such measures.
e. Consultation With Fish and Wildlife Management Agencies
Because the central focus of any site-specific approach is the
effect of the cooling water intake structure on the aquatic populations
or ecosystems, it is important that fish and wildlife management
agencies with jurisdiction over the affected water body have an
opportunity to provide information and views to the Director before
section 316(b) determinations are made. The Sample Rule would provide
for this in Sec. 125.100(b)(2). The UWAG recommendations also recognize
the important role of stakeholders, including fish and wildlife
management

[[Page 17167]]

agencies, in a structured site-specific alternative (UWAG, pp. 8-9).
EPA invites public comment on the appropriate role of fish and
wildlife management agencies if the final rule implements a site-
specific approach.
6. Implementation Burden Under Any Site-Specific Approach
Although well-implemented, site-specific approaches for determining
best technology available to minimize adverse environmental impact can
ensure that technologies are carefully tailored to site-specific
environmental needs, EPA also recognizes that site-specific regulatory
approaches can lead to difficult implementation challenges for State
and Federal permitting agencies. EPA invites comment on the following
discussion of the burdens associated with implementing section 316(b)
on a site-specific basis, the competing demands on permitting agencies,
and resources available to permitting agencies. EPA invites comment on
ways to employ a site-specific approach while minimizing implementation
burdens on permitting agencies.
The site-specific decision-making process requires each regulated
facility to develop, submit, and refine studies that characterize or
estimate potential adverse environmental impact. Although some
approaches allow facilities to use existing studies in renewal
applications, States must still conduct evaluations to ascertain the
continued validity of these studies and assess existing conditions in
the water body. Such studies can be resource intensive and require the
support of a multidisciplinary team. A Director's determinations as to
whether the appropriate studies have been performed and whether a given
facility has minimized adverse environmental impact have often been
subject to challenges that can take significant periods of time to
resolve and can impose significant resource demands on permitting
agencies, the public, and the permit applicant.
Some examples of the workload that can be required for permitting
agencies to implement a site-specific approach follow. Since, 1999, EPA
New England has devoted 0.6 full-time employees a year, including a
permit writer, a biologist and attorney, to reissuance of a permit for
the Pilgrim Nuclear Power Station (PNPS), \62\ At the Seabrook Nuclear
Power Station, EPA Region I has invested about one full-time employee
per year over four years to determine the nature and degree of adverse
environmental impacts and the appropriate permit conditions the permit
renewal. The State of New York Department of Environmental
Conservation's Division of Fish, Wildlife and Marine Resources spent
$169,587 in 1997 and $167,564 in 1998 to review cooling systems at
steam-motivated electricity generating facilities. The Division
estimated a total effort expenditure of approximately 2.2 full-time
employees in 1997 and 1998 and 4.3 full-time employees for 2001. These
figures do not include the level of effort associated with review time
spent by the Division of Environmental Permits, the Division of Water,
or the Division of Legal Affairs. (See Docket W-00-03.) Because of
workload concerns, some States have requested that EPA adopt
regulations that set clear requirements specifying standards of
performance, monitoring and compliance. \63\
---------------------------------------------------------------------------

\62\ Information provided by EPA Region I. Region I serves as
permitting authority for the non-delegated states of Massachusetts
and New Hampshire.
\63\ See communications from Mr. William McCracken, Chief of the
Permits Section, Surface Water Quality Division, Michigan Department
of Environmental Quality, January 24, 2002.
---------------------------------------------------------------------------

These levels of burden are of particular concern to the Agency and
to some State permitting agencies given the heavy permit workloads,
pressure on resources available to permitting agencies, and the
complexity of finalizing permits required to address 316(b)
requirements. Recent data indicate that most States are struggling to
meet their major permits issuance targets set for decreasing the permit
backlog. For example, these data indicate that for major facilities
engaged in the generation, transmission and/or distribution of electric
energy for sale (SIC 4911), the permit backlog is 30.3 percent \64\,
that is, higher than other categories of major permits (data indicate a
backlog of 23.1 percent for major permits in general), \65\ In 1998,
the EPA Office of Inspector General identified the backlog in issuance
of National Pollutant Discharge Elimination System permits as a
material weakness pursuant to the Federal Managers' Financial Integrity
Act (FMFIA). As part of its Fiscal Year 2001 FMFIA Report, EPA
recommended that the permit backlog be identified as a continuing
material weaknesses in its programs. EPA's Office of Water is examining
strategies to correct this weakness. \66\ The evidence does not,
however, establish that section 316(b) determinations are a factor in
the backlog in issuance of National Pollutant Discharge Elimination
System permits.
---------------------------------------------------------------------------

\64\ Backlog counts for these facilities are based on permits
expired as of November 21, 2001 or if the permit expired field in
the database is blank.
\65\ NPDES Permit Backlog Trend Report: October 31, 2001, issued
on November 30, 2001 by EPA's Water Permits Division, US EPA,
Washington, DC.
\66\Decision Memorandum from the Deputy Chief Financial Officer
of EPA to the Administrator, December 18, 2001.
---------------------------------------------------------------------------

EPA is also aware that resources available to State permitting
agencies are limited. In a recent survey conducted by ECOS
(Environmental Council of States) \67\ on States environmental agency
budget reductions during the current fiscal year and for the upcoming
fiscal year, 42 States reported that their agency was asked to cut or
reduce their budgets for the current fiscal year. \68\ For the
following fiscal year, 23 of the responding States expected additional
budget cuts. EPA is aware that at least one State, the State of
Maryland, has used State law to impose a small surcharge on electric
bills in the State to support a State research program, and that funds
from that program are used for section 316(b) studies.
---------------------------------------------------------------------------

\67\ The Environmental Council Of States is a national non-
profit association of state and territorial environmental
commissioners. See website: www.sso.org/ecos/. When the Axe Falls:
How State Environmental Agencies Deal with Budget Cuts by R. Steven
Brown, Deputy Executive Director and Chief Operating Officer of
ECOS. (See Docket for today's proposed rule.)
\68\ This state budget outlook is supported by a report
published on October 31, 2001, by the National Conference of State
Legislatures (NCSL).
---------------------------------------------------------------------------

EPA seeks additional information and data on the resources
necessary and available for the review of section 316(b) determinations
in existing facilities' permit renewals.
EPA invites comment on whether the resource requirements of the
site-specific approach also have served as a disincentive to a
comprehensive revisiting of section 316(b) permit conditions during
each renewal (typically every 5 years), despite advances in
technologies for reducing impingement mortality and entrainment.
EPA seeks comment on the above discussion of the resource
implications of implementing the requirements of section 316(b) on a
case-by-case basis. EPA invites comment on how the workload of a site-
specific approach could be streamlined so as to provide for the
benefits of a site-specific approach (e.g., application of technologies
specifically tailored to site-specific conditions) while recognizing
the resource constraints faced by so many permitting agencies.

[[Page 17168]]

D. Why EPA Is Not Considering Dry Cooling Anywhere?

EPA conducted a full analysis for the new facility rule (Phase I)
and rejected dry cooling as an economically practicable option on a
national basis. Dry cooling systems use either a natural or a
mechanical air draft to transfer heat from condenser tubes to air. In
conventional closed-cycle recirculating wet cooling towers, cooling
water that has been used to cool the condensers is pumped to the top of
a recirculating cooling tower; as the heated water falls, it cools
through an evaporative process and warm, moist air rises out of the
tower, often creating a vapor plume. Hybrid wet-dry cooling towers
employ both a wet section and dry section and reduce or eliminate the
visible plumes associated with wet cooling towers.
For the new facility rule, EPA evaluated zero or nearly zero intake
flow regulatory alternatives, based on the use of dry cooling systems.
EPA determined that the annual compliance cost to industry for this
option would be at least $490 million. EPA based the costs on 121
facilities having to install dry cooling. The cost for Phase II
existing facilities would be significantly higher. EPA estimates that
539 Phase II existing facilities would be subject to this proposal. The
cost would be significantly higher because existing facilities have
less flexibility, thus incurring higher compliance costs (capital and
operating) than new facilities. For example, existing facilities might
need to upgrade or modify existing turbines, condensers, and/or cooling
water conduit systems, which typically imposes greater costs than use
of the same technology at a new facility. In addition, retrofitting a
dry cooling tower at an existing facility would require shutdown
periods during which the facility would lose both production and
revenues, and decrease the thermal efficiency of an electric generating
facility.
The disparity in costs and operating efficiency of dry cooling
systems compared with wet cooling systems is considerable when viewed
on a nationwide or regional basis. For example, under a uniform
national requirement based on dry cooling, facilities in the southern
regions of the U.S. would be at an unfair competitive disadvantage
compared to those in cooler northern climates. Even under a regional
subcategorization strategy for facilities in cool climatic regions of
the U.S., adoption of a minimum requirement based on dry cooling could
impose unfair competitive restrictions for steam electric power
generating facilities. This relates primarily to the elevated capital
and operating costs associated with dry cooling. Adoption of
requirements based on dry cooling for a subcategory of facilities under
a particular capacity would pose similar competitive disadvantages for
those facilities.
EPA does not consider dry cooling a reasonable option for a
national requirement, nor for subcategorization under this proposal,
because the technology of dry cooling carries costs that are sufficient
to cause significant closures for Phase II existing facilities. Dry
cooling technology would also have a significant detrimental effect on
electricity production by reducing energy efficiency of steam turbines.
Unlike a new facility that can use direct dry cooling, an existing
facility that retrofits for dry cooling would most likely use indirect
dry cooling which is much less efficient than direct dry cooling. In
contrast to direct dry cooling, indirect dry cooling does not operate
as an air-cooled condenser. In other words, the steam is not condensed
within the structure of the dry cooling tower, but instead indirectly
through an indirect heat exchanger. Therefore, the indirect dry cooling
system would need to overcome additional heat resistance in the shell
of the condenser compared to the direct dry cooling system. Ultimately,
the inefficiency penalties of indirect dry cooling systems will exceed
those of direct dry cooling systems in all cases.
Although the dry cooling option is extremely effective at reducing
impingement and entrainment and would yield annual benefits of $138.2
million for impingement reductions and $1.33 billion for entrainment
reductions, it does so at a cost that would be unacceptable. EPA
recognizes that dry cooling technology uses extremely low-level or no
cooling water intake, thereby reducing impingement and entrainment of
organisms to dramatically low levels. However, EPA interprets the use
of the word ``minimize'' in section 316(b) in a manner that allows EPA
the discretion to consider technologies that very effectively reduce,
but do not completely eliminate, impingement and entrainment and
therefore meet the requirements of section 316(b). Although EPA has
rejected dry cooling technology as a national minimum requirement, EPA
does not intend to restrict the use of dry cooling or to dispute that
dry cooling may be the appropriate cooling technology for some
facilities. For example, facilities that are repowering and replacing
the entire infrastructure of the facility may find that dry cooling is
an acceptable technology in some cases. A State may choose to use its
own authorities to require dry cooling in areas where the State finds
its fishery resources need additional protection above the levels
provided by these technology-based minimum standards.

E. What Is the Role of Restoration and Trading?

1. Restoration Measures
Restoration measures, as used in the context of section 316(b)
determinations, include practices that seek to conserve fish or aquatic
organisms, compensate for lost fish or aquatic organisms, or increase
or enhance available aquatic habitat used by any life stages of
entrained or impinged species. Such measures have been employed in some
cases in the past as one of several means of fulfilling the
requirements imposed by section 316(b). Examples of restoration
measures that have been included as conditions of permits include
creating, enhancing, or restoring wetlands; developing or operating
fish hatcheries or fish stocking programs; removing impediments to fish
migration; and other projects designed to replace fish or restore
habitat valuable to aquatic organisms. Restoration measures have been
used, however, on an inconsistent and somewhat limited basis in the
context of the 316(b) program. Their role under section 316(b) has
never been explicitly addressed in EPA regulations or guidance until
EPA promulgated the final section 316(b) regulations for new
facilities, which is discussed below in more detail. Prior to the
section 316(b) new facility regulations, restoration projects were
undertaken as part of section 316(b) determinations at Phase II
existing facilities and in permitting actions where the cost of the
proposed technology was considered to be wholly disproportionate to the
demonstrated environmental benefits that could be achieved. Often such
cases involved situations where retrofitting with a technology such as
cooling towers was under consideration. In addition to the role for
restoration outlined as part of the today's proposed rule (see Section
VI.A. above), EPA invites comment on the following alternatives for
restoration as part of regulations for Phase II existing facilities.
a. The Role of Restoration in the Section 316(b) New Facility
Regulations
The final rule for new facilities includes restoration measures as
part of Track II. EPA did not include restoration in Track I because it
was

[[Page 17169]]

intended to be expeditious and provide certainty for the regulated
community and a streamlined review process for the permitting
authority. To do this for new facilities, EPA defined the best
technology available for minimizing adverse environmental impact in
terms of reduction of impingement and entrainment, a relatively
straightforward metric for environmental performance of cooling water
intake structures. In contrast, restoration measures in general require
complex and lengthy planning, implementation, and evaluation of the
effects of the measures on the populations of aquatic organisms or the
ecosystem as a whole.
EPA included restoration measures in Track II to the extent that
the Director determines that the measures taken will maintain the fish
and shellfish in the waterbody in a manner that represents performance
comparable to that achieved in Track I. Applicants in Track II need not
undertake restoration measures, but they may choose to undertake such
measures. Thus, to the extent that such measures achieve performance
comparable to that achieved in Track I, it is within EPA's authority to
authorize the use of such measures in the place of Track I
requirements. This is similar to the compliance alternative approach
EPA took in the effluent guidelines program for Pesticide Chemicals:
Formulating, Packaging and Repackaging. There EPA established a numeric
limitation but also a set of best management practices that would
accomplish the same numeric limitations. See 61 FR 57518, 57521 (Nov.
6, 1997). EPA believed that section 316(b) of the Clean Water Act
provided EPA with sufficient authority to allow the use of voluntary
restoration measures in lieu of the specific requirements of Track I
where the performance is substantially similar under the principles of
Chevron USA v. NRDC, 467 U.S. 837, 844-45 (1984). In section 316(b) of
the Clean Water Act, Congress is silent concerning the role of
restoration technologies both in the statute and in the legislative
history, either by explicitly authorizing or explicitly precluding
their use. In the context of the new facility rule EPA also believes
that appropriate restoration measures or conservation measures that are
undertaken on a voluntary basis by a new facility to meet the
requirements of that rule fall within EPA's authority to regulate the
``design'' of cooling water intake structures. Bailey v. U.S., 516 U.S.
137 (1995) (In determining the meaning of words used in a statute, the
court considers not only the bare meaning of the word, but also its
placement and purpose in the statutory scheme.)
In the new facility rule EPA recognized that restoration measures
have been used at existing facilities implementing section 316(b) on a
case-by-case, best professional judgment basis as an innovative tool or
as a tool to conserve fish or aquatic organisms, compensate for the
fish or aquatic organisms killed, or enhance the aquatic habitat harmed
or destroyed by the operation of cooling water intake structures. Under
Track II, that flexibility will continue to be available to new
facilities to the extent that they can demonstrate performance
comparable to that achieved in Track I. For example, if a new facility
that chooses Track II is on an impaired waterbody, that facility may
choose to demonstrate that velocity controls in concert with measures
to improve the productivity of the waterbody will result in performance
comparable to that achieved in Track I. The additional measures may
include such things as reclamation of abandoned mine lands to eliminate
or reduce acid mine drainage along a stretch of the waterbody,
establishment of riparian buffers or other barriers to reduce runoff of
solids and nutrients from agricultural or silvicultural lands, removal
of barriers to fish migration, or creation of new habitats to serve as
spawning or nursery areas. Another example might be a facility that
chooses to demonstrate that flow reductions and less protective
velocity controls, in concert with a fish hatchery to restock fish
being impinged and entrained with fish that perform a similar function
in the community structure, will result in performance comparable to
that achieved in Track I.
Finally, in the new facility rule, EPA recognized that it may not
always be possible to establish quantitatively that the reduction in
impact on fish and shellfish is comparable using the types of measures
discussed above as would be achieved in Track I, due to data and
modeling limitations. Despite such limitations, EPA stated that there
may be situations where a qualitative demonstration of comparable
performance could reasonably assure substantially similar performance.
For that reason, EPA provided, in Sec. 125.86 of the new facility rule,
that the Track II Comprehensive Demonstration Study should show that
either: (1) The Track II technologies would result in reduction in both
impingement mortality and entrainment of all life stages of fish and
shellfish of 90 percent or greater of the reduction that would be
achieved through Track I (quantitative demonstration) or, (2) if
consideration of impacts other than impingement mortality and
entrainment is included, the Track II technologies would maintain fish
and shellfish in the waterbody at a substantially similar level to that
which would be achieved under Track I (quantitative or qualitative
demonstration).
b. Restoration Approaches Being Considered for the Existing Facilities
Rule
In the existing facilities rule, EPA is proposing to allow
restoration as one means of satisfying the compliance requirements for
any one of the three alternatives in Sec. 125.94(a). The demonstration
a facility would make to show that the restoration measures provide
comparable performance to design and construction technologies and/or
operational measures would be similar to the demonstration that a
facility would make under Track II in the new facility rule. EPA is
also inviting comment on other restoration approaches it is
considering. These include discretionary and mandatory regulatory
approaches involving restoration measures as well as restoration
banking, which are discussed below.
(1) Discretionary Restoration Approaches
An approach being considered by EPA would provide the Director with
the discretion to specify appropriate restoration measures under
section 316(b), but would not require that he or she do so. This
approach is consistent with several precedents in which the permitting
authority allowed the use of restoration measures when the cost to
retrofit an existing facility's cooling water intake structures with
control technologies was determined to be wholly disproportionate to
the benefits the control technology would provide (e.g., John Sevier,
Crystal River, Chalk Point, Salem). \69\
---------------------------------------------------------------------------

\69\ In re Tennessee Valley Authority John Sevier Steam Plant,
NPDES Permit No. TN0005436 (1986); In re Florida Power Corp. Crystal
River Power Plant Units 1, 2, & 3, NPDES Permit FL0000159 (1988);
Chalk Point, MDE, State of Maryland, Discharge Permit, Potomac
Electric Power Co., State Discharge Permit No. 81-DP-0627B, NPDES
Permit No. MD0002658B (1987, modified 1991); Draft NJDEP Permit
Renewal Including Section 316(a) Variance Determination and Section
316(b) BTA Decision: NJDEP Permit No. NJ0005622 (1993).
---------------------------------------------------------------------------

(2) Mandatory Restoration Approach
Under this approach, the use of restoration measures would be
required as an element of a section 316(b) determination in all cases
or in some defined set of cases (e.g., for intake structures located on
oceans, estuaries,

[[Page 17170]]

or tidal rivers). Restoration would be required to compensate for
organisms that were not protected following facility installation of
control technologies. Phase II existing facilities with cooling water
intake structures would be required to implement some form of
restoration measures in addition to implementing direct control
technologies to minimize adverse environmental impact. Under this
approach, an existing facility would submit a plan to restore fish and
shellfish to the extent necessary for offsetting fish and shellfish
entrainment and impingement losses estimated to continue to occur after
any required control technology is installed. This restoration plan
would be reviewed and approved by the Director and incorporated in the
permit. This is similar to the mitigation sequence used under CWA
section 404, wherein environmental impacts are avoided and minimized
prior to consideration of compensatory mitigation measures although in
section 404, not all projects require mitigation. The development of
restoration measures applicable to a cooling water intake structure
would focus on the unique situation faced by each facility and would
allow for review and comment by the permitting agency and the public.
(3) Restoration Banking
Restoration plans could potentially use a banking mechanism similar
to those used in the CWA section 404 program, that would allow the
permittee to meet requirements by purchasing restoration credits from
an approved bank. For example, should wetlands restoration be an
appropriate mechanism for offsetting the adverse impact caused by a
cooling water intake structure, the permittee could purchase credits
from an existing wetlands mitigation bank established in accordance
with the Federal Guidance for the Establishment, Use and Operation of
Mitigation Banks (50 FR 58605; November 28, 1995). As in the CWA
section 404 program, public or private entities could establish and
operate the banks providing mitigation for impacts under 316(b). EPA
views the use of restoration banking for the purposes of this proposed
rule as one way to facilitate compliance and reduce the burden on the
permit applicant, while at the same time potentially enhancing the
ecological effectiveness of the required restoration activities.
2. Entrainment Trading
Under Sec. 125.90(d) of today's proposed rule, States may adopt
alternative regulatory requirements that will result in environmental
performance within a watershed that is comparable to the reductions of
impingement mortality and entrainment specified in the proposed
Sec. 125.94. EPA is considering an approach for implementing section
316(b) that would allow specific Phase II existing facilities to trade
entrainment reductions to achieve an overall standard of performance
for entrainment reduction in a watershed at a lower cost through a
voluntary State or authorized Tribal section 316(b) trading program.
EPA believes such an approach might be appropriate in light of section
316(b)'s objective of minimizing adverse environmental impact. The goal
of the trading approach is to provide an incentive for some Phase II
existing facilities to implement more protective technologies than
required by today's proposed rule, resulting in credits that can be
traded with other facilities that may not find the most protective
technologies economically practicable.
EPA acknowledges that the trading framework that EPA is
contemplating under section 316(b) differs from previous trading
strategies implemented by EPA because it involves trading living
resources rather than pollutant loads. Because this is a novel approach
to trading, it raises many questions. For example, how would the
program address concerns that some species have greater economic value
than others, or the counter-argument that some species may not be
economically valuable but nonetheless have high ecological value? What
is an appropriate spatial scale under which trading can occur to ensure
protection of water quality and aquatic organisms? The following
section addresses these questions and others and seeks comment on the
appropriate elements of a trading approach under section 316(b) that
would conserve and protect water quality and aquatic resources.
a. Entrainment Reduction vs. Impingement Reduction as a Basis for
Trading
Entrainment and impingement are the main causes of adverse
environmental impact from cooling water intake withdrawals. However,
impingement reduction technologies are relatively inexpensive compared
to entrainment reduction (see Chapter 2 of the Technical Development
Document for the New Facility Rule, EPA-821-R-01-036, November 2001).
Impingement reduction measures include decreasing intake velocities and
installation of traveling screens with fish baskets and fish return
systems. The implementation of a section 316(b) trading program for
impingement may not justify the cost of monitoring susceptible species
and administrating the program. EPA believes that a trading program
that focuses on entrainment is more viable. However, EPA requests
comment on whether to extend trading to include impingement of aquatic
organisms.
In contrast to impingement controls, entrainment reduction
technologies can be relatively expensive. Section 316(b) trading would
enable smaller facilities that cannot afford to install more costly
technologies to reduce their costs by trading with other Phase II
existing facilities that face relatively lower costs of entrainment
reduction. For the purpose of a section 316(b) trading program, an
entrainment reduction performance standard for a watershed would be set
by the authorized State or Tribe within the range of 60 to 90 percent
for all life stages of entrained fish and shellfish. The performance
standard would be set to reflect site-specific facility and ecological
characteristics. All facilities located in the watershed would need to
reach the performance standard through the installation of technologies
to reduce entrainment (or, potentially, restoration measures to
compensate for entrainment losses at the facility). A facility that can
afford to implement technologies to reduce entrainment above the
performance standard would have entrainment reduction credits to sell
to other facilities that cannot afford or choose not to meet the
performance standard by technology alone. EPA notes that in
Sec. 125.94(c) of today's proposed rule, Phase II existing facilities
may request a site-specific determination of best technology available
if the costs of compliance with the applicable performance standards
are significantly greater than the costs EPA considered when
establishing the performance standards or significantly greater than
site-specific benefits. If a section 316(b) trading program was
available, these facilities could potentially have a lower cost option
for meeting the applicable performance standard for their respective
waterbodies by purchasing credits from another facility that implements
more protective technologies. EPA seeks comment on whether a section
316(b) trading program would generally afford greater watershed
protection by increasing the number of facilities meeting the
performance standard and whether consideration of credit purchases
should be mandatory prior to the Director setting alternative
requirements.

[[Continued on page 17171]]

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