National Pollutant Discharge Elimination System--Proposed Regulations to Establish Requirements for Cooling Water Intake Structures at Phase II Existing Facilities [[pp. 17171-17220]]

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 17171-17220]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ap02-29]

[[pp. 17171-17220]]
National Pollutant Discharge Elimination System--Proposed
Regulations to Establish Requirements for Cooling Water Intake
Structures at Phase II Existing Facilities

[[Continued from page 17170]]

[[Page 17171]]

b. What Should Be the Spatial Scale for Trading?
EPA is considering limiting the zone within which trading may occur
among Phase II existing facilities subject to section 316(b). Due to
site-specific differences in species and life stages of entrained
organisms, the scale of the trading zone would be set to minimize these
differences as much as possible. Trading would be most protective if it
occurred among Phase II existing facilities that generally entrain the
same species and life stages at relatively similar densities per unit
flow through the facility. Thus, EPA would prefer that trades be
conducted by Phase II existing facilities sited in waterbodies that
share similar ecological characteristics, regardless of the relative
geographic proximity of the facilities to each other. EPA is also
considering limiting trades to specific waterbodies, specific
watersheds, or general waterbody types (tidal rivers, estuaries,
oceans). Preliminary EPA analyses indicate that some of these options
may increase the number of Phase II existing facilities eligible to
trade and thus may produce sufficient opportunities to reduce the cost
of meeting the performance standard, allowing for a broader range of
trades.
(1) Specific Waterbody
If section 316(b) trades for Phase II existing facilities were
limited on an individual waterbody basis, EPA estimates that there
would be a total of 132 Phase II existing facilities in 40 specific
waterbodies eligible to trade. In order to be eligible to trade, each
facility involved in the trade would need to be located on the same
waterbody and required to meet the performance standard of the
waterbody. Further limits would have to be placed on trading in very
large waterbodies (e.g., Mississippi River, Pacific Ocean, Atlantic
Ocean) to ensure that the facilities are within similar climatic zones,
and thus entrain similar species. Allowing trading among Phase II
existing facilities and those that may be subject to Phase III
regulations for cooling water intake structures could increase
opportunities for facilities to trade intake control requirements.
(2) Specific Watershed
By limiting trading on a watershed basis, the problems posed by
very large waterbodies are eliminated; however, the zone may include
different types of waterbodies that may harbor different species of
organisms. Hydrologic Unit Codes (HUC) were developed by the United
States Geological Survey (USGS) to divide the conterminous United
States by drainage basins. As the number of digits in the code
increases, the drainage basin delineation becomes more refined. Eight-
digit codes represent the fourth level of classification in the
hierarchy of hydrologic units, where each code represents all or part
of a surface drainage basin. There are 2,150 eight-digit HUCs in the
conterminous United States. In order to be eligible to trade under this
approach, all facilities involved in the trade would be located in the
same eight-digit HUC. EPA invites comment on these and other potential
trading zones for section 316(b) trading for Phase II existing
facilities.
(3) General Waterbody Type
EPA is also considering a site-specific approach that would require
facilities to study and provide data on the numbers, life stages, and
species of organisms entrained in order to be properly matched for
trading with another Phase II existing facility on the same waterbody
type (e.g., tidal river, estuary, ocean, Great Lake) which entrains the
similar numbers, life stages, and species of organisms. EPA seeks
comment on this approach which allows trades to occur among facilities
on the same general waterbody type, but not necessarily the same
waterbody.
c. What Should Be the Unit (Credit) for Trading?
A trading option requires a definition of the trading commodity and
the unit, or credit, that would be traded. In contrast to pollutant-
specific trading, which is normally based on the pounds of a single
pollutant released into the environment or reduced from a source,
trading of entrained species can involve a variety of fish and
shellfish species and their life stages, and may be highly variable
among facilities. Therefore, it could be difficult to define a trading
unit and substantial oversight would be needed under any of these
trading units to determine if the trade complied with the underlying
performance standards from year to year, or another appropriate period.
In developing this proposal, EPA considered a variety of potential
trading credits and invites comment on these and other potential
trading units. EPA is specifically interested in comments on whether
entrainment trading should be species-specific, have weighted values
for different species, or simply be net biomass entrainment expressed
in mass. EPA is also considering use of restoration measures in
conjunction with any of the trading units discussed below. Please see
section VI.E.1 of the preamble to today's proposed rule for additional
information and discussion on restoration.
(1) Species Density
Trading based on the density of entrained species life stages (the
number of eggs, larvae, juvenile and small fish for all fish and
shellfish species entrained per unit of flow through a facility) is
EPA's preferred approach because it would account for differences among
facilities in the number of organisms entrained per unit flow and
would, in a sense, standardize entrainment losses with intake flow
withdrawals. Under this approach, trading would be restricted to those
Phase II existing facilities sited at waterbodies with similar
ecological zones, such as the transitional zone between saline and
freshwater portions of an estuary. Because many aquatic species tend to
inhabit specific zones within a waterbody during their life histories,
restricting trade to individual zones would ensure that similar species
at similar densities are traded. In order for a trade to occur, the
facilities involved must historically entrain similar species. Under
this approach the comparable worth of the unit of flow would be
dependent upon the density of the species entrained (see example
below). Thus, if a facility entrains twice as many organisms as another
facility, its flow would be worth comparably twice as much. This
approach would ensure that all species entrained are protected, but may
limit the number of trades possible. It is possible that use of this
approach may lead to over-protection or under-protection of some
species since the average density of all fish and shellfish would be
used rather than the density for individual species.
(2) Species Counts
Another option for a trading unit is entrained organism counts by
species, life stage, and size. These types of measurements are
routinely collected as part of historical facility demonstration
studies. This option would be protective of all life stages
independently, but would require significant expenditures of time and
resources. Entrained organisms would need to be identified to fairly
precise taxonomic levels and organized by life stage and size classes.
This option would best address the question of different economic
values versus ecological values of species since it would allow
different monetary values to be set for each species. Although this
option would allow for comparable species-by-species trading among
Phase II existing facilities, EPA is concerned that it may also result
in

[[Page 17172]]

complex trading transactions. Also, the number of each species
entrained by a facility can vary substantially each year for many
reasons, including facility outages and extreme weather events.
Substantial oversight might be needed to determine if the trade
achieved the underlying technology-based performance standard from year
to year, or other appropriate period, for compliance.
(3) Biomass
Another potential measure that can be used for trading is the
biomass of entrained organisms. Biomass is defined as the weight of
living material (plant and animal) and can be measured in pounds or
kilograms. Measuring the biomass of organisms entrained by facility
intakes would be relatively fast and easy to quantify. However, the
pound/kilogram as a unit of measurement does not take into account
species variations found at different facility locations and within
multiple waterbody types. Thus, as a result of adopting this unit of
measurement, it would be impossible to distinguish between different
species, or even different kingdoms. Because the weights of all
entrained organisms are combined into a total mass, biomass measurement
may not be equally protective of all species and life stages, and
larger, heavier organisms may bias final results. Over time, biomass
trading may upset the natural equilibrium of certain species and/or
impact the functionality of the entire ecosystem should some species be
entrained more frequently than others. However, EPA invites comment on
whether biomass trading might be limited to certain zones of certain
waterbodies or waterbody types, in a manner similar to that described
above for species-density trading to address some of these concerns.
d. Example of Section 316(b) Trading Under EPA's Preferred Alternative
(Species Density)
Facility A is an existing 750 MGD facility located in an estuary.
Facility B is an existing 350 MGD facility located at the mouth of the
same estuary. The performance standard for this estuary has been set by
the authorized State or Tribe at a 75 percent reduction of entrainment
for all facilities. Facility A determines that it can install a cooling
tower at relatively low cost. The installation of the cooling tower
reduces the facility's flow by 95 percent. Using the standard
assumption that entrained organisms behave like passive water
molecules, this flow reduction will, on a long-term average basis,
reduce entrainment by 95 percent at Facility A. In effect, Facility A
has reduced its entrainment by 20 percent more than it needs to in
order to provide its share toward meeting the performance standard of
75 percent for the estuary. Because of its small size, Facility B
determines that it is not cost effective to reduce entrainment by 75
percent. Instead, Facility B chooses to install fine mesh wedgewire
screens, which reduce its entrainment by 60 percent. Facility B could
possibly make up for the remaining 15 percent of its share to meet the
estuary's performance standard by trading.
Based on historical monitoring data, Facility A entrains alewife,
Atlantic croaker, Atlantic menhaden, bay anchovy, blueback herring,
silversides, spot, striped bass, weakfish and white perch. The average
number, across many years of data, of all life stages of all species
entrained is 417,210 fish per day. Per gallon of water used, it
entrains 0.000556 fish (417,210/750,000,000).
Facility B also entrains alewife, Atlantic croaker, Atlantic
menhaden, bay anchovy, blueback herring, silversides, spot, striped
bass, weakfish, and white perch as determined by historical monitoring
data. Facility B historically entrains the same species of fish as
Facility A as they withdraw water from the same waterbody. The average
number, across many years of data, of all life stages of all species
entrained is 322,620 fish per day. Per gallon of water used, it
entrains 0.000922 fish (322,620/350,000,000). Based on density,
Facility B entrains 1.658 times as many fish as Facility A per unit
flow (0.000922/0.000556). This is the average density ratio of
organisms entrained.
Facility B needs to make up for 15 percent of its share toward the
estuary's performance standard for entrainment reduction. Again, using
the standard assumption that entrained organisms behave like passive
water molecules, the simplified 1:1 relationship between flow and
entrainment from Facility A is also used for Facility B in this
example. Therefore, Facility B needs to compensate for the
environmental effects caused by 15 percent of its flow, or 52,500,000
gallons of resource use (0.15 * 350,000,000). Since Facility A has
reduced entrainment 20 percent more than required, it has 150,000,000
gallons of resource use available for trading (0.20 * 750,000,000). A
trade could be made between these two facilities because they are
located on the same waterbody, they both must install entrainment
controls, and the same species are present in their respective
entrainment numbers. The average density ratio of organisms entrained
multiplied by the gallons of resource use needed by Facility B would
equal the gallons of resource use that Facility B would need to buy
from Facility A in order to make up for the difference in the density
of the species the two facilities entrain. Based on the discrepancy in
the average density of organisms entrained as calculated above, in
order to trade with Facility A, Facility B must purchase entrainment
credits for 1.658 times as many gallons as it needs. Thus, Facility B
needs to purchase 87,045,000 gallons of resource use from Facility A
(1.658 * 52,500,000).
e. Trading Option for New Facilities
EPA is considering extending a section 316(b) trading program
beyond the Phase II rule for existing electric generation facilities.
Those facilities that are covered by the Phase I rule (new facilities)
might be allowed to participate in a section 316(b) trading program.
New facilities could implement technological controls beyond what is
required under the Phase I rule. In general, if more facilities were
allowed to trade, there would be an increased degree of competitiveness
in trading and it would become easier to meet the performance standard
because entrainment reductions would be shared by multiple facilities.
EPA invites comment on the option of extending a section 316(b) trading
program to new facilities.
f. Voluntary Adoption of Trading by Authorized States and Tribes
Under EPA's preferred alternative for section 316(b) trading,
authorized States or Tribes would decide whether to voluntarily adopt a
section 316(b) trading program. EPA notes that authorized States and
Tribes would first need to adopt the appropriate legal authority to
conduct a section 316(b) trading program. In general, EPA believes that
States and Tribes have a better understanding of the dynamics, value,
and overall quality of their local waterbodies based on assigned
designated uses, 305(b) monitoring reports, and other relevant
information and studies compiled over time. Thus, authorized States or
Tribes may be in a better position to judge whether or not to develop
and implement a section 316(b) trading program. Although EPA
acknowledges that a nationally-run section 316(b) trading program may
enhance uniformity, EPA is concerned that a national program may not be
feasible because of differences in species; habitats; waterbody
characteristics; and the variety, nature, and magnitude of
environmental impacts from cooling water intake

[[Page 17173]]

structures found across the United States. EPA seeks comment on whether
a national registry of trades and associated national trading guidance
would be appropriate.
A voluntary program would be administered by the authorized State
or Tribe. Authorized States and Tribes that participate could allow
trading among facilities to meet the entrainment reduction performance
standard. Key environmental and natural resource agencies, industry and
its trade associations, and local environmental groups involved in the
protection of the watershed would participate in the authorized State
or Tribal section 316(b) trading program through the public comment
process. The program would also include consultation with from relevant
Federal, State and authorized Tribal resource agencies and neighboring
authorized States and Tribes where interstate waters are affected
(similar to stakeholder involvement under the NPDES permitting
program).
g. When Would the Permits Be Reissued to Trading Partners?
If trades under section 316(b) are done on a watershed basis, and
permits are synchronized, then permits would be reissued to trading
partners at the same time according to the permitting authority's
standard permit renewal cycle (e.g., every 5 years). With permitting
authorities that have moved toward a watershed permitting strategy,
synchronizing the permit renewal process for all trading partners in a
geographic area reduces some administrative cost and burden on the
permitting authorities.
Alternatively, a trading arrangement may not be specified in the
permit. Instead, the permit would include the performance standard and
a requirement to meet that standard. Under this approach, trades could
occur between permitting cycles. Another option would allow trading of
entrainment units between Phase II existing facilities within permit
cycles at the discretion of each authorized State or Tribal permitting
authority. A disadvantage to this approach is the additional
administrative burden borne by the permitting authorities. EPA seeks
comment on how to harmonize the reissuance of permits with trading
among Phase II existing facilities under section 316(b).
h. Implementation and Enforcement Issues for Section 316(b) Trading
The concept of a section 316(b) trading program for Phase II
existing facilities presents many challenges for the permitting program
at the Federal, State, or authorized Tribe level. These challenges
include development of implementation guidance, incorporation of a
section 316(b) trade tracking system within EPA's Permit Compliance
System or through some other tracking mechanism, self-reporting on
compliance with trade agreements (similar to the self-reporting
conducted through use of Discharge Monitoring Reports), determination
of the administrative cost and burden of such a trading program and EPA
oversight of whether regulatory requirements for impingement and
entrainment reduction are met. EPA invites comment on these unique
challenges and any others regarding implementation, compliance
assessment, and enforcement of a section 316(b) trading program.

VII. Implementation

As in the new facility rule, section 316(b) requirements for Phase
II existing facilities would be implemented through the NPDES permit
program. Today's proposal would establish application requirements in
Sec. 125.95, monitoring requirements in Sec. 125.96, and recordkeeping
and reporting requirements in Sec. 125.97 for Phase II existing
facilities that have a design intake flow of 50 MGD or more. The
proposed regulations also require the Director to review application
materials submitted by each regulated facility and include monitoring
and recordkeeping requirements in the permit (Sec. 125.98). EPA will
develop a model permit and permitting guidance to assist Directors in
implementing these requirements after they are finalized. In addition,
the Agency will develop implementation guidance for owners and
operators that will address how to comply with the application
requirements, the sampling and monitoring requirements, and the
recordkeeping and reporting requirements in these proposed regulations.

A. When Does the Proposed Rule Become Effective?

Phase II existing facilities subject to today's proposed rule would
need to comply with the Subpart J requirements when an NPDES permit
containing requirements consistent with Subpart J is issued to the
facility. See proposed Sec. 125.92. Under existing NPDES program
regulations, this would occur when an existing NPDES permit is reissued
or, when an existing permit is modified or revoked and reissued.

B. What Information Must I Submit to the Director When I Apply for My
Reissued NPDES Permit?

The NPDES regulations that establish the application process at 40
CFR 122.21(d)(2) generally require that facilities currently holding a
permit submit information and data 180 days prior to the end of the
permit term, which is five years. If you are the owner or operator of a
facility that is subject to this proposed rule, you would be required
to submit the information that is required under 40 CFR 122.21(r)(2),
(3), and (5) and Sec. 125.95 of today's proposed rule with your
application for permit reissuance. This section provides a general
discussion of the proposed application requirements for Phase II
existing facilities at the outset and then goes into more detail in
subsequent subsections. The Director would review the information you
provide in your application including the information submitted in
compliance with 40 CFR 122.21(r) and Sec. 125.95 and would confirm
whether your facility should be regulated as an existing facility under
these proposed regulations or as a new facility under regulations that
were published on December 19, 2001 (66 FR 65256) and establish the
appropriate requirements to be applied to the cooling water intake
structure(s).
Today's proposed rule would modify regulations at 40 CFR 122.21(r)
to require existing facilities to prepare and submit some of the same
information required for new facilities. The proposed application
requirements would require owners or operators of Phase II existing
facilities to submit two general categories of information when they
apply for a reissued NPDES permit. The general categories of
information would include (1) Physical data to characterize the source
waterbody in the vicinity where the cooling water intake structures are
located (40 CFR 122.21(r)(2)) and (2) data to characterize the design
and operation of the cooling water intake structures (40 CFR
122.21(r)(3)). Unlike the new facilities, however, Phase II existing
facilities would not be required to submit the Source Water Baseline
Biological Characterization Data required under 40 CFR 122.21(r)(4)).
Today's proposed rule would add a new requirement at 40 CFR
122.21(r)(5) to require a facility to submit information describing the
design and operating characteristics of its cooling water systems and
how they relate to the cooling water intake structures at the facility.
In addition, today's proposed rule would require all Phase II
existing facilities to submit the information

[[Page 17174]]

required under Sec. 125.95. In general, the proposed application
requirements in Sec. 125.95 require all Phase II existing facility
applicants, except those that already use a closed-cycle, recirculating
cooling system, to submit a Comprehensive Demonstration Study
(Sec. 125.95(b)). This study includes a proposal for information
collection; source waterbody information; a characterization of
impingement morality and entrainment; a proposal for technologies,
operational measures, restoration measures and estimated efficacies;
and a plan to conduct monitoring to demonstrate that the proposed
technologies and measures achieve the performance levels that were
estimated. The following describes the proposed application
requirements in more detail.
1. Source Water Physical Data (40 CFR 122.21(r)(1)(ii))
Under the proposed requirements at 40 CFR 122.21(r)(1)(ii), Phase
II existing facilities subject to this proposed rule would be required
to provide the source water physical data specified at 40 CFR
122.21(r)(2) in their application for a reissued permit. These data are
needed to characterize the facility and evaluate the type of waterbody
and species potentially affected by the cooling water intake structure.
The Director would use this information to evaluate the appropriateness
of the design and construction technologies proposed by the applicant.
The applicant would be required to submit the following specific
data: (1) A narrative description and scale drawings showing the
physical configuration of all source waterbodies used by the facility,
including areal dimensions, depths, salinity and temperature regimes,
and other documentation; (2) an identification and characterization of
the source waterbody's hydrological and geomorphological features, as
well as the methods used to conduct any physical studies to determine
the intake's zone of influence and the results of such studies; and (3)
locational maps.
2. Cooling Water Intake Structure Data (40 CFR 122.21(r)(1)(ii))
Under the proposed requirements at 40 CFR 122.21(r)(1)(ii), Phase
II existing facilities would be required to submit the cooling water
intake structure data specified at 40 CFR 122.21(r)(3) to characterize
the cooling water intake structure and evaluate the potential for
impingement and entrainment of aquatic organisms. Information on the
design of the intake structure and its location in the water column
would allow the permit writer to evaluate which species or life stages
would potentially be subject to impingement and entrainment. A diagram
of the facility's water balance would be used to identify the
proportion of intake water used for cooling, make-up, and process
water. The water balance diagram also provides a picture of the total
flow in and out of the facility, allowing the permit writer to evaluate
compliance with the performance standards.
The applicant would be required to submit the following specific
data: (1) A narrative description of the configuration of each of its
cooling water intake structures and where they are located in the
waterbody and in the water column; (2) latitude and longitude in
degrees, minutes, and seconds for each of its cooling water intake
structures; (3) a narrative description of the operation of each of
your cooling water intake structures, including design intake flows,
daily hours of operation, number of days of the year in operation, and
seasonal operation schedules, if applicable; (4) a flow distribution
and water balance diagram that includes all sources of water to the
facility, recirculating flows, and discharges; and (5) engineering
drawings of the cooling water intake structure.
3. Phase II Existing Facility Cooling Water System Description (40 CFR
122.21(r)(1)(ii))
Under the proposed requirements at 40 CFR 122.22(r)(1)(ii), Phase
II existing facilities would be required to submit the cooling water
system data specified at 40 CFR 122.21(r)(5) to characterize the
operation of cooling water systems and their relationship to the
cooling water intake structures at the facility. Also proposed to be
required is a description of the design intake flow that is attributed
to each system and the number of days of the year in operation and any
seasonal operation schedules, if applicable. This information would be
used by the applicant and the Director in determining the appropriate
standards that can be applied to the Phase II facility. Facilities that
have closed-cycle, recirculating cooling water systems will be
determined to have met the performance standards in Sec. 125.94 if all
of their systems are closed-cycle, recirculating cooling systems. These
facilities are not required to submit a Comprehensive Demonstration
Study. Additionally, if only a portion of the total design intake flow
is water withdrawn for a closed-cycle, recirculating cooling system,
such facilities may use the reduction in impingement mortality and
entrainment that is attributed to the reduction in flow in complying
with the performance standards in Sec. 125.94(b).
4. Comprehensive Demonstration Study (Sec. 125.95(b))
Proposed application requirements at Sec. 125.95(b) would require
all existing facilities except those deemed to have met the performance
standard in Sec. 125.94(b)(1) (reduced intake capacity to a level
commensurate with the use of a closed-cycle, recirculating cooling
water system) to perform and submit to the Director the results of a
Comprehensive Demonstration Study, including data and detailed analyses
to demonstrate that you will meet applicable requirements in
Sec. 125.94.
The proposed Comprehensive Demonstration Study has seven
components.
Proposal for Information Collection;
Source Waterbody Flow Information;
Impingement Mortality and Entrainment Characterization
Study;
Design and Construction Technology Plan;
Information to Support Proposed Restoration Measures;
Information to Support Site-specific Determination of Best
Technology Available for Minimizing Adverse Environmental Impact; and
Verification Monitoring Plan.

The information required under each of these components of the
Comprehensive Demonstration Study may not be required to be submitted
by all Phase II existing facilities. Required submittals for your
facility would depend on the compliance option you have chosen. All
Phase II existing facilities, except those deemed to have met the
performance standard in Sec. 125.94(b)(1), would be required to submit
a Proposal for Information Collection; a Source Waterbody Flow
Information; an Impingement Mortality and Entrainment Characterization
Study; a Design and Construction Technology Plan; and a Verification
Monitoring Plan. Only those Phase II existing facilities that propose
to use restoration measures in whole or in part to meet the performance
standards in Sec. 125.94 would be required to submit the Information to
Support Proposed Restoration Measures. Only those facilities who choose
to demonstrate that a site-specific standard is appropriate for their
site would be required to submit Information to Support Site-specific
Determination of Best Technology Available for Minimizing Adverse
Environmental Impact.

[[Page 17175]]

a. Proposal for Information Collection
Before performing the study you would be required to submit to the
Director for review and approval, a proposal stating what information
would be collected to support the study (see Sec. 125.96(b)(1)). This
proposal would provide: (1) A description of the proposed and/or
implemented technology(ies) and/or supplemental restoration measures to
be evaluated; (2) a list and description of any historical studies
characterizing impingement and entrainment and/or the physical and
biological conditions in the vicinity of the cooling water intake
structures and their relevance to this proposed study. If you propose
to use existing data, you must demonstrate the extent to which the data
are representative of current conditions and that the data were
collected using appropriate quality assurance/quality control
procedures; (3) a summary of any past, ongoing, or voluntary
consultations with appropriate Federal, State, and Tribal fish and
wildlife agencies that are relevant to this study and a copy of written
comments received as a result of such consultation; and (4) a sampling
plan for any new field studies you propose to conduct in order to
ensure that you have sufficient data to develop a scientifically valid
estimate of impingement and entrainment at your site. The sampling plan
would document all methods and quality assurance/quality control
procedures for sampling and data analysis. The sampling and data
analysis methods you propose must be appropriate for a quantitative
survey and must take into account the methods used in other studies
performed in the source waterbody. The sampling plan would include a
description of the study area (including the area of influence of the
cooling water intake structure), and provide taxonomic identifications
of the sampled or evaluated biological assemblages (including all life
stages of fish and shellfish).
The proposed rule does not specify particular timing requirements
for your information collection proposal, but does require review and
approval of the proposal by the Director. In general, EPA expects that
it would be submitted well in advance of the other permit application
materials, so that if the Director determined that additional
information was needed to support the application, the facility would
have time to collect this information, including additional monitoring
as appropriate. In some cases, however, where the facility intends to
rely on existing data and there has been no change in conditions at the
site since the last permit renewal, a long lead time might not be
necessary. This would most likely be the case for subsequent permit
renewals following the first renewal after the Phase II requirements go
into effect. EPA requests comment on whether it should specify a
particular time frame for submitting the information collection
proposal, or alternatively, whether it should remove the requirement
for approval by the Director.
b. Source Waterbody Flow Information
Under the proposed requirements at Sec. 125.95(b)(2)(i), Phase II
existing facilities, except those deemed to meet the performance
standard in Sec. 125.94(b)(1), with cooling water intake structures
that withdraw cooling water from freshwater rivers or streams would be
required to provide the mean annual flow of the waterbody and any
supporting documentation and engineering calculations that allow a
determination of whether they are withdrawing less than or greater than
five (5) percent of the annual mean flow. This would provide
information needed to determine which requirements (Sec. 125.94(b)(2)
or (3)) would apply to the facility. The documentation might include
either publicly available flow data from a nearby U.S. Geological
Survey (USGS) gauging station or actual instream flow monitoring data
collected by the facility. The waterbody flow should be compared with
the total design flow of all cooling water intake structures at the
regulated facility.
Under the proposed requirements at Sec. 125.95(b)(2)(ii), Phase II
existing facilities subject to the proposed rule with cooling water
intake structures that withdraw cooling water from a lake or reservoir
and that propose to increase the facility's design intake flow would be
required to submit a narrative description of the waterbody thermal
stratification and any supporting documentation and engineering
calculations to show that the increased flow meets the requirement not
to disrupt the natural thermal stratification or turnover pattern
(where present) of the source water except in cases where the
disruption is determined to be beneficial to the management of
fisheries for fish and shellfish by any fishery management agency(ies)
(Sec. 125.94(b)(4)(ii)). Typically, this natural thermal stratification
would be defined by the thermocline, which may be affected to a certain
extent by the withdrawal of cooler water and the discharge of heated
water into the system. This information demonstrates to the permit
writer that any increase in design intake flow is maintaining the
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
fishery management agency(ies).
c. Impingement Mortality and Entrainment Characterization Study
(Sec. 125.95(b)(3))
The proposed regulations would require that you submit the results
of an Impingement Mortality and Entrainment Characterization Study in
accordance with Sec. 125.96(b)(3). This characterization would include:
(1) Taxonomic identifications of those species of fish and shellfish
and their life stages that are in the vicinity of the cooling water
intake structure and are most susceptible to impingement and
entrainment; (2) a characterization of these species of fish and
shellfish and life stages, including a description of the abundance and
temporal/spatial characteristics in the vicinity of the cooling water
intake structure, based on the collection of a sufficient number of
years of data to characterize annual, seasonal, and diel variations in
impingement mortality and entrainment (e.g., related to climate/weather
differences, spawning, feeding and water column migration); and (3)
documentation of the current impingement mortality and entrainment of
all life stages of fish and shellfish at the facility and an estimate
of impingement mortality and entrainment under the calculation
baseline. This documentation may include historical data that are
representative of the current operation of the facility and of
biological conditions at the site. Impingement mortality and
entrainment samples to support the calculations required in
Sec. 125.95(b)(4)(iii) and (b)(5)(ii) must be collected during periods
of representative operational flows for the cooling water intake
structure and the flows associated with the samples must be documented.
In addition, this study must include an identification of species that
are protected under Federal, State, or Tribal law (including threatened
or endangered species) that might be susceptible to impingement and
entrainment by the cooling water intake structure(s). The Director
might coordinate a review of your list of threatened, endangered, or
other protected species with the U.S. Fish and Wildlife Service,
National Marine Fisheries Service, or other relevant agencies to ensure
that potential

[[Page 17176]]

impacts to these species have been addressed.
d. Design and Construction Technology Plan (Sec. 125.96(b)(4))
If you choose to use existing and/or proposed design and
construction technologies or operational measures in whole or in part
to meet the requirements of Sec. 125.94, proposed Sec. 125.95(b)(4)
would require that you develop and submit a Design and Construction
Technology Plan with your application that demonstrates that your
facility has selected and would implement the design and construction
technologies necessary to reduce impingement mortality and/or
entrainment to the levels required. The Agency recognizes that
selection of the specific technology or group of technologies for your
site would depend on individual facility and waterbody conditions.
Phase II existing facilities seeking to avoid entrainment reduction
requirements because their capacity utilization rate is less than 15
percent, would also be required to calculate and submit the capacity
utilization rate and supporting data and calculations. The data being
requested include (1) the average annual net generation of the facility
in (Mwh) measured over a five year period (if available) and
representative of operating conditions and (2) the net capacity of the
facility (in MW). These data are needed to determine whether the
facility has less than a 15 percent utilization rate and would only be
required to reduce impingement mortality in accordance with
Sec. 125.94(b)(1).
In its application, a Phase II existing facility choosing to use
design and construction technologies or operational measures to meet
the requirements of Sec. 125.94 would be required to describe the
technology(ies) or operational measures they would implement at the
facility to reduce impingement mortality and entrainment based on
information that demonstrates the efficacy of the technologies for
those species most susceptible. Examples of appropriate technologies
would include, but are not limited to, wedgewire screens, fine mesh
screens, fish handling and return systems, barrier nets, aquatic filter
barrier systems, enlargement of the cooling water intake structure to
reduce velocity. Examples of operational measures include, but are not
limited to, seasonal shutdowns or reductions in flow, and continuous
operations of screens, etc.
Phase II existing facilities that are required to meet the proposed
ranges to reduce impingement mortality by 80 to 95 percent and
entrainment by 60 to 90 percent would be required to provide
calculations estimating the reduction in impingement mortality and
entrainment of all life stages of fish and shellfish that would be
achieved through the use of existing and/or proposed technologies or
operational measures. In determining compliance with any requirements
to reduce impingement mortality or entrainment, you must first
determine the calculation baseline against which to assess the total
reduction in impingement mortality and entrainment. The calculation
baseline is defined Sec. 125.93 as an estimate of impingement mortality
and entrainment that would occur at your site assuming you had a
shoreline cooling water intake structure with an intake capacity
commensurate with a once-through cooling water system and with no
impingement and/or entrainment reduction controls. Reductions in
impingement mortality and entrainment from this calculation baseline as
a result of any design and construction technologies already
implemented at your facility would be added to the reductions expected
to be achieved by any additional design and construction technologies
that would be implemented in order to determine compliance with the
performance standards. Facilities that recirculate a portion of their
flow may take into account the reduction in impingement mortality and
entrainment associated with the reduction in flow when determining the
net reduction associated with existing technology and operational
measures. This estimate must include a site-specific evaluation of the
suitability of the technology(ies) based on the species that are found
at the site, and/or operational measures and may be determined based on
representative studies (i.e., studies that have been conducted at
cooling water intake structures located in the same waterbody type with
similar biological characteristics) and/or site-specific technology
prototype studies.
If your facility already has some existing impingement mortality
and entrainment controls, you would need to estimate the calculation
baseline. This calculation baseline could be estimated by evaluating
existing data from a facility nearby without impingement and/or
entrainment control technology (if relevant) or by evaluating the
abundance of organisms in the source waterbody in the vicinity of the
intake structure that may be susceptible to impingement and/or
entrainment. The proposed rule would specifically require that the
following information be submitted in the Design and Construction
Technology Plan: (1) A narrative description of the design and
operation of all design and construction technologies existing or
proposed to reduce impingement mortality; (2) a narrative description
of the design and operation of all design and construction technologies
existing or proposed to reduce entrainment; (3) calculations of the
reduction in impingement mortality and entrainment of all life stages
of fish and shellfish that would be achieved by the technologies and
operational measures you have selected based on the Impingement
Mortality and Entrainment Characterization Study in Sec. 125.95(b)(3);
(4) documentation which demonstrates that you have selected the
location, design, construction, and capacity of the cooling water
intake structure that reflects the best technology available for
meeting the applicable requirements in Sec. 125.94; and (5) design
calculations, drawings, and estimates to support the narrative
descriptions required by steps (1) and (2) above.
Today's proposed rule allows for the Director to evaluate, with
information submitted in your application, the performance of any
technologies you may have implemented in previous permit terms.
Additional or different design and construction technologies may be
required if the Director determines that the initial technologies you
selected and implemented would not meet the requirements of
Sec. 125.94.
e. Information To Support Proposed Restoration Measures
(Sec. 125.94(b)(5))
Under proposed Sec. 125.94(d), Phase II existing facilities subject
to the proposed rule may propose to implement restoration measures in
lieu of or in combination with design and construction or operational
measures to meet the performance standards in Sec. 125.94(b) or site-
specific requirements imposed under Sec. 125.94(c). Facilities
proposing to use restoration measures would be required to submit the
following information to the Director for review as proposed in
Sec. 125.95(b)(5). The Director must approve any use of restoration
measures.
First, the Phase II existing facility must submit a list and
narrative description of the restoration measures the facility has
selected and proposes to implement. This list and description should
identify the species and other aquatic resources targeted under any
restoration measures. The facility also must submit a summary of any
past, ongoing, or voluntary consultation with appropriate Federal,
State, and Tribal fish and wildlife agencies regarding the

[[Page 17177]]

proposed restoration measures that is relevant to the Comprehensive
Demonstration Study and a copy of any written comments received as a
result of such consultation.
Second, the facility must submit a quantification of the combined
benefits from implementing design and construction technologies,
operational measures and/or restoration measures and the proportion of
the benefits that can be attributed to each. This quantification must
include: (1) The percent reduction in impingement mortality and
entrainment that would be achieved through the use of any design and
construction technologies or operational measures that the facility has
selected (i.e., the benefits that would be achieved through impingement
and entrainment reduction); (2) a demonstration of the benefits that
could be attributed to the restoration measures selected; and (3) a
demonstration that the combined benefits of the design and construction
technology(ies), operational measures, and/or restoration measures
would maintain fish and shellfish at a level comparable to that which
you would achieve were you to implement the requirements of
Sec. 125.94. They also must establish that biotic community structure
and function would be maintained to a level comparable or substantially
similar to that which would be achieved through Sec. 125.94 (b) or (c).
If it is not possible to demonstrate quantitatively that
restoration measures such as creation of new habitats to serve as
spawning or nursery areas or establishment of riparian buffers would
achieve comparable performance, a facility may make a qualitative
demonstration that such measures would maintain fish and shellfish in
the waterbody at a level substantially similar to that which would be
achieved under Sec. 125.94. Any qualitative demonstration must be
sufficiently substantive to support a demonstration under
Sec. 125.94(d).
Third, the facility must submit a plan for implementing and
maintaining the efficacy of the restoration measures it has selected as
well as supporting documentation to show that the restoration measures,
or the restoration measures in combination with design and construction
technology(ies) and operational measures, would maintain the fish and
shellfish in the waterbody, including the community structure and
function, to a level comparable or substantially similar to that which
would be achieved through Sec. 125.94(b) and (c). This plan should be
sufficient to ensure that any beneficial effects would continue for at
least the term of the permit.
Finally, the facility must provide design and engineering
calculations, drawings, and maps documenting that the proposed
restoration measures would meet the restoration performance standard at
Sec. 125.94(d).
The proposed regulations at Sec. 125.98(b)(1)(ii) would require
that this information be reviewed by the Director to determine whether
the documentation demonstrates that the proposed restoration measures,
in conjunction with design and construction technologies and
operational measures would maintain the fish and shellfish in the
waterbody to a level substantially similar to that which would be
achieved under Sec. 125.94.
f. Information To Support Site-Specific Determination of Best
Technology Available for Minimizing Adverse Environmental Impact
Under the third compliance option, 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 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 Phase II
existing facility must first demonstrate to the Director either (1)
that its cost 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 existing facility's costs would be
significantly greater than benefits of complying with the performance
standards at the facility's site. A discussion of applying this cost
test is provided in Section VI.A of this proposed rule. Where a Phase
II existing facility demonstrates that it meets either of these cost
tests, the Director must 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 can
approve less costly technologies to the extent justified by the
significantly greater cost, and could determine that technologies and
measures in addition to those already in place are not justified
because of the significantly greater cost.
A Phase II existing facility that meets one of the two cost tests
described above must select less costly design and construction
technologies, operational measures, and/or restoration measures that
would minimize adverse environmental impact to the extent justified by
the significantly greater cost. In order to do this, 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. Phase II existing facilities would
assess adverse environmental impact associated with their cooling water
intake structures in the Comprehensive Demonstration Study that would
be required to be submitted to the Director under Sec. 125.95(b). This
study would include source waterbody flow information, and a
characterization of impingement mortality and entrainment, as described
in this section of this preamble.
Such facilities also must submit to the Director for approval a
Site-Specific Technology Plan. This plan would be based on the
Comprehensive Cost Evaluation Study and, for those facilities seeking a
site-specific determination of best technology available based on costs
significantly greater than benefits, a valuation of monetized benefits
(see Section VI.A). It 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. Existing facilities
would be required to submit design calculations, drawings, and
estimates to support these descriptions. This plan also would need to
include engineering estimates of the effectiveness of the technologies
or measures for reducing impingement mortality and entrainment of all
life stages of fish and shellfish. It also would need to include a
site-specific evaluation of the suitability of the technologies or
measures for reducing impingement mortality and entrainment based on
representative studies and/or site-specific technology prototype
studies. Again, design calculations, drawings and estimates would be
required to support such estimates. If a Phase II existing facility
intends to use restoration measures in its site-specific approach, it
also must submit the information required under

[[Page 17178]]

Sec. 125.95(b)(5). See preamble Section VII.B.4.e. Finally, the Site-
Specific Technology Plan would have to include documentation that the
technologies, operational measures or restoration measures selected
would reduce impingement mortality and entrainment to the extent
necessary to satisfy the requirements of Sec. 125.94 (i.e., the level
of performance would be reduced only to the extent justified by the
significantly greater cost).
g. Verification Monitoring Plan
Finally, proposed Sec. 125.95(b)(7) would require all Phase II
existing facilities, except those deemed to meet the performance
standard in Sec. 125.94(b)(1), to submit a Verification Monitoring Plan
to measure the efficacy of the implemented design and construction
technologies, operational measures, and restoration measures. The plan
would include a monitoring study lasting at least two years to verify
the full-scale performance of the proposed or already implemented
technologies and of any additional operational and restoration
measures. The plan would be required to describe the frequency of
monitoring and the parameters to be monitored and the bases for
determining these. The Director would use the verification monitoring
to confirm that the facility is meeting the level of impingement
mortality and entrainment reduction expected and that fish and
shellfish are being maintained at the level expected (as required in
Sec. 125.94(b)). Verification monitoring would be required to begin
once the technologies, operational measures, or supplemental
restoration measures are implemented and continue for a sufficient
period of time (but at least two years) to demonstrate that the
facility is reducing impingement mortality and entrainment to the level
of reduction required at Sec. 125.94(b) or (c).

C. How Would the Director Determine the Appropriate Cooling Water
Intake Structure Requirements?

The Director's first step would be to determine whether the
facility is covered by this rule. If the answer to all the following
questions is yes, the facility would be required to comply with the
requirements of this proposed rule.
(1) Does the facility both generate and transmit electric power or
generate electric power but sell it to another entity for transmission?
(2) Is the facility an ``existing facility'' as defined in
Sec. 125.93?
(3) Does the facility withdraw cooling water from waters of the
U.S.; or does the facility obtain cooling water by any sort of contract
or arrangement with an independent (supplier or multiple suppliers) of
cooling water if the supplier(s) withdraw(s) water from waters of the
U.S. and is not a public water system?
(4) Is at least 25 percent of the water withdrawn by the facility
used for cooling purposes?
(5) Does the facility have a design intake flow of 50 million
gallons or more per day (MGD)? \70\
---------------------------------------------------------------------------

\70\ If the answer is no to these flow parameters and yes to all
the other questions, the Director would use best professional
judgment on a case-by-case basis to establish permit conditions that
ensure compliance with section 316(b).
---------------------------------------------------------------------------

(6) Does the facility discharge pollutants to waters of the U.S.,
including storm water-only discharges, such that the facility has or is
required to have an NPDES permit?
The Director's second step would be to determine whether the
facility proposes to comply by demonstrating that its existing design
and construction technologies, operational measures, or restoration
measures meet the proposed performance standards (Option 1); by
implementing design and construction technologies, operational
measures, or restoration measures that, in combination with existing
technologies and operational measures, meet the proposed performance
standards (Option 2); or by seeking a site-specific determination of
best technology available to minimize adverse environmental impact
(Option 3) (see, Sec. 125.98(1)). The Director also would need to
determine whether the facility's utilization rate is less than 15
percent, since such facilities are only subject to impingement
mortality performance requirements.
Where a Phase II existing facility selects Option 1 and chooses to
demonstrate that its existing design and construction technologies,
operational measures, or restoration measures meet the proposed
performance standards, the Director would verify either that the
existing facility satisfies the reduced intake capacity requirement, or
that the facility meets the impingement and entrainment reduction and
other requirements. Facilities that have closed-cycle, recirculating
cooling water systems would meet the reduced intake capacity
requirement, and would not be subject to further performance standards.
Other methods of reducing intake capacity also could be used but would
need to be commensurate with the level that can be attained by a
closed-cycle, recirculating cooling water system.
Under Option 1, to verify that existing controls meet the
impingement and entrainment reduction requirements in the proposed
rule, the Director would need to (1) verify the facility's baseline
calculation; (2) confirm the location of the facility's cooling water
intake structure(s); (3) verify the withdrawal percentage of mean
annual flow; (4) review impingement and/or entrainment rates or
estimates; and (5) consider any use of restoration. These same steps
also would be part of determining requirements under Options 2 and 3,
as discussed below.
The Director would initially review and verify the calculation
baseline estimate submitted by the facility under Sec. 125.95(b)(iii).
This estimate must be consistent with the proposed definition of the
term ``calculation baseline'' and must be representative of current
biological conditions at the facility. The Director would then review
the information that the facility provides to validate the source
waterbody type in which the cooling water intake structure is located
(freshwater river or stream; lake or reservoir; or estuary, tidal
river, ocean, or Great Lake). The Director would review the supporting
material the applicant provided in the permit application to document
the physical placement of the cooling water intake structure. For
existing facilities with one or more cooling water intake structures
located in a freshwater river or stream, the Director would need to
determine whether the facility withdraws more or less than five percent
of the mean annual flow, which determines whether impingement, or
impingement and entrainment controls would apply. For facilities with
cooling water intake structures located on lakes or reservoirs other
than a Great Lake for which the facility seeks to increase the design
flow, the Director would need to determine whether the increased intake
flow would disrupt the natural thermal stratification or turnover
pattern of the source waterbody. In making this determination the
Director would need to consider anthropogenic factors that can
influence the occurrence and location of a thermocline, and would need
to coordinate with appropriate Federal, State, or Tribal fish and
wildlife agencies to determine if the disruption is beneficial to the
management of the fisheries. Both of these determinations would be
based on the source waterbody flow information required under proposed
Sec. 125.95(b)(2).
For Phase II existing facilities that use or propose to implement
restoration measures to meet the requirements of Sec. 125.94(b), the
Director would review the evaluation of any current or proposed
restoration measures submitted under proposed

[[Page 17179]]

Sec. 125.95(b)(5). The Director could gather additional information and
solicit input for the review from appropriate fishery management
agencies as necessary. The Director would need to determine whether the
current or proposed measures would maintain the fish and shellfish in
the waterbody at comparable levels to those that would be achieved
under Sec. 125.94, as well as review and approve the proposed
Verification and Monitoring Plan to ensure the restoration measures
meet Sec. 125.94(d) and 125.95(b)(3).
Finally, the Director would review impingement and/or entrainment
data or estimates to determine whether in-place or identified controls
achieve the performance standards proposed for the different categories
of source waterbodies. This step would involve comparing the
calculation baseline with the impingement and/or entrainment data or
estimates provided as part of the Comprehensive Demonstration Study
required under Sec. 125.95(b) and the Impingement Mortality and
Entrainment Characterization Study required under Sec. 125.95(b)(3). It
may also entail considering whether, how, and to what extent
restoration would allow the facility to meet applicable performance
standards.
If the Director determines that the Comprehensive Demonstration
Study submitted does not demonstrate that the technologies, operational
measures, and supplemental restoration measures employed would achieve
compliance with the applicable performance standards, the Director may
issue a permit requiring such compliance. If such studies are approved
and a permit is issued but the Director later determines, based on the
results of subsequent monitoring, that the technologies, operational
measures, and supplemental restoration measures did not meet the rule
standards, the Director could require the existing facility to
implement additional technologies and operational measures as necessary
to meet the rule requirements. In general, this would occur at the next
renewal of the permit. The Director would also review the facility's
Technology Verification Plan for post-operational monitoring to
demonstrate that the technologies are performing as predicted.
Under compliance Option 2, the same general steps would be followed
as described above for assessing compliance of existing controls with
applicable performance standards except that under this option the
Phase II existing facility would be demonstrating that the technologies
and measures identified would meet (rather than currently meet) the
applicable performance standards. This review would also be based on
data submitted in the Comprehensive Demonstration Study required under
Sec. 125.95(b).
These same basic steps also apply to facilities seeking to comply
under Option 3, however, the Director must make two additional
determinations under this option, including whether the facility meets
one of the applicable cost tests and whether any alternative
requirements are justified by significantly greater costs. Under Option
3, a Director must first determine whether a Phase II existing facility
satisfies either of the cost tests proposed at Sec. 125.94(c). Phase II
existing facilities seeking to comply under this option are required to
submit a Comprehensive Cost Evaluation Study under Sec. 125.95(b)(6),
which includes data that document the cost of implementing design and
construction technologies or operational measures to meet the
requirements of Sec. 125.94, as well as the costs of alternative
technologies or operational measures proposed. The Director would need
to review these data, including detailed engineering cost estimates,
and compare these with the costs the Agency considered in establishing
these requirements. Where the Director finds that the facility's cost
of implementation are significantly greater than those considered
during rule development, he or she must approve site-specific
requirements and could approve alternative technologies or operational
measures. Such alternative technologies or operational measures could
be those proposed by the facility in the Site-Specific Technology Plan,
but less protective requirements would have to be justified by the
significantly greater costs.
Where a Phase II existing facility seeks site-specific requirements
based on facility costs that are significantly greater than the
environmental benefits of compliance, the facility must submit a
Valuation of Monetized Benefits of Reducing Impingement and
Entrainment. The Director must review this valuation to determine
whether it fully values the impacts of the cooling water intake
structures at issue, as required in Sec. 125.95(b)(6)(ii), and whether
the facility's cost of implementation are significantly greater than
the environmental benefits of complying with the requirements of
Sec. 125.94. If the Director determines that the implementation costs
are significantly greater than the environmental benefits, the Director
must approve site-specific requirements and could approve alternative
technologies or operational measures. Such alternative technologies or
operational measures could be those proposed by the facility in the
Site-Specific Technology Plan, but less protective requirements would
have to be justified by the significantly greater costs. EPA is
interested in ways to decrease application review time and make this
process both efficient and effective.

D. What Would I Be Required To Monitor?

Proposed Sec. 125.96 provides that Phase II existing facilities
would have to perform monitoring to demonstrate compliance with the
requirements of Sec. 125.94 as prescribed by the Director. In
establishing such monitoring requirements, the Director should consider
the need for biological monitoring data, including impingement and
entrainment sampling data sufficient to assess the presence, abundance,
life stages, and mortality (including eggs, larvae, juveniles, and
adults) of aquatic organisms (fish and shellfish) impinged or entrained
during operation of the cooling water intake structure. These data
could be used by the Director in developing permit conditions to
determine whether requirements, or additional requirements, for design
and construction technologies or operational measures should be
included in the permit. The Director should ensure, where appropriate,
that any required sampling would allow for the detection of any annual,
seasonal, and diel variations in the species and numbers of individuals
that are impinged or entrained. The Director should also consider if a
reduced frequency in biological monitoring may be justified over time
if the supporting data show that the technologies are consistently
performing as projected under all operating and environmental
conditions and less frequent monitoring would still allow for the
detection of any future performance fluctuations. The Director should
further consider whether weekly visual or remote or similar inspections
should be required to ensure that any technologies that have been
implemented to reduce impingement mortality or entrainment are being
maintained and operated in a manner that ensures that they function as
designed. Monitoring requirements could be imposed on Phase II existing
facilities that have been deemed to meet the performance standard in
Sec. 125.94(b)(1) to the extent consistent with the provisions of the
NPDES program.

[[Page 17180]]

E. How Would Compliance Be Determined?

This proposed rule would be implemented by the Director placing
conditions consistent with this proposed rule in NPDES permits. To
demonstrate compliance, the proposed rule would require that the
following information be submitted to the Director:
Data submitted with the NPDES permit application to show
that the facility is in compliance with location, design, construction,
and capacity requirements;
Compliance monitoring data and records as prescribed by
the Director.

Proposed Sec. 125.97 would require existing facilities to keep records
and report compliance monitoring data in a yearly status report. In
addition, Directors may perform their own compliance inspections as
deemed appropriate (see CFR 122.41).

F. What Are the Respective Federal, State, and Tribal Roles?

Section 316(b) requirements are implemented through NPDES permits.
Today's proposed regulations would amend 40 CFR 123.25(a)(36) to add a
requirement that authorized State and Tribal programs have sufficient
legal authority to implement today's requirements (40 CFR part 125,
subpart J). Therefore, today's proposed rule would affect authorized
State and Tribal NPDES permit programs. Under 40 CFR 123.62(e), any
existing approved section 402 permitting program must be revised to be
consistent with new program requirements within one year from the date
of promulgation, unless the NPDES-authorized State or Tribe must amend
or enact a statute to make the required revisions. If a State or Tribe
must amend or enact a statute to conform with today's proposed rule,
the revision must be made within two years of promulgation. States and
Tribes seeking new EPA authorization to implement the NPDES program
must comply with the requirements when authorization is requested.
EPA recognizes that some States have invested considerable effort
in developing section 316(b) regulations and implementing programs. EPA
is proposing regulations that would allow States to continue to use
these programs by including in this national rule a provision that
allows States to use their existing program if the State establishes
that such programs would achieve comparable environmental performance.
Specifically, the proposed rule would allow any State to demonstrate to
the Administrator that it has adopted alternative regulatory
requirements that would result in environmental performance within each
relevant watershed that is comparable to the reductions in impingement
mortality and entrainment that would be achieved under Sec. 125.94. EPA
invites comment on such ``functionally equivalent'' programs. In
particular, EPA invites comment on the proposed alternative and on
decision criteria EPA should consider in determining whether a State
program is functionally equivalent. If EPA adopts such an approach, the
Agency would also need to specify the process through which an existing
State program is evaluated and whether such process can occur under the
existing State program regulations or whether additional regulations to
provide the evaluation criteria are needed.
Finally, EPA invites comment on the role of restoration and habitat
enhancement projects as part of any ``functionally equivalent'' State
programs.
In addition to updating their programs to be consistent with
today's proposed rule, States and Tribes authorized to implement the
NPDES program would be required to implement the cooling water intake
structure requirements following promulgation of the proposed
regulations. The requirements would have to be implemented upon the
issuance or reissuance of permits containing the requirements of
proposed subpart J. Duties of an authorized State or Tribe under this
regulation may include
Review and verification of permit application materials,
including a permit applicant's determination of source waterbody
classification and the flow or volume of certain waterbodies at the
point of the intake;
Determination of the standards in Sec. 125.94 that apply
to the facility;
Verification of a permit applicant's determination of
whether it meets or exceeds the applicable performance standards;
Verification that a permit applicant's Design and
Construction Technology Plan demonstrates that the proposed alternative
technologies would reduce the impacts to fish and shellfish to levels
required;
Verification that a permit applicant meets the cost test
and that permit conditions developed on a site-specific basis are
justified based on documented costs, and, if applicable, benefits;
Verification that a permit applicant's proposed
restoration measures would meet regulatory standards;
Development of draft and final NPDES permit conditions for
the applicant implementing applicable section 316(b) requirements
pursuant to this rule; and
Ensuring compliance with permit conditions based on
section 316(b) requirements.
EPA would implement these requirements where States or Tribes are
not authorized to implement the NPDES program. EPA also would implement
these requirements where States or Tribes are authorized to implement
the NPDES program but do not have sufficient authority to implement
these requirements.

G. Are Permits for Existing Facilities Subject to Requirements Under
Other Federal Statutes?

EPA's NPDES permitting regulations at 40 CFR 122.49 contain a list
of Federal laws that might apply to federally issued NPDES permits.
These include the Wild and Scenic Rivers Act, 16 U.S.C. 1273 et seq.;
the National Historic Preservation Act of 1966, 16 U.S.C. 470 et seq.;
the Endangered Species Act, 16 U.S.C. 1531 et seq.; the Coastal Zone
Management Act, 16 U.S.C. 1451 et seq.; and the National Environmental
Policy Act, 42 U.S.C. 4321 et seq. See 40 CFR 122.49 for a brief
description of each of these laws. In addition, the provisions of the
Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C.
1801 et seq., relating to essential fish habitat might be relevant.
Nothing in this proposed rulemaking would authorize activities that are
not in compliance with these or other applicable Federal laws.

H. Alternative Site-Specific Requirements

Today's proposed rule would establish national requirements for
Phase II existing facilities. EPA has taken into account all the
information that it was able to collect, develop, and solicit regarding
the location, design, construction, and capacity of cooling water
intake structures at these existing facilities. EPA concludes that
these proposed requirements would reflect the best technology available
for minimizing adverse environmental impact on a national level. In
some cases, however, data that could affect the economic practicability
of requirements might not have been available to be considered by EPA
during the development of today's proposed rule. Therefore, where a
facility's cost would be significantly greater than the cost considered
by EPA in establishing the applicable performance standards, proposed
Sec. 125.94(c)(2) would require the Director

[[Page 17181]]

to make a site-specific determination of the best technology available
based on less costly design and construction technologies, operational
measures, and/or restoration measures. Less costly technologies or
measures would be allowable to the extent justified by the
significantly greater cost. Similarly, Sec. 125.94(c)(3) provides that
where an existing facility's cost would be significantly greater than
the benefits of complying with the applicable performance standards,
the Director must make a site-specific determination of the best
technology available based on less costly technologies or measures.
These provisions would allow the Director, in the permit development
process, to set alternative best technology available requirements that
are less stringent than the nationally applicable requirements.
Under proposed Sec. 125.94(c), alternative requirements would not
be granted based on a particular facility's ability to pay for
technologies that would result in compliance with the requirements of
proposed Sec. 125.94. Thus, so long as the costs of compliance are not
significantly greater than the costs EPA considered and determined to
be economically practicable, and are not significantly greater than the
benefits of compliance with the proposed performance standards, the
ability of an individual facility to pay in order to attain compliance
with the rule would not support the imposition of alternative
requirements. Conversely, if the costs of compliance for a particular
facility are significantly higher than those considered by EPA in
establishing the presumptive performance standards, then regardless of
the facility's ability to afford the significantly higher costs, the
Director should make a site-specific determination of best technology
available based on less costly technologies and measures to the extent
justified by the significantly higher costs.
The burden is on the person requesting the site-specific
alternative requirement to demonstrate that alternative requirements
should be imposed and that the appropriate requirements of proposed
Sec. 125.94 have been met. The person requesting the site-specific
alternative requirements should refer to all relevant information,
including the support documents for this proposed rulemaking, all
associated data collected for use in developing each requirement, and
other relevant information that is kept on public file by EPA.

VIII. Economic Analysis

EPA used an electricity market model, the Integrated Planning Model
2000 (IPM 2000), to identify potential economic and operational impacts
of various regulatory options considered for proposal. Analyzed
characteristics include changes in capacity, generation, revenue, cost
of generation, and electricity prices. These changes are identified by
comparing two scenarios: (1) The base case scenario (in the absence of
Section 316(b) regulation); and (2) the post compliance scenario (after
the implementation of Section 316(b) regulation). The results of these
comparisons were used to assess the impacts of the proposed rule and
two of the five alternative regulatory options considered by EPA. The
following sections present EPA's economic analyses of the proposed rule
and the alternative options.

A. Proposed Rule

Today's proposed rule would provide three compliance options for
Phase II existing facilities. Such facilities could: (1) Demonstrate
that their existing cooling water intake structure design and
construction technologies, operational measures, and/or restoration
measures meet the proposed performance standards; (2) implement design
and construction technologies, operational measures, and/or restoration
measures that meet the proposed performance standards; or (3) where the
facility can demonstrate that its costs of complying with the proposed
performance standards are significantly greater than either the costs
EPA considered in establishing these requirements or the benefits of
meeting the performance standards, seek a site-specific determination
of best technology available to minimize adverse environmental impact.
The applicable performance standards are described in Section VI.A.,
above.
Section VIII.A.1 below presents the analysis of national costs
associated with the proposed section 316(b) Phase II Rule. Section
VIII.A.2 presents a discussion of the impact analysis of the proposed
rule at the market level and for facilities subject to this rule.
1. Costs
EPA estimates that facilities subject to this proposed rule will
incur annualized post-tax compliance costs of approximately $178
million. These costs include one-time technology costs of complying
with the rule, annual operating and maintenance costs, and permitting
costs (including initial permit costs, annual monitoring costs, and
repermitting costs). This cost estimate does not include the costs of
administering the rule by permitting authorities and the federal
government. Also excluded are compliance costs for 11 facilities that
are projected to be baseline closures (see discussion below). Including
compliance costs for projected baseline closure facilities would result
in a total annualized compliance cost of approximately $182 million.
2. Economic Impacts
EPA used an electricity market model to account for the dynamic
nature of the electricity market when analyzing the potential economic
impacts of Section 316(b) regulation. The IPM 2000 is a long-term
general equilibrium model of the domestic electric power market which
simulates the least-cost dispatch solution for all generation assets in
the market given a suite of user-specified constraints.\71\ The impacts
of compliance with a given regulatory option are defined as the
difference between the model output for the base case scenario and the
model output for the post-compliance scenario.\72\
---------------------------------------------------------------------------

\71\ For a more detailed description of IPM 2000 see the EBA
document.
\72\ The IPM model simulates electricity market function for a
period of 25 years. Model output is provided for five user specified
model run years. EPA selected three run years to provide output
across the ten year compliance period for the rule. Analyses of
regulatory options are based on output for model run years which
reflect a scenario in which all facilities are operating in their
post-compliance condition. Options requiring the installation of
cooling towers are analyzed using output from model run year 2013.
All other options are analyzed using output from model run years
2008. See the EBA document for a detailed discussion of IPM 2000
model run years.
---------------------------------------------------------------------------

Due to the lead time required in running an integrated electricity
market model, EPA first completed an electricity market model analysis
of two options with costs higher than those in today's proposed option:
the ``Closed-Cycle, Recirculating Wet Cooling based on Waterbody type
and Intake Capacity'' Option (waterbody/capacity-based option) and the
``Closed-Cycle, Recirculating Wet Cooling Everywhere'' Option (all
cooling towers option). Both of the analyzed options are more stringent
in aggregate than the proposed rule and provide a ceiling on its
potential economic impacts. Because of limited time after final
definition of the rule as proposed herein, EPA was unable to rerun the
IPM model with an analytic option that completely matches the proposed
rule's specifications. As a result, EPA adopted a two-step approach for
the aggregate impact analysis. First, EPA identified that for certain
regional electricity markets that

[[Page 17182]]

do not have any facilities costed with a closed-cycle recirculating
cooling water system, the waterbody/capacity-based option, as analyzed,
matches the technology compliance requirements of the proposed
rule.\73\ These are the North American Electric Reliability Council
(NERC) regions that do not border oceans and estuaries: ECAR, MAIN,
MAPP, SPP.\74\ Accordingly, EPA was able to interpret the results of
the IPM analysis for the waterbody/capacity-based option for these four
NERC regions as representative of the proposed rule in these regions.
As shown below, EPA found very small or no impacts in these NERC
regions. Second, EPA identified and compared data relevant to
determination of rule impacts for these four NERC regions and the
remaining NERC regions for which the IPM analysis would not be
indicative of the proposed rule. Finding no material differences in
these underlying characteristics between the two groups of NERC
regions, EPA concluded that the finding of no significant impacts from
the IPM-based analysis of the four NERC regions identified above, could
also be extended to the remaining six NERC regions. Therefore, EPA
believes that the proposed option, which would apply the same
requirements (e.g., based on technologies such as fine mesh screens,
filter fabric barrier nets, or fish return systems) to facilities in
all NERC regions, would, in total, have very small or no impacts. The
remainder of this section presents an assessment of the impacts of the
proposed rule using the market and Phase II existing facility-level
results from the IPM 2000 analysis of the alternative waterbody/
capacity-based option for these four NERC regions. A more detailed
analysis of all NERC regions under the alternative waterbody/capacity-
based option is presented in Section VIII.B.2 below.
---------------------------------------------------------------------------

\73\ While the compliance requirements are identical under the
proposed rule and the alternative waterbody/capacity-based option,
permitting costs associated with the proposed rule are higher than
those for the alternative option analyzed using the IPM 2000. The
cost differential averages approximately 30 percent of total
compliance costs associated with the alternative option. Despite the
higher permitting costs, EPA concludes that the results of the
alternative analysis are representative of impacts that could be
expected under the proposed rule.
\74\ ECAR (East Central Area Reliability Coordination Agreement)
includes the states of Kentucky, Ohio, and West Virginia, and
portions of Michigan, Maryland, Virginia, and Pennsylvania. MAIN
(Mid-America Interconnected Network, Inc.) includes the state of
Illinois and portions of Missouri, Wisconsin, Iowa, Minnesota and
Michigan. MAPP (Mid-Continent Area Power Pool) includes the states
of Nebraska and North Dakota, and portions of Iowa, South Dakota,
Wisconsin, Montana and Minnesota. SPP (Southwest Power Pool)
includes the states of Kansas and Oklahoma, and portions of
Arkansas, Louisiana, Texas, and New Mexico.
---------------------------------------------------------------------------

i. Market Level Impacts
This section presents the results of the IPM 2000 analysis for the
four NERC regions with no cooling tower requirements under the
alternative waterbody/capacity-based option: ECAR, MAIN, MAPP, and
SPP.\75\ As indicated above, the compliance requirements of this
analyzed option are identical to those of the proposed rule for these
four regions. Given the similarity in compliance requirements and the
limited electricity exchanges between NERC regions modeled in IPM 2000,
EPA concludes that the impacts modeled for the alternative waterbody/
capacity-based option would be representative of potential impacts
associated with the proposed rule for each of these regions.
---------------------------------------------------------------------------

\75\ The market level results include results for all units
located in each of the four NERC regions including facilities both
in scope and out of scope of the alternative waterbody/capacity-
based option.
---------------------------------------------------------------------------

Five measures developed from the IPM 2000 output are used to assess
market level impacts associated with Section 316(b) regulation: (1)
Total capacity, defined as the total available capacity of all
facilities not identified as either baseline closures or economic
closures resulting from the regulatory option; (2) new capacity,
defined as total capacity additions from new facilities; (3) total
generation, calculated as the sum of generation from all facilities not
identified as baseline closures or economic closures resulting from the
regulatory option; (4) production costs per MWh of generation,
calculated as the sum of total fuel and variable O&M costs divided by
total generation; and (5) energy prices, defined as the prices received
by facilities for the sale of electricity. Exhibit 6 presents the base
case and post compliance results for each of these economic measures.

Exhibit 6.--Market-Level Impacts of the Proposed Rule
[Four Nerc Regions; 2008]
----------------------------------------------------------------------------------------------------------------
NERC region Base case Option 1 Difference % Change
----------------------------------------------------------------------------------------------------------------
(ECAR)
Total Capacity (MW)............................. 118,390 118,570 180 0.2
New Capacity (MW)............................... 8,310 8,490 180 2.2
Total Generation (GWh).......................... 649,140 649,140 0 0.0
Production Costs ($2001/MWh).................... $12.53 $12.53 $0.00 0.0
Energy Prices ($2001/MWh)....................... $22.58 $22.56 ($0.02) -0.1
----------------------------------------------------------------------------------------------------------------
(MAIN)
Total Capacity (MW)............................. 60,230 60,210 -20 0.0
New Capacity (MW)............................... 6,540 6,530 -10 -0.2
Total Generation (GWh).......................... 284,920 284,860 -60 0.0
Production Costs ($2001/MWh).................... $12.29 $12.29 $0.00 0.0
Energy Prices ($2001/MWh)....................... $22.54 $22.55 $0.01 0.0
----------------------------------------------------------------------------------------------------------------
(MAPP)
Total Capacity (MW)............................. 35,470 35,470 0 0.0
New Capacity (MW)............................... 2,760 2,760 0 0.0
Total Generation (GWh).......................... 179,110 179,170 60 0.0
Production Costs ($2001/MWh).................... $11.67 $11.68 $0.01 0.0
Energy Prices ($2001/MWh)....................... $22.25 $22.20 ($0.05) -0.2
----------------------------------------------------------------------------------------------------------------
(SPP)
Total Capacity (MW)............................. 49,110 49,110 0 0.0
New Capacity (MW)............................... 160 160 0 0.0

[[Page 17183]]

Total Generation (GWh).......................... 217,670 217,750 80 0.0
Production Costs ($2001/MWh).................... $14.43 $14.43 $0.00 0.0
Energy Prices ($2001/MWh)....................... $25.00 $24.99 ($0.01) 0.0%
----------------------------------------------------------------------------------------------------------------

The results presented in Exhibit 6 reveal no significant changes in
any of the economic measures used to assess the impacts of the
alternative waterbody/capacity-based option in any of the four NERC
regions.\76\ One region, SPP, experienced no change of any consequence
to any of the five impact measures as a result of the alternative
option. Post compliance changes in total capacity and new capacity were
experienced in both ECAR and MAIN. Each of these measures decreased by
insignificant amounts in MAIN while ECAR experienced a slight increase
of 0.2 percent in total capacity and a slightly larger increase of 2.2
percent in new capacity additions. While the slight increases in total
and new capacity seen in ECAR did not result in changes in either
generation or production costs, energy prices did decrease slightly.
Energy prices also decreased slightly in MAPP despite no appreciable
difference in any other measure for that region. Based on these
results, EPA concludes that there are no significant impacts associated
with the proposed section 316(b) Phase II Rule in these regions.
---------------------------------------------------------------------------

\76\ In addition to the five impact measures presented in
Exhibit 6, EPA utilized IPM 2000 to identify changes in other
economic and operational characterisitcs, including revenues,
average fuel costs, changes in repowering, and the number and
capacity of facilities identfiied as economic closures. The IPM
results showed no economic closures and no changes in repowering
associated with compliance with the alternative waterbody/capacity-
based option in any of the four NERC regions presented in Exhibit 6.
For a detailed discussion of the results of the IPM 2000 analysis of
the alternative waterbody/capacity based option see section VIII.B.2
and the EBA document.
---------------------------------------------------------------------------

While the waterbody/capacity-based option, as analyzed in IPM,
matches the technology specifications of the proposed rule for the four
regions discussed above, this is not the case for the other six NERC
regions: ERCOT, FRCC, MAAC, NPCC, SERC, and WSCC.\77\ Under the
waterbody/capacity-based option, as analyzed, some facilities in these
regions were analyzed with more stringent and costly compliance
requirements, including recirculating wet cooling towers, than would
required by the proposed rule. As a result, the IPM waterbody/capacity-
based option overstates the expected rule impacts in these remaining
six regions. To provide an alternative approach to estimating the
rule's impacts in these regions, EPA compared characteristics relevant
to the determination of rule impacts for the four NERC regions
explicitly analyzed in the IPM analysis and the six NERC regions for
which the IPM analysis otherwise overstates impacts. EPA found no
material differences between the two groups of regions in (1) the
percentage of total base case capacity subject to the proposed rule,
(2) the ratio of the annualized compliance costs of the proposed rule
to total base case generation, and (3) the compliance requirements of
the proposed rule (see Exhibit 7 below). EPA therefore concludes that
the results for the four regions would be representative of the other
NERC regions as well.\78\
---------------------------------------------------------------------------

\77\ The six other NERC regions are: Electric Reliability
Council of Texas (ERCOT), Florida Reliability Coordinating Council
(FRCC), Mid Atlantic Area Council (MAAC), Northeast Power
Coordination Council (NPCC), Southeastern Electricity Reliability
Council (SERC), and Western Systems Coordinating Council (WSCC).
\78\ The comparison presented in Exhibit 7 includes information
for facilities modeled in IPM 2000 only. Of the 539 existing
facilities subject to the section 316(b) Phase II rule, nine are not
modeled in the IPM 2000: Three facilities are in Hawaii, and one is
in Alaska. Neither state is represented in the IPM 2000. One
facility is identified as an ``Unspecified Resource'' and does not
report on any EIA forms. Four facilities are on-site facilities that
do not provide electricity to the grid. The 530 existing facilities
were weighted to account for facilities not sampled and facilities
that did not respond to the EAP's industry survey and thus represent
a total of 540 facilities industry-wide.

Exhibit 7.--Comparison of Compliance Requirements by NERC Region--2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percentage of facilities subject to each compliance requirement--proposed rule
Total -------------------------------------------------------------------------------
Percent of annualized Both
NERC region total capacity compliance impingement Entrainment Impingement
subject to the cost per MWh Total and controls only controls only None
rule generation facilities entrainment (percent) (percent) (percent)
($2001) controls
--------------------------------------------------------------------------------------------------------------------------------------------------------
ECAR.................................... 66.5 0.05 99 32.4 7.1 23.9 36.6
MAIN.................................... 60.9 0.04 49 30.6 6.1 22.7 40.7
MAPP.................................... 42.1 0.04 42 9.5 7.1 28.5 54.8
SPP..................................... 40.7 0.03 32 12.6 0.0 46.9 40.5
Average................................. 57.1 0.04 .............. 24.8 5.8 27.8 41.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
ERCOT................................... 57.8 0.04 51 2.0 11.8 60.8 25.5
FRCC.................................... 49.8 0.07 30 40.0 13.3 16.7 30.0
MAAC.................................... 50.7 0.06 43 26.2 19.1 28.8 25.9
NPCC.................................... 49.6 0.08 54 22.1 34.2 16.5 27.1
SERC.................................... 53.8 0.03 95 16.8 7.4 31.6 44.2
WSCC.................................... 18.3 0.02 33 52.9 3.0 16.6 27.5
Average................................. 43.6 0.04 .............. 22.8 14.6 30.3 32.3
Average of All NERC Regions............. 47.7 0.04 .............. 23.6 10.9 29.3 36.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 17184]]

Exhibit 7 indicates that, on average, the percentage of total
capacity is slightly higher and the percentage of facilities subject to
the proposed rule is slightly lower in the four analyzed NERC regions
compared to the other six regions. In addition, the average annualized
compliance costs per MWh of generation is very similar in all NERC
regions. Based on this comparison and the limited amount electricity
exchanges between regions modeled in IPM 2000, EPA concluded that the
analysis of impacts under the proposed rule for the four NERC regions
is representative of likely impacts in the other NERC regions. As the
analysis of the impacts of the alternative waterbody/capacity-based
option revealed no significant impacts at the market level, EPA
concluded that there would be no significant impacts on any NERC region
associated with the proposed rule.
ii. Impacts on Facilities Subject to the Proposed Rule
This section presents the results of the facility impact analysis
for the proposed rule, again using the IPM 2000 analysis of the
alternative waterbody/capacity-based option for the four NERC regions
where the compliance requirements of the proposed rule and the analyzed
option are identical.\79\ EPA used the IPM 2000 results to analyze two
potential facility level impacts of the proposed section 316(b) Phase
II Rule: (1) potential changes in the economic and operational
characteristics of the group of Phase II existing facilities and (2)
potential changes to individual facilities within the group of Phase II
existing facilities.
---------------------------------------------------------------------------

\79\ These results only pertain to the steam electric component
of the Phase II existing facilities and thus do not provide complete
measures for facilities with both steam electric and non-steam
electric generation.
---------------------------------------------------------------------------

EPA used output from model run year 2008 to develop four measures
used to identify changes in the economic and operational
characteristics of the group of Phase II existing facilities. These
measures include: (1) Total capacity, defined as the total available
capacity of all facilities not identified as either baseline closures
or economic closures resulting from the regulatory option; (2) total
generation, calculated as the sum of generation from all facilities not
identified as baseline closures or economic closures resulting from the
regulatory option; (3) revenues, calculated as the sum of energy and
capacity revenues; and (4) production costs per MWh of generation,
calculated as the sum of total fuel and variable O&M costs divided by
total generation. Exhibit 8 presents the base case and post compliance
results for each of these economic measures.

Exhibit 8.--Impacts on Phase II Existing Facilities of the Proposed Rule
[Four NERC Regions; 2008]
----------------------------------------------------------------------------------------------------------------
Base case Proposed rule Difference % Change
----------------------------------------------------------------------------------------------------------------
(ECAR)
Total Capacity (MW)............................. 78,710 78,710 0.00 0.0
Total Generation (GWh).......................... 515,020 515,030 10.00 0.0
Revenues (Million $2001)........................ $17,650 $17,650 0.00 0.0
Production Costs ($2001/MWh).................... $12.34 $12.34 0.00 0.0
(MAIN)
Total Capacity (MW)............................. 36,700 36,700 0.00 0.0
Total Generation (GWh).......................... 226,360 226,350 -10.00 0.0
Revenues (Million $2001)........................ $7,890 $7,890 0.00 0.0
Production Costs ($2001/MWh).................... $11.74 $11.74 0.00 0.0
(MAPP)
Total Capacity (MW)............................. 14,920 14,920 0.00 0.0
Total Generation (GWh).......................... 103,430 103,470 40.00 0.0
Revenues (Million $2001)........................ $3,420 $3,420 0.00 0.0
Production Costs ($2001/MWh).................... $11.78 $11.78 0.00 0.0
(SPP)
Total Capacity (MW)............................. 19,990 19,990 0.00 0.0
Total Generation (GWh).......................... 112,250 112,350 100.00 0.1
Revenues (Million $2001)........................ $3,930 $3,930 0.00 0.0
Production Costs ($2001/MWh).................... $13.32 $13.34 0.01 0.1
----------------------------------------------------------------------------------------------------------------
Note: Total capacity, total generation, and revenues have been rounded to the closest 10.

The results for the four NERC regions presented in Exhibit 8 reveal
no significant changes in any of the economic measures used to assess
the impacts of the alternative waterbody/capacity-based option to the
group of Phase II existing facilities. None of the four NERC regions
analyzed experienced any post compliance change in either capacity or
revenues. Further, while there were some variations in total generation
derived from Phase II existing facilities in these regions, no region
experienced an increase or decrease in generation of more than one
tenth of one percent. Similarly, there was no significant change to the
production costs of Phase II existing facilities in any of the analyzed
regions. Given EPA's earlier noted finding of no material differences
between these four NERC regions and the remaining six NERC regions in
important characteristics relevant to rule impacts, EPA again concluded
that the finding of no significant impact for these four regions could
be extended to the remaining six regions. As a result, EPA concludes
that the proposed rule will not pose significant impacts in any NERC
region.
While the group of Phase II existing facilities as a whole is not
expected to experience impacts under the proposed rule, it is possible
that there would be shifts in economic performance among individual
facilities subject to this rule. To examine the range of possible
impacts to individual Phase II existing facilities, EPA analyzed
facility-specific changes in generation, production costs, capacity
utilization, revenue, and

[[Page 17185]]

operating income. Exhibit 9 presents the number of Phase II existing
facilities located in the four analyzed NERC regions by category of
change for each economic measure.

Exhibit 9.--Operational Changes at Phase II Existing Facilities from the Proposed Rule
[Four NERC Regions; 2008]
----------------------------------------------------------------------------------------------------------------
Reduction Increase
Economic measures ---------------------------------------------------- No change
0-1% 1% 0-1% 1%
----------------------------------------------------------------------------------------------------------------
Change in Generation........................... 2 0 1 2 218
Change in Production Costs..................... 0 0 27 0 178
Change in Capacity Utilization................. 2 0 2 1 218
Change in Revenue.............................. 56 0 44 2 121
Change in-Operating Income..................... 66 0 58 1 98
----------------------------------------------------------------------------------------------------------------
Note: IPM 2000 output for run year 2008 provides data for 223 Phase II existing facilities located in the four
NERC regions with identical compliance requirements under the alternative option and proposed rule. Eighteen
facilities had zero generation in either the base case or post compliance scenario. As such it was not
possible to calculate production costs in dollars per MWh of generation for these facilities. For all
measures, the percentages used to assign facilities to impact categories have been rounded to the nearest 10th
of a percent.

Exhibit 9 shows that there is almost no shift in economic activity
between facilities subject to this rule in the four analyzed NERC
regions. No facility experiences a decrease in generation, capacity
utilization, revenues, or operating income, or an increase in
production costs of more than one percent. These findings, together
with the findings from the comparison of compliance costs and
requirements across all regions above, further confirm EPA's conclusion
that the proposed rule would not result in economic impacts to Phase II
existing facilities located in the four analyzed NERC regions.

B. Alternative Regulatory Options

EPA is considering four alternative options that would establish
substantive requirements for best technology available for minimizing
adverse environmental impact by specific rule rather than by site-
specific analysis. These include: (1) Requiring existing facilities
located on estuaries and tidal rivers to reduce intake capacity
commensurate with the use of a closed-cycle recirculating cooling
system; (2) requiring all Phase II existing facilities to reduce intake
capacity commensurate with the use of closed-cycle, recirculating
cooling systems; (3) requiring all Phase II existing facilities to
reduce impingement and entrainment to levels established based on the
use of design and construction (e.g., fine mesh screens, fish return
systems) or operational measures; and (4) requiring all existing
facilities to reduce their intake capacity to a level commensurate with
the use of a dry cooling system.
EPA conducted an electricity market model analysis of alternative
options one and two as defined above. Section VIII.B.1 below presents
the national costs of these two alternative regulatory options
considered by EPA. Section VIII.B.2 discusses the impacts associated
with these two alternative regulatory options.
1. Costs
EPA estimated total national annualized post-tax cost of compliance
for two alternative options: (1) The ``Intake Capacity Commensurate
with Closed-Cycle, Recirculating Cooling System based on Waterbody
Type/Capacity'' Option (waterbody/capacity-based option) and (2) the
``Intake Capacity Commensurate with Closed-Cycle, Recirculating Cooling
System for All Facilities'' Option (all closed-cycle option). The
estimated total annualized post-tax cost of compliance for the
waterbody/capacity-based option is approximately $585 million. EPA
further estimates that the total annualized post-tax cost of compliance
for the all cooling tower option is approximately $2.26 billion. Not
included in either 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 the waterbody/
capacity-based option to approximately $595 million, and to roughly
$2.32 billion for the all cooling tower option.
2. Economic Impacts
As stated in Section VIII.A.2 above, EPA used the IPM 2000
electricity market model to assess impacts associated with the proposed
rule and regulatory options. These impacts are assessed by comparing
model output for the base case and post compliance scenarios for each
regulatory option. In support of this rule, EPA completed an
electricity market model analysis of two post compliance scenarios: (1)
The ``Intake Capacity Commensurate with Closed-Cycle, Recirculating
Cooling System based on Waterbody Type/Capacity'' Option (waterbody/
capacity-based option) and (2) the ``Intake Capacity Commensurate with
Closed-Cycle, Recirculating Cooling System for All Facilities'' Option
(all closed-cycle option). This section presents the results of the IPM
2000 analysis of these two post-compliance scenarios.
a. Intake Capacity Commensurate With Closed-Cycle, Recirculating
Cooling System Based on Waterbody Type/Capacity
This section presents the market level and Phase II existing
facility level impacts of the alternative waterbody/capacity-based
option. This option would require facilities that withdraw water from
an estuary, tidal river, or ocean and that meet certain intake flow
requirements, to reduce their intake capacity to a level that can be
attained by a closed-cycle, recirculating cooling system. This
requirement would be met within five to ten years of promulgation of
the final rule (2004 to 2012) depending on when a permittee's first
NPDES permit after promulgation expires. The impacts of compliance with
this option are calculated using base case and post compliance results
for model run year 2013. This run year reflects the long-term
operational changes of the regulatory option with all in-scope
facilities operating in their post compliance condition.
(1) Market Level Impacts
EPA used five measures to identify changes to economic and
operational characteristics of existing facilities and assess market
level impacts due to compliance with the alternative waterbody/
capacity-based option: (1) Capacity retirements, calculated as the
total capacity of facilities identified as economic closures due to the
alternative

[[Page 17186]]

option; (2) capacity retirements as a percentage of baseline capacity;
(3) post compliance changes in total production costs per MWh, where
production costs are calculated as the sum of total fuel and variable
O&M costs divided by total generation; (4) post compliance changes in
energy price, where energy prices are defined as the prices received by
facilities for the sale of electric generation; and (5) post compliance
changes in capacity price, where capacity prices are defined as the
price paid to facilities for making unloaded capacity available as
reserves to ensure system reliability. Exhibit 10 presents the market
level summary of these impact measures by NERC region.

Exhibit 10.--Market-Level Impacts of the Alternative Waterbody/Capacity-Based Option (2013)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Change in Change in
Baseline Capacity Closures as % production energy price capacity price
NERC region capacity (MW) closures (MW) of baseline cost ($/MWh) ($/MWh) ($/MWh)
capacity (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ECAR.................................................... 122,080 0 0.0 0.0 0.0 -0.2
ERCOT................................................... 80,230 0 0.0 0.0 0.0 -0.2
FRCC.................................................... 52,850 0 0.0 0.4 0.5 -2.0
MAAC.................................................... 65,270 0 0.0 0.7 0.6 -1.5
MAIN.................................................... 61,380 0 0.0 0.2 0.1 -0.1
MAPP.................................................... 36,660 0 0.0 0.0 0.0 -0.1
NPCC.................................................... 74,080 840 1.1 0.5 -0.3 13.2
SERC.................................................... 205,210 0 0.0 0.1 0.0 0.0
SPP..................................................... 51,380 0 0.0 0.0 0.0 0.0
WSCC.................................................... 173,600 2,170 1.3 1.9 -0.1 2.0
-----------------------------------------------------------------------------------------------
Total............................................... 922,740 3,010 0.3 0.5 n/a n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Baseline Capacity and Closure Capacity have been rounded to the nearest 10 MW.

Exhibit 10 shows that with the exception of an increase in the
capacity price paid in NPCC, no significant change in market-level
operation would result from the alternative waterbody/capacity-based
option. Two of the ten NERC regions modeled, NPCC and WSCC, would
experience economic closures of existing facilities as a result of the
alternative option. However, these closures represent an insignificant
percentage of total baseline capacity in these regions (1.1 percent and
1.3 percent respectively). Of the capacity retirements in NPCC, 400 MW
would be nuclear capacity and 440 MW would be oil/gas-fired capacity.
The vast majority of the closures in WSCC, 2,150 MW, represents nuclear
capacity. Six NERC regions would experience slight increases in
production costs per MWh. Production cost per MWh in WSCC would
increase the most, by almost 2 percent. In addition, three NERC regions
would experience a slight increase in energy price while NPCC and WSCC
both would both see a slight decrease in post compliance energy prices
due to the economic closure of existing capacity. Further, NPCC and
WSCC are the only regions that would experience an increase in capacity
price. The increase in capacity prices would be the highest in NPCC
with 13.2 percent.
(2) Phase II Existing Facility Level Impacts
The IPM 2000 results from model run year 2013 were used to analyze
two potential facility level impacts associated with the alternative
waterbody/capacity-based option: (1) Potential changes in the economic
and operational characteristics of the group of Phase II existing
facilities and (2) potential changes to individual facilities within
the group of Phase II existing facilities. EPA analyzed economic
closures and changes in production costs to assess impacts to all Phase
II existing facilities resulting from the alternative option. Exhibit
11 below presents the results from this analysis, by NERC region.

Exhibit 11.--Impacts on Phase II Existing Facilities of the Alternative Waterbody/Capacity-Based Option (2013)
----------------------------------------------------------------------------------------------------------------
Closure Analysis
------------------------------------------------ Change in
NERC region Baseline Percent of production
capacity (MW) # Facilities Capacity (MW) baseline cost ($/MWh)
capacity (percent)
----------------------------------------------------------------------------------------------------------------
ECAR............................ 78,680 0 0 0.0 -0.1
ERCOT........................... 42,330 0 0 0.0 0.0
FRCC............................ 24,460 0 0 0.0 0.7
MAAC............................ 30,310 0 0 0.0 0.0
MAIN............................ 33,650 0 0 0.0 0.0
MAPP............................ 14,900 0 0 0.0 0.0
NPCC............................ 36,360 (1) 650 1.8 -0.2
SERC............................ 100,780 0 0 0.0 0.0
SPP............................. 19,990 0 0 0.0 0.0
WSCC............................ 30,110 2 2,170 7.2 3.9
-------------------------------------------------------------------------------
Total....................... 411,570 1 2,820 0.7 -0.3
----------------------------------------------------------------------------------------------------------------
Note: Baseline Capacity and Closure Capacity have been rounded to the nearest 10 MW.

[[Page 17187]]

Exhibit 11 shows that impacts under the waterbody/capacity-based
option would be small. Similar to the market level, WSCC and NPCC are
the only regions that would experience capacity retirements at Phase II
existing facilities under this regulatory option. It should be noted
that retirements presented in these exhibits are net retirements,
accounting for both a potential increase and decrease in the number of
retirements, post compliance. For example, NPCC is projected to
experience a capacity loss of 650 MW under this option. However, one
facility fewer than under the base case is projected to retire: Two
facilities that would have retired in the baseline remain operational
under the analyzed option, because their compliance costs are low
compared to that of other facilities in the same region and they would
therefore become relatively more profitable. WSCC is the other region
with projected Phase II retirements under this option. The combined
capacity retirements of both regions would be 2,820 MW, or 0.7 percent
of all Phase II capacity.
While the group of Phase II existing facilities as a whole is not
expected to experience impacts under the waterbody/capacity-based
option, it is possible that there would be shifts in economic
performance among individual facilities subject to this rule. To assess
potential distributional effects, EPA analyzed facility-specific
changes in generation, production costs, capacity utilization, revenue,
and operating income. Exhibit 12 presents the total number of Phase II
existing facilities with different degrees of change in each of these
measures. \80\
---------------------------------------------------------------------------

\80\ Note that the facility-level exhibit excludes in-scope
facilities with significant status changes (including baseline
closures, avoided closures, and facilities that repower) to allow
for a better comparison of operational changes as a result of the
analyzed option. Status changes are discussed separately in this
section and the supporting Economic and Benefits Analysis Document.

Exhibit 12.--Operational Changes at Phase II Existing Facilities From the Waterbody/Capacity-Based Option (2013)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction Increase
Economic measures ------------------------------------------------------------------------------ No change
0-1% 1-3% >3% 0-1% 1-3% >3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Generation......................................... 7 17 21 4 4 9 444
Change in Production Costs................................... 6 5 1 13 16 3 380
Change in Capacity Utilization............................... 10 7 12 7 3 5 462
Change in Revenue............................................ 57 43 17 48 15 20 306
Change in Operating Income................................... 75 42 10 46 15 22 296
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: IPM 2000 output for model run year 2013 provides output for 506 Phase II existing facilities. Eighty-two facilities had zero generation in either
the base case or post compliance scenario. As such it was not possible to calculate production costs in dollars per MWh of generation for these
facilities. For all measures percentages used to assign facilities to impact categories have been rounded to the nearest 10th of a percent.

Exhibit 12 indicates that the majority of Phase II existing
facilities would not experience changes in generation, production
costs, or capacity utilization due to compliance with the alternative
option. Of those facilities with changes in post compliance generation
and capacity utilization, most would experience decreases in these
measures. In addition, while approximately 40 percent of Phase II
existing facilities would experience an increase or decrease in
revenues and/or operating income, the magnitude of such changes would
be small.
Under the alternative waterbody/capacity-based option, facilities
withdrawing water from an estuary, tidal river, or ocean are required
to meet standards for reducing impingement mortality and entrainment
based on the performance of wet cooling towers. These facilities would
have the choice to comply with Track I or Track II requirements.
Facilities that choose to comply with Track I would be required to
reduce their intake flow to a level commensurate with that which can be
attained by a closed-cycle, recirculating system. Facilities that
choose to comply with Track II would have to demonstrate that
alternative technologies would reduce impingement and entrainment to
comparable levels that would be achieved with a closed-cycle
recirculating system. EPA's estimation of impacts associated with the
alternative waterbody/capacity-based option is based on an electricity
market model analysis that assumes all facilities withdrawing water
from an estuary, tidal river, or ocean choose to comply with the
requirements of Track I. While these impacts represent the worst case
scenario under this option, it is reasonable to assume that a number of
facilities would choose to comply with the requirements of Track II.
EPA therefore also considered an additional scenario in which 33 of the
54 existing facilities costed with a cooling tower, or 61 percent,
would choose to comply with the requirements of Track II. While this
scenario was not explicitly analyzed, the absence of significant
impacts under the more expensive scenario, where all 54 facilities are
costed with cooling towers, suggests the alternative scenario would
have similar or lower impacts.
b. Intake Capacity Commensurate with Closed-Cycle, Recirculating
Cooling System for All Facilities
This section presents the market level and Phase II existing
facility level impacts of the closed-cycle, recirculating wet cooling
everywhere option. This option requires that existing facilities with a
design intake flow 50 MGD or more reduce their total design intake flow
to a level that can be attained by a closed-cycle recirculating cooling
water system. In addition, facilities in specified circumstances would
have to install design and construction technologies to minimize
impingement mortality and entrainment. Existing facilities would be
required to comply within five to ten years of promulgation of the
final rule (2004 to 2012) depending on when a permittee's first NPDES
permit after promulgation expires. The impacts of compliance with this
option are calculated using base case and post compliance results for
model run year 2013 in order to reflect the long-term operational
changes of the rule with all in-scope facilities operating in their
post compliance condition.

[[Page 17188]]

(1) Market Level Impacts
EPA used IPM output to examine changes to economic and operational
characteristics of existing facilities and to assess market level
impacts due to compliance with the all cooling towers option. The
measures used to assess market level responses to this option include
capacity retirements, capacity retirements as a percentage of baseline
capacity, and post compliance changes in total production costs per
MWh, energy price, and capacity price. Exhibit 13 presents the market
level summary of these impact measures by NERC region.

Exhibit 13.--Market-Level Impacts of the Alternative all cooling Towers Option (2013)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Closures as % of Change in Change in energy Change in
NERC region Baseline capacity Capacity closures baseline capacity production cost price ($/MWh) capacity price ($/
(MW) (MW) percent ($/MWh) percent percent MWh) percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
ECAR.................................. 122,080 2,190 1.8 2.4 1.9 0.7
ERCOT................................. 80,230 510 0.6 0.3 0.4 -0.1
FRCC.................................. 52,850 90 0.2 0.7 1.1 -3.8
MAAC.................................. 65,270 0 0.0 1.8 0.6 -0.2
MAIN.................................. 61,380 490 0.8 2.3 0.9 0.3
MAPP.................................. 36,660 0 0.0 1.0 0.1 3.0
NPCC.................................. 74,080 890 1.2 1.0 0.1 16.6
SERC.................................. 205,210 0 0.0 1.2 0.4 0.0
SPP................................... 51,380 20 0.0 0.5 0.3 -0.7
WSCC.................................. 173,600 2,370 1.4 1.9 0.1 1.0
-----------------------------------------------------------------------------------------------------------------
Total............................. 922,740 6,560 0.7 1.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Baseline Capacity and Closure Capacity have been rounded to the nearest 10 MW.

Exhibit 13 indicates that, of the ten NERC regions modeled, only
MAAC, MAPP, and SERC would not experience economic closures of existing
capacity as a result of the all cooling towers option. ECAR and WSCC
would experience the highest closures with 2,370 MW and 2,190 MW,
respectively. Of the 6,560 MW of capacity projected to retire as a
result of this option, 5,150 MW, or 79 percent, would be nuclear
capacity. The remainder would be oil/gas steam capacity. In addition,
every NERC region would experience an increase in both production costs
per MWh and energy prices. The increases in production costs would
range from a 0.3 percent increase in ERCOT to an increase of more than
2 percent in ECAR. The most substantial changes would occur in the
prices paid for capacity reserves. The highest capacity price increase
would occur in NPCC with 16.6 percent.

(2) Phase II Existing Facility Level Impacts:

As with the alternative waterbody/capacity-based option analysis,
the IPM 2000 results from model run year 2013 were used to analyze two
potential facility level impacts associated with the alternative all
cooling towers option: (1) Potential changes in the economic and
operational characteristics of the Phase II existing facilities and (2)
potential changes to individual facilities within the group of Phase II
existing facilities. EPA analyzed economic closures and changes in
production costs to assess impacts to all Phase II existing facilities
resulting from the alternative option. Exhibit 14 below presents the
results from this analysis, by NERC region.

Exhibit 14.--Impacts on Phase II Existing Facilities of the Alternative All Cooling Towers Option (2013)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Closure analysis Change in
--------------------------------------------------------- production Cost
NERC region Baseline capacity Percent of ($/MWh)
# Facilities Capacity (MW) baseline capacity (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ECAR..................................................... 78,680 1 2,060 2.6 1.4
ERCOT.................................................... 42,330 1 420 1.0 -0.5
FRCC..................................................... 24,460 0 0 0.0 0.8
MAAC..................................................... 30,310 0 0 0.0 -1.0
MAIN..................................................... 33,650 0 490 1.5 1.4
MAPP..................................................... 14,900 0 0 0.0 1.3
NPCC..................................................... 36,360 0 720 2.0 -0.3
SERC..................................................... 100,780 0 0 0.0 1.0
SPP...................................................... 19,990 1 20 0.1 0.1
WSCC..................................................... 30,110 2 2,170 7.2 2.6
----------------------------------------------------------------------------------------------
Total................................................ 411,570 5 5,880 1.4 -0.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Baseline Capacity and Closure Capacity have been rounded to the nearest 10 MW.

Exhibit 14 shows that economic impacts under the all cooling tower
option would be higher than under the proposed rule and the alternative
waterbody/capacity-based option. Overall, seven Phase II existing
facilities would retire under this option. An additional two facilities
that retire in the base case would find it profitable to remain
operating under this option. The net retirements are therefore five
facilities and 5,880 MW of capacity. ECAR would experience the highest
impact with capacity closures of over 2,000 MW while WSCC would
experience the highest percentage retirement, with 7.2 percent of its
total Phase II capacity.
While the group of Phase II existing facilities as a whole is not
expected to experience impacts under the all

[[Page 17189]]

cooling towers option, it is possible that this option would lead to
shifts in economic performance among individual facilities subject to
this rule. To identify these shifts, EPA analyzed facility-specific
changes in generation, production costs, capacity utilization, revenue,
and operating income. Exhibit 15 presents the total number of Phase II
existing facilities with different degrees of change in each of these
measures.

Exhibit 15.--Operational Changes at Phase II Existing Facilities From the All Cooling Towers Option (2013)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reduction Increase
Economic Measures ------------------------------------------------------------------------------ No Change
0-1% 1-3% > 3% 0-1% 1-3% > 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Generation......................................... 18 251 53 3 4 22 151
Change in Production Costs................................... 16 12 4 64 257 17 51
Change in Capacity Utilization............................... 15 25 25 8 12 15 402
Change in Revenue............................................ 154 121 55 88 39 35 10
Change in-Operating Income................................... 118 160 50 83 47 29 15
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: IPM 2000 output for model run year 2013 provides output for 502 Phase II existing facilities. Eighty-one facilities had zero generation in either
the base case or post compliance scenario. As such it was not possible to calculate production costs in dollars per MWh of generation for these
facilities. For all measures percentages used to assign facilities to impact categories have been rounded to the nearest 10th of a percent.

Exhibit 15 indicates that under the all cooling tower option, more
facilities would experience changes in their operations and economic
performance than under the other two analyzed options. For example, 322
out of 502 facilities, or 64 percent, would experience a reduction in
generation.\81\ In addition, 328 facilities would experience a
reduction in operating income while 338 facilities would see their
production cost per MWh increase. However, some facilities subject to
today's rule would also benefit from regulation under this option: 162
facilities would experience an increase in revenues and 159 would
experience an increase in operating income.
---------------------------------------------------------------------------

\81\ As explained earlier, facilities with significant status
changes (including baseline closures, avoided closures, and
facilities that repower) are excluded from this comparison.
---------------------------------------------------------------------------

IX. Benefit Analysis

A. Overview of Benefits Discussion

This section presents EPA's estimates of the national environmental
benefits of the proposed section 316(b) regulations for Phase II
existing facilities. The benefits occur due to the reduction in
impingement and entrainment at cooling water intake structures affected
by this rulemaking. Impingement and entrainment kills or injures large
numbers of aquatic organisms. By reducing the levels of impingement and
entrainment, today's proposed rule would increase the number of fish,
shellfish, and other aquatic life in local aquatic ecosystems. This, in
turn, will directly and indirectly improve direct use benefits such as
those associated with recreational and commercial fisheries. Other
types of benefits, including ecological and nonuse values, would also
be enhanced. The text below provides an overview of types and sources
of benefits anticipated, how these benefits were estimated, what level
of benefits have been estimated for the proposed rule, and how benefits
compare to costs. Additional detail and EPA's complete benefits
assessment can be found in the EBA for the proposed rule.

B. The Physical Impacts of Impingement and Entrainment

Impingement and entrainment can have adverse impacts on many kinds
of aquatic organisms, including fish, shrimp, crabs, birds, sea
turtles, and marine mammals. Adult fish and larger organisms are
trapped against intake screens, where they often die from the immediate
impact of impingement, residual injuries, or from exhaustion and
starvation. Entrained organisms that are carried through the facility's
intakes die from physical damage, thermal shock, or chemical toxicity
induced by antifouling agents.
The extent of harm to aquatic organisms depends on species
characteristics, the environmental setting in which the facilities are
located, and facility location, design, and capacity. Species that
spawn in nearshore areas, have planktonic eggs and larvae, and are
small as adults experience the greatest impacts, since both new
recruits and reproducing adults are affected (e.g., bay anchovy in
estuaries and oceans). In general, higher impingement and entrainment
are observed in estuaries and near coastal waters because of the
presence of spawning and nursery areas. By contrast the young of
freshwater species are epibenthic and/or hatchel from attached egg
masses rather than existing as free-floating individuals, and therefore
freshwater species may be less susceptible to entrainment.
The likelihood of impingement and entrainment also depends on
facility characteristics. If the quantity of water withdrawn is large
relative to the flow of the source waterbody, a larger number of
organisms will be affected. Intakes located in nearshore areas tend to
have greater ecological impacts than intakes located offshore, since
nearshore areas are usually more biologically productive and have
higher concentrations of aquatic organisms.
In general, the extent and value of reducing impingement and
entrainment at existing cooling water intake structure locations
depends on intake and species characteristics that influence the
intensity, time, and spatial extent of interactions of aquatic
organisms with a facility's cooling water intake structure and the
physical, chemical, and biological characteristics of the source
waterbody. A once-through cooling system withdraws water from a source
waterbody, circulates it through the condenser system, and then
discharges the water back to the waterbody without recirculation. By
contrast, closed-cycle cooling systems (which are one part of the basis
for best technology available in some circumstances) withdraw water
from the source waterbody, circulate the water through the condensers,
and then sends it to a cooling tower or cooling pond before
recirculating it back through the condensers. Because cooling water is
recirculated, closed-cycle systems generally reduce the water flow from
72 percent to 98 percent, thereby using only 2 percent to 28 percent of
the water used by once-through systems. It is generally assumed that
this would result in a comparable reduction in impingement and
entrainment.

[[Page 17190]]

C. Impingement and Entrainment Impacts and Regulatory Benefits are
Site-Specific

Site-specific information is critical in predicting benefits,
because studies at existing facilities demonstrate that benefits are
highly variable across facilities and locations. Even similar
facilities on the same waterbody can have very different impacts
depending on the aquatic ecosystem in the vicinity of the facility and
intake-specific characteristics such as location, design, construction,
and capacity.
Some of the important factors that make benefits highly site-
specific include important differences across the regulated facilities
themselves. Many of these facility-specific characteristics that affect
benefits add additional stressors to the aquatic systems in which they
operate. Benefits occur through the reduction of the stressors through
the application of impingement and entrainment reduction technologies.
Stressor-related factors that make benefits site-specific include:
Cooling water intake structure size and scale of operation
(e.g., flow volume and velocity)
Cooling water intake structure technologies and/or
operational practices in place (if any) for impingement and entrainment
reduction at baseline (i.e., absent any new regulations)
Cooling water intake structure intake location in relation
to local zones of ecological activity and significance (e.g., depth and
orientation of the intake point, and its distance from shore)
Cooling water intake structure flow volumes in relation to
the size of the impacted waterbody
Many of the key factors that make impingement and entrainment
impacts site-specific reflect the receptors exposed to the stressor-
related impacts. Receptors include the types of waterbodies impacted,
the aquatic species that are affected in those waterbodies, and the
people who use and/or value the status of the water resources and
aquatic ecosystems affected. Receptor-oriented factors that make
impingement and entrainment impacts highly site-specific include:
The aquatic species present near a facility
The ages and life stages of the aquatic species present near
the intakes
The timing and duration of species' exposure to the intakes
The ecological value of the impacted species in the context of
the aquatic ecosystem
Whether any of the impacted species are threatened,
endangered, or otherwise of special concern and status (e.g., depleted
commercial stocks)
Local ambient water quality issues that may also affect the
fisheries and their uses
All of these factors, as well as several others, have important
impacts on the level and significance of impingement and entrainment.
These factors determine baseline impacts, and the size and value of
regulation-related reductions in those impacts.
The regulatory framework proposed by EPA recognizes the site-
specific nature of impingement and entrainment impacts and is designed
to accommodate these factors to the greatest degree practicable in a
national rulemaking. For example, EPA's proposed regulatory approach
accounts for the types of waterbodies that a cooling water intake
structure impacts, the proportion of the source water flow supplied to
the cooling water intake structure, and technological design parameters
related to the impingement and entrainment from the intake. The
Agency's benefits analysis attempts to accommodate and reflect these
site-specific parameters.

D. Data and Methods Used to Estimate Benefits

To estimate the economic benefits of reducing impingement and
entrainment at existing cooling water intake structures, all the
beneficial outcomes need to be identified and, where possible,
quantified and assigned appropriate monetary values. Estimating
economic benefits can be challenging because of the many steps that
need to be analyzed to link a reduction in impingement and entrainment
to changes in impacted fisheries and other aspects of relevant aquatic
ecosystems, and then to link these ecosystem changes to the resulting
changes in quantities and values for the associated environmental goods
and services that ultimately are linked to human welfare.
The benefit estimates for this rule are derived from a series of
case studies from a range of waterbody types at a number of locations
around the country including:
The Delaware Estuary (Mid-Atlantic Estuaries)
The Ohio River (Large Freshwater Rivers)
Tampa Bay (Gulf Coast Estuaries)
New England Coast (Oceans)
Mount Hope Bay, New England (North Atlantic Estuaries)
San Francisco Bay/Delta (Pacific Coast Estuaries)
The Great Lakes
The following sections describe the methods used by EPA used to
evaluate impingement and entrainment impacts at section 316(b) case
study Phase II existing facilities and to derive an economic value
associated with any such losses.
1. Estimating Losses of Aquatic Organisms
The first set of steps in estimating the benefits of the proposed
rule involves estimating the magnitude of impingement and entrainment.
EPA's analysis involved compiling facility-reported empirical
impingement and entrainment counts and life history information for
affected species. Life history data typically included species-specific
growth rates, the fractional component of each life stage vulnerable to
harvest, fishing mortality rates, and natural (nonfishing) mortality
rates.
It is important to note that impingement and entrainment monitoring
data are often limited to a subset of species, and monitoring is often
of very limited duration (e.g., confined to a single year). This
implies that the magnitude of impingement and entrainment is often
underestimated. In addition, in many cases data are over two decades
old (e.g., from 1979). Therefore the data may not always reflect
current fishery conditions, including changes in fisheries due to water
quality improvements since the monitoring period. The limited temporal
extent of the data also omits the high variability often seen in
aquatic populations. If data are collected only in a year of low
abundance, impingement and entrainment rates will also be low, and may
not reflect the long term average. The data also may not represent
potential cumulative long-term impacts of impingement and entrainment.
In EPA's analysis of impingement and entrainment impacts, these
facility-derived impingement and entrainment counts were modeled with
relevant life history data to derive estimates of age 1 equivalent
losses (the number of individuals that would have survived to age 1 if
they had not been impinged and entrained by facility intakes), foregone
fishery yield (the amount in pounds of commercial and recreational fish
and shellfish that is not harvested due to impingement and entrainment
losses) and foregone production (losses of impinged and entrained
forage species that are not commercial or recreational fishery targets
but serve as valuable components of aquatic food webs, particularly as
an important food supply to other aquatic species including commercial
and recreational species).

[[Page 17191]]

2. Estimating Baseline Losses and the Economic Benefits of the Proposed
Rule
Given the projected physical impact on aquatic organisms (losses of
age 1 equivalents resulting from impingement and entrainment), the
second set of steps in the benefits analysis entails assigning monetary
values to the estimated losses. These economic loss estimates are
subsequently converted into estimated benefits for the proposed rule by
examining the extent to which impingement and entrainment is reduced by
adoption of the best technology available in accordance with the
options defined in this proposed rule.
Economic benefits can be broadly defined according to several
categories of goods and services furnished by the impacted species,
including those that pertain to the direct use or indirect use of the
impacted resources. There also are benefits that are independent of any
current or anticipated use (direct or indirect) of the resource; these
are known as nonuse or passive use values. The benefits can be further
categorized according to whether or not affected goods and services are
traded in the market. ``Direct use'' benefits include both ``market''
commodities (e.g., commercial fisheries) and ``nonmarket'' goods (e.g.,
recreational angling). Indirect use benefits also can be linked to
either market or nonmarket goods and services `` for example, the
manner in which reduced impingement and entrainment-related losses of
forage species leads through the aquatic ecosystem food web to enhance
the biomass of species targeted for commercial (market) and
recreational (nonmarket) uses. ``Nonuse'' benefits include only
``nonmarketed'' goods and services, reflecting human values associated
with existence and bequest motives.
The economic value of benefits is estimated using a range of
traditional methods, with the specific approach being dependent on the
type of benefit category, data availability, and other suitable
factors. Accordingly, some benefits are valued using market data (e.g.,
for commercial fisheries), and others are valued using secondary
nonmarket valuation data (e.g., benefits transfer of nonmarket
valuation studies of the value of recreational angling). Some benefits
are described only qualitatively, because it was not feasible to derive
reliable quantitative estimates of the degree of impact and/or the
monetary worth of reducing those impacts. In addition, some nonmarket
benefits are estimated using primary research methods. Specifically,
recreational values are estimated for some of the case studies (those
that are examined on a watershed-scale) using a Random Utility Model
(RUM). Also, some benefits estimates are developed using habitat
restoration costing or similar approaches that use replacement costs as
a proxy for beneficial values. Variations of these general
methodologies have been applied to better reflect site-specific
circumstances or data availability.
In the case of forage species, benefits valuation is challenging
because these species are not targeted directly by commercial or
recreational anglers and have no direct use values that can be observed
in markets or inferred from revealed actions of anglers. Therefore, two
general approaches were used to translate estimated impingement and
entrainment losses to forage species into monetary values. The first
approach examines replacement costs as a proxy for the value of
estimated forage species losses (expressed as the total number of age 1
equivalents) and was valued based on hatchery costs. This approach does
not take into consideration ecological problems associated with
introducing hatchery fish into wild populations. The second approach
used two distinct estimates of trophic transfer efficiency to relate
foregone forage production to foregone commercial and recreational
fishery yields. A portion of total forage production has relatively
high trophic transfer efficiency because it is consumed directly by
harvested species. The remaining portion of total forage production has
low trophic transfer efficiency because it reaches harvested species
indirectly following multiple interactions at different parts of the
food web. Ultimately, the production foregone approach assigns a value
to reduced forage species losses based on their indirect contribution
to higher commercial and recreational fishery values.
Benefits analyses for rulemakings under the Clean Water Act have
been limited in the range of benefits addressed, which has hindered
EPA's ability to compare the benefits and costs of rules
comprehensively. The Agency is working to improve its benefits
analyses, including applying methodologies that have now become well
established in the natural resources valuation field, but have not been
used previously in the rulemaking process. EPA was particularly
interested in expanding its benefits analysis for this rule to include
more primary research along with the use of secondary (e.g., benefits
transfer) methods to estimate recreation benefits. EPA has therefore
expanded upon its traditional methodologies in the benefits analysis
for this proposed rule by applying an original travel cost study using
data from the National Marine Fishery Service in the Delaware and Tampa
Estuaries and data from the National Recreational Demand Survey (NDS)
in Ohio in a Random Utility Model (RUM) of recreational behavior, to
estimate the changes in consumer valuation of water resources that
would result from reductions in impingement and entrainment-related
fish losses. These studies are presented in detail in the Case Study
Document.
The Agency also improved its analyses by performing several
Habitat-Based Replacement Cost analyses. A complete Habitat-Based
Replacement Cost analysis develops values for impingement and
entrainment losses based on the combined costs for implementing habitat
restoration actions, administering the programs, and monitoring the
increased production after the restoration actions. These costs are
developed by identifying the preferred habitat restoration alternative
for each species with impingement and entrainment, and then scaling the
level of habitat restoration until the losses across all species have
been offset fully by expected increases in the production of those
species. The total value of the impingement and entrainment losses is
then calculated as the sum of the costs across the categories of
preferred habitat restoration alternatives. An in-depth discussion of
the Habitat-Based Replacement Cost methodology is in Chapter A11 of the
Case Study Document. Examples of estimating benefits using the Habitat-
Based Replacement Cost methodology can be found in the case studies for
the Pilgrim Nuclear facility (Part G) and the Brayton Point facility
(Part F). A stream-lined version of the methodology can be found in the
J.R. Whiting case study (Part H) and the Monroe case study (Part I) of
the Case Study Document.
The primary strength of the Habitat-Based Replacement Cost method
is the explicit recognition that impingement and entrainment losses
have impacts on all components of the aquatic ecosystem, and the
public's use and enjoyment of that ecosystem, beyond that estimated by
reduced commercial and recreational fish catches. Results depend on the
quality of the impingement and entrainment data collected, the
availability of data on the habitat requirements of impinged or
entrained species, and the program for defining expected production
increases for species following implementation of restoration
activities.

[[Page 17192]]

3. EPA's Estimates of Impingement and Entrainment Losses and Benefits
Probably are Underestimates
EPA's estimates of fish losses due to impingement and entrainment,
and of the benefits of the proposed regulations, are subject to
considerable uncertainties. As a result, the Agency's benefits
estimates could be either over-or under-estimated. However, because of
the many factors omitted from the analysis (typically because of data
limitations) and the manner in which several key uncertainties were
addressed, EPA believes that its analysis is likely to lead to a
potentially significant underestimate of baseline losses and, therefore
lead to understated estimates of regulatory benefits.
Several of the key factors that are likely to lead EPA's analysis
to underestimate benefits include:

Data Limitations

EPA's analysis is based on facility-provided biological
monitoring data. These facility-furnished data typically focus on a
subset of the fish species impacted by impingement and entrainment,
resulting in an underestimate of the total magnitude of losses.
Industry biological studies often lack a consistent
methodology for monitoring impingement and entrainment. Thus, there are
often substantial uncertainties and potential biases in the impingement
and entrainment estimates. Comparison of results between studies is
therefore very difficult and sometimes impossible, even among
facilities that impinge and entrain the same species.
The facility-derived biological monitoring data often
pertain to conditions existing many years ago (e.g., the available
biological monitoring often was conducted by the facilities 20 or more
years ago, before activities under the Clean Water Act had improved
aquatic conditions). In those locations where water quality was
relatively degraded at the time of monitoring relative to current
conditions, the numbers and diversity of fish are likely to have been
depressed during the monitoring period, resulting in low impingement
and entrainment. In most of the nation's waters, current water quality
and fishery levels have improved, so that current impingement and
entrainment losses are likely to be greater than available estimates
for depressed populations.

Estimated Technology Effectiveness

The only technology effectiveness that is certain is
reductions in impingement and entrainment with cooling towers.
Potential latent mortality rates are unknown for most
technologies.
Installed technologies may not operate at the maximum
efficiency assumed by EPA in its estimates of technology effectiveness.

Potential Cumulative Impacts

Impingement and entrainment impacts often have cumulative
impacts that are usually not considered. Cumulative impacts refer to
the temporal and spatial accumulation of changes in ecosystems that can
be additive or interactive. Cumulative impacts can result from the
effects of multiple facilities located within the same waterbody and
from individually minor but collectively significant impingement and
entrainment impacts taking place over a period or time.
Relatively low estimates of impingement and entrainment
impacts may reflect a situation where cumulative impingement and
entrainment impacts (and other stresses) have appreciably reduced
fishery populations so that there are fewer organisms present in intake
flows.
In many locations (especially estuary and coastal waters),
many fish species migrate long distances. As such, these species are
often subject to impingement and entrainment risks from a large number
cooling water intake structures. EPA's analyses reflect the impacts of
a limited set of facilities on any given fishery, whereas many of these
fish are subjected to impingement and entrainment at a greater number
of cooling water intake structures than are included in the boundaries
of the Agency's case studies.

Recreational Benefits

The proportion of impingement and entrainment losses of
fishery species that were valued as lost recreational catch was
determined from stock-specific fishing mortality rates, which indicate
the fraction of a stock that is harvested. Because fishing mortality
rates are typically less than 20%, a large proportion of the losses of
fishery species were not valued in the benefits transfer and RUM
analyses.
Only selected species were evaluated because impingement
and entrainment or valuation data were limited.
In applying benefits transfer to value the benefits of
improved recreational angling, the Agency only assigned a monetary
benefit to the increases in consumer surplus for the baseline number of
fishing days. Changes in participation (except where the RUM is
estimated) are not considered. Thus, benefits will be understated if
participation increases in response to increased availability of
fishery species as a result of reduced impingement and entrainment.
This approach omits the portion of recreational fishing benefits that
arise when improved conditions lead to higher levels of participation.
Empirical evidence suggests that the omission of increased angling days
can lead to an underestimate of total recreational fishing benefits.
Where EPA has been able to apply its RUM analyses, the recreational
angling benefits are more indicative of the full range of beneficial
angling outcomes.

Secondary (Indirect) Economic Impacts

Secondary impacts, are not calculated (effects on marinas, bait
sales, property values, and so forth are not included, even though they
may be significant and applicable on a regional scale).

Commercial Benefits

The proportion of impingement and entrainment losses of
fishery species that were valued as lost commercial catch was
determined from stock-specific fishing mortality rates, which indicate
the fraction of a stock that is harvested. Because fishing mortality
rates are typically less than 20%, a large proportion of the losses of
fishery species were not valued in the benefits transfer analyses.
In most cases, invertebrate species (e.g, lobsters,
mussels, crabs, shrimp) were not included because of a lack of
impingement and entrainment data and/or life history information.
Impingement and entrainment impacts and associated
reductions in fishery yields are probably understated even for those
species EPA could evaluate because of a lack of monitoring data to
capture population variability and cumulative impingement and
entrainment impacts over time.
Current fishing mortality rates (and resulting estimates
of yield) often reflect depleted fisheries, not what the fisheries
should or could be if not adversely impacted by impingement and
entrainment and other stressors. As such, yield estimates may be
artificially low because of significantly curtailed recreational and/or
commercial catch of key species impinged and entrained (e.g., winter
flounder in Mount Hope Bay).

Forage Species

Forage species often make up the predominant share of
losses due to impingement and entrainment. However, impingement and
entrainment

[[Page 17193]]

losses of forage species are usually not known because many facility
studies focus on commercial and recreational fishery species only.
Even when forage species are included in loss estimates,
the monetary value assigned to forage species is likely to be
understated because the full ecological value of the species as part of
the food web is not considered.
Forage losses are often valued at only a fraction of their
potential full value because of partial ``replacement'' cost (even if
feasible to replace).
Low production foregone assumptions (no inherent value,
only added biomass to landed recreational and commercial species is
considered).
In one valuation approach EPA applied to forage species,
only the small share of these losses are valued--namely the
contribution of the forage species to the increased biomass of landed
recreational and commercial species.
This does not apply to benefits derived by the Habitat-
Based Replacement Cost approach, which provides a more comprehensive
indication of the benefits of reducing impingement and entrainment on
all species, including forage fish. EPA has applied this approach to a
limited number of settings, and in those settings the findings suggest
benefits appreciably greater than derived from the more traditional,
partial benefits approaches applied by the Agency.

Nonuse Benefits

Nonuse benefits are most likely understated using the 50
percent rule because the recreational values used are likely to be
understated.
The 50 percent rule itself is conservative (e.g., only
reflects nonuse component of total value to recreational users. It does
not reflect any nonuse benefits to recreational nonusers).
Impacts on threatened and endangered species are not fully
captured.

Incidental Benefits

EPA has not accounted for thermal impact reductions, which
will be incidental benefits in places where once-through facilities are
replaced with recirculating water regimes.

E. Summary of Benefits Findings: Case Studies

As noted above, EPA developed benefits estimates for various case
studies, and key results are described below.
1. The Delaware Estuary (Mid-Atlantic Estuaries)
The results of EPA's evaluation of impingement and entrainment
rates at cooling water intake structures in the Delaware Estuary
transition zone indicate that cumulative impacts can be substantial.
EPA's analysis shows that even when losses at individual facilities
appear insignificant, the total of all impingement and entrainment
impacts on the same fish populations can be sizable. For example,
nearly 44,000 age 1 equivalents of weakfish are lost as a result of
entrainment at Hope Creek, which operates with closed-cycle cooling and
therefore has relatively low entrainment rates. However, the number of
total weakfish age 1 equivalents lost as a result of entrainment at all
transition zone cooling water intake structures is over 2.2 million
individuals. Cumulative impacts of all species at Delaware Estuary
transition zones facilities is 14.3 million age 1 equivalent fish
impinged per year and entrainment is 616 million age 1 equivalent fish
entrained per year.
EPA has conservatively estimated cumulative impacts on Delaware
Estuary species by considering the impingement and entrainment impacts
of only transition zone cooling water intake structures. In fact, many
of the species affected by cooling water intake structures within the
transition zone move in and out of this area, and therefore may be
exposed to many more cooling water intake structures than considered
here. Regardless of the geographic extent of an evaluation of
cumulative impacts, it is important to consider how impingement and
entrainment rates relate to the relative abundance of species in the
source waterbody. Thus, low impingement and entrainment does not
necessarily imply low impact, since it may reflect low population
abundance, which can result from numerous natural and anthropogenic
factors, including long-term impingement and entrainment impacts of
multiple cooling water intake structures. On the other hand, high
population abundance in the source waterbody and associated high
impingement and entrainment may reflect waterbody improvements that are
independent of impacts from or improvements in cooling water intake
structure technologies. High levels of impingement and entrainment
impacts on a species may also indicate a high susceptibility of that
given species to cooling water intake structure effects.
In addition to estimating the physical impact of impingement and
entrainment in terms of numbers of fish lost because of the operation
of all in scope and out-of-scope cooling water intake structures in the
Delaware Estuary transition zone, EPA also examined the estimated
economic value of the losses from impingement and entrainment. The
estimated cumulative impact of impingement and entrainment at the 12
cooling water intake structures located in the Delaware case study area
was based on data available for the Salem facility and then
extrapolated to the other facilities on the basis of flow. Average
losses at all transition zone cooling water intake structures from
impingement are valued (using benefits transfer) at between roughly
$0.5 million and $1.1 million per year, and between approximately $23.9
million and $49.5 million per year for entrainment (all in 2001$).
Average losses at the four in scope facilities (using benefits transfer
combined with RUM recreation estimates) range from $0.5 million to $0.8
million per year for impingement and from $26.0 to $46.2 million per
year for entrainment (all in 2001$) (see Exhibit 13).
In this estuarine setting, benefits attributed to reducing losses
due to both impingement and entrainment may be quite large in terms of
numbers of fish and in terms of the portion of benefits that could be
monetized. Entrainment losses are over 40 times greater than
impingement losses. This reflects the typical richness of estuary
waters as important nursery locations for early life stages of many
important aquatic species, coupled with the significant adverse impact
that entrainment can have on such life stages. This result indicates
the relative importance of entrainment controls in estuary areas.

Exhibit 13.--Baseline Impacts (Annual Average) at Four in Scope
Facilities in the Transition Zone of the Delaware Estuary
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
Four In Scope Facilities
------------------------------------------------------------------------
a. age 1 equivalent fish lost... >14.3 mil/yr...... >616 mil/yr.

[[Page 17194]]

b. # lbs lost to landed fishery. >438,000 lbs/yr... >16 mil lbs/yr.
c. $ value of loss (2001$)...... $0.5 mil-$0.8 mil. $26.0 mil--$46.2
mil.
------------------------------------------------------------------------

In part, EPA's recreational benefits estimates for the Delaware
Estuary is based on a RUM analysis of recreational fishing benefits
from reduced impingement and entrainment. The RUM application in the
Delaware Estuary focuses on weakfish and striped bass fishing
valuation. Several recreational fishing studies have valued weakfish
and striped bass, but values specific to these studies are not
available. The study area includes recreational fishing sites at the
Delaware River Estuary and the Atlantic coasts of Delaware and New
Jersey.
EPA uses data for this case study from the Marine Recreational
Fishery Statistics Survey (MRFSS), combined with the 1994 Add-on MRFSS
Economic Survey (AMES). The study uses MFRSS information on angler
characteristics and angler preferences, such as where they go fishing
and what species they catch, to infer their values for changes in
recreational fishing quality. EPA estimated angler behavior using a RUM
for single-day trips. The study used standard assumptions and
specifications of the RUM model that are readily available from the
recreation demand literature. Among these assumptions are that anglers
choose fishing mode and then the site in which to fish; and that
anglers' choice of target species is exogenous to the model. EPA
modeled an angler's decision to visit a site as a function of site-
specific cost, fishing trip quality, presence of boat launching
facilities, and water quality.
The quality of a recreational fishing trip is expressed in terms of
the number of fish caught per hour of fishing. Catch rate is the most
important attribute of a fishing site from the angler's perspective.
This attribute is also a policy variable of concern because catch rate
is a function of fish abundance, which may be affected by fish
mortality caused by impingement and entrainment.
The Agency combined the estimated model coefficients with the
estimated changes in impingement and entrainment associated with
various cooling water intake structure technologies to estimate per
trip welfare losses from impingement and entrainment at the cooling
water intake structures located in the Delaware Estuary transition
zone. The estimated economic values of recreational losses from
impingement and entrainment at the 12 cooling water intake structures
located in the case study area are $0.75, $2.04, and $9.97 per trip for
anglers not targeting any particular species and anglers targeting
weakfish and striped bass, respectively (all in 2001$). EPA then
estimated benefits of reducing impingement and entrainment of two
species --weakfish and striped bass--at the four in scope cooling water
intake structures in the case study area. The estimated values of an
increase in the quality of fishing sites from reducing impingement and
entrainment at the in scope cooling water intake structures are $0.52,
$1.40 and $6.90 per trip for no target anglers and anglers targeting
weakfish and striped bass, respectively (all in 2001$).
EPA also examined the effects of changes in fishing circumstances
on fishing participation during the recreational season. First, the
Agency used the negative binomial form of the Poisson model to model an
angler's decision concerning the number of fishing trips per recreation
season. The number of fishing trips is modeled as function of the
individual's socioeconomic characteristics and estimates of individual
utility derived from the site choice model. The Agency then used the
estimated model coefficients to estimate percentage changes in the
total number of recreational fishing trips due to improvements in
recreational site quality. EPA combined fishing participation data for
Delaware and New Jersey obtained from MFRSS with the estimated
percentage change in the number of trips under various policy scenarios
to estimate changes in total participation stemming from changes in the
fishing site quality in the study area. The MRFSS fishing participation
data include information on both single-day and multiple-day trips. The
Agency assumed that per day welfare gain from improved fishing site
quality is independent of trip length. EPA therefore calculated total
fishing participation for this analysis as the sum of the number of
single day trips and the number of fishing days corresponding to
multiple day trips. Analysis results indicate that improvements in
fishing site quality from reducing impingement and entrainment at all
in scope facilities will increase the total number of fishing days in
Delaware and New Jersey by 9,464.
EPA combined fishing participation estimates with the estimated per
trip welfare gain under various policy scenarios to estimate the value
to recreational anglers of changes in catch rates resulting from
changes in impingement and entrainment in the Delaware Estuary
transition zone. EPA calculated low and high estimates of economic
values of recreational losses from impingement and entrainment by
multiplying the estimated per trip welfare gain by the baseline and
policy scenario number of trips, respectively. The estimated
recreational losses (2001$) to Delaware and New Jersey anglers from
impingement and entrainment of 2 species at all Phase II existing
facilities in the transitional estuary, and all facilities in the
transitional estuary range from $0.2 to $0.3 and from $7.2 to $13.2
million, respectively. Using similar calculations, the Agency estimated
that reducing impingement and entrainment of weakfish and striped bass
at the four in scope cooling water intake structures in the transition
zone will generate $5.2 to $9.3 million (2001$) annually, in
recreational fishing benefits alone, to Delaware and New Jersey
anglers.
In interpreting the results of the case study analysis, it is
important to consider several critical caveats and limitations of the
analysis. For example, in the economic valuation component of the
analysis, valuation of impingement and entrainment losses is often
complicated by the lack of market value for forage species, which may
comprise a large proportion of total losses. EPA estimates that more
than 500 million age 1 equivalents of bay anchovy may be lost to
entrainment at transition zone cooling water intake structure each year
(over 85 percent of the total of over 616 million estimated lost age 1
individuals for all species combined). Bay anchovy has no direct market
value, but it is nonetheless a critical component of estuarine food
webs. EPA included forage species impacts in the economic benefits
calculations, but the final

[[Page 17195]]

estimates may well underestimate the full value of the losses imposed
by impingement and entrainment. Thus, on the whole, EPA believes the
estimates developed here probably underestimate the economic benefits
of reducing impingement and entrainment in the Delaware transition
zone.
2. Ohio River (Large Rivers)
EPA evaluated the impacts of impingement and entrainment using
facility-generated data at 9 cooling water intake structures along a
500 mile stretch of the Ohio River, spanning from the western portion
of Pennsylvania, along the southern border of Ohio, and into eastern
Indiana. The results were then extrapolated to the 20 other in scope
facilities along this stretch of the river (a total of 29 facilities
are expected to be in scope for this rulemaking, and another 19
facilities are out-of-scope).
To estimate impingement and entrainment impacts for the Ohio, EPA
evaluated the available impingement and entrainment monitoring data at
9 case study facilities (W.C. Beckjord, Cardinal, Clifty Creek, Kammer,
Kyger Creek, Miami Fort, Philip Sporn, Tanners Creek, and WH Sammis).
The results from these 9 facilities with impingement and entrainment
data were then extrapolated to the remaining in scope facilities to
derive an impingement and entrainment baseline for all facilities
subject to the proposed rule (additional extrapolations were also made
to out-of-scope facilities so that total impingement and entrainment
could be estimated as well). The extrapolations were made on the basis
of relative operating size (operating MGD) and by river pool (Hannibal,
Markland, McAlpine, New Cumberland, Pike Island, and Robert C. Byrd
pools).
The results indicate that impingement at all facilities (in scope
and out-of-scope) causes the mortality of approximately 11.6 million
fish (age 1 equivalents) per year. This translates into over 1.11
million pounds of fishery production foregone per year, and over 15,000
pounds of lost fishery yield annually.
For in scope facilities only, the results indicate that impingement
causes the mortality of approximately 11.3 million fish (age 1
equivalents) per year (97.8 percent of all impingement). This
translates into nearly 1.09 million pounds of fishery production
foregone per year, and nearly 15,000 pounds of lost fishery yield
annually (98.1 percent and 97.1 percent of the total, respectively).
For entrainment, the results indicate that all facilities combined
(in scope and out-of-scope) cause the mortality of approximately 24.4
million fish (age 1 equivalents) per year. This translates into over
10.08 million pounds of fishery production foregone per year, and over
39,900 pounds of lost fishery yield annually.
For in scope facilities only, the results indicate that entrainment
causes the mortality of approximately 23.0 million fish (age 1
equivalents) per year (94.2 percent of all entrainment). This
translates into nearly 9.89 million pounds of fishery production
foregone per year, and over 39,000 pounds of lost fishery yield
annually (98.1 percent and 97.7 percent of the total, respectively).
In addition to estimating the physical impact of impingement and
entrainment in terms of numbers of fish lost because of the operation
of all in scope and out-of-scope cooling water intake structures in the
Ohio River case study area, EPA also estimated the baseline economic
value of the losses from impingement and entrainment. The economic
value of these losses is based on benefits transfer-based values
applied to losses to the recreational fishery, nonuse values, and the
partial value of forage species impacts (measured as partial as
replacement costs or production foregone). This provides an indication
of the estimated cumulative impact of impingement and entrainment at
the all in scope and out-of-scope cooling water intake structures in
the case study area, based on data available for the 9 case study
facilities with usable impingement and entrainment data, and then
extrapolated to the other facilities on the basis of flow and river
pool.
Average historical losses from all in scope facilities in the case
study area for impingement are valued using benefits transfer at
between roughly $0.1 million and $1.4 million per year (in 2001$).
Average historical losses from entrainment are valued using benefits
transfer at between approximately $0.8 million and $2.4 million per
year (all in 2001$) for in scope facilities.
EPA also estimated a random utility model (RUM) to provide primary
estimates of the recreational fishery losses associated with
impingement and entrainment in the Ohio River case study area. This
primary research results supplement the benefits transfer estimates
derived by EPA. The average annual recreation-related fishery losses at
all facilities in the case study amount to approximately $8.4 million
(in 2001$) per year (impingement and entrainment impacts combined). For
the in scope facilities covered by the proposed Phase II rule, the
losses due to impingement and entrainment were estimated via the RUM to
amount to approximately $8.3 million per year (in 2001$). Results for
the RUM analysis were merged with the benefits transfer-based estimates
in a manner that avoids double counting, and indicate that baseline
losses at in scope facilities amount to between $3.5 million and $4.7
million per year for impingement and between $9.3 and $9.9 million per
year for entrainment (in 2001$) (see Exhibit 14).

Exhibit 14.--Baseline Impacts (Annual Average) in the Ohio River at In
Scope Facilities
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
29 In Scope Facilities
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. > 11.3 mil/yr...... > 23.0 mil/yr
b. # lbs lost to landed fishery > 1.1 mil lbs/yr... > 9.9 mil lbs/yr
c. $ value of loss (2001$)..... $3.5 mil--$4.7 mil/ $9.3 mil--$9.9 mil/
yr. yr
------------------------------------------------------------------------

In interpreting the results of the case study analysis, it is
important to consider several critical caveats and limitations of the
analysis. In the economic valuation component of the analysis,
valuation of impingement and entrainment losses is often complicated by
the lack of market value for forage species, which may comprise a large
proportion of total losses. Forage species have no direct market value,
but are nonetheless a critical component of aquatic food webs. EPA
included forage species impacts in the economic benefits calculations,
but because techniques for valuing such losses are limited, the final
estimates may well underestimate the full ecological and economic value
of these losses.
In addition, the Ohio River case study is intended to reflect the
level of impingement and entrainment, and

[[Page 17196]]

hence the benefits associated with reducing impingement and entrainment
impacts, for cooling water impact structures along major rivers of the
U.S. However, there are several factors that suggest that the Ohio
River case study findings may be a low-end scenario in terms of
estimating the benefits of the proposed regulation at facilities along
major inland rivers of the U.S. These factors include the following:
The impingement and entrainment data developed by the
facilities were limited to one year only, and are from 1977 (nearly 25
years ago) and pertain to a period of time when water quality in the
case study area was worse than it is currently. This suggests that the
numbers of impinged and entrained fish today (the regulatory baseline)
would be appreciably higher than observed in the data collection
period. In addition, the reliance on a monitoring period of one year or
less implies that the naturally high variability in fishery populations
is not captured in the analysis, and the results may reflect a year of
above or below average impingement and entrainment.
The Ohio River is heavily impacted by numerous significant
anthropogenic stressors in addition to impingement and entrainment. The
river's hydrology has been extensively modified by a series of 20 dams
and pools, and the river also has been extensively impacted by
municipal and industrial wastewater discharges along this heavily
populated and industrialized corridor. To the degree to which these
multiple stressors were atypically extensive along the Ohio River (in
1977) relative to those along other cooling water intake structure-
impacted rivers in the U.S. (in 2002), the case study will yield
smaller than typical impingement and entrainment impact estimates.
The Ohio River is very heavily impacted by cumulative
effects of impingement and entrainment over time and across a large
number of cooling water intake structures. The case study segment of
the river has 29 facilities that are in scope for the Phase II
rulemaking, plus an additional 19 facilities that are out of scope.
Steam electric power generation accounted for 5,873 MGD of water
withdrawal from the river basin, more than 90 percent of the total
surface water withdrawals, according to 1995 data from USGS.
In conclusion, several issues and limitations in the impingement
and entrainment data for the Ohio case study (e.g., the reliance on
data for one year, nearly 25 years ago), and the many stressors that
affect the river (especially in the 1977 time frame), suggest that the
results obtained by EPA underestimate the benefits of the rule relative
to current Ohio River conditions. The results are also likely to
underestimate the benefits value of impingement and entrainment
reductions at other inland river facilities.
3. San Francisco Bay/Delta (Pacific Coast Estuaries)
The results of EPA's evaluation of impingement and entrainment of
striped bass, and threatened and endangered and other special status
fish species at the Pittsburg and Contra Costa facilities in the San
Francisco Bay/Delta demonstrate the significant economic benefits that
can be achieved if losses of highly valued species are reduced by the
proposed section 316(b) rule. The benefits were estimated by reference
to other programs already in place to protect and restore the declining
striped bass population and threatened and endangered fish species of
the San Francisco Bay/Delta region. The special status species that
were evaluated included delta smelt, threatened and endangered runs of
chinook salmon and steelhead, sacramento splittail, and longfin smelt.
Based on limited facility data, EPA estimates that the striped bass
recreational catch is reduced by about 165,429 fish per year due to
impingement at the two facilities and 185,073 fish per year due to
entrainment. Estimated impingement losses of striped bass are valued at
between $379,000 and $589,000 per year, and estimated entrainment
losses are valued at between $2.58 million to $4.01 million per year
(all in 2001$).
EPA estimates that the total loss of special status fish species at
the two facilities is 145,003 age 1 equivalents per year resulting from
impingement and 269,334 age 1 equivalents per year due to entrainment.
Estimated impingement losses of these species are valued at between
$12.38 million and $42.65 million per year, and estimated entrainment
losses are valued at between $23.1 million and $79.2 million per year
(all in 2001$).
The estimated value of the recreational losses and the special
status species losses combined range from $12.8 million to $43.2
million per year for impingement and from $25.6 million to $83.2
million per year for entrainment (all in 2001$) (see Exhibit 15).

Exhibit 15.--Baseline Impacts (Annual Average) for Special Status Fish
Species at 2 Facilities in the San Francisco Bay/Delta
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
Two In Scope Facilities
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. > 145,000/yr....... > 269,000/yr
b. number of striped bass lost 165,429............ 185,073
to recreational catch.
c. $ value of combined loss $12.8 mil--$43.2 $25.6 mil--$83.2
(2001$). mil/yr. mil/yr
------------------------------------------------------------------------

In interpreting these results, it is important to consider several
critical caveats and limitations of the analysis. No commercial
fisheries losses or non-special status forage species losses are
included in the analysis. Recreational losses are analyzed only for
striped bass. There are also uncertainties about the effectiveness of
restoration programs in terms of meeting special status fishery outcome
targets.
It is also important to note that under the Endangered Species Act,
losses of all life stages of endangered fish are of concern, not simply
losses of adults. However, because methods are unavailable for valuing
losses of fish eggs and larvae, EPA valued the losses of threatened and
endangered species based on the estimated number of age 1 equivalents
that are lost. Because the number of age 1 equivalents can be
substantially less than the original number of eggs and larvae lost to
impingement and entrainment, and because the life history data required
to calculate age 1 equivalent are uncertain for these rare species,
this method of quantifying impingement and entrainment losses may
result in an underestimate of the true benefits to society of the
proposed section 316(b) regulation.

[[Page 17197]]

4. The Great Lakes
EPA examined the estimated economic value of impingement and
entrainment at J.R. Whiting before installation of a deterrent net to
reduce impingement to estimate the historical losses of the facility
and potential impingement and entrainment damages at other Great Lakes
facilities that do not employ technologies to reduce impingement or
entrainment. Average impingement without the net is valued at between
$0.4 million and $1.2 million per year, and average entrainment is
valued at between $42,000 and $1.7 million per year (all in 2001$) (see
Exhibit 16).
The midpoints of the pre-net results from the benefits transfer
approach were used as the lower ends of the valuations losses. The
upper ends of the valuation of losses reflect results of the Habitat-
based Replacement Cost (HRC) method for valuing impingement and
entrainment losses. HRC-based estimates of the economic value of
impingement and entrainment losses at J.R. Whiting were included with
the transfer-based estimates to provide a better estimate of loss
values, particularly for forage species for which valuation techniques
are limited. The HRC technique is designed to provide a more
comprehensive, ecological-based valuation of impingement and
entrainment losses than valuation by traditional commercial and
recreational impacts methods. Losses are valued on the basis of the
combined costs for implementing habitat restoration actions,
administering the programs, and monitoring the increased production
after the restoration actions. In a complete HRC, these costs are
developed by identifying the preferred habitat restoration alternative
for each species with impingement and entrainment losses and then
scaling the level of habitat restoration until the losses across all
the species in that category have been offset by expected increases in
production of each species. The total value of impingement and
entrainment losses at the facility is then calculated as the sum of the
costs across the categories of preferred habitat restoration
alternatives.
The HRC method is thus a supply-side approach for valuing
impingement and entrainment losses in contrast to the more typically
used demand-side valuation approaches (e.g., commercial and
recreational fishing impacts valuations). An advantage of the HRC
method is that the HRC values can easily address losses for species
lacking a recreational or commercial fishery value (e.g., forage
species that typically are a large proportion of impingement and
entrainment impacts, but that are not readily valued in a traditional
benefits analysis). Further, the HRC explicitly recognizes and captures
the fundamental ecological relationships between impinged and entrained
organisms and their surrounding environment by valuing losses through
the cost of the actions required to provide an offsetting increase in
the existing populations of those species in their natural environment.
Impingement losses at J.R. Whiting with an aquatic barrier net are
estimated to be reduced by 92 percent, while entrainment losses are not
significantly affected. Thus, losses with a net are valued at between
$29,000 and $99,000 for impingement and between $42,000 and $1.7
million per year for entrainment (all in 2001$) (see Exhibit 17).

Exhibit 16.--Baseline Impacts (Annual Average) for J.R. Whiting Without
Net
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
One Great Lakes Facility
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. >1.8 mil/yr........ >290,000/yr.
b. # lbs lost to landed fishery >21.4 mil lbs/yr... > 404,000 lbs/yr.
c. $ value of loss (2001$)..... $0.4 mil-$1.2 mil/ $42,000-$1.7 mil/
yr. yr.
------------------------------------------------------------------------

Exhibit 17.--Baseline Impacts (Annual Average) for J.R. Whiting Without
Net
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
One Great Lakes Facility
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. >0.1 mil/yr........ >290,000/yr.
b. # lbs lost to landed fishery >1.7 mil lbs/yr.... >404,000 lbs/yr.
c. $ value of loss (2001$)..... $29,000-$99,000/yr. $42,000-$1.7 mil/
yr.
------------------------------------------------------------------------

5. Tampa Bay
To evaluate potential impingement and entrainment impacts of
cooling water intake structures in estuaries of the Gulf Coast and
Southeast Atlantic, EPA evaluated impingement and entrainment rates at
the Big Bend facility in Tampa Bay. EPA estimated that the impingement
impact of Big Bend is 420,000 age 1 equivalent fish and over 11,000
pounds of lost fishery yield per year. The entrainment impact is 7.71
billion age 1 equivalent fish and over nearly 23 million pounds of lost
fishery yield per year. Extrapolation of these losses to other Tampa
Bay facilities indicated a cumulative impingement impact of 1 million
age 1 fish (27,000 pounds of lost fishery yield) and a cumulative
entrainment impact of 19 billion age 1 equivalent fish (56 million
pounds of lost fishery yield) each year.
The results of EPA's evaluation of the dollar value of impingement
and entrainment losses at Big Bend, as calculated using benefits
transfer, indicate that baseline economic losses range from $61,000 to
$67,000 per year for impingement and from $7.1 million to $7.4 million
per year for entrainment (all in 2001$). Baseline economic losses using
benefits transfer for all in scope facilities in Tampa Bay (Big Bend,
PL Bartow, FJ Gannon, and Hookers Point) range from $150,000 to
$165,000 for impingement and from $17.5 million to $18.5 million per
year for entrainment (all in 2001$).
EPA also developed a random utility model (RUM) approach to
estimate the effects of improved fishing opportunities due to reduced
impingement and entrainment in the Tampa Bay Region. Cooling water
intake structures withdrawing water from Tampa Bay impinge and entrain
many of the species sought by recreational

[[Page 17198]]

anglers. These species include spotted seatrout, black drum,
sheepshead, pinfish, and silver perch. The study area includes Tampa
Bay itself and coastal sites to the north and south of Tampa Bay.
The study's main assumption is that anglers will get greater
satisfaction, and thus greater economic value, from sites where the
catch rate is higher, all else being equal. This benefit may occur in
two ways: first, an angler may get greater enjoyment from a given
fishing trip when catch rates are higher, and thus get a greater value
per trip; second, anglers may take more fishing trips when catch rates
are higher, resulting in greater overall value for fishing in the
region.
EPA's analysis of improvements in recreational fishing
opportunities in the Tampa Bay Region relies on a subset of the 1997
Marine Recreational Fishery Statistics Survey (MRFSS) combined with the
1997 Add-on MRFSS Economic Survey (AMES) and the follow-up telephone
survey for the Southeastern United States. The Agency evaluated five
species and species groups in the model: drums (including red and black
drum), spotted seatrout, gamefish, snapper-grouper, and all other
species. Impingement and entrainment was found to affect black drum,
spotted seatrout, and sheepshead which is included in the snapper-
grouper species category.
EPA estimated both a random utility site choice model and a
negative binomial trip participation model. The random utility model
assumes that anglers choose the site that provides them with the
greatest satisfaction, based on the characteristics of different sites
and the travel costs associated with visiting different sites. The trip
participation model assumes that the total number of trips taken in a
year are a function of the value of each site to the angler and
characteristics of the angler.
To estimate changes in the quality of fishing sites under different
policy scenarios, EPA relied on the recreational fishery landings data
by State and the estimates of recreational losses from impingement and
entrainment on the relevant species at the Tampa Bay cooling water
intake structures. The Agency estimated changes in the quality of
recreational fishing sites under different policy scenarios in terms of
the percentage change in the historic catch rate. EPA divided losses to
the recreational fishery from impingement and entrainment by the total
recreational landings for the Tampa Bay area to calculate the percent
change in historic catch rate from baseline losses (i.e., eliminating
impingement and entrainment completely).
The results show that anglers targeting black drum have the largest
per trip welfare gain ($7.18 in 2001$) from eliminating impingement and
entrainment in the Tampa region. Anglers targeting spotted seatrout and
sheepshead have smaller per-trip gains ($1.80 and $1.77 respectively,
in 2001$). The large gains for black drum are due to the large
predicted increase in catch rates. In general, based on a hypothetical
one fish per trip increase in catch rate, gamefish and snapper-grouper
are the most highly valued fish in the study area, followed by drums
and spotted seatrout.
EPA calculated total economic values by combining the estimated per
trip welfare gain with the total number of trips to sites in the Tampa
Bay region. EPA used the estimated trip participation model to estimate
the percentage change in the number of fishing trips with the
elimination of impingement and entrainment. These estimated percentage
increases are 0.93 percent for anglers who target sheepshead, 0.94
percent for anglers who target spotted seatrout, and 3.82 percent for
anglers who target black drum.
If impingement and entrainment is eliminated in the Tampa region,
total benefits are estimated to be $2,428,000 per year at the baseline
number of trips, and $2,458,000 per year at the predicted increased
number of trips (all in 2001$). At the baseline number of trips, the
impingement and entrainment benefits to black drum anglers are $270,000
per year; benefits to spotted seatrout anglers are $2,016,000 per year;
and benefits to sheepshead anglers are $143,000 per year (all in
2001$).
Results for the RUM analysis were merged with the benefits
transfer-based estimates to create an estimate of recreational fishery
losses from impingement and entrainment in a manner that avoids double
counting of the recreation impacts. Baseline economic losses combining
both approaches for all in scope facilities in Tampa Bay (Big Bend, PL
Bartow, FJ Gannon, and Hookers Point) range from $0.80 million to $0.82
million for impingement and from $20.0 million to $20.9 million per
year for entrainment (all in 2001$) (see Exhibit 18).
For a variety of reasons, EPA believes that the estimates developed
here underestimate the value of impingement and entrainment losses at
Tampa Bay facilities. EPA assumed that the effects of impingement and
entrainment on fish populations are constant over time (i.e., that fish
kills do not have cumulatively greater impacts on diminished fish
populations). EPA also did not analyze whether the number of fish
affected by impingement and entrainment would increase as populations
increase in response to improved water quality or other improvements in
environmental conditions. In the economic analyses, EPA also assumed
that fishing is the only recreational activity affected.

Exhibit 18.--Baseline Impacts (Annual Average) for Tampa Bay
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
Four In Scope Facilities
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. >1 mil/yr.......... >19 billion/yr.
b. # lbs lost to landed fishery >27,000 lbs/yr..... >56 million lbs/
yr.
c. $ value of loss (2001$)..... $0.80 mil-$0.82 mil/ $20.0 mil-$20.9
yr. mil/yr.
------------------------------------------------------------------------

6. Brayton Point
EPA evaluated cumulative impingement and entrainment impacts at the
Brayton Point Station facility in Mount Hope Bay in Somerset,
Massachusetts. EPA estimates that the cumulative impingement impact is
69,300 age 1 equivalents and 5,100 pounds of lost fishery yield per
year. The cumulative entrainment impact amounts to 3.8 million age 1
equivalents and 70,400 pounds of lost fishery yield each year.
The results of EPA's evaluation of the dollar value of impingement
and entrainment losses at Brayton Point (as calculated using benefits
transfer) indicate that baseline economic losses range from $7,000 to
$12,000 per year for impingement and from $166,000 to

[[Page 17199]]

$303,000 per year for entrainment (all in 2001$).
EPA also developed an Habitat-based Replacement Cost (HRC) analysis
to examine the costs of restoring impingement and entrainment losses at
Brayton Point. These HRC estimates were merged with the benefits
transfer results to develop a more comprehensive range of loss
estimates. The HRC results were used as an upper bound and the midpoint
of the benefits transfer method was used as a lower bound (HRC
annualized at 7 percent over 20 years). Combining both approaches, the
value of impingement and entrainment losses at Brayton Point range from
approximately $9,000 to $890,00 per year for impingement, and from $0.2
million to $28.3 million per year for entrainment (all in 2001$) (see
Exhibit 19).
For a variety of reasons, EPA believes that the estimates developed
here underestimate the total economic benefits of reducing impingement
and entrainment at Brayton Point. EPA assumed that the effects of
impingement and entrainment on fish populations are constant over time
(i.e., that fish kills do not have cumulatively greater impacts on
diminished fish populations). EPA also did not analyze whether the
number of fish affected by impingement and entrainment would increase
as populations increase in response to improved water quality or other
improvements in environmental conditions. In the economic analyses, EPA
also assumed that fishing is the only recreational activity affected.

Exhibit 19.--Baseline Impacts (Annual Average) for Brayton Point
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
One In Scope Facility
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. >69,300/yr......... >3.8 mil/yr.
b. # lbs lost to landed fishery >5,100 lbs/yr...... >70,400 lbs/yr.
c. $ value of loss (2001$)..... $9,000-$890,000/yr. $0.2 mil-$28.3 mil/
yr.
------------------------------------------------------------------------

7. Seabrook Pilgrim
The results of EPA's evaluation of impingement and entrainment
rates at Seabrook and Pilgrim indicate that impingement and entrainment
at Seabrook's offshore intake is substantially less than impingement
and entrainment at Pilgrim's nearshore intake. Impingement per MGD
averages 68 percent less and entrainment averages 58 percent less at
Seabrook. The species most commonly impinged at both facilities are
primarily winter flounder, Atlantic herring, Atlantic menhaden, and red
hake. These are species of commercial and recreational interest.
However, the species most commonly entrained at the facilities are
predominately forage species. Because it is difficult to assign an
economic value to such losses, and because entrainment losses are much
greater than impingement losses, the benefits of an offshore intake or
other technologies that may reduce impingement and entrainment at these
facilities are likely to be underestimated. There also are several
important factors in addition to the intake location (nearshore versus
offshore) that complicate the comparison of impingement and entrainment
at the Seabrook facility to impingement and entrainment at Pilgrim
(e.g., entrainment data are based on different flow regimes, different
years of data collection, and protocols for reporting monitoring
results).
Average impingement losses at Seabrook are valued at between $3,500
and $5,200 per year, and average entrainment losses are valued at
between $142,000 and $315,000 per year (all in 2001$) (see Exhibit 20).
Average impingement losses at Pilgrim are valued at between $3,300 and
$5,000 per year, and average entrainment losses are valued at between
$523,500 and $759,300 per year (all in 2001$). These values reflect
estimates derived using benefits transfer.
EPA also developed an HRC analysis to examine the costs of
restoring impingement and entrainment losses at Pilgrim. Using the HRC
approach, the value of impingement and entrainment losses at Pilgrim
are approximately $507,000 for impingement, and over $9.3 million per
year for entrainment (HRC annualized at 7 percent over 20 years) (all
in 2001$). These HRC estimates were merged with the benefits transfer
results to develop a more comprehensive range of loss estimates.
These HRC estimates were merged with the benefits transfer results
to develop a more comprehensive range of loss estimates. The HRC
results were used as an upper bound and the midpoint of the benefits
transfer method was used as a lower bound (HRC annualized at 7 percent
over 20 years). Combining both approaches, the value of impingement and
entrainment losses at Pilgrim range from approximately $4,000 to
$507,00 per year for impingement, and from $0.6 million to $9.3 million
per year for entrainment (all in 2001$) (see Exhibit 21).

Exhibit 20.--Baseline Impacts (Annual Average) for Seabrook
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
One In Scope Facility: Seabrook
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. > 1.8 mil/yr....... > 290,000/yr
b. # lbs lost to landed fishery > 21.4 mil lbs/yr.. > 404,000 lbs/yr
c. $ value of loss (2001$)..... $3,000-$5,000...... $142,000-$315,000
------------------------------------------------------------------------

Exhibit 21.--Baseline Impacts (Annual Average) for Pilgrim
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
One In Scope Facility: Pilgrim Losses Using Benefits Transfer
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. > 1.8 mil/yr....... > 290,000/yr

[[Page 17200]]

b. # lbs lost to landed fishery > 21.4 mil lbs/yr.. > 404,000 lbs/yr
c. $ value of loss (2001$)..... $3,000-$5,000/yr... $0.5 mil-$0.7 mil/
yr
------------------------------------------------------------------------
Pilgrim Losses Using HRC as Upper Bounds and Benefits Transfer Midpoints
as Lower
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. > 1.8 mil/yr....... > 290,000/yr
b. # lbs lost to landed fishery > 21.4 mil lbs/yr.. > 404,000 lbs/yr
c. $ value of loss (2001$)..... $4,000-$507,000/yr. $0.6 mil-$9.3 mil/
yr
------------------------------------------------------------------------

8. Monroe
EPA estimates that the baseline impingement losses at the Monroe
facility are 35.8 million age 1 equivalents and 1.4 million pounds of
lost fishery yield per year. Baseline entrainment impacts amount to
11.6 million age 1 equivalents and 608,300 pounds of lost fishery yield
each year.
The results of EPA's evaluation of the dollar value of baseline
impingement and entrainment losses at Monroe (as calculated using
benefits transfer) indicate that baseline economic losses range from
$502,200 to $981,750 per year for impingement and from $314,600 to
$2,298,500 per year for entrainment (all in 2001$).
EPA also developed an HRC analysis to examine the costs of
restoring impingement and entrainment losses at Pilgrim. These HRC
estimates were merged with the benefits transfer results to develop a
more comprehensive range of loss estimates. These HRC estimates were
merged with the benefits transfer results to develop a more
comprehensive range of loss estimates. The HRC results were used as an
upper bound and the midpoint of the benefits transfer method was used
as a lower bound (HRC annualized at 7 percent over 20 years). Combining
both approaches, the value of impingement and entrainment losses at
Monroe range from approximately $0.7 million to $5.6 per year for
impingement, and from $1.3 million to $13.9 million per year for
entrainment (all in 2001$) (see Exhibit 22).
For a variety of reasons, EPA believes that the estimates developed
here underestimate the total economic benefits of reducing impingement
and entrainment at the Monroe facility. EPA assumed that the effects of
impingement and entrainment on fish populations are constant over time
(i.e., that fish kills do not have cumulatively greater impacts on
diminished fish populations). EPA also did not analyze whether the
number of fish affected by impingement and entrainment would increase
as populations increase in response to improved water quality or other
improvements in environmental conditions. In the economic analyses, EPA
also assumed that fishing is the only recreational activity affected.

Exhibit 22.--Baseline Losses at (Annual Average) Monroe (Using HRC
Values as Upper Bounds)
------------------------------------------------------------------------
Impingement Entrainment
------------------------------------------------------------------------
One In Scope Facility
------------------------------------------------------------------------
a. age 1 equivalent fish lost.. > 1.8 mil/yr....... > 290,000/yr
b. # lbs lost to landed fishery > 21.4 mil lbs/yr.. > 404,000 lbs/yr
c. $ value of loss (2001$)..... $0.7 mil-$5.6 mil.. $1.3 mil-$13.9 mil
------------------------------------------------------------------------

F. Estimates of National Benefits

1. Methodology
In order to compare benefits to costs for a national rulemaking
such as the section 316(b) proposed rule for Phase II existing
facilities, there is a need to generate national estimates of both
costs and benefits. This section describes the methodology EPA has
developed to provide national estimates of benefits.
Because benefits are very site-specific, there are limited options
for how EPA can develop national-level benefits estimates from a
diverse set of over 500 regulated entities. EPA could only develop a
limited number of case studies, and to interpret these cases in a
national context, the Agency identified a range of settings that
reflect the likely benefits potential of a given type of facility (and
its key stressor-related attributes) in combination with the waterbody
characteristics (receptor attributes) in which it is located. Benefits
potential settings can thus be defined by the various possible
combinations of stressor (facility) and receptor (waterbody, etc)
combinations.
Ideally, case studies would be selected to represent each of these
``benefits potential'' settings and then could be used to extrapolate
to like-characterized facility-waterbody setting cooling water intake
structure sites. However, data limitations and other considerations
precluded EPA from developing enough case studies to reflect the
complete range of benefits-potential settings. Data limitations also
made it difficult to reliably assign facilities to the various benefits
potential categories.
Based on the difficulties noted above, EPA adopted a more
practical, streamlined extrapolation version of its preferred approach,
as this is the only viable approach available to the Agency. To develop
a feasible, tractable manner for developing national benefits estimates
from a small number of case study investigations, EPA made its national
extrapolations on the basis of a combination of three relevant
variables: (1) The volume of water (operational flow) drawn by a
facility; (2) the level of recreational angling activity within the
vicinity of the facility; and (3) the type of waterbody on which the
facility is located. Extrapolations were then made across facilities
according to their respective waterbody type.
The first of these variables--operational flow (measured as
millions of gallons per day, or MGD)--reflects the degree of stress
caused by a facility. The second variable --the number of angler days
in the area (measured as the number of recreational angling days within
a 120 mile radius) -- reflects the degree to which there is a demand

[[Page 17201]]

(value) by local residents to use the fishery that is impacted. The
third variable--waterbody type (e.g., estuary, ocean, freshwater river
or lake, or Great Lakes)--reflects the types, numbers, and life stages
of fish and other biological receptors that are impacted by the
facilities. Accordingly, the extrapolations based on these three
variables reflect the key factors that affect benefits: the relevant
stressor, the biological receptors, and the human demands for the
natural resources and services impacted.
Flow: The flow variable the Agency developed is the monetized
benefits per volume of water flowing through cooling water intake
structures, in specific, applying a metric of ``dollars per million
gallons per day'' ($/MGD), where MGD levels are based on average
operational flows as reported by the facilities in the EPA Section
316(b) Detailed Questionnaire and Short Technical Questionnaire
responses, or through publically available data.
Angler days. The angler day variable the Agency used is based on
data developed by the U.S. Fish and Wildlife Survey as part of its 1996
National Survey of Fishing, Hunting, and Wildlife-Associated
Recreation. These data were interpreted within a GIS-based approach to
estimate the level of recreational angling pursued by populations
living within 120 miles of each facility (additional detail is provided
in the EBA).
In developing the index, EPA used a GIS analysis to identify
counties within a 120 mile radius of each facility. The area for each
facility included the county the facility is located in and any other
county with 50 percent or more of its population residing within 120
miles of the facility. EPA estimated angling activity levels for two
types of angling days for each county: freshwater angling days and
saltwater angling days. Estimated angling days for the appropriate
waterbody type were summed across all counties in a facility's area to
yield estimated angling days near the facility. For each type of
angling, EPA estimated angling days by county residents as a percentage
of the State angling days by residents 16 years and older reported in
the 1996 National Survey of Fishing, Hunting, and Wildlife-Associated
Recreation (USFWS, 1997). Angling days in each State were partitioned
into days by urban anglers and days by rural anglers based on the U.S.
percentages reported in the 1996 National Survey.
For urban counties,
Angling Days = State Urban Angling Days * County Pop/State Pop in Urban
Counties
For rural counties,
Angling Days = State Rural Angling Days * County Pop/State Pop in Rural
Counties
EPA determined urban and rural population by State by summing the
1999 county populations for the State's urban and rural counties
respectively. EPA determined each county's urban/rural status using
definitions developed by the U.S. Department of Agriculture (as
included in NORSIS 1997). These index values are based upon the
estimated number of angling days by residents living near the facility.
The index value for each facility is a measure of the facility's share
of the total angling days estimated at all in scope facilities located
on a similar waterbody.
The analysis then proceeded by waterbody type.

Estuaries

National baseline losses and benefits for estuaries were based on
the Salem and Tampa Bay case studies. The case studies were
extrapolated to other facilities on the basis of regional fishery
types, in an effort to reflect the different types of fisheries that
are impacted in various regions of the country's coastal waters. As
such, the Tampa Bay case study results were applied to estuary
facilities located in Florida and other Gulf Coast States, and the
Salem results were applied to all remaining estuary facilities (note
that the Salem results used for the extrapolation differ from the case
study results presented above in order to reflect losses without a
screen currently in place at the facility). Ideally, a West Coast
facility would have served as the basis of extrapolation to estuarine
facilities along the Pacific Coast, but EPA could not develop a
suitable case study for that purpose in time for this proposal.
However, EPA intends to develop such a western estuary case study and
report its findings in an anticipated forthcoming Notice of Data
Availability.
In order to extrapolate baseline losses from the Salem and Big Bend
facilities to all in scope facilities on estuaries, EPA calculated an
index of angling activity for each of these in scope facilities. The
angling index is a percentage value that ranges from 0 to 1. Dividing
baseline losses at a facility by the index value provides an estimate
of total baseline losses at all in scope facilities located on
waterbodies in the same category.

Rivers and Lakes

EPA combined rivers, lakes and reservoirs into one class of
freshwater-based facilities (Great Lakes are not included in this
group, and were considered separately). The waterbody classifications
for freshwater rivers and lakes/reservoirs were grouped together for
the extrapolation due to similar ecological and hydrological
characteristics of freshwater systems used as cooling water. The
majority of these hydrologic systems have undergone some degree of
modification for purposes such as water storage, flood control, and
navigation. The degree of modification can vary very little or quite
dramatically. A facility falling into the lake/reservoir category may
withdraw cooling water from a lake that has been reclassified as a
reservoir due to the addition of an earthen dam, or from a reservoir
created by the diversion of a river through a diversion canal for use
as a cooling lake. The species composition and ecology of these two
waterbodies may vary greatly. While the ecology of river systems and
lakes or reservoirs are considerably different, due to structural
modifications these two classifications may be quite similar
ecologically depending on the waterbody in question. For example, many
river systems, including the Ohio River, are now broken up into a
series of navigational pools controlled by dams that may function more
similarly to a reservoir than a naturally flowing river.
Baseline losses and benefits in the Ohio case study were based on
29 in scope facilities in the Ohio River case study area. The Agency
extrapolated these losses to all in scope facilities on other
freshwater rivers, lakes, and reservoirs.

Oceans and Great Lakes

Oceans and Great Lakes estimates were based on extrapolations from
the Pilgrim and JR Whiting facility case studies, respectively. For
these two facilities (and their associated waterbody types), the
valuation method applied by EPA in the national extrapolations was
based on the Habitat-based Replacement Cost approach, which reflects
values for addressing a much greater number of impacted species (not
just the small share that are recreational or commercial species that
are landed by anglers). For example, at JR Whiting, the benefits
transfer approach developed values for recreational angling amounted to
only 4 percent of the estimated total impingement losses, and reflected
only 0.02 percent of the age 1 fish lost due to impingement. At
Pilgrim, the benefits transfer approach reflected recreational losses
for only 0.5 percent of the entrained age 1 equivalent fish at that
site. Because the Agency was able to

[[Page 17202]]

develop HRC values for these sites and recreational fishery impacts
were such a small part of the impacts, EPA extrapolated only based on
HRC estimates and used only the flow-based (MGD) index for oceans and
the Great Lakes.

Results

The results of the index calculations for operational flow and
angling effort used for extrapolating case study baseline losses to
national baseline losses for all in scope facilities are reported in
Exhibit 23 below.

Exhibit 23.--Flow and Angling Indices
------------------------------------------------------------------------
Percent of
Normalized in scope
Waterbody Type Based on MGD angling
percent base
------------------------------------------------------------------------
Estuary-N. Atlantic......... Salem........... 4.39 2.10
Estuary-S. Atlantic......... 4 Tampa Bay 19.24 20.28
facilities.
Freshwater systems.......... 29 Ohio River 9.30 12.34
facilities.
Great Lake.................. JR Whiting...... 3.92 13.89
Ocean....................... Pilgrim......... 3.42 6.54
------------------------------------------------------------------------

Waterbody

EPA further tailored its extrapolation approach, so that monetized
benefits estimates are based on available data for similar types of
waterbody settings. Thus, for example, the case study results for the
Salem facility (located in the Delaware Estuary) and the Tampa
facilities are applied (on a per MGD and angling day index basis) only
to other facilities located in estuary waters. Likewise, results from
Ohio River facilities are applied to inland freshwater water cooling
water intake structures (excluding facilities on the Great Lakes), and
losses estimated for the Pilgrim facility are applied to facilities
using ocean waters at their intakes, and results for J.R. Whiting are
used for the Great Lakes facilities.
As noted above, the waterbody classifications for freshwater rivers
and lakes or reservoirs were grouped together for the extrapolation due
to similar ecological and hydrological characteristics of freshwater
systems used as cooling water. The majority of these hydrologic systems
have undergone some degree of modification for purposes such as water
storage, flood control, and navigation. Due to structural
modifications, these freshwater waterbody types be quite similar
ecologically. For example, many river systems, including the Ohio
River, are now broken up into a series of navigational pools controlled
by dams that may function more similarly to a reservoir than a
naturally flowing river.
The natural species distribution, genetic movement, and seasonal
migration of aquatic organisms that may be expected in a natural system
is affected by factors such as dams, stocking of fish, and water
diversions. Since the degree of modification of inland waterbodies and
the occurrence of fish stocking could not be determined for every
cooling water source, the waterbody categories ``freshwater rivers'',
and ``lakes/reservoirs'' were grouped together.
The facilities chosen for extrapolation are expected to have
relatively average benefits per MGD and angling day index, for their
respective waterbody types. Benefits per MGD and angling day index are
not expected to be extremely high or low relative to other facilities.
EPA was careful not to use facilities that were unusual in this regard.
Salem is located in the transitional zone of the estuary, a lesser
productive part of the estuary.
The use of flow and angler day basis for extrapolation has some
practical advantages and basis in logic; however, it also has some less
than fully satisfactory implications. The advantages of using this
extrapolation approach include:
Feasibility of application, because the extrapolation
relies on waterbody type, angler demand, and MGD data that are
available for all in scope facilities.
Selectively extrapolating case study results to facilities
on like types of waterbodies reflects the type of aquatic setting
impacted, which is intended to capture the number and types of species
impacted by impingement and entrainment at such facilities (i.e.,
impacts at facilities on estuaries are more similar to impacts at other
estuary-based cooling water intake structures than they are to
facilities on inland waters).
Flow in MGD is a useful proxy for the scale of operation
at cooling water intake structures, a variable that typically will have
a large impact on baseline losses and potential regulatory benefits.
While there may be a high degree of variability in the
actual losses (and benefits) per MGD across facilities that impact
similar waterbodies, the extrapolations are expected to be reasonably
accurate on average for developing an order-of-magnitude national-level
estimate of benefits.
The recreational participation level (angler day) variable
provides a logical basis to reflect the extent of human user demands
for the fishery and other resources affected by impingement and
entrainment.
The estimates are not biased in either direction.
Some of the disadvantages of the use of extrapolating results on
the basis of waterbody type, recreational angling day data, and
operational flows (MGD) include:
The approach may not reflect all of the variability that
exists in impingement and entrainment impacts (and monetized losses or
benefits) within waterbody classifications. For example, within and
across U.S. estuaries, there may be different species, numbers of
individuals, and life stages present at different cooling water intake
structures.
The approach may not reflect all of the variability that
exists in impingement and entrainment impacts (and monetized losses or
benefits) across operational flow levels (MGD) at different facilities
within a given waterbody type.
Extrapolating to national benefits according to flow (MGD), angling
levels, and waterbody type, as derived from estimates for a small
number of case studies, may introduce inaccuracies into national
estimates. This is because the three variables used as the basis for
the extrapolation (MGD, recreational angling days, and waterbody type)
may not account for all of the variability expected in site-specific
benefits levels. The case studies may not reflect the average or
``typical'' cooling water intake structures impacts on a given type of
waterbody (i.e., the extrapolated results might under- or over-state
the physical and dollar value of impacts per MGD and fishing day index,
by

[[Page 17203]]

waterbody type). The inaccuracies introduced to the national-level
estimates by this extrapolation approach are of unknown magnitude or
direction (i.e., the estimates may over- or understate the anticipated
national-level benefits), however EPA has no data to indicate that the
case study results are atypical for each waterbody type.
2. Results of National Benefits Extrapolation
National benefits for 3 regulatory compliance options were
estimated for the 539 facilities found to be in scope of the section
316(b) Phase II rulemaking. The benefits estimates were derived in a
multi-step process that used operational flows and the recreational
fishing index as the basis for extrapolating case study results to the
national level.
In the first step, EPA used the baseline losses (dollars per year)
derived from the analysis of facilities examined in the case studies.
In some instances, the case study facilities had already implemented
some measures to reduce impingement and/or entrainment. In such cases,
baseline losses as appropriate to the national extrapolation were
estimated using data for years prior to the facilities' actions (e.g.,
based on impingement and entrainment before the impingement deterrent
net was installed at JR Whiting). These pre-action baselines provide a
basis for examining other facilities that have not yet taken actions to
reduce impingement and/or entrainment. Baseline losses at the selected
case study facilities are summarized in Exhibit 24.

Exhibit 24.--Baseline Losses From Selected Case Studies
[Baseline losses from selected case studies, values in thousands of 2001$]
----------------------------------------------------------------------------------------------------------------
Impingement Entrainment
Case study -----------------------------------------------------------------------------
Low Mid High Low Mid High
----------------------------------------------------------------------------------------------------------------
Salem............................. $528 $704 $879 $16,766 $23,657 $30,548
Brayton........................... 9 450 890 235 14,261 28,288
Contra Costa...................... 2,666 5,726 8,785 6,413 13,630 20,847
Pittsburgh........................ 10,096 22,268 34,440 19,166 40,760 62,354
4 Tampa Bay Facilities............ 801 809 817 20,007 20,454 20,901
29 Ohio Facilities................ 3,452 4,052 4,652 9,257 9,584 9,912
Monroe............................ 742 3,190 5,639 1,307 7,604 13,902
JR Whiting........................ 358 797 1,235 42 873 1,703
Pilgrim Nuclear................... 4 256 507 642 4,960 9,279
----------------------------------------------------------------------------------------------------------------

In the second step, EPA extrapolated the baseline dollar loss
estimates from the case study models to all of the remaining 539
facilities by multiplying the index of operational flow for each
facility by the estimated dollar losses at baseline per unit flow,
based on each facility's source waterbody type, were extrapolated. This
resulted in a national estimate of baseline monetizable losses for all
539 in scope facilities as summarized in Exhibit 25.

Exhibit 25.--Baseline Losses Extrapolated to all In Scope Facilities Using MGD Only
[Baseline losses extrapolated to all in scope facilities--MGD only, values in thousands of 2001$]
----------------------------------------------------------------------------------------------------------------
Impingement Entrainment
Facility Case study -----------------------------------------------------------------
Low Mid High Low Mid High
----------------------------------------------------------------------------------------------------------------
Estuary, Non Gulf
----------------------------------------------------------------------------------------------------------------
Salem........................ Delaware....... $528 $704 $879 $16,766 $23,657 $30,548
Brayton Point................ Brayton........ 9 450 890 235 14,261 28,288
Contra Costa................. California..... 2,666 5,726 8,785 6,413 13,630 20,847
Pittsburgh................... California..... 10,096 22,268 34,440 19,166 40,760 62,354
All Other In Scope........... ............. 11,167 14,875 18,583 354,346 499,991 645,636
All 78 In Scope.............. ............. 24,467 44,022 63,578 396,925 592,298 787,672
----------------------------------------------------------------------------------------------------------------
Estuary, Gulf Coast
----------------------------------------------------------------------------------------------------------------
4 Tampa Facilities........... Tampa Bay...... 801 809 817 20,007 20,454 20,901
All Other In Scope........... ............. 3,361 3,395 3,429 83,982 85,857 87,732
All 30 In Scope.............. ............. 4,162 4,204 4,247 103,989 106,311 108,633
----------------------------------------------------------------------------------------------------------------
Freshwater
----------------------------------------------------------------------------------------------------------------
29 Ohio Facilities........... Ohio........... 3,452 4,052 4,652 9,257 9,584 9,912
Monroe....................... Monroe......... 742 3,190 5,639 1,307 7,604 13,902
All Other In Scope........... ............. 33,317 39,111 44,906 89,348 92,514 95,679
All 393 In Scope............. ............. 37,511 46,353 55,196 99,911 109,702 119,493
----------------------------------------------------------------------------------------------------------------
Great Lake
----------------------------------------------------------------------------------------------------------------
JR Whiting................... JR Whiting..... 358 797 1,235 42 873 1,703
All Other In Scope........... ............. 8,774 19,523 30,271 1,025 21,385 41,745
All 16 In Scope.............. ............. 9,132 20,319 31,506 1,067 22,257 43,448
----------------------------------------------------------------------------------------------------------------

[[Page 17204]]

Ocean
----------------------------------------------------------------------------------------------------------------
Pilgrim Nuclear.............. Pilgrim........ 4 256 507 642 4,960 9,279
All Other In Scope........... ............. 115 7,219 14,323 18,127 140,146 262,165
All 22 In Scope.............. ............. 119 7,475 14,830 18,769 145,106 271,444
----------------------------------------------------------------------------------------------------------------
Total All Facilities
----------------------------------------------------------------------------------------------------------------
All 539 In Scope............. ............. 75,390 122,374 169,357 620,661 975,675 1,330,690
----------------------------------------------------------------------------------------------------------------

In the third step, the Agency extrapolated baseline losses from the
case studies were also developed using the angling index values for
each case study. The calculation of the index is described above. The
results are summarized in Exhibit 26.

Exhibit 26.--Baseline Losses Extrapolated--Angling Days Only
[Values in thousands of 2001$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Impingement Entrainment
Facility Case Study -----------------------------------------------------------------------------------
Low Mid High Low Mid High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary, Non Gulf
--------------------------------------------------------------------------------------------------------------------------------------------------------
Salem................................... Delaware.................. $528 $704 $879 $16,766 $23,657 $30,548
Brayton Point........................... Brayton................... 9 450 890 235 14,261 28,288
Contra Costa............................ California................ 2,666 5,726 8,785 6,413 13,630 20,847
Pittsburgh.............................. California................ 10,096 22,268 34,440 19,166 40,760 62,354
All Other In Scope...................... .......................... 23,840 31,755 39,671 756,471 1,067,399 1,378,327
All 78 In Scope......................... .......................... 37,139 60,903 84,667 799,050 1,159,706 1,520,363
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary, Gulf Coast
--------------------------------------------------------------------------------------------------------------------------------------------------------
4 Tampa Facilities...................... Tampa Bay................. $801 $809 $817 $20,007 $20,454 $20,901
All Other In Scope...................... .......................... 3,148 3,180 3,212 78,664 80,421 82,177
All 30 In Scope......................... .......................... 3,949 3,989 4,029 98,672 100,875 103,078
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freshwater
--------------------------------------------------------------------------------------------------------------------------------------------------------
29 Ohio Facilities...................... Ohio...................... $3,452 $4,052 $4,652 $9,257 $9,584 $9,912
Monroe.................................. Monroe.................... 742 3,190 5,639 1,307 7,604 13,902
All Other In Scope...................... .......................... 23,203 27,238 31,273 62,224 64,429 66,633
All 393 In Scope........................ .......................... 27,396 34,480 41,564 72,787 81,617 90,447
--------------------------------------------------------------------------------------------------------------------------------------------------------
Great Lake
--------------------------------------------------------------------------------------------------------------------------------------------------------
JR Whiting.............................. JR Whiting................ $358 $797 $1,235 $42 $873 $1,703
All Other In Scope...................... .......................... 2,231 4,965 7,698 261 5,438 10,616
All 16 In Scope......................... .......................... 2,589 5,761 8,933 302 6,311 12,319
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ocean
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pilgrim Nuclear......................... Pilgrim................... $4 $256 $507 $642 $4,960 $9,279
All Other In Scope...................... .......................... 56 3,529 7,001 8,861 68,504 128,147
All 22 In Scope......................... .......................... 60 3,784 7,508 9,502 73,464 137,426
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total All Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
All 539 In Scope........................ .......................... $71,134 $108,918 $146,701 $980,314 $1,421,974 $1,863,633
--------------------------------------------------------------------------------------------------------------------------------------------------------

As a fourth step, EPA calculated the average baseline losses of the
flow-based results and the angling-based results. This develops results
that reflect an equal-weighted extrapolation measure of each case study
facility's baseline loss, based on it's percent share of flow and
recreational fishing relative to all in scope facilities in each
waterbody type. The results of this average are reported in Exhibit 27.

[[Page 17205]]

Exhibit 27.--Baseline Losses Extrapolated to All In scope Facilities--Means of MGD and Angling
[Values in thousands of 2001$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Impingement Entrainment
Facility Case Study -----------------------------------------------------------------------------------
Low Mid High Low Mid High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary, Non Gulf
--------------------------------------------------------------------------------------------------------------------------------------------------------
Salem................................... Delaware.................. $528 $704 $879 $16,766 $23,657 $30,548
Brayton Point........................... Brayton................... 9 450 890 235 14,261 28,288
Contra Costa............................ California................ 2,666 5,726 8,785 6,413 13,630 20,847
Pittsburgh.............................. California................ 10,096 22,268 34,440 19,166 40,760 62,354
All Other In Scope...................... .......................... 17,503 23,315 29,127 555,409 783,695 1,011,981
All 78 In Scope......................... .......................... 30,803 52,463 74,122 597,988 876,002 1,154,017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary. Gulf Coast
--------------------------------------------------------------------------------------------------------------------------------------------------------
4 Tampa Facilities...................... Tampa Bay................. $801 $809 $817 $20,007 $20,454 $20,901
All Other In Scope...................... .......................... 3,255 3,288 3,321 81,323 83,139 84,955
All 30 In Scope......................... .......................... 4,055 4,097 4,138 101,330 103,593 105,856
--------------------------------------------------------------------------------------------------------------------------------------------------------
Freshwater
--------------------------------------------------------------------------------------------------------------------------------------------------------
29 Ohio Facilities...................... Ohio...................... $3,452 $4,052 $4,652 $9,257 $9,584 $9,912
Monroe.................................. Monroe.................... 742 3,190 5,639 1,307 7,604 13,902
All Other In Scope...................... .......................... 28,260 33,175 38,089 75,786 78,471 81,156
All 393 In Scope........................ .......................... 32,453 40,417 48,380 86,349 95,660 104,970
--------------------------------------------------------------------------------------------------------------------------------------------------------
Great Lake
--------------------------------------------------------------------------------------------------------------------------------------------------------
JR Whiting.............................. JR Whiting................ $358 $797 $1,235 $42 $873 $1,703
All Other In Scope...................... .......................... 5,503 12,244 18,985 643 13,412 26,180
All 16 In Scope......................... .......................... 5,861 13,040 20,220 685 14,284 27,884
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ocean
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pilgrim Nuclear......................... Pilgrim................... $4 $256 $507 $642 $4,960 $9,279
All Other In Scope...................... .......................... 86 5,374 10,662 13,494 104,325 195,156
All 22 In Scope......................... .......................... 90 5,629 11,169 14,135 109,285 204,435
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total All Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
All 539 In Scope........................ .......................... $73,262 $115,642 $158,029 $800,487 $1,198,824 $1,597,162
--------------------------------------------------------------------------------------------------------------------------------------------------------

In the fifth step, EPA selected the set of extrapolation values the
Agency believes are the most reflective of the baseline loss scenarios
that applied in each waterbody type. For estuaries and freshwater
facilities, EPA used the midpoint of its loss estimates of impingement
and entrainment at the case study facilities, and then applied the
average of the MGD- and angler-based extrapolation results. This
provides estimates of national baseline losses that reflect the
broadest set of values and parameters (i.e., the full range of loss
estimates, plus the application of all three extrapolation variables).
For oceans and the Great Lakes, EPA developed national-scale
estimates using its HRC-based loss estimates, because EPA was able to
develop HRC estimates for these sites, and because these HRC values are
more comprehensive than the values derived using the more traditional
benefits transfer approach. The HRC estimates cover losses for a much
larger percentage of fish lost due to impingement and entrainment,
whereas the benefits transfer approach addressed losses only for a
small share of the impacted fish. Since recreational fish impacts were
an extremely small share of the total fish impacts at these sites, EPA
extrapolated the HRC findings using only the MGD-based index (i.e., the
angler-based index was not relevant).
The results of EPA's assessment of its best estimates for baseline
losses due to impingement and entrainment are shown in Exhibit 28.

Exhibit 28.--Best Estimate Baseline Losses
[Best estimate baseline losses, values in thousands of 2001$]
----------------------------------------------------------------------------------------------------------------
Facility Case study Impingement Entrainment
----------------------------------------------------------------------------------------------------------------
Salem...................................... Delaware..................... $704 $23,657
Brayton Point.............................. Brayton...................... 450 14,261
Contra Costa............................... California................... 5,726 13,630
Pittsburgh................................. California................... 22,268 40,760
All Other In Scope......................... ............................. 23,315 783,695
All 78 In Scope............................ ............................. 52,463 876,002
----------------------------------------------------------------------------------------------------------------

[[Page 17206]]

Estuary and Gulf Coast
----------------------------------------------------------------------------------------------------------------
4 Tampa Facilities......................... Tampa Bay.................... $809 $20,454
All Other In Scope......................... ............................. 3,288 83,139
All 30 In Scope............................ ............................. 4,097 103,593
----------------------------------------------------------------------------------------------------------------
Freshwater
----------------------------------------------------------------------------------------------------------------
29 Ohio Facilities......................... Ohio......................... $4,052 $9,584
Monroe..................................... Monroe....................... 3,190 7,604
All Other In Scope......................... ............................. 30,891 73,069
All 393 In Scope........................... ............................. 38,133 90,258
----------------------------------------------------------------------------------------------------------------
Great Lake
----------------------------------------------------------------------------------------------------------------
JR Whiting................................. JR Whiting................... $1,235 $1,703
All Other In Scope......................... ............................. 30,271 41,745
All 16 In Scope............................ ............................. 31,506 43,448
----------------------------------------------------------------------------------------------------------------
Ocean
----------------------------------------------------------------------------------------------------------------
Pilgrim Nuclear............................ Pilgrim...................... $507 $9,279
All Other In Scope......................... ............................. 14,323 262,165
All 22 In Scope............................ ............................. 14,830 271,444
----------------------------------------------------------------------------------------------------------------
Total All Facilities
----------------------------------------------------------------------------------------------------------------
All 539 In Scope........................... ............................. $141,029 $1,384,745
----------------------------------------------------------------------------------------------------------------

In the sixth and final step, EPA estimated the potential benefits
of each regulatory option by applying a set of estimated percent
reductions in baseline losses. The percent reduction in baseline losses
for each facility reflects EPA assessment of (1) regulatory baseline
conditions at the facility (i.e., current practices and technologies in
place), and (2) the percent reductions in impingement and entrainment
that EPA estimated would be achieved at each facility that the Agency
believes would be adopted under each regulatory option. The options
portrayed in the Exhibits correspond to the following technical
descriptions of each alternative:
Option 1 requires all Phase II existing facilities located on
different categories of waterbodies to reduce intake capacity
commensurate with the use of closed-cycle, recirculating cooling water
systems based on location and the percentage of the source waterbody
they withdraw for cooling;
Option 2 is variation of Option 1, but embodies a two-track
approach whereby some facilities may use site-specific studies to
comply using alternative approaches;
Option 3 (the Agency's preferred option) requires all Phase II
existing facilities to reduce impingement and entrainment to levels
established based on the use of design and construction or operational
measures, except for facilities that are below flow thresholds for
lakes and rivers;
Option 3a is a variation of Option 3, wherein all Phase II existing
facilities are required to reduce impingement and entrainment to levels
established based on the use of design and construction or operational
measures;
Option 4 requires all Phase II existing facilities to reduce intake
capacity commensurate with the use of closed-cycle, recirculating
cooling water systems;
Option 5 requires that all Phase II existing facilities reduce
intake capacity commensurate with the use of dry cooling systems.
The results of EPA approach to estimating national benefits are
shown in Exhibits 29 through 32 (note that the percent reductions shown
in these exhibits are the flow-weighted average reductions across all
facilities in each waterbody category for each regulatory option).

Exhibit 29.--Impingement Benefits for Various Options--By Reduction Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percentage Reductions
Baseline -----------------------------------------------------------------------------
Waterbody Type Facility impingement OPTION 1 OPTION 2 OPTION 3 OPTION 3a OPTION 4 OPTION 5
loss percent percent percent percent percent percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary--NonGulf.................... All 78 In Scope........ $52,463 64.5 47.5 33.2 25.0 40.9 97.5
Estuary--Gulf....................... All 30 In Scope........ 4,097 63.2 45.9 26.5 30.0 45.3 96.7
Freshwater.......................... All 393 In Scope....... 40,417 47.3 47.3 47.3 46.7 59.0 98.0
Great Lake.......................... All 16 In Scope........ 31,506 80.0 80.0 80.0 77.0 88.6 96.3
Ocean............................... All 22 In Scope........ 14,830 73.2 59.0 50.6 47.2 59.7 88.8
ALL................................. All 539 In Scope....... 143,312
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 17207]]

Exhibit 30.--Impingement Benefits for Various Options--By Benefit Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline Benefits (Values in thousands of 2001$)
Waterbody type Facility impingement -----------------------------------------------------------------------------
loss OPTION 1 OPTION 2 OPTION 3 OPTION 3a OPTION 4 OPTION 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary--NonGulf.................... All 78 In Scope........ $52,463 $33,834 $24,909 $17,418 $13,125 $21,470 $51,141
Estuary--Gulf....................... All 30 In Scope........ 4,097 2,588 1,882 1,087 1,230 1,856 3,961
Freshwater.......................... All 393 In Scope....... 40,417 19,117 19,117 19,117 18,855 23,828 39,605
Great Lake.......................... All 16 In Scope........ 31,506 25,205 25,205 25,205 24,260 27,900 30,326
Ocean............................... All 22 In Scope........ 14,830 10,849 8,746 7,503 6,995 8,858 13,168
ALL................................. All 539 In Scope....... 143,312 91,593 79,858 70,329 64,465 83,911 138,201
--------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit 31.--Entrainment Benefits for Various Options--By reduction Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Entrainment percentage reductions
Baseline -----------------------------------------------------------------------------
Waterbody type Facility loss OPTION 1 OPTION 2 OPTION 3 OPTION 3a OPTION 4 OPTION 5
percent percent percent percent percent percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary--NonGulf.................... All 78 In Scope........ $876,002 67.2 59.1 48.5 47.1 79.2 97.5
Estuary--Gulf....................... All 30 In Scope........ 103,593 66.9 52.3 47.0 47.8 79.3 96.7
Freshwater.......................... All 393 In Scope....... 95,660 12.4 12.4 12.4 44.2 72.7 98.0
Great Lake.......................... All 16 In Scope........ 43,448 57.8 57.8 57.8 57.8 88.6 96.3
Ocean............................... All 22 In Scope........ 271,444 74.2 58.9 45.0 45.0 74.1 88.8
ALL................................. All 539 In Scope....... 1,390,147
--------------------------------------------------------------------------------------------------------------------------------------------------------

Exhibit 32.--Entrainment Benefits for Various Options--By Benefit Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Entrainment benefit (Values in thousands of 2001$)
Waterbody type Facility Baseline -----------------------------------------------------------------------------
loss OPTION 1 OPTION 2 OPTION 3 OPTION 4 OPTION 5 OPTION 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary--NonGulf.................... All 78 In Scope........ $876,002 $588,552 $517,960 $424,708 $412,696 $693,420 $853,940
Estuary--Gulf....................... All 30 In Scope........ 103,593 69,324 54,206 48,645 49,508 82,186 100,175
Freshwater.......................... All 393 In Scope....... 95,660 11,883 11,883 11,883 42,277 69,575 93,738
Great Lake.......................... All 16 In Scope........ 43,448 25,092 25,092 25,092 25,092 38,474 41,820
Ocean............................... All 22 In Scope........ 271,444 201,301 159,809 122,098 122,098 201,025 241,020
ALL................................. All 539 In Scope....... 1,390,147 896,152 768,950 632,426 651,671 1,084,681 1,330,694
--------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, EPA developed a more generic illustration of potential
benefits, based on a broad range (from 10 percent to 90 percent) of
potential reductions in impingement and entrainment. These illustrative
results are shown in Exhibit 33. Finally, the benefits estimated for
Option 3, the Agency's preferred option, are detailed in Exhibit 34.

Exhibit 33.--Summary of Potential Benefits Associated With Various Impingement and Entrainment Reduction Levels
----------------------------------------------------------------------------------------------------------------
Benefits (values in thousands of
2001$)
Reduction level percent -------------------------------------
Impingement Entrainment
----------------------------------------------------------------------------------------------------------------
10......................................... All 539 In Scope............. $14,331 $139,015
20......................................... All 539 In Scope............. 28,662 278,029
30......................................... All 539 In Scope............. 42,994 417,044
40......................................... All 539 In Scope............. 57,325 556,059
50......................................... All 539 In Scope............. 71,656 695,073
60......................................... All 539 In Scope............. 85,987 834,088
70......................................... All 539 In Scope............. 100,319 973,103
80......................................... All 539 In Scope............. 114,650 1,112,118
90......................................... All 539 In Scope............. 128,981 1,251,132
----------------------------------------------------------------------------------------------------------------

Exhibit 34.--Summary of Benefits From Impingement Controls Associated With Option 3
----------------------------------------------------------------------------------------------------------------
Benefits (values in thousands of
2001$)
Waterbody type Facility -------------------------------------
Impingement Entrainment
----------------------------------------------------------------------------------------------------------------
Estuary--NonGulf........................... All 78 In Scope.............. $17,418 $424,708
Estuary--Gulf.............................. All 30 In Scope.............. 1,087 48,645
Freshwater................................. All 393 In Scope............. 19,117 11,883

[[Page 17208]]

Great Lake................................. All 16 In Scope.............. 25,205 25,092
Ocean...................................... All 22 In Scope.............. 7,503 122,098
ALL........................................ All 539 In Scope............. 70,329 632,426
----------------------------------------------------------------------------------------------------------------

Under today's proposal, facilities can choose the Site-Specific
Determination of Best Technology Available in Sec. 125.94(a) in which a
facility can demonstrate to the Director that the cost of compliance
with the applicable performance standards in Sec. 125.94(b) would be
significantly greater than the costs considered by EPA when
establishing these performance standards, or the costs would be
significantly greater than the benefits of complying with these
performance standards. EPA expects that if facilities were to choose
this approach, then the overall national benefits of this rule will
decrease markedly. This is because under this approach facilities would
choose the lowest cost technologies possible and not necessarily the
most effective technologies to reduce impingement and entrainment at
the facility.

X. Administrative Requirements

A. E.O. 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The order defines a ``significant regulatory action''
as one that is likely to result in a rule that may:
Have an annual effect on the economy of $100 million or
more or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or
communities;
Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, it has been
determined that this proposed rule is a ``significant regulatory
action.'' As such, this action was submitted to OMB for review. Changes
made in response to OMB suggestions or recommendations will be
documented in the public record.

B. Paperwork Reduction Act

The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. EPA has
prepared an Information Collection Request (ICR) document (EPA ICR No.
2060.01) and you may obtain a copy from Susan Auby by mail at
Collection Strategies Division; U.S. Environmental Protection Agency
(2822); 1200 Pennsylvania Ave., NW.; Washington, DC 20007, by e-mail at
auby.susan@epamail.epa.gov, or by calling (202) 260-49011. You also can
download a copy off the Internet at http://www.epa.gov/icr. The
information collection requirements relate to existing electric
generation facilities with design intake flows of 50 million gallons
per day or more collecting information for preparing comprehensive
demonstration studies, monitoring of impingement and entrainment,
verifying compliance, and preparing yearly reports.
The total burden of the information collection requirements
associated with today's proposed rule is estimated at 4,251,240 hours.
The corresponding estimates of cost other than labor (labor and non-
labor costs are included in the total cost of the proposed rule
discussed in Section VIII of this preamble) is $191 million for 539
facilities and 44 States and one Territory for the first three years
after promulgation of the rule. Non-labor costs include activities such
as capital costs for remote monitoring devices, laboratory services,
photocopying, and the purchase of supplies. The burden and costs are
for the information collection, reporting, and recordkeeping
requirements for the three-year period beginning with the assumed
effective date of today's rule. Additional information collection
requirements will occur after this initial three-year period as
existing facilities continue to be issued permit renewals and such
requirements will be counted in a subsequent information collection
request. EPA does not consider the specific data that would be
collected under this proposed rule to be confidential business
information. However, if a respondent does consider this information to
be confidential, the respondent may request that such information be
treated as confidential. All confidential data will be handled in
accordance with 40 CFR 122.7, 40 CFR part 2, and EPA's Security Manual
Part III, Chapter 9, dated August 9, 1976.
Burden is defined as the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
Compliance with the applicable information collection requirements
imposed under this proposed rule (see Secs. 122.21(r), 125.95, 125.96,
125.97, and 125.98) is mandatory. Existing facilities would be required
to perform several data-gathering activities as part of the permit
renewal application process. Today's proposed rule would require
several distinct types of information collection as part of the NPDES
renewal application. In general, the information would be used to
identify which of the requirements in today's proposed rule apply to
the existing facility, how the existing facility would meet those
requirements, and whether the existing facility's cooling water intake
structure reflects the best technology available for minimizing
environmental impact.

[[Page 17209]]

Categories of data required by today's proposed rule follow.
Source waterbody data for determining appropriate
requirements to apply to the facility, evaluating ambient conditions,
and characterizing potential for impingement and entrainment of all
life stages of fish and shellfish by the cooling water intake
structure;
Intake structure data, consisting of intake structure
design and a facility water balance diagram, to determine appropriate
requirements and characterize potential for impingement and entrainment
of all life stages of fish and shellfish;
Information on design and construction technologies
implemented to ensure compliance with applicable requirements set forth
in today's proposed rule; and
Information on supplemental restoration measures proposed
for use with or in lieu of design and construction technologies to
minimize adverse.
In addition to the information requirements of the permit renewal
application, NPDES permits normally specify monitoring and reporting
requirements to be met by the permitted entity. Existing facilities
that fall within the scope of this proposed rule would be required to
perform biological monitoring as required by the Director to
demonstrate compliance, and visual or remote inspections of the cooling
water intake structure and any additional technologies. Additional
ambient water quality monitoring may also be required of facilities
depending on the specifications of their permits. The facility would be
expected to analyze the results from its monitoring efforts and provide
these results in an annual status report to the permitting authority.
Finally, facilities would be required to maintain records of all
submitted documents, supporting materials, and monitoring results for
at least three years. (Note that the Director may require that records
be kept for a longer period to coincide with the life of the NPDES
permit.)
All impacted facilities would carry out the specific activities
necessary to fulfill the general information collection requirements.
The estimated burden includes developing a water balance diagram that
can be used to identify the proportion of intake water used for
cooling, make-up, and process water. Facilities would also gather data
to calculate the reduction in impingement mortality and entrainment of
all life stages of fish and shellfish that would be achieved by the
technologies and operational measures they select. The burden estimates
include sampling, assessing the source waterbody, estimating the
magnitude of impingement mortality and entrainment, and reporting
results in a comprehensive demonstration study. The burden also
includes conducting a pilot study to evaluate the suitability of the
technologies and operational measures based on the species that are
found at the site.
Some of the facilities (those choosing to use restoration measures
to maintain fish and shellfish) would need to prepare a plan
documenting the restoration measures they would implement and how they
would demonstrate that the restoration measures were effective. The
burden estimates incorporate the cost of preparing calculations,
drawings, and other materials supporting the proposed restoration
measures, as well as performing monitoring to verify the effectiveness
of the restoration measures.
Some facilities may choose to request a site-specific determination
of BTA because of costs significantly greater than those EPA considered
in establishing the performance standards or because costs are
significantly greater than the benefits of complying with the
performance standards. These facilities must perform a comprehensive
cost evaluation study and/or a valuation of the monetized benefits of
reducing impingement and entrainment, as well as submitting a site-
specific technology plan characterizing the design and construction
technologies, operational measures and restoration measures they have
selected.
Exhibit 35 presents a summary of the maximum burden estimates for a
facility to prepare a permit application and monitor and report on
cooling water intake structure operations as required by this rule.

Exhibit 35.--Maximum Burden and Costs per Facility for NPDES Permit Application and Monitoring and Reporting
Activities
----------------------------------------------------------------------------------------------------------------
Other direct
Activities Burden (hr) Labor cost costs (lump
sum) a
----------------------------------------------------------------------------------------------------------------
Start-up activities.......................................... 43 $1,964 $50
Permit application activities................................ 242 9,071 500
Source water baseline biological characterization data....... 265 10,622 750
Proposal for collection of information for comprehensive 271 11,407 1,000
demonstration study b.......................................
Source waterbody flow information............................ 116 3,794 100
Design and construction technology plan...................... 146 5,260 50
Impingement mortality and entrainment characterization studyb 5,264 289,061 13,000
Evaluation of potential cooling water intake structure 2,578 144,838 500
effectsb....................................................
Information for site-specific determination of BTA........... 692 32,623 200
Site-specific technology plan................................ 177 6,963 75
Verification monitoring plan................................. 128 5,489 1,000
--------------------------------------------------
Subtotal............................................... 9,922 521,092 17,225
==================================================
Biological monitoring (impingement sampling)................. 388 20,973 650
Biological monitoring (entrainment sampling)................. 776 42,044 4,000
Visual or remote inspections c............................... 253 8,994 100
Verification study d......................................... 122 5,927 500
Yearly status report activities.............................. 324 14,906 750
--------------------------------------------------
Subtotal............................................... 1,863 92,844 $6,000
----------------------------------------------------------------------------------------------------------------
a Cost of supplies, filing cabinets, photocopying, boat renting, etc.

[[Page 17210]]

b The Impingement Mortality and Entrainment Characterization Study and Evaluation of Potential CWIS Effects also
have capital, O&M and contracted service costs associated with them.
c Remote monitoring equipment also has capital and O&M costs associated with it.
d The verification monitoring also has contracted services associated with it.

EPA believes that all 44 States and one Territory with NPDES
permitting authority will undergo start-up activities in preparation
for administering the provisions of the proposed rule. As part of these
start-up activities, States and Territories are expected to train
junior technical staff to review materials submitted by facilities, and
then use these materials to evaluate compliance with the specific
conditions of each facility's NPDES permit.
Each State's/Territory's actual burden associated with reviewing
submitted materials, writing permits, and tracking compliance depends
on the number of new in-scope facilities that will be built in the
State/Territory during the ICR approval period. EPA expects that State
and Territory technical and clerical staff will spend time gathering,
preparing, and submitting the various documents. EPA's burden estimates
reflect the general staffing and level of expertise that is typical in
States/Territories that administer the NPDES permitting program. EPA
considered the time and qualifications necessary to complete various
tasks such as reviewing submitted documents and supporting materials,
verifying data sources, planning responses, determining specific permit
requirements, writing the actual permit, and conferring with facilities
and the interested public. Exhibit 36 provides a summary of the maximum
burden estimates for States/Territories performing various activities
with the proposed rule.

Exhibit 36.--Estimating State/Territory Maximum Burden and Costs for Activities
----------------------------------------------------------------------------------------------------------------
Other direct
Activities Burden (hr) Labor cost costs (lump
sum) a
----------------------------------------------------------------------------------------------------------------
Start-up activities (per State/Territory).................... 100 $3,496 $50
State/Territory permit issuance activities (per facility).... 811 32,456 300
Verification study review (per facility)..................... 21 689 50
Review of alternative regulatory requirements (per facility). 192 6,237 50
Annual State/Territory activities (per facility)............. 50 1,662 50
--------------------------------------------------
Subtotal............................................... 1,174 44,540 500
----------------------------------------------------------------------------------------------------------------

An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information, unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.
EPA requests comments on the Agency's need for this information,
the accuracy of the provided burden estimates, and any suggested
methods for minimizing respondent burden, including through the use of
automated collection techniques. Send comments on the ICR to the
Director, Collection Strategies Division; U.S. Environmental Protection
Agency (2822); 1200 Pennsylvania Ave., NW. Washington, DC 20460; and to
the Office of Information and Regulatory Affairs; Office of Management
and Budget; 725 17th Street, NW.; Washington, DC 20503, marked
``Attention: Desk Officer for EPA.'' Include the ICR number in any
correspondence. Because OMB is required to make a decision concerning
the ICR between 30 and 60 days after April 9, 2002, a comment is best
assured of having its full effect if OMB receives it by May 9, 2002.
The final rule will respond to any OMB or public comments on the
information collection requirements contained in this proposal.

C. Unfunded Mandates Reform Act

1. UMRA Requirements
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and Tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including Tribal governments, it must have developed under
section 203 of UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with regulatory requirements.
EPA estimated total annualized (post-tax) costs of compliance for
the proposed rule to be $182 million ($2001). Of this total, $153
million is incurred by the private sector and $19.6 million is incurred
by State and local governments that operate in-scope facilities.\82\
Permitting authorities incur an additional $3.6 million to administer
the rule, including labor costs to write permits and to conduct
compliance monitoring and enforcement activities. EPA estimates that
the highest

[[Page 17211]]

undiscounted cost incurred by the private sector in any one year is
approximately $480 million in 2005. The highest undiscounted cost
incurred by government sector in any one year is approximately $42
million in 2005. Thus, EPA has determined that this rule contains a
Federal mandate that may result in expenditures of $100 million or more
for State, local, and Tribal governments, in the aggregate, or the
private sector in any one year. Accordingly, EPA has prepared a written
statement under Sec. 202 of UMRA, which is summarized below.
---------------------------------------------------------------------------

\82\ In addition, 13 facilities owned by Tennessee Valley
Authority (TVA), a federal entity, incur $9.8 million in compliance
costs. The costs incurred by the federal government are not included
in this section.
---------------------------------------------------------------------------

2. Analysis of Impacts on Government Entities
Governments may incur two types of costs as a result of the
proposed regulation: (1) Direct costs to comply with the rule for
facilities owned by government entities; and (2) administrative costs
to implement the regulation. Both types of costs are discussed below.
a. Compliance Costs for Government-Owned Facilities
Exhibit 37 below provides an estimate of the number of government
entities that operate facilities subject to the proposed rule, by
ownership type and size of government entity. The exhibit shows that 23
large government entities operate 43 facilities subject to the proposed
regulation. There are 22 small government entities that operate 22
facilities subject to regulation. No small government entity operates
more than one affected facility. Of the 65 facilities that are owned by
government entities, 48 are owned by municipalities, eight are owned by
political subdivisions, seven are owned by state governments, and two
are owned by municipal marketing authorities.

Exhibit 37.--Number of Government Entities and Government-Owned Facilities
----------------------------------------------------------------------------------------------------------------
Number of government entities (by Number of facilities (by government
size) entity size)
Ownership type -----------------------------------------------------------------------------
Large Small Total Large Small Total
----------------------------------------------------------------------------------------------------------------
Municipality...................... 16 19 35 29 19 48
Municipal marketing authority..... 0 2 2 0 2 2
State Government.................. 4 0 4 7 0 7
Political Subdivision............. 3 1 4 7 1 8
-----------------------------------------------------------------------------
Total......................... 23 22 45 43 22 65
----------------------------------------------------------------------------------------------------------------

Exhibit 38 summarizes the annualized compliance costs incurred by
State, local, and Tribal governments for the proposed rule. The exhibit
shows that the estimated annualized compliance costs for all
government-owned facilities are $19.6 million. The 43 facilities owned
by large governments would incur costs of $13.6 million; the 22
facilities owned by small governments would incur costs of $6 million.

Exhibit 38.--Number of Regulated Government-Owned Facilities and
Compliance Costs by Size of Government for Proposed Rule
------------------------------------------------------------------------
Number of Compliance
facilities costs
Size of Government subject to (million
regulation $2001)
------------------------------------------------------------------------
Facilities Owned by Large Governments......... 43 $13.6
Facilities Owned by Small Governments......... 22 6.0
All Government-Owned Facilities............... 65 19.6
------------------------------------------------------------------------

EPA's analysis also considered whether the proposed rule may
significantly or uniquely affect small governments. EPA estimates that
22 facilities subject to the proposed rule are owned by small
governments (i.e., governments with a population of less than 50,000).
The total compliance cost for all the small government-owned facilities
incurring costs under the proposed rule is $6.0 million, or
approximately $273,000 per facility. The highest annualized compliance
costs for a government-owned facility is $965,000. In comparison, all
non-government-owned facilities subject to this rule are expected to
incur annualized compliance costs of $176 million, or $330,000 per
facility. The highest annualized cost for a facility not owned by a
small government is $4.3 million. EPA therefore concludes that these
costs do not significantly or uniquely affect small governments. The
Economic and Benefits Assessment provides more detail on EPA's analysis
of impacts on governments.
b. Administrative Costs
The requirements of Section 316(b) are implemented through the
NPDES (National Pollutant Discharge Elimination System) permit program.
Forty-five states and territories currently have NPDES permitting
authority under section 402(b) of the Clean Water Act (CWA). EPA
estimates that states and territories will incur four types of costs
associated with implementing the requirements of the proposed rule: (1)
Start-up activities; (2) first permit issuance activities; (3)
repermitting activities, and (4) annual activities. EPA estimates that
the total annualized cost for these activities will be $3.6 million.
Exhibit 39 below presents the annualized costs of the major
administrative activities.

Exhibit 39.--Annualized Government Administrative Costs (million $2001)
------------------------------------------------------------------------
Activity Cost
------------------------------------------------------------------------
Start-up Activities........................................ $0.02
First Permit Issuance Activities........................... 1.61
Repermitting Activities.................................... 1.05
Annual Activities.......................................... 0.94
------------
Total...................................................... 3.62
------------------------------------------------------------------------

3. Consultation
EPA consulted with State governments and representatives of local
governments in developing the regulation. The outreach activities are
discussed in Section XI.E (E.O. 13131 addressing Federalism) of this
preamble.
4. Alternatives Considered
In addition to the proposed rule, EPA considered and analyzed
several alternative regulatory options to determine the best technology
available for minimizing adverse environmental impact. EPA selected the
proposed rule because it meets the requirement of section 316(b) of the
CWA that the location, design, construction, and capacity of CWIS
reflect the BTA for minimizing AEI, and it is economically practicable.

[[Page 17212]]

D. Regulatory Flexibility Act as Amended by SBREFA (1996)

The RFA generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
After considering the economic impacts of today's proposed rule on
small entities, the Agency certifies that this action will not have a
significant economic impact on a substantial number of small entities
for reasons explained below.
For the purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business according to
Small Business Administration (SBA) size standards; (2) a small
governmental jurisdiction that is a government of a city, county; town,
school district or special district with a population of less than
50,000; and (3) a small organization that is a not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field. The SBA thresholds define minimum employment,
sales revenue, or MWh output sizes below which an entity qualifies as
small. The thresholds used in this analysis are firm-level four-digit
Standard Industrial Classification (SIC) codes.\83\ Exhibit 40 below
presents the SBA size standards used in this analysis.
---------------------------------------------------------------------------

\83\ The North American Industry Classification System (NAICS)
replaced trhe Standard Industrial Classification (SIC) System as of
October 1, 2000. The data sources EPA used to identify the parent
entities of the facilities subject to this rule did not provide
NAICS codes at the time of analysis.

Exhibit 40.--Unique Phase II Entity Small Business Size Standards (by
Standard Industry Classification Codes (SIC)) \84\
------------------------------------------------------------------------
SBA size
SIC code SIC description standard
------------------------------------------------------------------------
1311.......................... Crude Petroleum and 500 Employees
Natural Gas.
3312.......................... Steel Works, Blast 1,000 Employees.
Furnaces (Including
Coke Ovens), and
Rolling Mills.
4911.......................... Electric Services..... 4 million MWh.
4924.......................... Natural Gas 500 Employees.
Distribution.
4931.......................... Electric and Other $5.0 Million.
Services Combined.
4932.......................... Gas and Other Services $5.0 Million.
Combined.
4939.......................... Combination Utilities, $5.0 Million.
NEC.
4953.......................... Refuse Systems........ $10.0 Million.
6512.......................... Operators of $5.0 Million.
Nonresidential
Buildings.
8711.......................... Engineering Services.. $6.0 Million.
------------------------------------------------------------------------
\84\ Information Source: U.S. Small Business Administration, Office of
Size Standards, Exhibit of Size Standards (www.sba.gov/regulations/
siccodes/siccodes.html)

EPA used publicly available data from the 1999 Forms EIA-860A and
EIA-860B as well as information from EPA's 2000 Section 316(b) Industry
Survey to identify the parent entities of electric generators subject
to this proposed rule. EPA also conducted research to identify recent
changes in ownership, including the current owner of each generator,
and each owner's primary SIC code, sales revenues, employment, and/or
electricity sales. Based on the parent entity's SIC code and the
related size standard set by the SBA, EPA identified facilities that
are owned by small entities.
Based on this analysis, EPA expects this proposed rule to regulate
only a small absolute number of facilities owned by small entities,
representing only 1.3 percent of all facilities owned by small entities
in the electric power industry. EPA has estimated that 28 in-scope
electric generators owned by small entities would be regulated by this
proposed rule. Of the 28 generators, 19 are projected to be owned by a
municipality, six by a rural electric cooperative, two by a municipal
marketing authority, and one by a political subdivision.
Only facilities with design intake flows of 50 MGD or more are
subject to this rule. In addition, only a small percentage of all small
entities in the electric power industry, 1.3 percent, is subject to
this rule. Finally, of the 28 small entities, two entities would incur
annualized post-tax compliance costs of greater than three percent of
revenues; nine would incur compliance costs of between one and three
percent of revenues; and the remaining 17 small entities would incur
compliance costs of less than one percent of revenues. The estimated
compliance costs that facilities owned by small entities would likely
incur represent between 0.12 and 5.29 percent of the entities' annual
sales revenue.
Exhibit 41 summarizes the results of Regulatory Flexibility Act
analysis. From the small absolute number of facilities owned by small
entities that would be affected by the proposed rule, the low
percentage of all small entities, and the very low impacts, EPA
concludes that the proposed rule will not have a significant economic
impact on a substantial number of small entities.

Exhibit 41.--Summary of RFA Analysis
----------------------------------------------------------------------------------------------------------------
(A) Number (D)
of in- (B) Number Percent of
scope of small (C) Total small (E) Annual compliance
Type of Entity facilities entities number of entities costs/annual sales
owned by with in- small in-scope of revenue
small scope entities rule [(B)/
entities facilities (C)]
----------------------------------------------------------------------------------------------------------------
Municipality....................... 19 19 1,110 1.7 0.4 to 5.3%

[[Page 17213]]

Municipal Marketing Authority...... 2 2 22 9.1 0.1 to 0.1%
Rural Electric Cooperative......... 6 6 877 0.7 0.2 to 0.5%
Political Subdivision.............. 1 1 104 1.0 1.2 to 1.2%
Other Types........................ 0 0 97 0.0 n/a
----------------------------------------------------------------------------
Total.......................... 28 28 2,210 1.3 0.1-5.3%
----------------------------------------------------------------------------------------------------------------

The Economic and Benefits Analysis for the Proposed Section 316(b)
Phase II Existing Facilities Rule presents more detail on EPA's small
entity analysis in support of this proposed rule.

E. E.O. 12898: Federal Actions To Address Environmental Justice in
Minority Populations and Low-Income Populations

Executive Order 12898 requires that, to the greatest extent
practicable and permitted by law, each Federal agency must make
achieving environmental justice part of its mission. E.O. 12898
provides that each Federal agency must conduct its programs, policies,
and activities that substantially affect human health or the
environment in a manner that ensures such programs, policies, and
activities do not have the effect of excluding persons (including
populations) from participation in, denying persons (including
populations) the benefits of, or subjecting persons (including
populations) to discrimination under such programs, policies, and
activities because of their race, color, or national origin.
Today's final rule would require that the location, design,
construction, and capacity of cooling water intake structures (CWIS) at
Phase II existing facilities reflect the best technology available for
minimizing adverse environmental impact. For several reasons, EPA does
not expect that this final rule would have an exclusionary effect, deny
persons the benefits of the participating in a program, or subject
persons to discrimination because of their race, color, or national
origin.
To assess the impact of the rule on low-income and minority
populations, EPA calculated the poverty rate and the percentage of the
population classified as non-white for populations living within a 50-
mile radius of each of the 539 in-scope facilities. The results of the
analysis, presented in the EBA, show that the populations affected by
the in-scope facilities have poverty levels and racial compositions
that are quite similar to the U.S. population as a whole. A relatively
small subset of the facilities are located near populations with
poverty rates (24 of 539, or 4.5%), or non-white populations (101 of
539, or 18.7%), or both (13 of 539, or 2.4%), that are significantly
higher than national levels. Based on these results, EPA does not
believe that this rule will have an exclusionary effect, deny persons
the benefits of the NPDES program, or subject persons to discrimination
because of their race, color, or national origin.
In fact because EPA expects that this final rule would help to
preserve the health of aquatic ecosystems located in reasonable
proximity to Phase II existing facilities, it believes that all
populations, including minority and low-income populations, would
benefit from improved environmental conditions as a result of this
rule. Under current conditions, EPA estimates approximately 2.2 billion
fish (expressed as age 1 equivalents) of recreational and commercial
species are lost annually due to impingement and entrainment at the 529
in scope Phase II existing facilities. Under the Agency's preferred
option, over 1.2 billion individuals of these commercially and
recreationally sought fish species (age 1 equivalents) will now survive
to join the fishery each year (435 million fish due to reduced
impingement impacts, and 789 million fish due to reduced entrainment).
These additional 1.2 billion fish will provide increased opportunities
for subsistence anglers to increase their catch, thereby providing some
benefit to low income households located near regulation-impacted
waters.

F. E.O. 13045: Protection of Children From Environmental Health Risks
and Safety Risks

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any
rule that (1) is determined to be ``economically significant'' as
defined under Executive Order 12866, and (2) concerns an environmental
health or safety risk that EPA has reason to believe might have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health and
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency. This
proposed rule is an economically significant rule as defined under
Executive Order 12866. However, it does not concern an environmental
health or safety risk that would have a disproportionate effect on
children. Therefore, it is not subject to Executive Order 13045.

G. E.O. 13175: Consultation and Coordination With Indian Tribal
Governments

Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' ``Policies that have tribal
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on one or more Indian Tribes, on
the relationship between the Federal government and the Indian Tribes,
or on the distribution of power and responsibilities between the
Federal government and Indian Tribes.''
This proposed rule does not have tribal implications. It will not
have substantial direct effects on tribal governments, on the
relationship between the Federal government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
government and Indian Tribes,

[[Page 17214]]

as specified in Executive Order 13175. EPA's analyses show that no
facility subject to this proposed rule is owned by tribal governments.
This proposed rule does not affect Tribes in any way in the foreseeable
future. Accordingly, the requirements of Executive Order 13175 do not
apply to this rule.

H. E.O. 13158: Marine Protected Areas

Executive Order 13158 (65 FR 34909, May 31, 2000) requires EPA to
``expeditiously propose new science-based regulations, as necessary, to
ensure appropriate levels of protection for the marine environment.''
EPA may take action to enhance or expand protection of existing marine
protected areas and to establish or recommend, as appropriate, new
marine protected areas. The purpose of the Executive Order is to
protect the significant natural and cultural resources within the
marine environment, which means ``those areas of coastal and ocean
waters, the Great Lakes and their connecting waters, and submerged
lands thereunder, over which the United States exercises jurisdiction,
consistent with international law.''
This proposed rule recognizes the biological sensitivity of tidal
rivers, estuaries, oceans, and the Great Lakes and their susceptibility
to adverse environmental impact from cooling water intake structures.
This proposal provides the most stringent requirements to minimize
adverse environmental impact for cooling water intake structures
located on these types of water bodies, including potential reduction
of intake flows to a level commensurate with that which can be attained
by a closed-cycle recirculating cooling system for facilities that
withdraw certain proportions of water from estuaries, tidal rivers, and
oceans.
EPA expects that this proposed rule will reduce impingement and
entrainment at facilities with design intake flows of 50 MGD or more.
The rule would afford protection of aquatic organisms at individual,
population, community, or ecosystem levels of ecological structures.
Therefore, EPA expects today's proposed rule would advance the
objective of the Executive Order to protect marine areas.

I. E.O. 13211: Energy Effects

Executive Order 13211 on ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' requires EPA
to prepare a Statement of Energy Effects when undertaking regulatory
actions identified as ``significant energy actions.'' For the purposes
of Executive Order 13211, ``significant energy action'' means (66 FR
28355; May 22, 2001):

any action by an agency (normally published in the Federal Register)
that promulgates or is expected to lead to the promulgation of a
final rule or regulation, including notices of inquiry, advance
notices of proposed rulemaking, and notices of proposed rulemaking:
(1)(i) That is a significant regulatory action under Executive
Order 12866 or any successor order, and
(ii) Is likely to have a significant adverse effect on the
supply, distribution, or use of energy; or
(2) That is designated by the Administrator of the Office of
Information and Regulatory Affairs as a significant energy action.

For those regulatory actions identified as ``significant energy
actions,'' a Statement of Energy Effects must include a detailed
statement relating to (1) any adverse effects on energy supply,
distribution, or use (including a shortfall in supply, price increases,
and increased use of foreign supplies), and (2) reasonable alternatives
to the action with adverse energy effects and the expected effects of
such alternatives on energy supply, distribution, and use.
This proposed rule does not qualify as a ``significant energy
action'' as defined in Executive Order 13211 because it is not likely
to have a significant adverse effect on the supply, distribution, or
use of energy. The proposed rule does not contain any compliance
requirements that would directly reduce the installed capacity or the
electricity production of U.S. electric power generators, for example
through parasitic losses or auxiliary power requirements. In addition,
based on the estimated costs of compliance, EPA currently projects that
the rule will not lead to any early capacity retirements at facilities
subject to this rule or at facilities that compete with them. As
described in detail in Section VIII, EPA estimates small effects of
this rule on installed capacity, generation, production costs, and
electricity prices. EPA's therefore concludes that this proposed rule
will have small energy effects at a national, regional, and facility-
level. As a result, EPA did not prepare a Statement of Energy Effects.
EPA recognizes that some of the alternative regulatory options
discussed in the preamble would have much larger effects and might well
quality as ``significant energy actions'' under Executive Order 13211.
If EPA decides to revise the proposed requirements for the final rule,
it will reconsider its determination under Executive Order 13211 and
prepare a Statement of Energy Effects as appropriate.
For more detail on the potential energy effects of this proposed
rule or the alternative regulatory options considered by EPA, see
Section VIII above or the Economic and Benefits Analysis for the
Proposed Section 316(b) Phase II Existing Facilities Rule.

J. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) of 1995, Pub. L. 104-113, Sec. 12(d) directs EPA to use
voluntary consensus standards in its regulatory activities unless to do
so would be inconsistent with applicable law or otherwise impractical.
Voluntary consensus standards are technical standards (e.g., materials
specifications, test methods, sampling procedures, and business
practices) that are developed or adopted by voluntary consensus
standard bodies. The NTTAA directs EPA to provide Congress, through the
Office of Management and Budget (OMB), explanations when the Agency
decides not to use available and applicable voluntary consensus
standards.
This proposed rule does not involve such technical standards.
Therefore, EPA is not considering the use of any voluntary consensus
standards. EPA welcomes comments on this aspect of the proposed rule
and, specifically, invites the public to identify potentially
applicable voluntary consensus standards and to explain why such
standards should be used in this proposed rule.

K. Plain Language Directive

Executive Order 12866 and the President's memorandum of June 1,
1998, require each agency to write all rules in plain language. We
invite your comments on how to make this proposed rule easier to
understand. For example: Have we organized the material to suit your
needs? Are the requirements in the rule clearly stated? Does the rule
contain technical language or jargon that is not clear? Would a
different format (grouping and order of sections, use of headings,
paragraphing) make the rule easier to understand? Would more (but
shorter) sections be better? Could we improve clarity by adding tables,
lists, or diagrams? What else could we do to make the rule easier to
understand?

L. Executive Order 13132: Federalism

Executive Order 13132 (64 FR 43255, August 10, 1999) requires EPA
to develop an accountable process to ensure ``meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. Policies

[[Page 17215]]

that have federalism implications'' are defined in the Executive Order
to include regulations that have ``substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government.''
Under section 6 of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute unless the
Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments or EPA
consults with State and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law, unless
the Agency consults with State and local officials early in the process
of developing the proposed regulation.
This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. Rather, this proposed rule would
result in minimal administrative costs on States that have an
authorized NPDES program. EPA expects an annual burden of 146,983 hours
with an annual cost of $41,200 (non-labor costs) for States to
collectively administer this proposed rule. EPA has identified 65 Phase
II existing facilities that are owned by federal, state or local
government entities. The annual impacts on these facilities is not
expected to exceed 2,252 burden hours and $56,739 (non-labor costs) per
facility.
The proposed national cooling water intake structure requirements
would be implemented through permits issued under the NPDES program.
Forty-three States and the Virgin Islands are currently authorized
pursuant to section 402(b) of the CWA to implement the NPDES program.
In States not authorized to implement the NPDES program, EPA issues
NPDES permits. Under the CWA, States are not required to become
authorized to administer the NPDES program. Rather, such authorization
is available to States if they operate their programs in a manner
consistent with section 402(b) and applicable regulations. Generally,
these provisions require that State NPDES programs include requirements
that are as stringent as Federal program requirements. States retain
the ability to implement requirements that are broader in scope or more
stringent than Federal requirements. (See section 510 of the CWA.)
Today's proposed rule would not have substantial direct effects on
either authorized or nonauthorized States or on local governments
because it would not change how EPA and the States and local
governments interact or their respective authority or responsibilities
for implementing the NPDES program. Today's proposed rule establishes
national requirements for Phase II existing facilities with cooling
water intake structures. NPDES-authorized States that currently do not
comply with the final regulations based on today's proposal might need
to amend their regulations or statutes to ensure that their NPDES
programs are consistent with Federal section 316(b) requirements. See
40 CFR 123.62(e). For purposes of this proposed rule, the relationship
and distribution of power and responsibilities between the Federal
government and the States and local governments are established under
the CWA (e.g., sections 402(b) and 510); nothing in this proposed rule
would alter that. Thus, the requirements of section 6 of the Executive
Order do not apply to this rule.
Although section 6 of Executive Order 13132 does not apply to this
rule, EPA did consult with State governments and representatives of
local governments in developing the proposed rule. During the
development of the proposed section 316(b) rule for new facilities, EPA
conducted several outreach activities through which State and local
officials were informed about this proposal and they provided
information and comments to the Agency. The outreach activities were
intended to provide EPA with feedback on issues such as adverse
environmental impact, BTA, and the potential cost associated with
various regulatory alternatives.
EPA has made presentations on the section 316(b) rulemaking effort
in general at eleven professional and industry association meetings.
EPA also conducted two public meetings in June and September of 1998 to
discuss issues related to the section 316(b) rulemaking effort. 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.
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 meetings with
environmental groups attended by representatives from between 3 and 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. EPA also met with OMB and utility representatives and
other federal agencies (the Department of Energy, the Small Business
Administration, the Tennessee Valley Authority, the National Oceanic
and Atmospheric Administration's National Marine Fisheries Service and
the Department of Interior's U.S. Fish and Wildlife Service). After
publication of the proposed Phase I rule, EPA continued to meet with
stakeholders at their request.
EPA received more than 2000 comments on the Phase I proposed rule
and NODA. In some cases these comments have informed the development of
the Phase II rule proposal.
In January, 2001, EPA also attended technical workshops organized
by the Electric Power Research Institute and the Utilities Water Action
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). 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.

[[Page 17216]]

Finally, 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 for
section 316(b) of the CWA.
In the spirit of this Executive Order and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed rule
from State and local officials.
BILLING CODE 6560-50-P

[[Page 17217]]

[GRAPHIC]
[TIFF OMITTED]
TP09AP02.000

BILLING CODE 6560-50-C

[[Page 17218]]

List of Subjects

40 CFR Part 9

Reporting and recordkeeping requirements.

40 CFR Part 122

Administrative practice and procedure, Confidential business
information, Hazardous substances, Reporting and recordkeeping
requirements, Water pollution control.

40 CFR Part 123

Administrative practice and procedure, Confidential business
information, Hazardous substances, Indian-lands, Intergovernmental
relations, Penalties, Reporting and recordkeeping requirements, Water
pollution control.

40 CFR Part 124

Administrative practice and procedure, Air pollution control,
Hazardous waste, Indians-lands, Reporting and recordkeeping
requirements, Water pollution control, Water supply.

40 CFR Part 125

Cooling Water Intake Structure, Reporting and recordkeeping
requirements, Waste treatment and disposal, Water pollution control.

Dated: February 28, 2002.
Christine Todd Whitman,
Administrator.
For the reasons set forth in the preamble, chapter I of title 40 of
the Code of Federal Regulations is amended as follows:

PART 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

1. The authority citation for part 9 continues to read as follows:

Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003,
2005, 2006, 2601-2671, 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330,
1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR,
1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g,
300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2,
300j-3, 300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542,
9601-9657, 11023, 11048.

2. In Sec. 9.1 the table is amended by revising the entry for
``122.21(r)'' and by adding entries in numerical order under the
indicated heading to read as follows:

Sec. 9.1 OMB approvals under the Paper Work Reduction Act.

* * * * *

------------------------------------------------------------------------
40 CFR citation OMB control No.
------------------------------------------------------------------------

* * * *
* * *
------------------------------------------------------------------------
EPA Administered Permit Programs: The National Pollutant Discharge
Elimination System
------------------------------------------------------------------------

* * * *
* * *
122.21(r)...................... 2040-0241, xxxxx-xxxxx

* * * *
* * *
------------------------------------------------------------------------
Criteria and Standards for the National Pollutant Discharge Elimination
System
------------------------------------------------------------------------

* * * *
* * *
125.95......................... xxxx-xxxx
125.96......................... xxxx-xxxx
125.97......................... xxxx-xxxx
125.98......................... xxxx-xxxx

* * * *
* * *
------------------------------------------------------------------------

PART 122--EPA ADMINISTERED PERMIT PROGRAMS: THE NATIONAL POLLUTANT
DISCHARGE ELIMINATION SYSTEM

1. The authority citation for part 122 continues to read as
follows:

Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.

2. Section Sec. 122.21 by revising paragraph (r) to read as
follows:

Sec. 122.21 Application for a permit (applicable to State programs,
see Sec. 123.25)

* * * * *
(r) Applications for facilities with cooling water intake
structures--(1)(i) New facilities with new or modified cooling water
intake structures. New facilities with cooling water intake structures
as defined in part 125, subpart I of this chapter must report the
information required under paragraphs (r)(2), (3), and (4) of this
section and Sec. 125.86 of this chapter. Requests for alternative
requirements under Sec. 125.85 of this chapter must be submitted with
your permit application.
(ii) Phase II existing facilities. Phase II existing facilities as
defined in part 125, subpart J of this chapter must report the
information required under paragraphs (r)(2), (3), and (5) of this
section and Sec. 125.95 of this chapter. Requests for site-specific
determination of best technology available for minimizing adverse
environmental impact under Sec. 125.94(c) of this chapter must be
submitted with your permit application.
(2) Source Water Physical Data including:
(i) A narrative description and scaled drawings showing the
physical configuration of all source water bodies used by your
facility, including areal dimensions, depths, salinity and temperature
regimes, and other documentation that supports your determination of
the water body type where each cooling water intake structure is
located;
(ii) Identification and characterization of the source waterbody's
hydrological and geomorphological features, as well as the methods you
used to conduct any physical studies to determine your intake's area of
influence within the waterbody and the results of such studies; and

[[Page 17219]]

(iii) Locational maps.
(3) Cooling Water Intake Structure Data including:
(i) A narrative description of the configuration of each of your
cooling water intake structures and where it is located in the water
body and in the water column;
(ii) Latitude and longitude in degrees, minutes, and seconds for
each of your cooling water intake structures;
(iii) A narrative description of the operation of each of your
cooling water intake structures, including design intake flows, daily
hours of operation, number of days of the year in operation and
seasonal changes, if applicable;
(iv) A flow distribution and water balance diagram that includes
all sources of water to the facility, recirculating flows, and
discharges; and
(v) Engineering drawings of the cooling water intake structure.
(4) Source Water Baseline Biological Characterization Data. This
information is required to characterize the biological community in the
vicinity of the cooling water intake structure and to characterize the
operation of the cooling water intake structures. The Director may also
use this information in subsequent permit renewal proceedings to
determine if your Design and Construction Technology Plan as required
in Sec. 125.86(b)(4) should be revised. This supporting information
must include existing data (if they are available). However, you may
supplement the data using newly conducted field studies if you choose
to do so. The information you submit must include:
(i) A list of the data in paragraphs (r)(4)(ii) through (vi) of
this section that are not available and efforts made to identify
sources of the data;
(ii) A list of species (or relevant taxa) for all life stages and
their relative abundance in the vicinity of the cooling water intake
structure;
(iii) Identification of the species and life stages that would be
most susceptible to impingement and entrainment. Species evaluated
should include the forage base as well as those most important in terms
of significance to commercial and recreational fisheries;
(iv) Identification and evaluation of the primary period of
reproduction, larval recruitment, and period of peak abundance for
relevant taxa;
(v) Data representative of the seasonal and daily activities (e.g.,
feeding and water column migration) of biological organisms in the
vicinity of the cooling water intake structure;
(vi) Identification of all threatened, endangered, and other
protected species that might be susceptible to impingement and
entrainment at your cooling water intake structures;
(vii) Documentation of any public participation or consultation
with Federal or State agencies undertaken in development of the plan;
and
(viii) If you supplement the information requested in paragraph
(r)(4)(i) of this section with data collected using field studies,
supporting documentation for the Source Water Baseline Biological
Characterization must include a description of all methods and quality
assurance procedures for sampling, and data analysis including a
description of the study area; taxonomic identification of sampled and
evaluated biological assemblages (including all life stages of fish and
shellfish); and sampling and data analysis methods.
The sampling and/or data analysis methods you use must be
appropriate for a quantitative survey and based on consideration of
methods used in other biological studies performed within the same
source water body. The study area should include, at a minimum, the
area of influence of the cooling water intake structure.
(5) Phase II Existing Facility Cooling Water System Data. Phase II
existing facilities, as defined in part 125, subpart J of this chapter,
must provide the following information:
(i) A narrative description of the operation of each of your
cooling water systems, relationship to cooling water intake structures,
proportion of the design intake flow that is used in the system, number
of days of the year in operation and seasonal changes, if applicable;
(ii) Engineering calculations and supporting data to support the
description required by paragraph (r)(5)(i) of this section.
3. Section 122.44 is amended by revising paragraph (b)(3) to read
as follows:

Sec. 122.44 Establishing limitations, standards, and other permit
conditions (applicable to State NPDES programs, see Sec. 123.25).

* * * * *
(b) * * *
(3) Requirements applicable to cooling water intake structures
under section 316(b) of the CWA, in accordance with part 125, subparts
I and J of this chapter.
* * * * *

PART 123--STATE PROGRAM REQUIREMENTS

1. The authority citation for part 123 continues to read as
follows:

Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.

2. Section 123.25 is amended by revising paragraph (a)(4) (a) and
(36) to read as follows:

Sec. 123.25 Requirements for permitting.

(a) * * *
(4) Sec. 122.21 (a) (b), (c)(2), (e) (k), (m) (p), and (r)--
(Application for a permit);
* * * * *
(36) Subparts A, B, D, H, I, and J of part 125 of this chapter;
* * * * *

PART 124--PROCEDURES FOR DECISIONMAKING

1. The authority citation for part 124 continues to read as
follows:

Authority: Resource Conservation and Recovery Act, 42 U.S.C.
6901 et seq.; Safe Drinking Water Act, 42 U.S.C. 300f et.seq; Clean
Water Act, 33 U.S.C. 1251 et seq.; Clean Air Act, 42 U.S.C. 7401 et
seq.

2. Section 124.10 is amended by revising paragraph (d)(1)(ix) to
read as follows:

Sec. 124.10 Public notice of permit actions and public comment period.

* * * * *
(d) * * *
(1) * * *
(ix) Requirements applicable to cooling water intake structures
under section 316(b) of the CWA, in accordance with part 125, subparts
I and J of this chapter.
* * * * *

PART 125--CRITERIA AND STANDARDS FOR THE NATIONAL POLLUTANT
DISCHARGE ELIMINATION SYSTEM

1. The authority citation for part 125 continues to read as
follows:

Authority: Clean Water Act, 33 U.S.C. 1251 et seq.; unless
otherwise noted.

2. Section 125.83 is amended by revising the definition of cooling
water as follows:

Sec. 125.83 What special definitions apply to this subpart?

* * * * *
Cooling water means water used for contact or noncontact cooling,
including water used for equipment cooling, evaporative cooling tower
makeup, and dilution of effluent heat content. The intended use of the
cooling water is to absorb waste heat rejected from the process or
processes used, or from auxiliary operations on the facility's
premises. Cooling water that is used in a manufacturing process either
before or

[[Page 17220]]

after it is used for cooling is considered process water for the
purposes of calculating the percentage of a new facility's intake flow
that is used for cooling purposes in Secs. 125.81(c) and 125.91(c).
* * * * *
3. Add subpart J to part 125 to read as follows:
Subpart J--Requirements Applicable to Cooling Water Intake Structures
for ``Phase II Existing Facilities'' Under Section 316(b) of the Act
Sec.
125.90 What are the purpose and scope of this subpart?
125.91 What is a Phase II existing facility subject to this
subpart?
125.92 When must I comply with this subpart?
125.93 What special definitions apply to this subpart?
125.94 How will requirements reflecting best technology available
for minimizing adverse environmental impact be established for my
Phase II existing facility?
125.95 As an owner or operator of a Phase II existing facility,
what must I collect and submit when I apply for my reissued NPDES
permit?
125.96 As an owner or operator of a Phase II existing facility,
what monitoring must I perform?
125.97 As an owner or operator of a Phase II existing facility,
what records must I keep and what information must I report?
125.98 As the Director, what must I do to comply with the
requirements of this subpart?

Subpart J--Requirements Applicable to Cooling Water Intake
Structures for ``Phase II Existing Facilities'' Under Section
316(b) of the Act

Sec. 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 are subject to this subpart
(Phase II existing facilities). The purpose of these requirements is to
establish the best technology available for minimizing adverse
environmental impact associated with the use of cooling water intake
structures. These requirements are implemented through National
Pollutant Discharge Elimination System (NPDES) permits issued under
section 402 of the Clean Water Act (CWA).
(b) This subpart implements section 316(b) of the CWA for Phase II
existing facilities. Section 316(b) of the CWA provides that any
standard established pursuant to sections 301 or 306 of the CWA and
applicable to a point source shall require that the location, design,
construction, and capacity of cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact.
(c) Existing facilities that are not subject to this subpart must
meet requirements under section 316(b) of the CWA determined by the
Director on a case-by-case, best professional judgment (BPJ) basis.
(d) Notwithstanding any other provision 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
Sec. 125.94, the Administrator shall approve such alternative
regulatory requirements.
(e) Nothing in this subpart shall be construed to preclude or deny
the right of any State or political subdivision of a State or any
interstate agency under section 510 of the CWA to adopt or enforce any
requirement with respect to control or abatement of pollution that is
not less stringent than those required by Federal law.

Sec. 125.91 What is a ``Phase II Existing Facility'' subject to this
subpart?

(a) This subpart applies to an existing facility, as defined in
Sec. 125.93, if it:
(1) Is a point source that uses or proposes to use a cooling water
intake structure;
(2) Both generates and transmits electric power, or generates
electric power but sells it to another entity for transmission;
(3) 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
(4) Has a design intake flow of 50 million gallons per day (MGD) or
more. Facilities that meet these criteria are referred to as ``Phase II
existing facilities.''
(b) In the case of a cogeneration facility that shares a cooling
water intake structure with another existing facility, only that
portion of the cooling water intake flow that is used in the
cogeneration process shall be considered for purposes of determining
whether the 50 MGD and 25 percent criteria in paragraphs (a)(3) and (4)
of this section are met.
(c) 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.
(d) Whether or not 25 percent of water withdrawn is used for
cooling purposes must be measured on an average monthly basis. The 25
percent threshold is met if any monthly average of cooling water over
any 12 month period is 25 percent or more of the total water withdrawn.

Sec. 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.

Sec. 125.93 What special definitions apply to this subpart?

The definitions in Subpart I of Part 125, except the definitions of
cooling water and existing facility, apply to this subpart. The
following definitions also apply to this subpart:
Administrator means the same as defined in 40 CFR 122.2.
All life stages means eggs, larvae, juveniles, and adults.
Calculation baseline means an estimate of impingement mortality and
entrainment that would occur at your site assuming you had a shoreline
cooling water intake structure with an intake capacity commensurate
with a once-through cooling water system and with no impingement and/or
entrainment reduction controls.
Capacity utilization rate means the ratio between the average
annual net generation of the facility (in MWh) and the total net
capability of the facility (in MW) multiplied by the number of
available hours during a year. The average annual generation must be
measured over a five year period (if available) of representative
operating conditions.
Cogeneration facility means a facility that operates equipment used
to produce, from the same fuel source: electric energy used for
industrial, commercial, and/or institutional purposes at one or more
host facilities and/or for sale to another entity for transmission; and
forms of useful thermal energy (such as heat or steam), used for
industrial commercial,

[[Continued on page 17221]]

Notices For
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994

National Pollutant Discharge Elimination System--Proposed Regulations to Establish Requirements for Cooling Water Intake Structures at Phase II Existing Facilities [[pp. 17171-17220]]

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