Effluent Limitations Guidelines and New Source Performance Standards for the Meat and Poultry Products Point Source Category; Notice of Data Availability

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

[Federal Register: August 13, 2003 (Volume 68, Number 156)]
[Proposed Rules]
[Page 48471-48513]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13au03-23]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 432
[FRL-7543-2]
RIN 2040-AD56

Effluent Limitations Guidelines and New Source Performance
Standards for the Meat and Poultry Products Point Source Category;
Notice of Data Availability

AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of data availability.

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SUMMARY: On February 25, 2002 (67 FR 8582), EPA published a proposal to
establish technology-based effluent limitations guidelines and
standards for the meat and poultry products (MPP) point source category
(formerly the meat product point source category). The proposal would
apply to approximately 300 facilities that have wastewater discharges
directly to surface waters from the operation of new and existing meat
processing, poultry processing and independent rendering facilities.
EPA developed the proposal to address changes in the meat processing
industry over the last 30 years, and to include measures that reduce
pollution from nutrients. Also, the proposal would establish national
regulations for the poultry processing industry for the first time.
In the proposal, EPA specifically solicited comment on 20 issues.
EPA received comments on these and other issues from various
stakeholders, including State and local regulatory authorities,
environmental groups, individual industrial facilities and industry
groups, and private citizens. This notice of data availability presents
a summary of data received in comments since the proposal and
additional data collected by EPA and describes how these data may be
used by EPA in developing final regulations.
EPA is evaluating how the comments and new data may change certain
aspects of the regulatory analysis presented at proposal and how this
information might affect the regulatory options considered for the
proposal. This includes an evaluation of the underlying data and
methodology used to estimate the costs, pollutant load reductions, and
financial impacts associated with the proposed regulation in light of
the comments and new information. This document describes EPA's current
thinking on these subjects and presents information on how the new data
and information received since proposal could affect the proposed
limitations and standards. Today, EPA is making these data and new
information available for public review and comment. The new data and
analyses on non-small red meat and poultry slaughterhouses (the largest
industry subcategories) are summarized and discussed in this notice.
Due to time constraints in preparing the NODA the new costs and
loadings for processing-only red meat and poultry facilities,
independent rendering facilities, and small facilities are not
presented in this document, but this information will be available in
the public docket for public review at the time of the NODA
publication. EPA solicits public comment on the issues and information
presented in this notice of data availability and in the public docket
supporting this document.
This document also serves to clarify the distinction between an MPP
facility and a CAFO, and specifically discusses the possible changes to
the MPP rule as a result of the clarification.

DATES: You must submit comments by September 29, 2003.

ADDRESSES: Public comments regarding this document should be mailed to
Water Docket, Environmental Protection Agency, Mailcode 4101T, 1200
Pennsylvania Avenue, NW., Washington, DC 20460, Attention Docket ID No.
OW-2002-0014, or submitted electronically at http://www.epa.gov/edocket.
For additional information on how to submit comments see section B,
``SUPPLEMENTARY INFORMATION, How and To Whom Do I Submit Comments?''

FOR FURTHER INFORMATION CONTACT: For additional information, contact
Ms. Samantha Lewis at (202) 566-1058 or at the following e-mail
address: lewis.samantha@epa.gov or Ms. Shari Barash at (202) 566-0996
or at the following e-mail address: barash.shari@epa.gov.

SUPPLEMENTARY INFORMATION:

A. Regulated Entities

Entities potentially regulated by this action include:

----------------------------------------------------------------------------------------------------------------
Category Examples of regulated entities Primary SIC and NAICS codes
----------------------------------------------------------------------------------------------------------------
Industry................................. Facilities engaged in first ..................................
processing, further processing,
or rendering of meat and poultry
products, which may include the
following sectors:
Meat Packing Plant............ 2011 (SIC)
Animal (except Poultry) 311611 (NAICS)
Slaughtering.
Meat Processed from Carcasses. 311612 (NAICS)
Sausages and Other Prepared 2013 (SIC)
Meat Products.
Poultry Slaughtering and 2015 (SIC)
Processing.
Poultry Processing............ 311615 (NAICS)
Rendering and Meat By-Product 311613 (NAICS)
Processing.
Support Activities for Animal 11521 (NAICS)
Production.
Prepared Feed and Feed 2048 (SIC)
Ingredients for Animals and
Fowls, Except Dogs and Cats.
Dog and Cat Food.............. 2047 (SIC)
Dog and Cat Food Manufacturing 311111 (NAICS)
Other Animal Food 311119 (NAICS)
Manufacturing.
All Other Miscellaneous Food 311999 (NAICS)
Manufacturing.
Animal and Marine Fats and 2077 (SIC)
Oils.
Poultry Hatcheries............ 11234 (NAICS)
Livestock Services, Except 0751 (SIC)
Veterinary.
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The preceding table is not intended to be exhaustive, but rather
provides a guide for readers regarding entities likely to be regulated
by the proposed rule. This table lists the types of entities that EPA
is now aware could potentially be regulated by promulgation of the
proposed rule. Other types of entities not listed in the table could
also be regulated. To determine whether your facility would be
regulated by promulgation of the proposed rule, you

[[Page 48473]]

should carefully examine the applicability subsection of each proposed
subpart of part 432. You should also examine the description of the
proposed scope of each subpart in section VI.B of the proposed rule. If
you have questions regarding the applicability of this proposed rule to
a particular entity, please contact the person listed for technical
information in the preceding FOR FURTHER INFORMATION CONTACT section.

B. How Can I Get Copies of This Document and Other Related Information?

1. Docket. EPA has established an official public docket for this
action under Docket ID No. OW-2002-0014. The official public docket
consists of the documents specifically referenced in this action, any
public comments received, and other information related to this action.
The official public docket is the collection of materials that is
available for public viewing at the Water Docket in the EPA Docket
Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Ave., NW.,
Washington, DC. The EPA Docket Center Public Reading Room is open from
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the Water Docket is (202) 566-
2426. For access to docket materials, please call ahead to schedule an
appointment. Every user is entitled to copy 266 pages per day before
incurring a charge. The Docket may charge 15 cents a page for each page
over the page limit plus an administrative fee of $25.
2. Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr/.
An electronic version of the public docket is available through
EPA's electronic public docket and comment system, EPA Dockets. You may
use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public
comments, access the index listing of the contents of the official
public docket, and to access those documents in the public docket that
are available electronically. Once in the system, select ``search,''
then key in the appropriate docket identification number.
Certain types of information will not be placed in the EPA Dockets.
Information claimed as confidential business information (CBI) and
other information whose disclosure is restricted by statute, which is
not included in the official public docket, will not be available for
public viewing in EPA's electronic public docket. EPA's policy is that
copyrighted material will not be placed in EPA's electronic public
docket but will be available only in printed, paper form in the
official public docket. To the extent feasible, publicly available
docket materials will be made available in EPA's electronic public
docket. When a document is selected from the index list in EPA Dockets,
the system will identify whether the document is available for viewing
in EPA's electronic public docket. Although not all docket materials
may be available electronically, you may still access any of the
publicly available docket materials through the docket facility
identified in section B.1. EPA intends to work towards providing
electronic access to all of the publicly available docket materials
through EPA's electronic public docket.
For public commenters, it is important to note that EPA's policy is
that public comments, whether submitted electronically or in paper,
will be made available for public viewing in EPA's electronic public
docket as EPA receives them and without change, unless the comment
contains copyrighted material, CBI, or other information whose
disclosure is restricted by statute. When EPA identifies a comment
containing copyrighted material, EPA will provide a reference to that
material in the version of the comment that is placed in EPA's
electronic public docket. The entire printed comment, including the
copyrighted material, will be available in the public docket.
Public comments submitted on computer disks that are mailed or
delivered to the docket will be transferred to EPA's electronic public
docket. Public comments that are mailed or delivered to the Docket will
be scanned and placed in EPA's electronic public docket. Where
practical, physical objects will be photographed, and the photograph
will be placed in EPA's electronic public docket along with a brief
description written by the docket staff.
For additional information about EPA's electronic public docket
visit EPA Dockets online or see 67 FR 38102, May 31, 2002.

C. How and To Whom Do I Submit Comments?

You may submit comments electronically, by mail, or through hand
delivery/courier. To ensure proper receipt by EPA, identify the
appropriate docket identification number in the subject line on the
first page of your comment. Please ensure that your comments are
submitted within the specified comment period. Comments received after
the close of the comment period will be marked ``late.'' EPA is not
required to consider these late comments. If you wish to submit CBI or
information that is otherwise protected by statute, please follow the
instructions in section D. Do not use EPA Dockets or e-mail to submit
CBI or information protected by statute.
1. Electronically. If you submit an electronic comment as
prescribed below, EPA recommends that you include your name, mailing
address, and an e-mail address or other contact information in the body
of your comment. Also include this contact information on the outside
of any disk or CD-ROM you submit, and in any cover letter accompanying
the disk or CD-ROM. This ensures that you can be identified as the
submitter of the comment and allows EPA to contact you in case EPA
cannot read your comment due to technical difficulties or needs further
information on the substance of your comment. EPA's policy is that EPA
will not edit your comment, and any identifying or contact information
provided in the body of a comment will be included as part of the
comment that is placed in the official public docket, and made
available in EPA's electronic public docket. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment.
i. EPA Dockets. Your use of EPA's electronic public docket to
submit comments to EPA electronically is EPA's preferred method for
receiving comments. Go directly to EPA Dockets at http://www.epa.gov/
edocket, and follow the online instructions for submitting comments.
To access EPA's electronic public docket from the EPA Internet Home Page,
select ``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once
in the system, select ``search,'' and then key in Docket ID No. OW-
2002-0014. The system is an ``anonymous access'' system, which means
EPA will not know your identity, e-mail address, or other contact
information unless you provide it in the body of your comment.
ii. E-mail. Comments may be sent by electronic mail (e-mail) to OW-
Docket@epa.gov, Attention Docket ID No.OW-2002-0014. In contrast to
EPA's electronic public docket, EPA's e-mail system is not an
``anonymous access'' system. If you send an e-mail comment directly to
the Docket without going through EPA's electronic public docket, EPA's
e-mail system automatically captures your e-mail address. E-mail

[[Page 48474]]

addresses that are automatically captured by EPA's e-mail system are
included as part of the comment that is placed in the official public
docket, and made available in EPA's electronic public docket.
iii. Disk or CD-ROM. You may submit comments on a disk or CD-ROM
that you mail to the mailing address identified in section C.2. These
electronic submissions will be accepted in Word Perfect, Microsoft
Word, or ASCII file format. Avoid the use of special characters and any
form of encryption.
2. By Mail. Send an original and three (3) copies of your comments
and enclosures as well as any references cited in your comments to
Water Docket, Environmental Protection Agency, Mailcode: 4101T, 1200
Pennsylvania Avenue, NW., Washington, DC 20460, Attention Docket ID No.
OW-2002-0014.
3. By Hand Delivery or Courier. Deliver your comments to Water
Docket, EPA Docket Center, EPA West, Room B102, 1301 Constitution
Avenue, NW., Washington, DC, Attention Docket ID No. OW-2002-0014. Such
deliveries are only accepted during the Docket's normal hours of
operation, as identified in section B.1.

D. How Should I Submit CBI to the Agency?

Do not submit information that you consider to be CBI
electronically through EPA's electronic public docket or by e-mail.
Send information identified as CBI by mail only to the following
address: Engineering & Analysis Division, Mail Code 4303T, U.S.
Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460, Attention: Samantha Lewis, Docket ID No. OW-2002-
0014.
You may claim information that you submit to EPA as CBI by marking
any part or all of that information as CBI (if you submit CBI on disk
or CD-ROM, mark the outside of the disk or CD-ROM as CBI and then
identify electronically within the disk or CD-ROM the specific
information that is CBI). Information so marked will not be disclosed
except in accordance with procedures set forth in 40 CFR part 2.
In addition to one complete version of the comment that includes
any information claimed as CBI, a copy of the comment that does not
contain the information claimed as CBI must be submitted for inclusion
in the public docket and EPA's electronic public docket. If you submit
the copy that does not contain CBI on disk or CD-ROM, mark the outside
of the disk or CD-ROM clearly that it does not contain CBI. Information
not marked as CBI will be included in the public docket and EPA's
electronic public docket without prior notice. If you have any
questions about CBI or the procedures for claiming CBI, please consult
one of the people identified in the FOR FURTHER INFORMATION CONTACT
section.

E. What Should I Consider as I Prepare My Comments for EPA?

You may find the following suggestions helpful for preparing your
comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide any technical information and/or data you used that
support your views.
4. If you estimate potential burden or costs, explain how you
arrived at your estimate.
5. Provide specific examples to illustrate your concerns.
6. Offer alternatives.
7. Make sure to submit your comments by the comment period deadline
identified.
8. To ensure proper receipt by EPA, identify the appropriate docket
identification number in the subject line on the first page of your
response. It would also be helpful if you provided the name, date, and
Federal Register citation related to your comments.

Contents of This Document

I. Purpose of this Document
II. New Analytical Data and Complete Survey Data
A. Post-Proposal Analytical Wastewater Sampling Data
B. Discharge Monitoring Report Data
C. Information from EPA Regions and States
D. Data Submitted by Industry
E. Incorporation of All Surveys and Additional Survey Follow-Up
III. Revisions to the Cost Model
A. Proposed Costing Approach
B. Revised Costing Approach
IV. Revised Pollutant Loadings and Reductions Methodology
A. Proposed Pollutant Loadings Approach
B. Revised Pollutant Loadings Approach
V. Changes Considered to Applicability, Definitions, and Regulated
Pollutants
A. Changes Considered to Applicability and Definitions
B. Changes Considered to the Pollutants Selected for Regulation
C. Concerns Regarding Fecal Coliforms Limitations and Standards
D. Concerns About Total Nitrogen Limitations and Standards
E. Data Selection for Oil and Grease Loadings and Limitations/
Standards
VI. New Information and Consideration of Revision to Economic
Methodologies
A. Closure Analysis
B. Trade Elasticity Methodology
VII. Changes to EPA's Environmental Assessment
A. Water Quality Modeling: What Changes and Information are
Being Considered?
B. Recreational Benefits: What Changes and Information are Being
Considered?
C. Toxicity Assessment: What Changes and Information are Being
Considered?
D. Other Benefits Categories Being Considered
VIII. Possible Changes to the Proposed Limitations and Standards
A. Revision of Statistical Methodology for Long-Term Averages
and Loadings
B. Consideration of Assumed Monitoring Frequency
C. Data Review for Final Limitations and Standards
D. Evaluation of Final Variability Factors
E. Evaluation of Achievability of Final Limitations and
Standards
F. Errors in 40 CFR part 432 and Recodification
IX. Consideration of Options
A. Description of Modified Options
B. Options Being Considered for Best Practicable Control
Technology Currently Available (BPT)
C. Options Being Considered for Best Available Technology
Economically Achievable (BAT)
D. Options Being Considered for New Source Performance Standards
(NSPS)
X. Revised Estimates of Costs, Loadings, Economic Impacts, and Cost-
Effectiveness
A. Revised National Estimates of Costs, Loadings, and Economic
Impacts
B. Revised National Estimates of Cost Reasonableness and Cost-
Effectiveness
C. Results of Barrier to Entry Analysis for New Sources
XI. Solicitation of Comment

I. Purpose of This Document

Today's document has several purposes. First, EPA is presenting a
summary of new data and information submitted during the public comment
period on the proposed MPP regulations as well as data collected by EPA
since proposal. Second, EPA discusses major issues raised in comments
on the proposal and revisions in the data analyses resulting from these
comments and the additional data. Third, the document summarizes EPA's
current thinking on how this new information and suggestions made by
commenters affect the analyses of the proposed rule. The document also
summarizes several changes from the proposed regulatory requirements
that EPA is considering for the final rule in light of the new
material. The document includes revised target effluent concentrations
for each model technology that incorporate post-proposal data
collections and submissions that EPA used for developing revised
compliance cost and pollutant loading reduction estimates.

[[Page 48475]]

Finally, the document discusses how incorporation of the new data and
information would affect the cost and removals estimates associated
with various treatment options.
Since proposal, EPA has incorporated a significant amount of
additional technical and economic data (from fully analyzing all of the
previously collected industry survey information as well as newly
submitted/collected data) into the database used for developing the
proposed MPP effluent limitations and standards. New data that EPA has
used in the revised cost and economic models discussed in this NODA
include data from screener surveys and detailed surveys that were not
received in time to be incorporated into the analysis for the proposal
and data from EPA and industry wastewater sampling of MPP raw
wastewater, influent to treatment and wastewater effluent. In addition,
EPA has modified certain assumptions used in its cost and pollutant
loadings models. The new analyses presented in this NODA provide EPA's
current thinking on how the analyses of regulatory options for the
final rule may change as a result of the additional information
obtained.
For a number of the subcategories proposed for regulation, these
modifications have resulted in changes in the estimated cost and
pollutant removals associated with the treatment options considered at
proposal. As a consequence, the estimated economic impacts and cost
effectiveness of the treatment options have changed as well. In light
of these new results, EPA is seeking further comment on the regulatory
options considered for the proposal as well as several modifications to
these options that are based in part on new information regarding
technology in place in the industry.
Through this notice of data availability, EPA seeks further public
comment on any and all aspects of the specific data and issues it has
identified here. However, EPA is seeking public comment only on these
specific data and issues. Nothing in today's document is intended to
invite further discussion of other issues discussed in the MPP proposal
or to reopen the proposal in general for additional public comments.
EPA continues to review the comments already submitted on the proposed
rule and will address those comments, along with comments submitted on
the data and issues identified in today's document, in the final
rulemaking.

II. New Analytical Data and Complete Survey Data

There are five general areas of new analytical data and
information: (1) EPA post-proposal sampling, (2) discharge monitoring
report (DMR) data, (3) information from EPA Regional offices and
States, (4) data submitted by industry, and (5) incorporation of all
surveys and additional survey follow-up. EPA has incorporated much of
this data into its analyses for this NODA. However, some data has not
been included in the new analyses. As discussed elsewhere, analyses for
non-small meat and poultry slaughterhouses are presented in this notice
while analyses for further processors, renderers and small slaughterers
are presented in the rulemaking docket. EPA has placed this data in the
docket and although it has not incorporated the information into its
analyses for the NODA, the Agency intends to use it for the final rule
as appropriate. The detailed discussion below indicates which data have
been incorporated into the NODA analysis at this juncture and which
have not. Sections II.A-E discuss each of the five areas in more
detail.

A. Post-Proposal Analytical Wastewater Sampling Data

In response to public comments, EPA has performed a number of
analytical wastewater sampling episodes since the publication of the
proposed rule to collect additional data on raw wastewater loadings,
treatment efficiencies, and treatment variability for certain treatment
options. EPA also performed a holding time study for the bacterial
pollutant parameters (e.g. fecal coliforms).
1. EPA Site Visits and Sampling Episodes
During the comment period and at the public meetings on the
proposal, commenters raised concerns over the representativeness of
EPA's database for certain types of MPP facilities and whether the
treatment systems at facilities sampled as ``BPT'' (Best Practicable
Technology) or ``BAT'' (Best Available Technology) were accurately
represented in the cost model. Based on these concerns, EPA worked with
a coalition of industry representatives to identify types of facilities
in these groups that would be good candidates for EPA's post-proposal
wastewater sampling program. EPA then selected two poultry facilities
identified by EPA regional personnel as being good sampling candidates
and performed a pre-sampling site visit at each. During the poultry
site visits EPA collected detailed information on the sampling
logistics, production schedules, and processes the treatment systems
employed. This information allowed EPA to determine whether the site
was employing technology considered to be ``Best Available
Technology.'' Based on this information, EPA selected one poultry
facility for analytical wastewater sampling. This facility performs
first processing, further processing and rendering. EPA has
incorporated data from this sampling episode into the analyses
presented in today's notice.
In addition, based on comments concerning facility operations and
analytical results during the pre-proposal sampling episodes, EPA also
decided to conduct an additional sampling episode at two of the six red
meat facilities that were sampled prior to proposal. In response to
comments regarding background levels of metals and other pollutants,
EPA collected source water samples during each post-proposal sampling
episode. EPA collected characterization samples of wastewater from
production operations and paired influent and effluent samples from
these facilities' treatment systems over five days. EPA notes that it
did not use the earlier data from the pre-proposal sampling episodes at
these two facilities in the analyses presented in today's notice, due
to certain data quality issues. However, following completion of an
evaluation of these issues, EPA may use these episodes along with the
post-proposal sampling data, for the analyses supporting the final rule
(see Section VIII for discussion of these data issues and solicitation
of comment).
In addition, EPA conducted a post-proposal site visit to a poultry
further processing facility (i.e., a poultry processing facility where
first processing and rendering are not performed on-site) that it had
not sampled previously and obtained grab samples to characterize
treatment system influent (i.e., raw influent prior to preliminary
treatment steps) and effluent wastewater. EPA has incorporated the
results from this episode into its revised analysis of poultry further
processing facilities. Analyses for further processors can be found in
Section 21.1, DCNs 125606 and 126002 of the public record.
EPA also sampled for Ultimate BOD at one red meat and one poultry
facility. The results of the Ultimate BOD analysis have not been
incorporated in the analyses for the NODA (See Section V.D for a
discussion on the issues associated with use of these data). Non-
confidential versions of all new Site Visit Reports (SVRs) and Sampling

[[Page 48476]]

Episode Reports (SERs) can be found in Section 19.1.4.2 the public
record for this notice.
EPA previously indicated that it would sample at an independent
renderer after proposal (see 67 FR 8606). However, EPA subsequently
decided that other data sources provided adequate information and
instead evaluated information on three independent renderers provided
by the industry. This information included data on the size of each
facility, the wastewater treatment in-place and the wastewater
characteristics of the influent to the treatment system and treated
effluent. Two of the three facilities also provided data collected from
wastewater sampled at intermediate points in the wastewater treatment
system. In EPA's view, this data combined with (or evaluated in
comparison with) data from sampling which included rendering wastewater
(e.g., data from a facility that performs slaughtering, further
processing, and rendering) provide an appropriate basis for evaluating
the baseline loadings and treatment-in-place at rendering facilities.
EPA has used this data in the NODA analysis for developing default
baseline concentrations and assessing treatment-in-place for facilities
in Subcategory J (Independent Renderers). EPA's estimates of costs and
pollutant loadings for Subcategory J are presented in Section 21.1,
DCNs 125606 and 126002 of the public record.
2. Holding Time Study
When EPA conducted its own sampling episodes at the facilities, it
exceeded the required holding time for some samples. While laboratories
qualified to conduct total coliforms, fecal coliforms, and E. coli
analyses may have been within driving distance of the facilities being
evaluated, laboratories qualified to perform fecal streptococcus,
Salmonella, and Aeromonas analyses generally were not available, as
analysis for these analytes is more complex than coliforms analyses. As
a result, for most sampling episodes, EPA decided samples should be
shipped overnight to a laboratory capable of performing all of the
bacterial analyses. Because these samples would exceed the holding time
requirements in 40 CFR part 136, EPA performed a holding time study to
evaluate the possible effects of analyzing samples at different holding
times.
To determine if results for samples with longer holding times were
consistent with results for samples analyzed within eight hours (i.e.,
the time period consistent with 40 CFR part 136 for compliance
sampling) for total coliforms, fecal coliforms, E. coli, Aeromonas,
fecal streptococcus, and [Salmonella from MPP facilities, EPA conducted
a study to evaluate sample concentrations at 8, 24, 30, and 48 hours
after sample collection for wastewater effluent samples from a beef
facility (before disinfection and final effluent), a pork facility
(final effluent prior to discharge into the sewer system), and a
poultry facility (final effluent). The study report which contains
results for all target bacteria is located at DCN 165311 in Section
22.6 in the public record for this NODA. This NODA discusses only the
results for fecal coliforms and E. coli as EPA is not intending to
establish numeric limitations for other target indicators in the
holding time study. As holding times increase, the fecal coliforms and
E. coli concentrations may change. EPA's intent in conducting the study
was to provide some insights about the length of time that would still
provide comparable results to samples held for eight hours.
For red meat (e.g., beef and pork) effluent, the results of this
study indicate that samples for fecal coliforms and E. coli
measurements can be held for 24 hours and still produce results
comparable to analyses conducted at 8 hours after sample collection,
provided that samples are stored on ice until analysis and not frozen.
For poultry wastewater effluent, the study results indicate that
samples held longer than the 8 hours do not provide comparable results
to results at 8 hour holding times.

B. Discharge Monitoring Report Data

As discussed further in Sections III and VIII, EPA is considering
the use of discharge monitoring report (DMR) data, and the supporting
daily or weekly measurements, to evaluate and revise as necessary the
proposed MPP limitations and standards (Section VIII) and compliance
cost and loadings estimates for various technology options for the
final rule (Section III). EPA used the summary DMR data from detailed
survey recipients and PCS to supplement its sampling data in the
development of pollutant loading and reduction estimates presented in
today's notice. EPA has also incorporated daily/weekly DMR supporting
data from 16 facilities in the slaughtering subcategories (A-D and K)
into the revised facility-level long-term averages and variability
factors, see DCN 165080 and DCN 165160.
EPA obtained summary DMR data, where available, from: (1) EPA's
permit compliance system (PCS) for survey facilities (both detail
survey sites and screener survey sites), (2) EPA Regional offices for
some screener survey sites, detailed survey sites, and facilities
identified in PCS as performing meat or poultry processing operations
(see Section II.C below), and (3) individual further processor screener
survey sites based on discussions during survey follow-up (see Section
II.E for additional discussion on survey follow-up). EPA also requested
detailed DMR data from 24 facilities in the slaughtering subcategories
(Subcategories A-D and K) as discussed below.
Following proposal, based on the DMR summary data provided in the
detailed surveys or PCS, EPA requested individual data points (e.g.,
daily or weekly measurements) from 24 detailed survey sites in
Subcategories A-D and K for use in evaluating and revising the
limitations and standards and supporting analyses (See Sections III.B
and VIII.D of today's notice for more information on how EPA is
considering using the DMR data). To date, EPA has received complete
data from16 facilities, partial data from 5 facilities, and no data
from 3 facilities. EPA has placed all data received to date in the
public record (Section 19.3.3) and will include any additional data as
it is received. EPA intends to incorporate all appropriate data from
this request into the analyses for the final rule including target
effluent concentrations used for estimating compliance costs and
pollutant load reductions and for developing or evaluating the long-
term averages and variability factors for the final limitations. For
this notice, EPA has incorporated the 16 complete daily/weekly data
sets into its development of facility-level (episode-level) long-term
averages and variability factors (see DCNs 165080 and 165160), but not
into the revised analyses of costs and loadings. Summary DMR data has
been used in the revised cost and loading estimates however.

C. Information From EPA Regions and States

1. Permits, Permit Applications and Fact Sheets
In an effort to obtain additional information without burdening the
facilities directly, EPA gathered permits, permit applications and
permit fact sheets from EPA Regional offices and States for some
facilities from which EPA did not receive a detailed survey and which
were identified as meat or poultry processors either in EPA's Permit
Compliance System (PCS) or in the screener survey database. PCS is a
database which contains monitoring and NPDES permit data from major and

[[Page 48477]]

some minor point sources which discharge wastewater directly to surface
water.
EPA was interested in obtaining information on the permit
requirements and treatment-in-place at facilities which had specific
production processes about which we had limited information for the
proposal (e.g. stand-alone further processors and renderers.) EPA
identified over 980 facilities in PCS that were classified under SIC
codes 2011, 2013, 2015 and 2077 (the codes which identify meat or
poultry processing and rendering), plus some related codes referring to
different aspects of food processing such as 2091 (Canned and Cured
Fish and Seafoods) and 2099 (Food Preparations, Not Elsewhere
Classified). EPA then refined the list by selecting those facilities
that had data in PCS for at least one of the following pollutant
parameters: TKN, nitrate + nitrite, total phosphorus, chemical oxygen
demand (COD), carbonaceous biochemical oxygen demand (CBOD), total
nitrogen, fecal streptococci, total dissolved solids (TDS), chloride,
E. coli, oil and grease as hexane extractable material (O&G as HEM),
copper, chromium, nickel, and zinc. EPA then added to the list all
further processors and independent renderer that were in the screener
survey database, but were not currently on the list generated through
PCS. Detailed survey recipients were then excluded because they
provided sufficient information in their survey responses. EPA then
sought permits for all the facilities identified on this refined list,
which is included in the record (see DCN 100769).
EPA obtained a copy of the permit, permit application and/or fact
sheet for 61 facilities (in 20 states) of 104 total facilities (in 27
states) on the refined list and obtained notice of closure on an
additional 14 of the 104 facilities. However, EPA intends to include
this information in its analyses for the final rule as appropriate.
This information will provide EPA with descriptive information on
additional MPP facilities which, when combined with the monitoring data
contained in PCS, may help EPA to further evaluate the baseline level
of wastewater treatment currently practiced by the industry.
More specifically, EPA is considering using this data to fill data
gaps in the information used in EPA's estimates of baseline pollutant
loadings for certain types of facilities (e.g., further processors and
independent renderers) and for developing the option-specific target
effluent concentrations (i.e., long-term averages) used for estimating
compliance costs and pollutant reductions for these facilities for the
final rule. For these classes of facilities, EPA would use the permit,
fact sheet and permit application to expand the information regarding
production practices and wastewater treatment currently in-place to
better assess the baseline performance of these facilities and costs to
comply with the regulatory options considered. See Section 21.1, DCNs
125606 and 126002 of the public record for EPA's estimates of costs and
pollutant reductions for further processors and renderers. These
estimates do include these additional data.
EPA may also use the data from PCS to assess the achievability of
the limitations for these types of facilities in the final rule. EPA
notes that because PCS does not generally contain the weekly/daily
individual data points, EPA intends, at this time, to rely on other
more detailed data to develop limitations and standards for these types
facilities.
2. Summary of POTW Interferences and Upsets
As discussed in the proposal (67 FR 8637), EPA worked with its
Regional offices and state pretreatment coordinators to collect
additional data to determine whether or not national categorical
pretreatment standards are necessary for the MPP industry. EPA did not
propose to establish pretreatment standards for existing or new
facilities in the MPP industry.
For each Region, EPA listed the indirect discharging screener
survey facilities and corresponding POTWs according to the survey
response. EPA requested the Regional Pretreatment Coordinators to
verify that the screener survey MPP site had correctly identified the
receiving POTW. EPA also asked the coordinators to identify any
instances of interference or upsets that were attributed to the listed
MPP site. The majority of MPP indirect dischargers are located in EPA
Region 5 (Illinois, Ohio, Indiana, Michigan, Minnesota, and Wisconsin)
and the majority of responses from this request were also from Region
5. There were very few reported instances of interference or upset from
MPP facilities. One state pretreatment coordinator noted that in many
cases MPP facilities pay a surcharge to the POTW to discharge higher
than normal strength wastewater. In California, the state with the
largest number of indirect discharge MPP sites, only two instances of
POTW problems were identified as related to MPP discharges. Although it
did not identify any specific instances of problems, the State of
Oklahoma indicated its belief that not all POTWs can handle the
conventional pollutant loadings from MPP facilities. For this reason
and because of the lack of information available to establish local
limits, the State supported the promulgation of pretreatment standards
for MPP facilities that discharge to POTWs.
At this time, EPA does not consider this Regional/State information
to be sufficient evidence that pretreatment standards are necessary for
the MPP industry. For further discussion and to review the data listing
and responses described above, see DCN 115077 in the public record for
today's notice.

D. Data Submitted by Industry

In addition, EPA received some estimated summary-level cost data in
the industry comments on what it may cost for a red meat and a
rendering facility to upgrade their existing technologies. Also,
several facilities submitted cost data as part of their detailed survey
that provided estimated costs specific to installation or upgrade of
each facility's wastewater treatment system. EPA also obtained upgrade/
retrofit cost information from one red meat site and one poultry
products site as a follow-up to earlier, pre-proposal sampling and from
one poultry site that was sampled post-proposal. EPA has used this
information in the development of the revised cost estimates presented
in today's notice.
EPA has also received comment from industry representatives on
components of its revised costing methodology during meetings with
stakeholders. These comments and EPA's response, including a summary of
changes made to the cost models as a result, can be found in the public
record supporting this NODA (see DCN 115078). Non-confidential cost
information can be found in Section 19.5 of the public record.
In general, these industry commenters believed that EPA had
substantially underestimated the costs of achieving the proposed
limits, in part because they believed additional treatment steps and/or
capacity would be needed to reliably and consistently comply with these
limits. Among the most significant issues raised were the sizing of the
aerobic tanks, the need for a supplemental carbon source to maintain an
adequate BOD to TKN ratio in the influent to the aerobic treatment
stage, the costs for by-passing a portion of the treatment stream
around the anaerobic lagoon to maintain sufficient BOD for
denitrification, the level of nitrate/nitrite (as nitrogen) reduction
achievable in the anoxic tank and the degree of comparability between
poultry

[[Page 48478]]

and red meat facilities with respect to raw wastewater nitrogen
concentrations, the level of cost savings attributable to reduced
chemical additions for alkalinity, the cost and required dosage for
polymer additions, the need for final holding lagoon to achieve
consistent compliance, the practicality of achieving a 10 times recycle
rate in the anoxic tank, and the incremental labor necessary to operate
the treatment system.
Using revised assumptions that they believed were more realistic,
these commenters estimated costs for 9 sample facilities that ranged
from 4 to 8 times the cost estimates projected by EPA for these same
facilities. EPA is still reviewing the revised assumptions used by
these commenters, but preliminarily believes that some of them may be
overly conservative and thus tend to overstate costs. EPA solicits
comment and especially real-world data from plants operating the
various technology options under consideration for the final rule to
aid in determining realistic parameter estimates and assumptions for
its cost models.
EPA received limited wastewater sampling data for seven specific
facilities in response to its request in the proposed rule. These data
were submitted by two individual facilities, two companies, one
provided site-specific data for four facilities and one provided
generalized data for its facilities, an industry coalition, and an
industry trade association. The data submitted by the industry
coalition and the industry trade association were the same, and
represented data for four pollutants for one of the poultry facilities
sampled by EPA for the proposal. This data has not been incorporated
into the analyses for today's notice. Of the seven facilities for which
data were submitted, data for two of the facilities was the same as the
data provided in the facilities' detailed surveys (this data was
provided only for TKN). EPA included this data in the loadings and cost
analyses in today's notice. EPA did not use data from the remaining
facilities for its analyses for today's notice because EPA requires
supporting information about the facilities (e.g., treatment system
type, production type) before the data can be used in order to classify
the data properly. Once the supporting information is submitted by the
facilities, EPA anticipates that it will be able to use this data for
the final rule. EPA did not incorporate the data submitted by the
remaining company because it only supplied a typical range of TKN
values for a number of its poultry facilities, and not for any specific
facility. EPA has since requested facility-specific data from this
commenter for each of its facilities (see Section II.B regarding DMR
data requests).

E. Incorporation of All Surveys and Additional Survey Follow-Up

As discussed in the preamble to the proposed rule (67 FR 8593), EPA
was not able to incorporate data from all complete survey responses
prior to publication. In the proposal, EPA stated that it would use
information from all screener and detailed surveys, including those
collected after the cut-off dates (April 24, 2001 and May 29, 2001,
respectively), in the analyses presented in this Notice of Data
Availability. For the proposal, EPA was able to include information
from 961 of 1500 screener survey responses and some of the information
from 241 of 328 detailed survey responses. EPA notes that not all
surveys returned to EPA provide complete information (even with EPA
follow-up). For today's notice, EPA is using responses from 1,254
screener surveys and 328 detailed surveys. EPA notes that the analyses
presented in today's notice focus on the 53 (of 328) detailed survey
recipients who are non-small meat and poultry slaughterhouses
discharging directly to surface waters. However, EPA included all the
usable screener surveys and detailed surveys in its calculation of
survey weights for developing national estimates (see Section III.B.3
for a discussion of survey weights). EPA has also analyzed detailed
survey data from 5 additional direct dischargers which include three
small facilities (two poultry facilities and one red meat facility),
one poultry further processing facility, and one facility that only
performs rendering operations. EPA has included data from these
facilities in its analyses for small slaughterhouses, further
processors, and renderers in Section 21.1 of the docket and intends to
use the data from these facilities in developing the final rule. See
Section X, for a discussion of EPA's revised estimates of compliance
costs, pollutant reductions and economic impacts.
1. Confirmation of Screener Survey Information
In addition to incorporating the survey data described above, EPA
sought to clarify screener survey information and collected additional
information from screener survey sites in response to comments
regarding the validity of EPA's database and EPA's characterization of
the baseline pollutant loadings from the MPP industry. EPA contacted 34
screener survey facilities that appeared to be direct dischargers based
on their screener survey responses. These 34 facilities represent
direct dischargers that were not engaged in slaughtering operations
(i.e., they only performed further processing or rendering). The
majority of these sites were identified as further processors, however,
5 sites were renderers. EPA contacted these facilities to discuss the
wastewater treatment systems in place at the site in 1999 (the base
year of the survey) as well as to verify the following information:
Manufacturing type (e.g., red meat further processor vs. poultry
further processor); wastewater flows; production classification (small
vs. non-small); discharge mode/wastewater management type (e.g.,
indirect discharge to POTW, direct discharge to receiving water, land
application); monitored pollutant parameters; current wastewater
treatment system and target concentrations; and discharge/receiving
water body. EPA obtained responses from 30 sites. Of these, 18 were in
fact direct dischargers, 11 turned out to be indirect dischargers and
one was not currently operating. EPA has incorporated this information
into the analyses of further processors and renderers in Section 21.1.,
DCNs 125606 and 126002 of the docket. EPA also received discharge
monitoring report (DMR) data from three further processing sites in
response to these follow-up discussions. This DMR data has also been
incorporated into the analyses of further processors and renderers in
Section 19.3.3 of the docket. Non-confidential responses are provided
in Section 19.3.1 of the public record for today's notice.
2. Confirmation of Detailed Survey Information
EPA conducted several follow-up efforts to ensure that the detailed
survey data collected from MPP facilities are as complete and accurate
as possible, including follow-up phone calls to facilities if survey
responses were incomplete or if there were discrepancies in the data
reported in the detailed surveys. EPA then made an effort to
systematically confirm information for all direct discharge detailed
survey recipients. Specifically, EPA mailed a summary of facility-
specific responses (referred to as a ``fact sheet'') to the 58 detailed
survey respondents that indicated they were direct dischargers in their
survey response. EPA did not send ``fact sheets'' to indirect
dischargers because, as proposed and based on further evaluation as
discussed above, EPA is not considering further regulation of

[[Page 48479]]

such facilities in the final rule. The fact sheet requested
confirmation of the following information for 1999 by product type
(i.e., red meat or poultry): Type of processing (i.e., first
processing, further processing, rendering), the related production
volume, and the wastewater flows from various production operations. In
addition, EPA requested information on the site's wastewater treatment
system. This included confirmation of the Agency's classification of
the treatment level of the facility's wastewater treatment system
according to EPA's treatment option designations as identified in the
cover letter to the facility; average effluent flow rate; targeted
pollutant parameters (e.g., BOD removal, nitrification, phosphorus
removal); and confirmation of the summary of the effluent parameters
and concentrations from the survey that EPA intends to use in
developing pollutant loading estimates. Based on the revised fact
sheets, EPA incorporated changes to its database for today's notice to
the extent possible (e.g., EPA is still contacting some facilities to
clarify their response). See Section 19.3.2.4 of the record for copies
of non-confidential letters and fact sheets.

III. Revisions to the Cost Model

A. Proposed Costing Approach

EPA proposed to establish effluent limitations based on the
performance of biological wastewater treatment designed and operated to
achieve denitrification. For the proposed costs, EPA used a model
facility approach, applied frequency factors to obtain national
estimates, and applied the CAPDET computer model.
1. Model Facility Approach
To determine the economic achievability of this technology EPA used
a model facility approach to estimate the cost of installing or
upgrading the wastewater treatment to achieve the limits. As described
in the preamble to the proposed regulation (67 FR 8607), EPA developed
19 separate model facility groups based on the different combinations
of production processes that are possible (for example a meat
slaughtering, rendering and further processing facility as compared to
a meat slaughtering and rendering facility). These model facility
groups were further subdivided according to facility size based on
annual production. The distribution of facilities by size and the
production range defining each size group were derived from the
screener survey responses, and a median wastewater flow for each model
facility/size category combination was identified.
2. National Estimates Using Frequency Factors
EPA evaluated the baseline wastewater treatment technologies using
information provided in response to the detailed survey as described in
the proposal preamble (67 FR 8609). The number of facilities with
specific treatment units, as reported in the detailed surveys were
counted and from these counts EPA developed frequency factors,
presented as percentages and applied them to the national population to
represent the baseline level of treatment-in-place. These frequency
factors were based upon raw counts of survey responses without regard
to the sample weights, because these weights were not yet available for
the proposal, due to the fact that EPA had not completed its analysis
of survey results. See Section III.B.3 for an explanation of the survey
weights. As an example of the type of frequency factor calculation used
at proposal, suppose ten facilities reported a specific treatment
system, then a frequency factor of 3 percent of the industry as a whole
was calculated by dividing ten by the number of detailed survey
responses (328), and expressing as a percent. This frequency factor was
then applied to each model facility group.
3. Use of CAPDET Model
At proposal, EPA used a commercially available cost model entitled
the Computer Assisted Procedure For Design And Evaluation Of Wastewater
Treatment Systems (CAPDET) as one approach to estimate the costs of
wastewater treatment for meat and poultry processors (67 FR 8609).
CAPDET designs and estimates the cost of construction, installation and
annual operation of wastewater treatment from the ground up, but cannot
evaluate the cost of upgrades to existing equipment. Since all direct
discharge MPP facilities have wastewater treatment in place, much of
the costs that would be incurred by MPP facilities would be associated
with upgrades to their treatment systems. Recognizing that CAPDET is
not suited for addressing upgrades, EPA developed a second approach for
the proposal analysis that specifically estimated the retrofit costs
associated with the required upgrades (67 FR 8610).

B. Revised Costing Approach

Based on public comments on the proposed costing approach and the
incorporation of new data, EPA has revised its approach for developing
national estimates of compliance costs for the MPP industry. For the
costs presented in today's notice, EPA used a facility-specific
approach, applied survey weights to obtain national estimates, and
developed its own computer model specific to the MPP industry.
1. Comments on Proposed Approach
EPA received several comments critical of the proposed approach for
developing costs for the MPP industry. Many comments criticized the use
of the frequency factor approach for estimating national costs.
Commenters were concerned that this approach identified the frequency
of a particular treatment technology in place without considering the
varying levels of performance within that technology.
EPA also received comments regarding the use of the CAPDET model to
estimate the costs of compliance. Commenters argued that CAPDET is not
appropriate for estimating the costs of treating meat and poultry
products wastewater. Commenters also expressed disagreement over the
retrofit cost estimate arguing that this approach does not account for
site specific factors and concerns such as the need to add a source of
carbon which would result in an increase in the sludge produced. Some
facilities may need a carbon source, such as methanol, to provide
enough BOD for denitrification to occur. These aspects of the
wastewater treatment requirements would result in additional costs. The
commenters stated that EPA had underestimated the costs by an order of
magnitude.
2. Facility-Specific Model Approach
In response to comments and because it was able to incorporate new
data, EPA has substantially revised the method to estimate compliance
costs since the proposal by developing a cost model specific to the
Meat and Poultry Products Category. This new approach considers the
costs for each facility, rather than the proposed model approach. EPA
has now estimated facility specific costs for each of the 53 direct
discharging meat and poultry slaughterers (i.e., first processors) that
responded to EPA's detailed survey. These estimates are the basis for
the national estimates of costs for these subcategories. EPA classified
each detailed survey facility's wastewater treatment system based on
the description provided in the survey, and the summary of monitoring
data also submitted with the survey. In some cases, EPA modified a
facility's discharge status from direct to indirect discharger
following discussions with

[[Page 48480]]

the facility to clarify the discharge destination of its process
wastewater versus non-process wastewater. Once the facility's treatment
system was classified into one of the technology options under
consideration, the requirements for upgrading the system to comply with
more stringent options were identified and costs were estimated for
these upgrades using EPA's MPP Industry Cost Model (see Section
III.B.4).
3. National Estimates Using Survey Weights
Instead of using ``frequency factors'' (see Section III.A.2) that
were used as rough estimates for the proposal, EPA applied survey
weights to the facility-specific estimates to derive national estimates
of costs, pollutant removals, and economic impacts associated with the
MPP rule. The survey weights incorporate the statistical probability
that a particular facility was selected to receive the detailed
questionnaire and are adjusted for any nonresponse. For example, a
survey weight of 3 means that the facility represents itself and two
others in the sample. Probability samples, which were used to select
the facilities for the MPP surveys, allow inferences to be made to the
sampling frame from which the sample was drawn. Numerous textbooks and
technical journals describe a variety of ways of drawing valid
probability samples and making inferences to the sampling frame from
which the sample was selected. EPA determined the size (i.e., number of
facilities) of the probability samples by applying standard statistical
equations. These samples provide an adequate database that can be used
to estimate population characteristics.
Since the proposal, EPA has incorporated data from additional
screener and detailed surveys into its analysis. Using this new
information, EPA has revised the screener survey weights and calculated
the detailed survey weights. To calculate the screener survey weights,
EPA used standard survey statistics based upon the sample design and
nonresponse. Appendix B of the proposal development document provides
the equations used for these calculations. To calculate the detailed
survey weights, EPA followed the general methodology described in
Appendix B which first develops survey weights based upon the sample
design, then adjusts them for nonresponse, and finally calibrates them
based upon the screener national estimates. DCN 115115 provides the
values of the survey weights for the non-small direct discharge
slaughtering facilities in Subcategories A-D and K. This section of the
NODA provides more details about the calibration step used to calculate
the final detailed survey weights.
By using data from either the screener questionnaire or the
detailed questionnaire, EPA could categorize the survey data into one
of 14 groups described below. The availability of overlapping
information was an important consideration because the screener
questionnaire collected data on only a few characteristics. However,
because the screener has a larger sample size, it provides better
estimates of the number of eligible facilities in the MPP population.
Thus, EPA used the screener estimates to calibrate the detailed survey
weights, as described below, so that the national estimates from the
two questionnaires would result in the same values for those
characteristics contained in both surveys.
As a first step in the calibration, EPA categorized facilities into
groups using the facility meat type (red meat, poultry, or a mixture)
and production type (first processing, further processing, first
processing/further processing, first processing/rendering, further
processing/rendering, first processing/further processing/rendering).
In addition, EPA gathered independent renderers into one group. As a
result of crossing three meat types by six different production types
and adding rendering, EPA obtained 19 possible groups of facilities.
EPA further split these groups into non-small and small based on total
production. As a result, EPA obtained a total of 38 possible groups of
facilities.
Within each of the 38 possible groups, EPA then compared the
estimated number of facilities using the screener weights to the
estimates using the detailed survey weights. Because the detailed
questionnaire had data for only a few or no facilities within some
groups, EPA determined that it was necessary to collapse some groups.
If a group had less than five respondents to the detailed questionnaire
or less than 10 respondents to the screener questionnaire, EPA
collapsed it with another group. Also, if the estimates from the
screener and the detailed questionnaire differed by more than a factor
of 2.5, then EPA collapsed that group with another to improve variance
estimates. By collapsing groups, EPA obtained information about
facilities with similar characteristics, and improved precision for its
national estimates based upon data available only from the detailed
questionnaire (e.g., data about the wastewater treatment components).
To perform this step, EPA determined that it was appropriate to
collapse certain production types and sizes within meat type. For
example, EPA collapsed the two groups for non-small red meat slaughters
and non-small red meat slaughter/render into a single group. After
collapsing the groups, EPA obtained the 14 groups shown in Table III.B-
1.
Within each of the 14 groups, EPA then calibrated the detailed
survey weights so that the national estimate of facilities using the
detailed questionnaire database matched the national estimates based
upon the screener data. To calibrate the survey weight, EPA used the
ratio of the national estimates based upon the screener database and
the detailed questionnaire database, respectively. For example, for a
particular group (such as renderer), suppose that the national estimate
based on the screener weights and the screener database is 30
facilities. Further suppose that 20 facilities is the national estimate
based upon the detailed survey weights and the detailed questionnaire
database. The ratio of the two estimates is 1.5. Thus, each detailed
survey weight in the group would be multiplied by 1.5. Therefore, a
detailed survey weight of 4 for a particular facility would be adjusted
upward to a final survey weight of 6. Because facilities from different
sampling strata could be assigned to the same group, it is possible to
have facilities with different survey weights within a particular
group.
Table III.B-1 provides the number of facilities in the screener
database, the number of facilities in the detailed questionnaire
database, and the national estimate of the number of facilities. Note
the national estimates presented here include all MPP facilities (e.g.,
direct dischargers, indirect dischargers, zero dischargers, and all
facilities regardless of size) and is not the same as the national
estimate of number of in-scope MPP facilities (e.g., direct dischargers
above the category-specific production thresholds).

[[Page 48481]]

Table III.B-1.--Number of MPP Facilities
----------------------------------------------------------------------------------------------------------------
Number of facilities
-----------------------------------------------
Group Detailed
Screener questionnaire National
database database estimate
----------------------------------------------------------------------------------------------------------------
Non-small Red Meat Slaughter or Slaughter/Render................ 28 23 62
Small Red Meat Slaughter or Slaughter/Render.................... 64 7 490
Non-small Red Meat Processor or Processor/Render................ 22 5 83
Small Red Meat Processor or Processor/Render.................... 311 43 1873
Non-small Red Meat Slaughter/Processor or Slaughter/Processor/ 27 25 74
Render.........................................................
Small Red Meat Slaughter/Processor or Slaughter/Processor/Render 122 16 1012
Non-small Mixed Meat............................................ 92 15 270
Small Mixed Meat................................................ 344 18 1924
Non-small Poultry Slaughter..................................... 66 22 149
Non-small Poultry Slaughter/Render.............................. 10 5 21
Non-small Poultry Slaughter/Processor, Processor, or Processor/ 72 35 162
Render.........................................................
Non-small Poultry Slaughter/Processor/Render.................... 10 9 24
Small Poultry Slaughter, Slaughter/Render, Slaughter/Processor, 56 6 344
Slaughter/Processor/Render, Processor, or Processor/Render.....
Render Only..................................................... 29 20 132
----------------------------------------------------------------------------------------------------------------

4. MPP Industry Cost Model
Instead of using the CAPDET model (see Section III.A.3), EPA
developed cost equations for treatment units that were derived from a
combination of vendor supplied information, data and information
provided in the detailed surveys, and the comments on the proposal.
Because the detailed survey did not collect information about many of
the specific parameters used in the production process and treatment
system of individual facilities, EPA has supplemented the facility-
specific information with typical specifications or parameters derived
from literature, survey results, and industry comments. For example,
EPA has assumed that facilities have pipes of typical sizes for their
operations. As a consequence of such assumptions, a particular facility
might need a somewhat different engineering configuration from what was
modeled if it has installed equipment that varies from the typical
equipment or specifications used to estimate costs. However, because
EPA has applied typical specifications and parameters that are broadly
representative of the industry to a range of processes and treatment
systems and has contacted facilities, as follow-up, to identify the
site specific configuration information to the extent that the facility
can furnish it, EPA considers that costs for these detailed survey
facilities are reasonably accurate.
Some of the areas that EPA paid particular attention to in revising
the estimates of cost, include issues associated with the pretreatment
of wastewater prior to reaching the biological wastewater treatment
system, such as BOD levels, the generation of sludge, and the type of
disinfection.
The type of pretreatment may affect the levels of BOD entering the
biological treatment system. Commenters said that pretreatment with
anaerobic lagoons is so effective at reducing BOD that if facilities
were required to denitrify, a source of carbon would have to be added
to the wastewater to ensure that denitrification would take place.
Based on industry-supplied data and a review of the literature, EPA has
estimated that an influent BOD:TKN ratio of at least 3:1 is preferable
for effective denitrification. EPA has thus included costs for
facilities to bypass some of the wastewater around the anaerobic
lagoons to supplement BOD if data indicate that the concentration of
BOD leaving the anaerobic lagoon is not at least three times the
concentration of TKN. Anaerobic lagoon bypass was observed at one
facility EPA sampled. Because flows may be too low for effective bypass
during periods of no or low operations (e.g., weekends) at some
facilities, EPA costed those facilities for the purchase and operation
of a system to use methanol as a carbon source for denitrification. To
ensure facilities can meet the low nitrogen concentrations in Option 4,
EPA also costed for methanol use in the second anoxic tank during
regular activity (e.g., weekdays) if BOD supplementation is needed.
In conjunction with the higher BOD concentrations in the biological
wastewater treatment system, EPA has also accounted for increased
sludge generation and estimated costs for additional sludge dewatering
and hauling. EPA has estimated the cost to upgrade the biological
wastewater treatment to accomplish nutrient removals for a variety of
different baseline treatment configurations, including activated sludge
systems, sequencing batch reactors (SBR), oxidation ditch systems,
Schreiber reactors, and Biolac systems. For each different type of
biological system, EPA identified the equipment and construction that
would be necessary to achieve the long-term average concentrations
(i.e., target effluent concentrations) considered for each option.
Upgrades could include additional reaction tanks, chemical addition
requiring a mixing tank and chemical storage area, piping to provide a
waste stream bypass of the anaerobic lagoon, and increased sludge
handling capacity.
EPA also notes that for the proposal EPA estimated compliance costs
for disinfection based on ultraviolet (UV) technology because of
possible concerns with the discharge of disinfection byproducts from
the treatment system. However, for today's notice, EPA is instead
assuming that chlorination will be the primary means of achieving fecal
coliforms limits and is thus not including disinfection costs for
facilities that have any type of disinfection technology in place, and
is costing chlorination for the facilities that do not. EPA is also not
including costs for dechlorination technology because EPA expects that
facilities with water quality based limits for chlorine and/or
chlorinated by-products already have dechlorination in place and that
additional limits for chlorine and/or chlorinated by-products will be
rare. There are no national technology based limits for these
parameters (and EPA is not proposing any). EPA solicits comment on
costing for disinfection using chlorination only (without
dechlorination), and information on

[[Page 48482]]

facilities that are or may be required to comply with limits for
disinfectants and/or disinfection byproducts.

IV. Revised Pollutant Loadings and Reductions Methodology

A. Proposed Pollutant Loading Approach

For the proposal, EPA established a hierarchy using available data
from sampling or detailed surveys to develop baseline loads for each of
the MPP model facility groups (67 FR 8611). The pollutant load
reductions were calculated by determining the effluent loads that would
be achieved by each of the regulatory options under consideration and
subtracting this value from the baseline loading. The effluent loads
for the regulatory options were derived from the sampling data and
combined with typical flow values for each model facility group derived
from the detailed surveys.

B. Revised Pollutant Loading Approach

EPA received comments which criticized the use of the hierarchy to
determine baseline loads and objected to how data was transferred to
derive baseline loads for all of the model facility groups. EPA has
revised the proposed approach to address these comments and to develop
pollutant loadings and load reductions which are consistent with the
revised costing methodology. EPA's revised assessment of pollutant
loading reductions was developed on a facility level similar to the
revised analysis of costs. The baseline loadings presented in this
notice were developed using facility specific effluent data submitted
with the detailed surveys or obtained from Discharge Monitoring Reports
(DMRs) from PCS. The baseline loadings in today's notice do not
incorporate the weekly/daily data from the 16 slaughtering facilities
that responded to EPA's request as discussed in Section II.B but do
incorporate the summary DMR data for these 16 facilities. EPA also has
incorporated the results from its additional sampling episodes into its
determination of pollutants of concern (POC). Based upon the new data
and minor modifications to the use of pre-proposal sampling data, EPA
is no longer considering Salmonella to be a POC for the poultry
subcategories and Carbaryl to be a POC for the red meat subcategories.
For facilities without monitoring information for some pollutants, EPA
developed a default data set which used all data available for a
subcategory (i.e., all data submitted with the detailed surveys
supplemented by or in combination with other information from the
detailed surveys and from EPA's sampling program for this regulation).
Using this data, EPA developed an average effluent concentration for
each regulated subcategory (i.e. poultry slaughterers and red meat
slaughterers) for each pollutant of concern (See Tables IV.B-1 and
IV.B-2 below) under each regulatory option to be used in the cost and
loadings methodologies. EPA notes that these average target effluent
concentrations are not derived using the delta-lognormal distribution
used for developing the long-term average concentrations used for
calculating limitations and standards. For the final rule, EPA may use
the same long term averages for estimating loadings reduction that it
uses for calculating limitations and standards, and expects these
values will be close to those used in the NODA analysis.
Sufficient data was available from detailed surveys and sampling
episodes to allow EPA to derive default baseline concentrations for
poultry slaughterers and red meat slaughterers without transferring
between subcategories. For developing default concentrations for
baseline loadings for independent renderers, EPA used data from 12
rendering facilities, including detailed surveys, industry submitted
data, DMR data from PCS and data obtained in response to screener
survey follow-up (see Section II.E). However, because of the general
lack of data for the pollutants of concern for stand-alone poultry or
red meat further processors, EPA combined baseline data from both
poultry and red meat further processors. The result was one set of
default baseline concentrations that applied to all further processors,
regardless of whether it was a poultry or red meat further processor.
EPA expects that wastewater characteristics at further processors are
more likely to be dependent on the processing operation (e.g.,
breading, frying) than on the type of meat. EPA solicits comment on the
differences in wastewater characteristics at red meat and poultry
further processors. See DCN 100767 for additional information on the
default baseline concentration used for today's notice. The target
effluent concentrations for each regulatory option were transferred
from meat slaughterers to meat further processors and independent
renderers. Similarly, the effluent concentrations for each regulatory
option were transferred from poultry slaughterers to poultry further
processors. For the final rule, EPA anticipates using the information
collected from EPA regions and states (See Section II.C.1) in its
development of effluent concentrations for these types of facilities.
However, if data for all regulatory options is not available for the
final rule, EPA anticipates data transfers as presented in this NODA.
EPA notes that, based on implementation of the revised (more rigorous)
approach to developing loadings, there are no pollutant reductions
associated with pesticides.

IV.B-1.--Average Target Effluent Concentrations for Costs and Loadings for Subcategories A-D, F-I and J by
Option
[mg/L]
----------------------------------------------------------------------------------------------------------------
Option 2 Option 2+P Option 2.5 Option 2.5 + P Option 4
----------------------------------------------------------------------------------------------------------------
BOD............................. 7.00 7.00 7.00 7.00 6.45
TSS............................. 25.10 25.10 25.10 25.10 18.65
COD............................. 125.04 125.04 125.04 125.04 125.04
CBOD............................ 6.00 6.00 6.00 6.00 6.00
Ammonia as Nitrogen............. 0.895 0.895 0.895 0.895 0.185
Total Nitrogen.................. N/A N/A 34.2 34.2 13.51
Total Phosphorus................ N/A 8.28 N/A 8.28 5.12
Nitrate/Nitrite................. N/A N/A 20.87 20.87 10.35
TKN............................. 3.615 3.615 3.615 3.615 3.17
O&G (as HEM).................... 14.05 14.05 14.05 14.05 14.05
----------------------------------------------------------------------------------------------------------------
Note: See Section IX.A for a description of the technology options.
N/A: Not applicable because technology option is not designed to control the pollutant parameter.

[[Page 48483]]

IV.B-2.--Average Target Effluent Concentrations for Costs and Loadings for Subcategories K and L by Option
[mg/L]
----------------------------------------------------------------------------------------------------------------
Option 2 Option 2+P Option 2.5 Option 2.5 + P Option 4
----------------------------------------------------------------------------------------------------------------
BOD............................. 8.80 8.80 8.80 8.80 7.00
TSS............................. 10.21 10.21 10.21 10.21 5.05
COD............................. 29.60 29.60 29.60 29.60 17.25
CBOD............................ 6.00 6.00 6.00 6.00 6.00
Ammonia as Nitrogen............. 1.00 1.00 1.00 1.00 0.17
Total Nitrogen.................. N/A N/A 32.40 32.40 1.86
Total Phosphorus................ N/A 4.20 N/A 4.20 2.27
Nitrate/Nitrite................. N/A N/A 20.87 20.87 0.52
TKN............................. 4.97 4.97 4.97 4.97 1.34
O&G (as HEM).................... 5.90 5.90 5.90 5.90 5.39
----------------------------------------------------------------------------------------------------------------
Note: See Section IV.A for a description of the technology options.
N/A: Not applicable because technology option is not designed to control the pollutant parameter.

V. Changes Considered to Applicability, Definitions, and Regulated
Pollutants

A. Changes Considered to Applicability and Definitions

EPA received comment on the size thresholds in the proposed rule,
as well as a request from permitting authorities to clarify the overlap
between the Concentrated Animal Feeding Operations (CAFO) rule and the
MPP rule. This section discusses changes EPA is considering for the
final rule including: (1) Changes in the production based thresholds;
and (2) clarification on the distinction between CAFOs and animal
holding areas in the MPP industry.
EPA based the proposed production thresholds and its definition of
``small'' facility on available screener survey data (67 FR 8587). As
discussed in Section II.E of today's notice, EPA is including
additional screener surveys as well as detailed surveys in its analysis
for this NODA. If EPA determines that the economic achievability, cost-
effectiveness, or environmental benefits of the rule can be enhanced by
revising the production-based thresholds, EPA will consider revising
the thresholds for the final rule. EPA notes that although one
commenter requested a higher production threshold for poultry
facilities (e.g., 100 million versus 10 million pounds per year) for
determining applicability of the effluent guidelines limitations and
standards, they did not provide any information that would serve as a
basis for EPA to revise the proposed production based thresholds.
Please note that, in error, EPA also solicited comment on its use
of 100 employees at the facility level for analyzing economic impacts
on small businesses. In fact, EPA used the SBA size standard of 500
employees at the company level to perform its small business impact
analyses for both the proposal and today's notice and will continue to
do so for the final rule.
Subsequent to promulgating the final CAFO rule earlier this year
(68 FR 7176; February 12, 2003), EPA received a request from permitting
authorities to clarify the distinction between animal feeding
operations (AFOs) and animal holding areas at MPP facilities to avoid
any ambiguity about which permit requirements and effluent guidelines
apply to discharges from the MPP animal holding areas. EPA's NPDES
regulations at 40 CFR part 122.23(b)(1) define an AFO as ``a lot or
facility (other than an aquatic animal production facility) where the
following conditions are met: (1) Animals (other than aquatic animals)
have been, are, or will be stabled or confined and fed or maintained
for a total of more than 45 days or more in any 12-month period, and
(2) Crops, vegetation, forage growth, or post-harvest residues are not
sustained in the normal growing season over any portion of the lot or
facility.'' All meat and poultry slaughtering facilities have live
animal receiving areas. Although the animals at MPPs are not typically
kept or maintained for more than a day, animals are present for more
than 45 days in a 12 month period. Therefore, the AFO definition could
be construed to include animal holding areas at meat and poultry
slaughtering facilities.
EPA does not interpret the AFO definition to include animal holding
areas at meat and poultry slaughtering facilities. Furthermore, the
CAFO rules do not establish requirements for MPP animal holding areas.
Meat slaughtering and processing operations currently fall under the
Meat Products Point Source Category at part 432. The MPP rule, as
proposed, would add requirements to part 432 for poultry processing
plants. Wastes from animal holding areas at MPP facilities were
identified during the original effluent guidelines rulemakings in the
1970s as being part of the MPP facilities' process wastewater and the
requirements at part 432 apply to these wastes. NPDES permits have
historically addressed the animal holding areas at processing
facilities as part of the meat processing facility rather than as an
animal feeding operation. Given the effectiveness of this approach, EPA
does not intend to change the applicability of the MPP rules to animal
holding areas. Rather this Notice is clarifying that animal holding
areas at meat and poultry slaughtering facilities are still subject to
the requirements of the MPP rule codified at 40 CFR part 432 and are
not subject to the NPDES CAFO requirements codified at 40 CFR part 122
or the CAFO effluent guidelines codified at 40 CFR part 412.
To avoid potential confusion, EPA may include regulatory language
in the applicability section of the MPP rule clarifying that animal
holding areas at meat and poultry slaughtering facilities are subject
to the requirements codified at part 432 and not the CAFO requirements
at parts 122 or 412, and solicits comment on this aspect of the
applicability language for part 432.

B. Changes Considered to the Pollutants Selected for Regulation

Based on comments on the proposed rule, EPA is considering a
revision to the pollutants it proposed for regulation (i.e., Ammonia
(as N), BOD₅, COD, Fecal Coliforms, O&G (as HEM), Total
Nitrogen, Total Phosphorus, and TSS). EPA notes that the selection of
pollutants proposed for regulation was subcategory-specific and size-
specific and not all pollutants were proposed for each subcategory,
facility size, or limitation type (e.g., BPT, BAT). (See rule text of
the proposed rule for a

[[Page 48484]]

specific list of proposed parameters for each subcategory; 67 FR 8657).
EPA proposed adding COD to the BPT limitations for non-small
facilities (i.e., based on subcategory-specific production thresholds)
in Subcategories A-D and F-J to better reflect the design and operation
of the existing BPT treatment technology (67 FR 8630). Commenters
stated that biological treatment systems in place at meat products
facilities are not designed or operated based upon COD removal and that
doing so would be financially burdensome. In addition, commenters state
that BOD or CBOD (carbonaceous BOD) would be a more appropriate measure
for monitoring biological treatment system performance. EPA agrees that
COD may not be an appropriate indicator of biological treatment
technology performance at MPP facilities. Based on EPA's analysis of
new data and the complete survey information, EPA is more likely to
retain the current limits for BOD (and other conventional pollutants)
and add total nitrogen to the BPT limitations for Subcategories A-D and
F-J to reflect the partial denitrification currently occurring at many
of these facilities (see Section IX for a discussion of options EPA is
considering for BPT for the final rule). In this case, EPA would not
regulate COD or CBOD in the final rule, because COD would not provide
much useful information and CBOD would be somewhat redundant with the
current BOD limitations and standards.
For BAT limitations, EPA is still considering the regulation of
ammonia (as nitrogen) for small facilities (below the subcategory-
specific production thresholds) in Subcategories A-D, F-I, and K-L and
all of the facilities in Subcategory J, as proposed. Also, depending on
the option EPA selects for the final rule, EPA is considering the
regulation of ammonia (as nitrogen), total nitrogen, and/or total
phosphorus for non-small facilities (above the production thresholds)
in Subcategories A-D, F-I, and K-L, as proposed. Note that if EPA does
not select a model technology for the BAT level of control that
includes phosphorus removal, EPA would not regulate total phosphorus at
BAT. The same holds true for the new source performance standards
(NSPS).

C. Concerns Regarding Fecal Coliforms Limitations and Standards

For the proposal, EPA retained the existing limitation/standard of
``Maximum of 400 MPN per 100 ml at any time'' of fecal coliforms for
BPT and NSPS for Subparts A through I (i.e., red meat subcategories)
and Subpart J (i.e., independent rendering). In addition, EPA proposed
the same fecal coliforms values for the BPT limitations and NSPS for
Subparts K and L (proposed poultry subcategories). Based on analysis
conducted for the proposal, EPA tentatively determined that this level
was achievable by poultry facilities. As a result of the proposal, EPA
received comment on several issues regarding the proposed and existing
limitations and standards for fecal coliforms. This section addresses
the major comments that the Agency received.
1. Reporting Units
Commenters requested EPA to allow for monitoring of fecal coliforms
to be reported in units of colony forming units (CFU) per 100
milliliters (mL) in addition to the units of most probable numbers
(MPN) per 100 mL specified in the existing regulations. To obtain
results in units of MPN per 100 mL, the laboratory uses the multiple-
tube fermentation technique. To obtain results in units of CFU per 100
mL, the laboratory uses a membrane filtration which is a direct plating
method in which samples are filtered through 0.45um membrane filters
that are subsequently transferred to petri dishes containing a
selective or differential agar medium. Based on the research of Thomas
and Woodward in ``Estimation of Coliforms Density by the Membrane
Filter and the Fermentation Tube Methods'' (DCN 165320), results from
either technique can be considered comparable, so long as the volume
analyzed is equivalent. This finding of comparability is consistent
with documentation for the existing fecal coliforms limitations and
standards (see, for example, page 154 of the 1974 development document
for the renderer segment (EPA 440/1-74/031-a) where EPA states ``This
method [membrane filter procedure]
and the multiple-tube technique
which results in a MPN (most probable number) value, yield comparable
results.''). Therefore, EPA is considering revising the limitations and
standards to allow for results to be reported in either MPN units or
CFU units per 100 ml. EPA solicits comment on this possible revision.
2. Impact of UV Technology
Several commenters were concerned with the industry's ability to
consistently achieve the existing and proposed fecal coliforms
limitation/standard of 400 MPN/100 ml at ``any time'' with the use of
ultraviolet radiation (UV) technology. Some facilities are using this
technology as an alternative to treatment using chlorination which is
itself associated with some environmental concerns. As discussed in
Section III.B, for the proposal, EPA estimated compliance costs for
disinfection based on UV technology. However, for today's notice, EPA
is not including costs for facilities that have any type of
disinfection technology in place and is costing chlorination for the
three facilities that do not currently have any type of disinfection.
The model technology does not include a dechlorination step. For the
final rule, EPA intends to evaluate the achievability of the fecal
coliforms limitation/standard using UV treatment. In its preliminary
review, EPA is investigating whether the samples are likely to be
extremely turbid for which UV treatment would not sufficiently kill
fecal coliforms without agitation during the treatment step. As part of
its preliminary review, EPA considered its sampling episode data from
the facility with UV technology (episode 6486). This review showed that
discharges of fecal coliforms are well below the current limitation/
standard, because the concentrations ranged from non-detected to a
measured value of 166 MPN/100 mL. For the final rule, EPA intends to
further review these sampling episode data and to consider the self-
monitoring data from facilities that use UV technology. EPA solicits
comments and data on UV performance and costs for reducing fecal
coliforms in MPP wastewaters. EPA also solicits comment on the extent
to which water quality standards are driving the MPP industry to shift
from chlorination/dechlorination to UV to achieve water quality
standards for chlorine and whether this shift necessitates a revised
fecal coliforms limit that is consistently achievable with UV
technology.
3. Holding Times of EPA Sampling Data
As explained in Section II.A.2, when EPA conducted its own sampling
episodes at the facilities, it exceeded the required holding time for
some samples for fecal coliforms. DCN 165310 in Section 22.6 of the
public record lists the holding times and fecal coliforms measurements
from the EPA sampling episodes.
For red meat facilities, where EPA is retaining the previously
promulgated limitations and standards, EPA is considering using the
fecal coliforms data from the EPA sampling episodes for some analyses
such as (1) calculations for loadings and (2) evaluation of treatment
performance by comparing influent and effluent data. For the treatment
technologies that EPA is currently considering, all of the red meat
data from sampling episodes are associated with holding times of about

[[Page 48485]]

24 hours. Based on the results of the holding time study (see Section
II.A.2 above), EPA is considering using the 24-hour data for these
analyses. Note that EPA does not intend to revise the current
limitations and standards for red meat facilities, and thus, is not
using these data to develop limitations and standards for fecal
coliforms. EPA requests comment on the use of the 24-hour holding time
data for analysis of loadings and treatment performance at red meat
facilities.
For poultry facilities, where EPA is transferring the existing
limitations and standards from the red meat subcategories, EPA will
only use data associated with the 8-hour holding time for its loading
analysis because the holding time study indicated that longer holding
times for poultry processing wastewaters were not comparable to the 8-
hour period. Because only one sampling episode (6304) meets this
criterion, EPA will base its loadings and other analyses on fecal
coliforms data from this single sampling episode and any appropriate
self-monitoring data. EPA will also use these data in evaluating the
achievability of the limitations that EPA intends to transfer from the
existing limitations for the red meat subcategory. EPA requests comment
on the transfer of limitations for the poultry subcategory from the red
meat subcategory, and on its planned use of data to analyze loadings
and treatment performance.
4. Extending Holding Times in 40 CFR Part 136
As discussed in the preamble to the proposed rule (67 FR 8631), EPA
planned to conduct the holding time study for two purposes: to evaluate
the use of data in developing loadings estimates and limitations/
standards, and for possible revisions to current holding time
requirements. The previous section addresses EPA's intended use of the
data for developing loadings estimates. Because the study collected
data from only three facilities in the MPP industry, EPA does not
consider the study results to provide a sufficient basis to revise the
holding times specified in 40 CFR part 136 which apply to all
industries.
5. Monitoring of Both Fecal Coliforms and E. coli
As part of its evaluation of the existing guidelines, EPA has
reviewed its use of fecal coliforms as a regulated parameter. On page
68 of the1974 development document for the renderer segment (EPA 440/1-
74/031-a), EPA explained that it selected fecal coliforms as an
indicator parameter because ``they have originated from the intestinal
tract of warmblooded animals. Their presence in water indicates the
potential presence of pathogenic bacteria and viruses.'' However, EPA
subsequently issued a guidance document for water quality criteria that
recommends the monitoring of E. coli or enterococci rather than fecal
coliforms in recreational waters. (See ``Ambient Water Quality Criteria
for Bacteria--1986,'' January 1986, EPA440/5-84-002.)
While EPA has not validated an analytical method for E. coli in
industrial wastewaters, which consist of considerably more complex
matrices than ambient waters, it has analyzed for E. coli in MPP
wastewaters using Standard Method 9221F and this appears to have
provided reasonable estimates of the E. coli concentrations, based upon
EPA's evaluation of the laboratory reports. However, EPA does not
consider these data to be appropriate to use in developing limitations
and standards for E. coli. Instead, EPA considers the E. coli data to
be appropriate for general comparisons of E. coli and fecal coliforms
concentrations in MPP wastewaters. For the pork and beef facilities in
the holding time study, the E. coli and fecal coliforms concentration
values were identical. For the effluent from the sampling episodes
corresponding to the model technologies, the values of E. coli and
fecal coliforms are identical for most samples. Thus, because fecal
coliforms and E. coli in MPP effluent generally have similar
concentration values, EPA continues to consider that fecal coliforms
prove a reliable indicator parameter for E. coli.
While EPA considers fecal coliforms to be the appropriate parameter
for regulation for the MPP industry, EPA recognizes that some states
and tribes may still prefer that facilities monitor directly for E.
coli. Because concentrations of fecal coliforms and E. coli are
similar, EPA is considering an alternative that would allow facilities
to monitor for E. coli instead of fecal coliforms in the effluent. This
alternative would be available when EPA amends 40 CFR part 136 to
include an analytical method for E. coli in industrial effluent. EPA
expects to promulgate such a method in the next few years. EPA is
currently conducting validation studies of this method, and expects to
propose this method in 2004.
In this alternative, EPA would allow a facility to monitor for E.
coli rather than fecal coliforms after the facility certified that the
concentrations of the two parameters were similar in the final
effluent. As part of the application process for this certification,
the facility would be required to submit data demonstrating the
similarities of concentrations of fecal coliforms and E. coli in its
facility's wastewater over an extended period of time (perhaps a month
or longer). If the permit authority determined that the E. coli
concentrations had values that, on average, were greater than some
``cutoff'' percent (for example, 75 or 90 percent) of the fecal
coliforms concentration values, then the certification would allow the
facility to monitor for E. coli rather than fecal coliforms. In this
instance, the permit would contain an E. coli limitation/standard set
equivalent to the same numerical value as the existing fecal coliforms
limitation/standard for that facility. If the E. coli concentration
values, on average, were lower than the cutoff percent of the fecal
coliforms concentration values, then under this possible approach the
permitting authority would be able to establish a limitation/standard
for E. coli in place of fecal coliforms only if the numerical value for
the E. coli limitation/standard in the facility's permit would be
reduced by an appropriate amount from the fecal coliforms limitation/
standard for that facility. Note that EPA is not proposing to set
national limitations for E. coli, because EPA lacks the data necessary
to set such limitations. EPA believes, however, that the alternate
approach discussed here could avoid the need to monitor for both E.
coli and fecal coliforms in cases where the permitting authority
believes E. coli is the more appropriate indicator.
EPA solicits comment on this alternative and the specifications it
is considering. EPA also solicits comments on whether this alternative
would be beneficial for facilities, even though facilities could not
use this method until EPA has adopted an approved method for E. coli in
industrial effluent. Note that EPA is not proposing to set national
limitations for E. coli as part of the MPP rule, because EPA lacks the
information necessary to set such limitations at this time.

D. Concerns About Total Nitrogen Limitations and Standards

At the time of proposal, EPA expressed a tentative view that limits
based on the performance of poultry products facilities could also be
achieved by meat products facilities. EPA received comment from
industry stakeholders indicating that the relative proportions of
nitrogenous BOD and carbonaceous BOD differ in poultry wastewaters from
red meat wastewater.

[[Page 48486]]

Because of these differences, commenters were concerned that it would
be inappropriate to transfer total nitrogen limitations from poultry to
red meat subcategories. Based on the evaluations discussed below, EPA
is considering transferring total nitrogen limitations from poultry to
red meat subcategories for the final rule.
EPA has performed a comparison of the poultry and meat processing
wastewaters after anaerobic lagoon treatment (See DCN 100765). In this
comparison, using data from surveys and sampling episodes, EPA
evaluated parameters which are commonly used to determine the
characteristics of wastewater for biologically-based treatment systems.
These parameters included 5-day biochemical oxygen demand (BOD),
chemical oxygen demand (COD), oil and grease, nitrogen, phosphorous,
and total suspended solids (TSS) as well as biokinetic parameters
(i.e., maximum specific growth rate, the half saturation constant,
decay rate, and yield coefficient). EPA concluded that wastewater
strength and biodegradation rates of poultry processing wastewater and
meat wastewater are similar and fall within the same general ranges
(e.g., the average concentration for COD in the poultry processing
wastewater was approximately 851 mg/L compared to 961 mg/L and for meat
processing wastewater). However, EPA found the average TKN and ammonia
concentrations of meat processing wastewater are somewhat higher than
those of poultry processing wastewater (e.g., 265 mg/L TKN for meat
compared to 109 mg/L TKN for poultry; 162 mg/L ammonia for meat
compared to 54.5 mg/L for poultry). Nitrogen in poultry processing and
meat processing wastewaters after anaerobic treatment is primarily
present as ammonia. Since the substrate in both types of wastewater is
the same and the nitrification systems are universal, it is reasonable
to apply treatment systems used for nitrifying poultry wastewater may
to meat processing wastewater. However, higher ammonia and TKN
concentrations in meat wastewater after anaerobic treatment may warrant
modifications in design and operational characteristics of the
treatment system; therefore, EPA has included costs for such modified
design and operational characteristics when estimating compliance costs
for meat products facilities. For example, higher TKN can result in a
BOD:TKN ratio that is lower than what is needed to achieve
denitrification and, as discussed in Section III, EPA has included
costs for an additional carbon source such as methanol, when
appropriate, to achieve the needed BOD:TKN ratio.
EPA notes that treatment systems for BOD removal, nitrification,
denitrification, and phosphorus removal systems are universal. This
observation is consistent with our review of treatment systems of both
industries which reveals that many of the treatment processes used to
treat poultry processing wastewaters are also used to treat meat
processing wastewaters. Thus, EPA expects that many of the same
modifications to existing poultry processing plants for enhancing
biological nutrient removal can be used for meat processing wastewater
treatment options. However, EPA recognizes that when meat processing
facilities incorporate these enhancements specific operating parameters
and treatment effectiveness may be different than for poultry
facilities, depending on the specific characteristics of the influent
wastewater. EPA requests comments and data that would help to establish
the differences and similarities between poultry and meat processing
wastewater, and the implications of these similarities and differences
for the relative treatability of each.
In its consideration of the total nitrogen reductions, EPA thought
that Ultimate BOD (UBOD) analyses performed on wastewater from poultry
and meat facilities could be used to determine whether the carbonaceous
and nitrogenous portions in BOD are similar (or not) at the two types
of facilities. While EPA has not yet fully evaluated this, EPA
collected samples and conducted UBOD analyses (using Standard Method
5210C and EPA Method 353.1) in samples of raw wastewaters and treated
effluents from one poultry and one meat facility. From the poultry
facility (episode 6493), EPA analyzed UBOD in eight samples collected
on two sampling days at four sampling locations. From the meat facility
(episode 6496), EPA analyzed six samples collected on three days at two
sampling locations. The analysis of UBOD provides measurement of
dissolved oxygen (DO), nitrate/nitrite, CBOD, and nitrogenous BOD
(NBOD) in a sample over a period of 25 days. (NBOD is calculated by
applying a multiplier of 4.57 to the nitrate/nitrite concentration
value.) For each sample, there are 16 measurements of each parameter as
a result of analyzing aliquots every day for the first five days and
every other day until the end of the 25-day time frame. EPA will use
these measurements, located at DCNs 165460 and 165470, to evaluate the
degradation rates of BOD and nitrification in the wastewaters. To
evaluate these rates, EPA intends to compare the general pattern of the
degradation curves for the samples for each facility. However, EPA is
concerned that the UBOD data for the poultry facility may be minimum
values, because total DO depletion occurred on one or more days for all
samples, which would artificially limit measured BOD on subsequent
days. Thus, EPA is not sure how useful this analysis will be in
comparing poultry and meat processing wastewaters. EPA requests comment
on this issue.
EPA may also use the UBOD data to evaluate some other aspects of
its costing model. For example, for some facilities it was necessary
for EPA to estimate aerobic volume; in order to do this, EPA needed
both BOD degradation and nitrification rates. For these estimates, EPA
derived default biodegradation rates based on literature and some
limited data submitted as part of the MPP detailed survey. EPA may be
able to use the UBOD data to evaluate the estimates of the
biodegradation rates and to develop any appropriate adjustments for MPP
wastewaters.
EPA solicits comments on its initial comparison of poultry and meat
processing wastewaters. In addition, because industry representatives
have expressed some concerns about the applicability of UBOD analyses
to total nitrogen performance, EPA solicits comments on the
appropriateness of using the UBOD data to determine total nitrogen
performance in the two subcategories and whether other information
would be more relevant. EPA also solicits comments on the applicability
of the UBOD data for estimating BOD biodegradation rates and
nitrification rates for use in its cost model. Further, EPA solicits
additional data on UBOD in raw wastewaters.

E. Data Selection for Oil and Grease Loadings and Limitations/Standards

The proposed limitations for oil and grease were based upon data
from EPA sampling episodes. For these samples, EPA used EPA Method 1664
to measure the oil and grease concentrations. Method 1664 uses normal
hexane (n-hexane) as the extraction solvent, instead of Freon which is
an ozone-depleting agent. Because EPA had developed its proposed
limitations using Method 1664 data, it expressed the limitations as oil
and grease measured as n-hexane extractable material (HEM). (Defined at
67 FR 8658).
EPA also had two other reasons for expressing the limitations as
HEM. First, there are environmental concerns associated with the older
methods that

[[Page 48487]]

use Freon, which is an ozone-depleting agent. Second, EPA expects that
facilities will choose to use Method 1664 in the future rather than
Freon methods, because Freon is expected to become more expensive and
difficult to obtain. For these two reasons, EPA expects to promulgate
the final limitations for ``oil and grease measured as HEM.'' As a
consequence, compliance monitoring would require the use of a method,
such as Method 1664, that measures oil and grease as HEM.
With the incorporation of industry self-monitoring data, EPA now
has oil and grease concentration data measured by Freon methods.
Because these data do not measure oil and grease as HEM, EPA has
excluded them from its analyses and loadings estimates for the NODA.
However, EPA acknowledges that at the time of development of Method
1664, EPA had explained that Method 1664 and Freon methods generally
provide comparable results for industrial wastewaters (see, for
example, http://www.epa.gov/waterscience/methods/1664fs.html). However,
during the development of Method 1664 and subsequently, some industries
have expressed concerns about potentially differing results from the
two methods. In response to these comments, EPA has provided guidance
for facilities to evaluate if the two methods are comparable in their
own wastewater. (See chapter 2 in ``Analytical Method Guidance for EPA
Method 1664A Implementation and Use (40 CFR part 136),'' February 2000,
EPA/821-R-00-003; DCN 165620). EPA solicits data from any MPP
facilities that may have performed this comparison in the MPP
wastewaters.
Before the final rule, EPA may assess whether the oil and grease
data between the two methods appear to differ within the same model
technology options. (See DCNs 165011, 165140, 165070, 165150 for the
data and summary statistics.) Further, if data from both a Freon method
and Method 1664 are available from the same facility, then EPA intends
to compare the concentrations from the two methods for that facility.
Depending on the results of these comparisons, EPA may incorporate the
Freon-based data into its development of the final limitations/
standards for oil and grease. In this case, EPA would also consider
allowing the use of Freon-based methods for compliance monitoring. EPA
solicits comments on whether it should use only Method 1664 data in
calculating its loadings and final limitations/standards for oil and
grease measured as HEM.

VI. New Information and Consideration of Revisions to Economic
Methodologies

A. Closure Analysis

For the proposed rule, EPA projected facility level economic
impacts using a probability model derived from Census data because
detailed survey financial information was not available at proposal.
See Section II.E for discussion of incorporation of additional survey
information. However, in the Economic Analysis (EA) document supporting
the proposal, EPA presented the economic impact methodology it intended
to use for the final rulemaking. EPA received several comments
recommending modification to this methodology. EPA intends to use the
methodology proposed for the final rulemaking with some modifications
in response to these comments. Additionally, EPA may use some Census
data to perform analyses in subcategories for which adequate detailed
survey data are not available. Based on comments and incorporation of
additional data, EPA is considering revisions to the proposed economic
analysis methodology in the following areas: projection of future
facility income, tax shields, and company level aggregation and closure
analysis. The revisions that EPA is considering are discussed below.
1. Forecasting Future Facility Income
For the proposal, EPA stated it would use the survey period, 1997
to 1999, as the baseline for projecting facility and company net income
for use in the closure model. Commenters objected to the use of this
period as the baseline because unusual supply and demand conditions
resulted in unusually large margins for meat companies, and therefore,
atypically profitable years.
EPA concurs with this assessment. To address these concerns EPA
developed a forecasting model that uses historical data on the periodic
cycles of the relevant markets to generate an index. This index is used
to forecast net income for MPP facilities, accounting for cyclical
effects on profits. EPA has used this model for the analyses in today's
notice and is considering its use for the final MPP rule.
In the red meat sectors, EPA used U.S. Department of Agriculture's
Economic Research Service (USDA/ERS) time series on the monthly farm-
to-wholesale price spread to develop its margin forecast. To forecast
the margin in the poultry sector, EPA developed a new monthly time
series by subtracting the USDA/ERS broiler wholesale production cost
time series from its broiler wholesale price time series. These time
series, which ran from 1970 to 2002 for beef and pork, and from 1990 to
2002 for poultry, were converted to constant 1999 prices. To
deseasonalize each time series, EPA calculated each month's value as
the average price spread for a 12 month period centered on that month
(i.e., a 12-month centered moving average). The price spread time
series were deseasonalized because each series reflects cyclical
behavior within each year as well as over longer time periods (e.g.,
each year the demand for turkey peaks in November and December).
Deseasonalizing the farm-to-wholesale price spread time series data set
enables EPA to focus on the longer-run cycles.
From the time series data for each sector, clear, consistent cycles
were readily identifiable. EPA used these cycles to develop a
``normal'' or ``average'' cycle for each meat type. To test the
validity of the normal cycle pattern, the normal cycle was used to
remove the cyclical component (de-cycle) from the moving average time
series for the farm-to-wholesale price spread. After de-cycling, these
time series showed only random variation and the general trend of the
original series, indicating that the cyclical variation in these data
sets had been successfully captured by the model. The cycles were then
used to forecast the wholesale margin for the 2003 to 2018 time period.
Complete details of the methodology used to measure and forecast the
wholesale margin cycles are provided in the docket (see Section 21.2,
DCN 125502).
EPA used the historical and projected wholesale margin time series
to develop indices. These indices are applied to survey net income data
to forecast facility and company earnings for use in the closure model.
Net income was projected to vary directly with the farm-to-wholesale
price spread; as the spread narrows, net income declines. As commenters
pointed out, the 1997 to 1999 survey period was at or near the peak of
a cycle, and as a result net income could be expected to decline as
industry moved toward the cycle trough. Therefore, EPA selected cycle
high points (largest annual margin) for the base period of its indices.
Index values for succeeding years were calculated as the proportion of
each year's margin to the base period margin.
In addition, EPA had to select a starting value for net income to
which the indices are applied. EPA ran a series of net income
projections. Each run used a different combination of net income
starting point and cycle index. From these combinations, EPA selected

[[Page 48488]]

the following five projection methods for net income:
? Using a simple average of 1997, 1998, and 1999 net income
projected over the 15 year project life to provide an unsophisticated
baseline;
? Using 1999 net income as the start point for projections
using Cycle 1 in Table VI.A.1 (index initial value is 1999);
? Projecting three different net income time series, all
using Cycle 2 in Table VI.A.1 (index initial value is the largest
margin in the 1995 and 2002 period), but starting from different
detailed survey data points: maximum, average, and minimum facility net
income.
As described in the proposal EA (Section 3.2.2), EPA uses the
preponderance of evidence under different forecasting methods to
determine if a facility is projected to close. Because EPA intends to
use five forecasting methods for the final rule, a facility is
projected to close if the present value (PV) of future compliance costs
exceeds the forecast PV of net income under three of the five
forecasting methods. EPA notes that the results of these five methods
are not independent and is considering basing its closure analysis for
the final rule on a subset of these methods. EPA solicits comment on
this forecasting model for future facility income in the MPP industry.
As a sensitivity analysis, EPA also projected closures if the PV of
future compliance costs exceeds the forecast PV of net income under one
of the five forecasting methods. The results of this sensitivity
analysis can be found in the docket at DCN 125607.

Table VI.A.1.--Business Cycle Indices for Forecasting Net Income
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cycle 1 Cycle 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year 1 of Cycle Equals 1999 Year 1 of Cycle Equals High Point of 1995-2001
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year Beef Pork Broilers Beef Pork Broilers
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 1.00 1.00 1.00 1.00 1.00 1.00
2....................................................... 1.05 0.84 0.79 0.96 0.84 0.81
3....................................................... 1.05 0.84 1.64 0.94 0.84 0.63
4....................................................... 1.01 0.83 1.15 0.98 0.83 0.95
5....................................................... 0.99 0.87 1.04 0.86 0.87 0.61
6....................................................... 1.03 0.79 1.61 0.83 0.79 0.48
7....................................................... 0.91 0.67 1.20 0.86 0.67 0.99
8....................................................... 0.88 0.66 1.04 0.91 0.66 0.70
9....................................................... 0.90 0.79 1.61 0.80 0.79 0.63
10...................................................... 0.96 0.77 1.20 0.76 0.77 0.97
11...................................................... 0.85 0.65 1.04 0.78 0.65 0.73
12...................................................... 0.80 0.60 1.61 0.83 0.60 0.63
13...................................................... 0.82 0.70 1.20 0.75 0.70 0.97
14...................................................... 0.88 0.75 1.04 0.70 0.75 0.73
15...................................................... 0.79 0.63 1.61 0.70 0.63 0.63
16...................................................... 0.73 0.56 1.20 0.75 0.56 0.97
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Tax Shields
EPA received comments on its methodology for estimating investment
tax shields on new wastewater treatment technology. One comment pointed
out that EPA's methodology apparently failed to deduct interest
payments from the revenue base used to determine the tax rate
applicable to tax shields, though it did subsequently subtract out
interest payments to yield net income. This could produce an
overestimate of the tax shields the company accrues on its investment
in wastewater treatment equipment. EPA agrees with this commenter, and
for the analysis supporting this notice has subtracted interest
payments from earnings before interest and taxes (EBIT) to determine
both taxable income and the applicable tax rate.
A second comment on EPA's method for estimating tax shields stated
that EPA's methodology would overestimate tax shields if incremental
compliance costs decrease earnings before taxes to such an extent that
a facility's marginal tax rate changes. EPA examined estimated
compliance costs and net income for each facility, and found that in
practice there would be no effect on estimated tax shields. In the vast
majority of cases, no change in tax rates would result given the
magnitude of projected compliance costs. For one facility where the tax
rate could have changed due to the incremental compliance costs, EPA's
method of limiting estimated tax shields so they cannot exceed taxes
actually paid resulted in a smaller estimated tax shield than if EPA
estimated its tax shield by incorporating the change in rates.
3. Aggregation of Company Level Costs and Company Level Closure
Analysis
Following proposal, EPA completed review of the detailed surveys
(see Section II for discussion on completion of survey review). Less
than 40 percent of direct discharging facilities provided facility
level financial data in the detailed survey. Industry has stated that
many companies in the MPP industry do not maintain financial records at
the facility level. Instead they maintain their financial records at,
for example, the company level, division level or product line level.
As a result, EPA was unable to scale up its facility level closure
analysis to produce a national-level projection of closures. Rather,
for each facility for which there was sufficient data, EPA recorded the
closure status of the associated number of facilities as ``unknown.''
EPA did collect company level financial data and when necessary
this data can be supplemented using publicly available data. Therefore,
EPA is considering a closure analysis at the company level in addition
to the facility level analysis and has performed that analysis for
today's notice (see Section VI for estimated economic impacts). This
requires EPA to estimate compliance costs at the company level as well
as the facility level. The Altman Z' analysis, described in the
proposal EA (Section 3.1.3.2) document, is also a company level
analysis and so EPA used the same method for estimating company level
costs for both models.

[[Page 48489]]

The company level closure analysis is identical to the facility
level closure analysis in that EPA projects the net present value (NPV)
of each company's net income over the 15 year project life. Salvage
value is assumed to equal zero, as proposed, for the reasons described
in DCN 125505. EPA excludes salvage value from the closure analysis
because academic studies and EPA experience on previous projects both
demonstrate that it is extremely difficult to estimate accurately.
Therefore, inclusion of salvage value would add a highly arbitrary
component to the closure analysis. The NPV of projected compliance
costs is subtracted from the NPV of projected net income; if this value
is positive, the company is deemed to remain open, if this value is
negative, the company is projected to close, with associated losses in
output and employment.
To estimate company level compliance costs, EPA reviewed the 55
non-small detailed survey direct discharging facilities to determine
their corporate parent, then compiled a list of all other meat
processing facilities owned by each of those corporate parents. EPA
primarily relied on the screener survey and the PCS database to
estimate the number of direct discharging facilities owned by these
corporate parents that were not represented in the detailed survey
database. EPA estimates that the 26 corporate parents of those 55
direct dischargers owned about 345 MPP facilities in 1999. EPA then
determined the discharge status of these 345 facilities because
indirect discharging facilities will not incur costs under this
regulation, and estimated that of the 345 facilities owned by these
corporate parents, approximately 125 were direct dischargers. Of these
125 direct dischargers, 55 received detailed surveys, and 70 required
analysis based on non-survey data.
To estimate compliance costs attributable to the 70 non-surveyed
facilities, EPA applied mean compliance costs by meat type (red meat or
poultry) to each non-surveyed facility. EPA examined alternative means
of allocating compliance costs to these facilities, such as matching
costs from detailed survey facilities based on meat type and processes
performed. EPA determined that applying average costs by meat type to
non-surveyed facilities resulted in more conservative (i.e., higher)
cost estimates. See DCN 125501 for additional information on the
estimation of non-surveyed direct discharge facilities. EPA solicits
information on the actual number of non-surveyed direct discharging
facilities that are owned by each parent company identified and the
production type of these facilities (e.g., first processor, further
processor, renderer). EPA notes that, for the final rule, it is
considering using a company-specific mean compliance cost if additional
financial data is received in response to today's notice. EPA did not
attempt to scale up the projected company closures to correspond to a
national estimate because EPA lacks data on which to base sample
weights for the 26 companies. Thus, the company level analysis reflects
closures only among the 26 companies analyzed. EPA made an effort to
determine whether there are additional companies that own direct
discharging MPP facilities and found three additional companies based
on the screener survey results that may own direct discharging MPP
facilities. Therefore, the company level analysis could underestimate
the number of company closures nationally. EPA solicits comment and
information on the presence of additional companies that have
facilities within the scope of the MPP rule.
In addition, EPA solicits comment on the aggregation of facility
level compliance costs to the company level, and the use of a company
level closure analysis. In addition, EPA solicits comment on the
methodology used to estimate compliance costs for the closure analysis
for the 70 non-surveyed facilities which are owned by the same parent
companies as the 55 detailed survey recipients.

B. Trade Elasticity Methodology

Commenters on the proposed rule raised concerns over EPA's
assessment of foreign trade impacts for poultry facilities.
Specifically, the commenters stated that EPA did not adequately address
the impact of the proposal on poultry exports. Based on these comments,
EPA has reviewed its methodology and is considering revising it for the
final rule.
For the proposed rule, EPA analyzed trade impacts through the
international trade component of EPA's MPP market model. The primary
determinant of trade impacts are the trade elasticities specified for
the model. EPA derived its trade elasticities based on Armington's
framework in which one country's meat products are an imperfect
substitute for those of other countries. After review of the proposal
model, EPA is considering revising its derivation of trade elasticities
for the final rule, and is using the revised trade elasticities for the
analyses supporting today's notice. EPA also examined but rejected an
alternative derivation of trade elasticities based on Orcutt's
framework in which each country's meat products are perfect substitutes
for those of any other country for the reasons described below.
EPA selected the Armington specification based on the fact that the
U.S. both imports and exports meat products. If U.S. consumers consider
U.S. meat products and foreign meat products to be perfect substitutes,
there would be no reason to simultaneously import and export these
products. This intuitive explanation is supported by econometric
evidence (Galloway, et al. 2000). In addition, analysts have observed
that U.S. poultry exports are largely composed of dark meat which is
considered inferior by U.S. consumers but is preferred by foreign
consumers (Aylward, 2002; Salin et al., 2002; Standard & Poor's, 2000).
Thus, EPA determined that the Armington framework is conceptually more
appropriate for modeling trade in meat and poultry products than a
framework that treats all meat products as perfect substitutes.
EPA used Armington's (1969a, 1969b) expressions for partial and
cross-price elasticities of demand for a traded product to derive trade
elasticities for meat products. The key data points for this estimation
are: (1) The price elasticity of domestic demand for meat products
regardless of the country of origin, (2) relative trade shares between
the home country and its trading partner(s), and (3) the elasticity of
substitution between each country's meat products. EPA found suitable
econometric estimates of the elasticity of substitution, and adequate
data for estimating trade shares (see Section 3.1.4 and Appendix C of
the proposal EA).
For the proposed rule, EPA indirectly derived the price elasticity
of U.S. demand for meat products regardless of the country of origin
from the price elasticity of U.S. demand for meat products of U.S.
origin (assumed to equal the U.S. domestic price elasticity of meat
demand) using Armington's equations in repeated substitutions. In the
revisions being considered by EPA, the Agency uses the U.S. domestic
price elasticity of meat demand as a direct proxy for the price
elasticity of U.S. demand for meat products regardless of the country
of origin. This is more consistent with the econometric studies used to
estimate the U.S. price elasticity of meat demand; such studies do not
typically distinguish country of origin in measuring U.S. retail meat
purchases. Details of EPA's derivation of trade elasticities may be
found in the docket (DCN 125503).

[[Page 48490]]

Table VI.B.1 summarizes EPA's estimated trade elasticities under
the methodology used for proposal and for the revised methodology
described above.

Table VI.B.1.--Estimates of Armington Trade Elasticities for the MPP Market Model
----------------------------------------------------------------------------------------------------------------
Import elasticities a Export elasticties b
----------------------------------------------------------------------------------------------------------------
Meat type Proposal c Revised Proposal Revised
----------------------------------------------------------------------------------------------------------------
Beef............................................ 0.9588 1.9994 -1.5584 -1.5316
Pork............................................ 0.8519 1.3337 -1.5745 -1.5711
Broilers........................................ 0.8767 1.1458 -1.2017 -1.1903
Turkeys......................................... 0.7145 1.1600 -1.1865 -1.1557
----------------------------------------------------------------------------------------------------------------
a The percent change in U.S. demand for rest of the world (ROW) meat products resulting from a one percent
change in U.S. price.
b The percent change in ROW demand for U.S. meat products resulting from a one percent change in U.S. price.
c In reviewing the trade elasticities used for proposal, EPA found an error in its calculation. Therefore the
trade elasticities presented in this table differ from those used in the proposal economic impact analysis.

Based on the preferred option at the time of proposal (BAT 3), EPA
compared trade impacts using the proposal elasticities and the revised
elasticities. Annual imports were projected to be larger using the
revised elasticities. Beef imports were 1.5 million pounds per year
larger (a difference of 0.001 percent) under the revised elasticities;
pork imports were about 280,000 pounds per year larger, while poultry
imports were less than 20,000 pounds per year larger. Exports were
slightly smaller using the revised elasticities. Beef exports were
projected to be about 160,000 pounds per year smaller; the difference
in pork and poultry exports was less than 100,000 pounds per year for
each product. The difference in export projections is less than 0.006
percent of baseline. Revised estimates of market impacts including
export and import quantities under the modified options using revised
cost estimates are presented in Table X.A-7. EPA solicits comment on
its revised trade elasticity methodology.

VII. Changes to EPA's Environmental Assessment

EPA received comments on the methodologies used to estimate MPP
pollutant loadings and those used to estimate environmental benefits
associated with the proposed regulatory options. At proposal, EPA based
its estimates of monetary benefits of the rule on the suitability, as
determined by concentrations of four specific water quality variables,
of affected waters for a range of recreational uses (boating, fishing,
and swimming). EPA employed the National Water Pollution Control
Assessment Model (NWPCAM) version 1.1 to derive its benefit estimates.
Ecological effects such as habitat degradation were noted but not
quantified to avoid double-counting benefits derived using NWPCAM
version 1.1.
Based on public comments received on the proposal and as discussed
in the proposed rule, EPA is considering possible revisions to its
approach as described in more detail below. Briefly, these revisions
include (1) inclusion of nitrate and phosphate in the water quality
variables modeled by NWPCAM to estimate the water quality index (WQI);
(2) use of alternative or supplemental environmental models to more
thoroughly characterize the environmental benefits of the regulation;
(3) improvements to the algorithm relating changes in water quality to
households' willingness to pay for improved water quality; and (4)
consideration of other benefit categories (e.g., reduced adverse human
health effects from consuming fish and water contaminated by toxic
compounds in MPP effluents; reduced costs of treatment associated with
lower total suspended solids (TSS) loads in community water systems'
(CWSs) intake water; reduced episodic fish kills resulting from
discharges from MPP facilities; and a Regional Vulnerability Assessment
(ReVA) that was designed to predict future environmental risk and
support informed decision-making and prioritization of issues for risk
management). EPA may consider other approaches for estimating benefits
that are not specified in this NODA but may be a result of comments on
today's notice. Note that revised results based on these methodological
changes are not yet available, but will be placed in the record for
this rulemaking as they become so. To the extent practicable, EPA will
consider public comment on these results, even if filed after the
comment period for the NODA, as it prepares the benefits analysis for
the final rule.

A. Water Quality Modeling: What Changes and Information Are Being
Considered?

1. National Water Pollution Control Assessment Model (NWPCAM)
EPA used NWPCAM version 1.1 to estimate environmental impacts to
surface water quality resulting from implementation of the proposed
rule. NWPCAM version 1.1 modeled instream concentrations of dissolved
oxygen (DO), total Kjedahl nitrogen (TKN), biochemical oxygen demand
(BOD), TSS, and fecal coliforms (FC). Four of these indicators (DO,
BOD, TSS, and FC) were combined to generate a water quality index (WQI-
4). The WQI is a 0 to 100 scale structured so that each water quality
parameter is weighted to reflect its significance in determining the
suitability of water for progressively more demanding uses. Changes in
the WQI-4 were converted to monetary values based on a contingent
valuation survey (Carson and Mitchell, 1993). Commenters remarked that
this approach was an over-simplification because it may have ignored
several other classes of pollutants discharged from MPP facilities
including nitrogen (N) and phosphorous (P). For more details about
valuation of water quality, see Section VII.B of this NODA.
NWPCAM version 1.1, used for the proposal, does not model nutrients
discharged by MPP facilities. Since proposal, EPA has developed NWPCAM
version 1.6 which simulates concentrations of the nutrients, nitrogen
and phosphorus. Since the updated model addresses two additional
components of wastewater discharges from MPP facilities, EPA is
considering using the updated model to estimate the water quality
change and the associated monetized benefits for the final MPP rule.
Commenters also had concerns about the missing sources of loadings in
the model, especially nonpoint and

[[Page 48491]]

minor point sources that were not captured in NWPCAM version 1.1.
NWPCAM version 1.6 models water quality using a stream reach network
with greater resolution and incorporates additional point and nonpoint
source loadings.
The NWPCAM version 1.6 generates a water quality index (WQI-6) from
six indicators of water quality (TSS, DO, BOD5, FC, nitrate
(NO₃-), and phosphate
(PO₄3-)). The weights on individual water quality
parameters are adjusted from WQI-4 to reflect the increased number of
parameters in WQI-6. The new WQI-6 is a broader measure of water
quality and is expected to provide a better representation of changes
in water quality downstream of MPP facilities. A version of NWPCAM
capable of simulating nitrogen and phosphorus concentrations and
employing the WQI-6 is described in EPA, 2002.\1\
---------------------------------------------------------------------------

\1\ U.S. EPA (U.S. Environmental Protection Agency). Estimation
of National Economic Benefits Using the National Water Pollution
Control Assessment Model to Evaluate Regulatory Options for
Concentrated Animal Feeding. December, 2002.
---------------------------------------------------------------------------

EPA solicits comment on the use of the six-parameter Water Quality
Index (instead of the four-parameter Index) to assess the environmental
improvements from revising the current MPP regulation. In particular,
EPA solicits comment on the inclusion of nitrogen and phosphorous in
the kinetics model.
EPA is considering the use of National Water-Quality Assessment
Program (NAWQA) data to calibrate the baseline predicted by NWPCAM
version 1.6 for the stream reaches associated with MPP facilities. EPA
proposes to download NAWQA data for as many of the regions where MPP
facilities are located as possible. Based on the comparison of NAWQA
vs. NWPCAM version 1.6 data, EPA plans to estimate the prediction
errors for each region using the NAWQA data and use the errors to
adjust the NWPCAM results in each region. EPA then plans to generate a
probability distribution for the errors for each parameter and then set
up a Monte Carlo program to simulate variability in the water quality
index as a function of NWPCAM uncertainty for all parameters at once.
EPA solicits comment on the use of NAWQA data to calibrate the
baseline, and solicits other sources of data to use in the calibration
effort.
2. Site-Specific or Watershed-Specific Models
In order to more comprehensively simulate detailed water quality
and aquatic ecosystem responses to MPP loadings and loading reductions,
EPA is considering the use of other available models to evaluate the
effects of nutrients and pollutants on receiving waterbodies from
individual representative MPP facilities at a more site specific level
either in lieu of or in addition to NWPCAM. In particular, the Agency
is investigating the use of a simulation model for aquatic ecosystems
(AQUATOX), an enhanced stream water quality model (QUAL2E), and the
Better Assessment Science Integrating Point and Nonpoint Sources
(BASINS) model. One advantage of using these models is their capacity
to predict impacts of nutrient inputs on dissolved oxygen through
eutrophication. Detailed information on each of these models can be
found at http://www.epa.gov/waterscience/wqm/. Output from these
candidate models could be used to qualitatively and quantitatively
illustrate potential water quality and aquatic ecosystem responses to
MPP loads and load reductions, or could be used in conjunction with
environmental benefits valuation methods to estimate monetized benefits
of MPP loads reductions. For example, water quality output from one or
more of these models could be used as the basis for the calculation of
the WQI-6 described above, and subsequent monetization. Alternatively,
other output parameters from these models, such as levels of rough,
forage, and game fish, could be used as the basis for other
monetization approaches.
AQUATOX is an ecosystem model that estimates the environmental fate
and effects of toxic chemicals, conventional pollutants, and nutrients
from point and non-point sources on a stream-specific basis. In
particular, AQUATOX allows assessors to model the fate of TSS, ammonia,
nitrate, phosphate, carbon dioxide, DO, pH, temperature, light, and
dissolved organic toxicants on the receiving waterbody. AQUATOX also
provides an assessment of the impacts of these pollutants on assorted
organisms (e.g., phytoplankton, certain guilds and taxonomic groups of
invertebrates and fish) and detrital components. AQUATOX can be used to
investigate pollutant effects on streams, small rivers, ponds, and
lakes. AQUATOX is relatively applicable to site-specific studies,
models many conventional pollutants and nutrients, and estimates the
impacts on a wide range of key aquatic ecosystem variables. Possible
constraints of using AQUATOX to model the impacts and benefits from
regulating the MPP industry are that (a) fairly detailed pollutant- and
reach-specific parameters must be compiled to run the model, (b) it
does not estimate BOD and FC (pollutants necessary for the water
quality index (WQI) calculations) concentrations in the receiving
waterbody, (c) AQUATOX is intended to represent a single stream or
river reach or an entire pond, lake, reservoir, or estuary. A segmented
version of AQUATOX, or multiple model runs, would be required to
evaluate spatially variable conditions downstream of the immediate
waterbody of interest if this were determined to be necessary.
QUAL2E simulates the in-stream behavior of toxic chemicals,
conventional pollutants, and nutrients on a branching, one-dimensional
stream-specific basis. In particular, QUAL2E models the concentrations
of DO, BOD, temperature, algae, organic nitrogen, ammonia, nitrite,
nitrate, organic phosphorus, dissolved phosphorus, FC, up to three
conservative pollutants (pollutants that remain chemically unchanged in
the water), and one non-conservative pollutant from point and non-point
sources. QUAL2E allows a user to model up to 25 reaches on a river and
25 pollution sources along the river. Like AQUATOX, QUAL2E is
relatively applicable to a site-specific analysis, and it also models
many conventional pollutants and nutrients. Possible constraints of
using QUAL2E to model the MPP industry are that (a) detailed pollutant-
and reach-specific parameters must be compiled to run the model, (b) it
does not estimate the TSS (a pollutant necessary for the WQI
calculations) concentration in the receiving waterbody, and (c) it is
only applicable for rivers, not lakes or estuaries.
BASINS is a multipurpose environmental analysis system that allows
users to perform watershed- and water-quality based studies. This tool
allows users to investigate river segments and how they may be impaired
by point source and non-point source discharges. Databases available
for use with BASINS provide necessary environmental background data,
environmental monitoring data, and point source loading data. BASINS
integrates the use of models such as QUAL2E, the Hydrological
Simulation Program Fortran (HSPF) and Soil and Water Assessment Tool
(SWAT) to conduct fate and transport assessments of point and non-point
sources. BASINS models conventional pollutants and nutrients, including
all the pollutants necessary to calculate a WQI, and (a) all the
pollutant- and reach-specific parameters are available in the system's
database files, (b) reach background concentrations for DO, ammonia,
and BOD are available in the system's

[[Page 48492]]

database files, and (c) it is applicable to rivers, estuaries, and
lakes.
If site-specific models are used, EPA will not be able to model
each regulated MPP facility receiving water or watershed separately due
to various factors, including data requirements and time constraints.
One potential scenario is to develop a limited number of ``generic''
watersheds that are representative of the topography and hydrology of
the areas in which MPP facilities are located. Load reduction scenarios
for each of the facilities with detailed information would then be
evaluated for water quality improvements using the ``generic''
watershed which best represents the geography and flow conditions of
the discharging facility. Another option being considered is to model a
small sample of the watershed or reach areas containing MPP facilities
and extrapolate results to a broader number of areas (see Section
VII.B.2 of this NODA).
In determining which of these candidate models to pursue, EPA will
weigh resource requirements for each model, the availability of data
required to run each model, and the contribution of the endpoints
simulated by each model toward best representing the range of
environmental impacts and benefits of regulation. If EPA uses one or
more of these models for the final rule, EPA will use the revised final
loadings estimates along with information on facility location within
watersheds. A comparison of the advantages and disadvantages of all
three models is provided in Table VII.A.2-1. EPA solicits comment on
the applicability of the AQUATOX, QUAL2E and BASINS models to model the
environmental benefits of the MPP regulation.

Table VII.A.2-1.--Summary of the Features of AQUATOX, QUAL2E, and BASINS
------------------------------------------------------------------------
AQUATOX QUAL2E BASINS
------------------------------------------------------------------------
Conventional and Conventional and Conventional
nutrient loadings nutrient loadings (including DO, BOD,
assessed assessed TSS, FC) and nutrient
....................... loadings assessed
Eciststen effects Requires specific data ......................
(effects on fish and about reach and Includes background
other aquatic life) pollutant parameters levels for DO₃, NH₃,
estimated ....................... and BOD
Does not model TSS; ......................
Requires specific data Only models rivers, no Reach and pollutant
about reach and estuaries or lakes data easily available
pollutant parameters ....................... from BASINS databases
Peer reviewed/available ......................
Does not model BOD, FC; to public Models rivers,
Multiple model runs estuaries, and lakes
required to model ......................
effect of pollutants Peer reviewed/
downstream from reach available to public

Peer reviewed/available
to public
------------------------------------------------------------------------

B. Recreational Benefits: What Changes and Information Are Being
Considered?

The benefits analysis for the proposed rule used two methods to
estimate a household's willingness to pay for improvements in water
quality: (1) A water quality ladder; and (2) a continuous water quality
index. Both methods are based on results from a stated-preference
survey conducted by Mitchell and Carson (1993).\2\ Previous
applications of the Mitchell and Carson survey had focused on the
household willingness to pay for ``stepped'' improvements in water
quality from current levels to boatable, fishable, and swimmable
conditions nationwide. Each step on the ladder, i.e. use level, was
defined by a set of water quality indicators such that a water body
must meet minimal criteria for every indicator to be classified into
the next higher use class. Thus, the stepped willingness to pay could
only indicate a benefit from an action that resulted in all water
quality indicators satisfying the next higher use category. The ladder
approach failed to attribute any benefits to improvements in water
quality that were insufficient to actually achieve a discrete
improvement in use. Conversely, a relatively small change in water-
quality could receive a relatively large valuation if it happened to
push water-quality over the threshold between steps. A ``continuous''
method was suggested by Mitchell and Carson (1993) as a means to
attribute benefits to marginal water quality improvement whether or not
it happened to be of sufficient improvement to result in
reclassification to a higher use class. The benefits analysis of the
proposed MPP regulation presented both methods in order to contrast
their results.
---------------------------------------------------------------------------

\2\ Carson, Richard T. and Robert C. Mitchell. 1993. The Value
of Clean Water: The Public's Willingness to Pay for Boatable,
Fishable, and Swimmable Quality Water. Water Resources Research
29(7):2445-2454.
---------------------------------------------------------------------------

The ``continuous'' method of monetizing water quality benefits from
WQI changes used in the analysis of the proposed rule was further
revised in the benefit assessment of the final effluent limitation
guidelines for CAFO. This revision included the application of a
benefit transfer function from the Mitchell and Carson survey. Mitchell
and Carson expressed the results of their survey in several forms. In
one format, Mitchell and Carson assigned a single value to each change
in use class, e.g., households were willing to pay $184 (1999 dollars;
updated household income) to raise all of the nation's waters from
boatable to fishable conditions. The continuous benefit analysis of the
MPP proposed rule divided this value by the number of WQI points in the
step so that each unit change was assigned a portion of the value for
achieving the whole step. For example, assume the threshold WQI for
boatable waters was 79 and the threshold for the next higher step,
fishable waters, was 94.4. Dividing $184 by 15.4 WQI points in the
boatable range allocates $11.91 to each WQI point gained. Thus,
household willingness to pay for a three point improvement in WQI in
this range would be $35.73 (=3x11.91). Mitchell and Carson also
expressed their results as an equation relating the change in the water
quality index and household income to the household's willingness to
pay for improved water quality. For the final rule, EPA is considering
using this function to value benefits based on the changes in the WQI.
The continuous equation approach may be superior to the ladder approach
in that it addresses concerns that benefits from marginal changes in
the water quality are missed using the discrete ladder. And the
Mitchell-Carson benefit function approach may be superior to the WQI
approach used at proposal in that it is less sensitive to the baseline
use of the waterbody. In contrast, the WQI

[[Page 48493]]

approach used at proposal applies values to water quality index changes
that are more consistent with expected levels of use as predicted by
NWPCAM results and the threshold criteria in the ladder. The valuation
function from the Mitchell and Carson work also demonstrates
consistency with economic theory in that it exhibits a declining
marginal willingness to pay for water quality. However, the ladder
approach captures the discrete changes in uses presented to respondents
in the survey instrument used to collect the underlying valuation data.
While EPA recognizes that caution must be used in manipulating
valuations derived from stated preference surveys, EPA believes the
WQI-6 and the Mitchell-Carson valuation function may help address some
concerns associated with the NWPCAM monetization of benefits at
proposal. Both of these enhancements were incorporated in NWPCAM
version 1.6 used to analyze benefits for the final CAFO rulemaking (DCN
350510).
Since willingness-to-pay (WTP) for water quality improvements was
assessed by Mitchell-Carson only at a national level (i.e., ``How much
would you pay to bring all freshwaters in the U.S. from boatable up to
swimmable?''), NWPCAM needs a methodology for assigning a share of this
WTP to individual water bodies that may benefit from the rule.
Generally, EPA assigns this share proportioned based on the ratio of
affected stream miles to total stream miles. In doing this EPA
allocates two thirds of willingness to pay to water quality
improvements that occur in state. It is reasonable to assume that
individuals will have greater marginal values for water quality
improvements that occur in state, and Carson and Mitchell results
appear to support this assumption. The consequences of alternative
assumptions, such as equal marginal willingness to pay for in state and
out of state water quality improvements, on final benefit estimates is
a function of relative populations and ratios of population to total
stream miles for states with and without stream reaches affected by
this rule. For the final rule, EPA is considering conducting a
sensitivity analysis to determine the impacts of these assumptions on
the monetized benefits estimates.
EPA solicits comment on the use of Mitchell and Carson's valuation
function for estimating the monetized benefit for the MPP industry. If
more site-specific valuation information becomes available, EPA may
decide to incorporate those site-specific values for estimating the
monetized benefit.

C. Toxicity Assessment: What Changes and Information Are Being
Considered?

Commenters also raised concerns over pollutants of concern (POCs)
that were not addressed in the proposal. Based on these comments, EPA
has performed exploratory analysis employing stream dilution modeling
techniques, which do not take into account fate processes other than
complete immediate mixing, to assess the potential impacts of releases
of ten pollutants (ammonia, barium, chromium, copper, manganese,
molybdenum, nickel, titanium, vanadium, and zinc) from the 53detailed
survey MPP facilities for which sufficient data were available to
model. These 53 facilities directly discharge wastewaters to 53
receiving streams. These simplified stream dilution techniques have
been used in other promulgated effluent guidelines such as Iron and
Steel, Metal Products and Machinery, and Transportation Equipment
Cleaning.
Using this approach, EPA assessed the potential impacts in terms of
effects on aquatic life and human health. The impacts to aquatic life
are projected by comparing the modeled instream pollutant
concentrations under current (baseline) treatment levels, to published
EPA aquatic life criteria guidance \3\ or, for pollutants for which no
water quality criteria have been developed, to toxic effect levels
(i.e., lowest reported or estimated concentration that is toxic to
aquatic life).
---------------------------------------------------------------------------

\3\ In performing this analysis, EPA uses guidance documents
published by EPA that recommend numeric human health and aquatic
life water quality criteria for numerous pollutants. States often
consult these guidance documents when adopting water quality
criteria as part of their water quality standards. The simplified
stream dilution techniques are used as a screening analysis for
priority pollutants and hence EPA uses the national criteria values
in lieu of more site specific values. It is not intended as a
comprehensive analysis, but rather as a trigger for potential
impacts in terms of effects on aquatic life and human health. A more
site-specific analysis could be undertaken if the simplified stream
dilution technique projected in-stream exceedences of national
aquatic life and human health criteria.
---------------------------------------------------------------------------

Impacts to human health are projected by (1) comparing estimated
instream pollutant concentrations to health-based toxic effect values
or criteria, and (2) estimating the potential reductions of
noncarcinogenic (systemic adverse effects such as reproductive
toxicity) hazard from consuming contaminated fish and drinking water.
Systemic hazards are evaluated for the general population (drinking
water only), sport anglers and their families, and subsistence anglers
and their families. Potential carcinogenic risks are not evaluated
since none of the pollutants modeled are classified by EPA as known or
probable carcinogens.
EPA projects that modeled instream pollutant concentrations of one
pollutant (copper) will slightly exceed (1.03 ratio) chronic aquatic
life criteria or toxic effects levels in only 1 of the 53 receiving
streams at current discharge levels. No exceedences of acute aquatic
life criteria or toxic effect levels are projected. In addition, EPA
projects that one pollutant (manganese) will marginally exceed (1.2
ratio) human health criteria or toxic effect levels in 1 of the
receiving streams. No systemic toxicant effects are projected for
anglers consuming fish caught from any of the receiving streams at
current discharge levels. Based on these results, EPA projects that
there are no meaningful health or aquatic life benefits to be obtained
as a result of the selected BPT or BAT options and no further analyses
of these types of impacts are being considered.

D. Other Benefits Categories Being Considered

1. Drinking Water Treatment
Suspended solids can interfere with effective drinking water
treatment. Specifically, high sediment concentrations that interfere
with coagulation, filtration, and disinfection increase treatment
costs. With more than 11,000 public drinking water systems throughout
the United States relying on surface waters as a primary source, these
costs can be substantial, though at most only a small fraction of these
systems could be impacted by MPP facilities.
For the final rule, EPA is considering estimating the monetary
value associated with the estimated reductions in TSS stream
concentrations in terms of reduced drinking water treatment costs. This
is done by relating the changes in TSS concentrations predicted by
NWPCAM with the operational and maintenance (O&M) costs associated with
the conventional treatment technique of gravity filtration at the
drinking water treatment facility. These estimated cost reductions may
be subject to a number of uncertainties, such as the use of average
input values and default treatment design values, resulting in a rough
approximation of estimated benefits.
The analytic approach being considered includes: (1) Identifying
public drinking water systems and their water supplies that are
potentially impacted by the discharge from MPP facilities; (2) linking
the water supplies to the TSS concentrations predicted by NWPCAM at
baseline and the various

[[Page 48494]]

regulatory options; and (3) estimating the reductions in drinking water
treatment costs.
a. Identification of Public Drinking Water Systems
Information regarding public water systems is contained in the Safe
Drinking Water Information System (SDWIS) \4\ Database. There are
11,403 Community Water Systems (CWSs supply water to the same
population year-round) that rely on surface water to serve 178.1
million people. The water supplies of a small number of these CWSs may
be impacted by the discharge from MPP facilities. The first step in the
approach that EPA is considering is identifying the subset relevant to
the MPP rule of CWSs and their associated streams, the populations
served, and operating status. This will be performed using two EPA
databases: (1) Water Supply Database (WSDB) \5\ and (2) SDWIS.
Hydrologic locational information will be obtained from WSDB, and
populations served by the drinking water systems, as well as operating
status, will be obtained from SDWIS.
---------------------------------------------------------------------------

\4\ U.S. EPA (U.S. Environmental Protection Agency). 2000a. Safe
Drinking Water Information System (SDWIS). Office of Groundwater and
Drinking Water. Accessed September 2002. www.epa.gov/safewater/pws/factoids.html
.
\5\ U.S. EPA (U.S. Environmental Protection Agency). 2000b.
Water Supply Database. Office of Water. Downloaded February 2000.
---------------------------------------------------------------------------

b. Application of TSS Concentrations and Water System Data
To estimate reduced drinking water treatment costs associated with
TSS reductions, EPA will link the site-specific water system data from
WSDB and SDWIS with NWPCAM predicted TSS concentration reductions at
baseline and the various regulatory options (see Section VII.A. for
discussion of water quality modeling). The median concentrations of TSS
predicted by NWPCAM will be applied to each of the public water
utilities located within the watershed. EPA may consider using site-
specific TSS concentrations (i.e., the concentration at the drinking
water intake) for the final rule. EPA is currently working to determine
if the appropriate data are available. EPA solicits comment on the use
of site-specific TSS concentrations for estimating reduced drinking
water treatment costs.
c. Estimation of Drinking Water Treatment Costs
EPA is considering employing the Water Treatment Estimation Routine
(WaTER),\6\ developed in a cooperative effort between the U.S.
Department of the Interior, Bureau of Reclamation, and the National
Institute of Standards and Technology, to estimate reduced drinking
water treatment costs based on projected reductions in TSS stream
concentrations. Using minimal information such as production capacity
and raw water composition, WaTER calculates dose rates and cost
estimates (construction and annual O&M) for 15 standard water treatment
processes, based on default design values. These default design values
can be modified, based on the users specific requirements. WaTER
employs cost indices and the Producer Price Index and derives cost data
from Estimating Water Treatment Costs (EPA-600/2-79-162a-d, 1979).\7\
Cost estimates are derived independently for each selected process.
---------------------------------------------------------------------------

\6\ U.S. Bureau of Reclamation. 1999. Water Treatment Estimation
Routine (WaTER). Denver, Colorado. U.S. Department of the Interior.
August 1999. Accessed September 2002. http://www.usbr.gov/water/desal.html.
\7\ U.S. EPA (U.S. Environmental Protection Agency). 1979.
Estimating Water Treatment Costs. EPA-600/2-79-162a-d. August 1979.
---------------------------------------------------------------------------

EPA is considering using WaTER to estimate reduced O&M costs for
the standard water treatment process of gravity filtration, based on
the capacities of drinking water treatment utilities and the estimated
TSS stream concentration reductions. There are two components to
gravity filtration: the backwashing system and the gravity filter
structure. O&M costs are based on the area of the filter bed
(applicable range 13-2600m2) as determined by the system
flow rate (production capacity) and TSS concentration. Major O&M costs
include materials, energy, and labor. Off-site disposal costs and
pretreatment costs, as well as construction costs, will not be included
in EPA's estimates. Cost saving estimates will be derived based on the
change in O&M costs predicted at baseline and the regulatory options.
EPA solicits comment on this approach to estimating monetized
benefits associated with reduced TSS concentrations predicted by NWPCAM
at drinking water intakes.
2. Fish Kills
Episodic fish kills resulting from nutrients, animal waste spills
and other discharges from MPP facilities have been documented in the
Mid-West, and South as well as along the East Coast. Causes for the
fish kills included increase in the pH, toxic amounts of ammonia and
chlorine, nutrients and fecal coliforms (see Section 20.4.2, DCN
145010). In the case of excessive nitrogen and phosphorous discharges,
these pollutants can trigger increases in algae growth that reduce the
concentration of dissolved oxygen in water and can eventually cause
fish to die.
In addition to killing and harming fish directly, pollution from
MPP facilities can affect other aquatic organisms that in turn harm
fish. In particular, the Eastern Shore of the United States has been
plagued with problems related to Pfiesteria, a dinoflagellate algae
that, under certain circumstances, can transform into a toxic form that
stuns fish, making them lethargic. Other toxins are believed to break
down their fish skin tissue and leave lesions or large gaping holes
that often result in death. One reason for the transformation of
Pfiesteria to its toxic form is believed to be high levels of nutrients
in water (Morrison, 1997).\8\ EPA is gathering evidence on documented
fish kills resulting from discharges from MPP facilities. EPA may
either use this estimate of fish kills in its non-quantified benefits
assessment, or use it to derive a lower bound quantified estimate of
fish kills attributed to MPP facilities as part of the benefits
analysis for the final rule. EPA requests information on documented
fish kills resulting from MPP discharges and comment on the use of this
information in its benefits assessment.
---------------------------------------------------------------------------

\8\ Morrison, C. 1997. ``The Cell from Hell and Poultry Farmers:
Do They Have Anything in Common?'' The Shore Journal. August 31.
---------------------------------------------------------------------------

3. Regional Vulnerability Assessment
The Office of Research and Development within EPA is developing the
Regional Vulnerability Assessment (ReVA) program to evaluate
environmental conditions and known pollutants/stressors within a
geographic region. Detailed information about ReVA can be found at
http://www.epa.gov/reva/about.htm. ReVA's purpose is to identify those
ecosystems most vulnerable to being lost or permanently harmed in the
next 5 to 25 years and to determine which pollutants/stressors are
likely to cause the greatest risk. The goal of ReVA is not exact
predictions, but identification of the types of undesirable
environmental changes most likely to occur over the coming years. The
ReVA program will improve environmental assessments for a region by
using integrative technologies to predict future environmental risk and
support informed, proactive decision-making and prioritization of
issues for risk management. Detailed information on

[[Page 48495]]

this program can be found at http://www.epa.gov/reva.
ReVA is a tool for integrating research on human and environmental
health, ecorestoration, landscape analysis, regional exposure and
process modeling, problem formulation, and ecological risk guidelines.
ReVA develops landscape models that predict probability of impairment
for individual watersheds given land use and biophysical
characteristics. ReVA is able to explore hierarchical modeling (broad
scale, landscape models combined with fine-scale watershed models) and
grouping of watersheds to assess benefits associated with proposed
alternative effluent standards against a backdrop of existing non-point
source pollution and naturally occurring conditions that influence
watershed vulnerability. EPA may consider using the output from the
ReVA program as an additional source of information characterizing the
environmental impacts and potential benefits of MPP facilities. EPA
solicits comment on the use of a regional vulnerability assessment for
the MPP environmental assessment.

VIII. Possible Changes to the Proposed Limitations and Standards

This section describes EPA's plans for revising the proposed
limitations and standards before the final rule. The NODA record
contains episode-level summary statistics, including the episode long-
term averages and episode variability factors. (In this context,
``episode'' refers to either an EPA sampling episode data set or an
industry-submitted self-monitoring data set.) After EPA completes its
statistical and engineering review of the episode summary statistics
and other available information, it will select episode data sets that
reflect the appropriate performance capabilities of the model
technologies for each option. EPA then will use these episode data sets
to calculate the option long-term average as the median of the selected
episode long-term averages, and the option variability factor as the
mean of the selected episode variability factors. The final limitation/
standard will be calculated as the product of the option long-term
average and option variability factor, as explained in Sections 13.8
and 13.9 of the proposal technical development document.
Because EPA has not performed its review of the episode data sets,
the NODA record does not include option long-term averages, option
variability factors, and limitations/standards. Instead, the following
discussion provides an overview of EPA's plans for reviewing the
episode data sets and revising the proposed limitations and standards.
The first subsection, VIII.A, discusses the revisions to the
statistical methodology used to develop the limitations/standards and
loadings. The second subsection, VIII.B, describes EPA's consideration
of comments on the assumed monitoring frequency used to develop the
proposed limitations and standards (and for deriving costs for
complying with the proposed rule). The third subsection, VIII.C,
describes EPA's plans for reviewing the data that will be used to
develop the final limitations and standards. The fourth subsection,
VIII.D, describes EPA's planned review of the variability factors that
EPA expects to use to derive the final limitations and standards. The
fifth subsection, VIII.E, describes EPA's plans for assessing the
achievability of the limitations and standards it is considering
promulgating. The final subsection, VIII.F, describes EPA's preliminary
identification of errors in 40 CFR part 432 and the recodification
included in the proposed rule.

A. Revision of Statistical Methodology for Long-Term Averages and
Loadings

In the proposal, EPA used the data from 11 MPP sampling episodes to
develop the proposed long-term average effluent concentrations,
variability factors, limitations/standards, and loadings. Since then,
EPA has completed three additional MPP sampling episodes which operate
some of the technologies considered as a basis of the limitations and
standards. Two of the additional sampling episodes were at facilities
that had been sampled prior to proposal. EPA also has received self-
monitoring data from 16 of the 24 MPP facilities from which EPA
requested data, as discussed in Section II.B above. The following two
sections briefly discuss EPA's methodology at proposal and the revised
methodology EPA is considering for calculating limitations/standards
and the loadings associated with the various technology options.
1. Estimation of Daily Values and Long-Term Averages in the Proposal
For the proposal, to the extent possible with available data, EPA
calculated the limitations/standards and technology option loadings
using the measured daily effluent concentrations at the sampled
facilities that were chosen as the basis for each technology option.
However, when effluent data were unavailable from a particular model
technology, EPA estimated the daily effluent concentrations by
combining influent data with removal fractions from facilities with
components of the model technology. When influent data were not
available, EPA estimated the daily effluent concentrations using a
facility pollutant mass balance between the final effluents from
wastewaters from different processes (e.g., first processing,
rendering), as explained in Section 9.2.2 of the proposal development
document. As explained in Section 13 of the proposal development
document, EPA also adjusted several estimated concentration values
upward to be more consistent with documented performance values for the
technology or actual effluent concentrations.
To derive the proposed limitations and standards, EPA then modeled
the combined measured and estimated effluent data using the modified
delta-lognormal distribution to estimate the long-term averages and
variability factors. After reviewing the estimated long-term averages
used in calculating limitations, EPA determined that substitutions were
necessary and appropriate. Sections 9 and 13 of the proposal
development document describe the substitutions.
2. Revised Approach
EPA has revised its data selection to incorporate the new data from
sampling episodes and DMRs (i.e., individual weekly/daily data points,
not summary data). As a consequence of the new data and the comments
that it received, EPA intends to use only measured effluent values
rather than estimated values in developing the final limitations/
standards and loadings. DCNs 165011 and 165140 provides listing of the
data that EPA is considering using to calculate the final limitations
and standards. For today's NODA, because of time constraints, EPA has
used the arithmetic average of the data in calculating the target
effluent concentrations used for developing costs and loadings. For the
final rule, EPA intends to use the modified delta-lognormal
distribution to model the data, and thus, the long term average values
will be similar but somewhat different than the target effluent
concentrations presented today. Also, EPA plans to use the daily/weekly
data, rather than the summary DMR data used today. This delta-lognormal
distribution was used for the proposal and is described in Appendix G
of the proposal development document. See Section VIII.D for EPA's plan
for reviewing variability factors to be used for the final rule.
For the two facilities that EPA sampled twice (i.e., once prior to
proposal and once after proposal), EPA's initial assessment is that the
post-

[[Page 48496]]

proposal sampling episode at each facility provides a better
demonstration of the model technology, and has included only the post-
proposal episode in the NODA analyses. For the proposal, EPA had
excluded one of the pre-proposal episodes (6446) and included the other
pre-proposal episode (6335) in its analyses. For episode 6446, EPA
continues to exclude these data due to concerns that the facility had
with the results of its self-sampling (see DCN 15169) in comparison to
EPA's sampling episode results. For episode 6335, EPA had now excluded
these data due to a combination of inconsistent laboratory results for
nitrogen and operational issues at the facility during the sampling
episode (see DCN 00211). For several POCs both of these pre-proposal
episodes showed higher effluent concentrations than the post-proposal
episodes at the same facility. However, for Total Nitrogen, which EPA
is considering regulating in the final rule, these pre-proposal
episodes showed lower effluent concentrations than the post-proposal
episodes at the same facility. EPA solicits comment on the use of data
from Episodes 6446 and 6335 for use in developing pollutant loading
estimates and limitations and standards for the final rule.

B. Consideration of Assumed Monitoring Frequency

In developing the proposed maximum monthly limitations and
standards, EPA had assumed a monitoring frequency of thirty samples per
month (i.e., daily monitoring). In the preamble (67 FR 8632), EPA
solicited comment on whether small poultry facilities should have
monthly limitations/standards based upon 20 days, rather than 30 days,
because they would be unlikely to operate on weekends. In response, EPA
received comments that stated that monitoring every day during the
month was too frequent for all facilities. In response, EPA is
considering reducing the assumed monitoring frequency to weekly for any
new limitations and standards promulgated in this rulemaking. EPA
incorporated this assumed monitoring frequency into the monitoring
costs for this notice. EPA solicits comment on such a change in
monitoring frequency.
The comments indicate some confusion may exist about the assumed
monitoring frequency used to develop the existing limitations and
standards. In the 1975 rule, the monthly limitations and standards
specified that the ``Average of daily values for thirty consecutive
days shall not exceed'' the stated value. Thus, EPA assumes that
facilities perform daily monitoring to comply with the existing
regulations. As stated by commenters, the monitoring frequency has an
effect on the probability of exceedences. Thus, a facility should
monitor at the same frequency that EPA has assumed in developing the
limitations and standards. Monitoring less frequently results,
theoretically, in average values that are more variable. As a
consequence, for example, a facility that collects four monitoring
samples per month would be likely to exceed, at a relatively high rate,
the monthly average limitations based upon an assumed monitoring
frequency of 30 monitoring samples per month. Thus, if facilities
monitor less frequently, then operators may find they need to design
treatment systems to achieve an average below the long term average
basis of the limitations/standards and/or exert more control over
variability of the discharges in order to maintain compliance with the
limitations/standards.

C. Data Review for Final Limitations and Standards

While EPA has preliminarily reviewed the analytical data for the
NODA, EPA will conduct a more detailed engineering and statistical
review of the data before the final rule, similar to that performed for
other rules. The following paragraphs identify specific data reviews
that EPA typically performs before promulgating a final rule.
For all pollutants that might be regulated in the final rule, EPA
plans an engineering review of its data to verify that the limitations
and standards are reasonable based upon the design and expected
operation of the control technologies and the facility process
conditions. As part of that review, EPA plans to examine the range of
performance represented by the episode data sets with the model
technology. EPA expects that some episode data sets will demonstrate
application of the best available technology and report an effluent
quality that would meeting the limitations EPA is considering. Other
episode data sets may demonstrate performance from the same types of
technology, but not reflect the best design and/or operating conditions
for that technology. For these facilities, EPA will evaluate the degree
to which the facility can upgrade its design, operating, and
maintenance conditions to meet the limitations or standards EPA is
considering. If such upgrades are not possible, then the limitations
and standards associated with the candidate technology would be
modified to reflect the lowest levels that the technology can
reasonably be expected to reliably and consistently achieve. If some
individual values are greater than the limitations and standards EPA is
considering, EPA expects to consider whether the facility can eliminate
those comparatively high values and achieve the limitations under
consideration through optimization and improved operation of the
treatment system. If so, EPA might conclude that the limitations
adequately reflect the treatment capabilities of the model
technologies. In such cases, EPA expects to adjust its cost estimates
for the facility to cover any upgrades and improved O&M necessary to
reliably and consistently meet the limitations. See Section 13.6 of the
proposal development document for further explanation.
As part of its engineering and statistical review of the data, EPA
intends to review the sampling episode and industry self-monitoring
data for consistency and any unusual patterns (such as all values being
the same over a period of time which can indicate nondetected values
rather than measured values, lack of sensitivity in the laboratory
procedures, or other causes). EPA also intends to evaluate
discrepancies between concentrations for related pollutant parameters.
For example, because CBOD theoretically should be less than BOD, EPA
might investigate CBOD values that exceeded BOD values to determine
whether any data exclusions are appropriate. In addition, EPA plans to
reevaluate the engineering and statistical reasons for excluding any
data that otherwise meet the data review criteria used to assess
laboratory reports. These data review criteria are used consistently
for each guideline and are located at DCN 165330 in Section 22.6 in the
record. EPA also will verify that it has fully documented its reasons
for excluding any data that otherwise meet the data review criteria for
the laboratory reports, for example the data from Episodes 6446 and
6335, as discussed in Section VIII.A.
EPA intends to review field duplicates and multiple grab
measurements and investigate extreme discrepancies between values for
samples collected on the same day. The measurements for the field
duplicates and grab samples are listed in DCNs 165020 and 165030. EPA
also intends to review summary statistics for each episode (see DCNs
165070 and 165150). EPA may further review episodes with patterns such
as minimum and maximum values far apart. If some episodes appear to
have data in ranges different from most other episodes in the same
subcategory, EPA may perform additional engineering evaluation of the

[[Page 48497]]

process conditions and treatment performance. For example, if one
facility has substantially more concentrated effluent than the others,
a detailed engineering review might reveal conditions that would
justify excluding the less concentrated effluent data from other
facilities from the calculations of limits.
For the larger self-monitoring data sets, EPA intends to review
graphical displays of the daily measurements to evaluate patterns in
the data, such as steadily increasing or decreasing values over time or
during certain time intervals. The plots may also indicate data values
that should be reviewed further and possibly excluded if they appear to
reflect conditions other than normal operations. For example, EPA might
exclude a value which was substantially lower than the other
measurements if an extremely high flow value was recorded for that day.
Where both influent and effluent are available for an episode, EPA
intends to investigate the impact on the performance of the technology
due to the influent levels. In this investigation, EPA might evaluate
whether the influent concentrations are at treatable levels and whether
the treatment system had efficient removal capability. For the
proposal, this treatable level was defined as five times the nominal
quantitation limit that generally was associated with the analytical
method most frequently used to measure samples collected during EPA's
sampling episodes. (The nominal quantitation limit is the smallest
quantity of an analyte that can be reliably measured with a particular
method. The record items for the proposal generally refer to the
``nominal quantitation limit'' as the ``baseline value.'') If the
influent data were below the treatable level or just slightly above,
EPA may exclude the effluent data from the analyses for the final
limitations and standards. EPA's purpose in excluding these effluent
data sets would be to ensure that the effluent concentrations resulted
from treatment and not simply from the absence or extremely low levels
of that pollutant passing through a treatment system.
For most facilities in the MPP concentration database, EPA has data
from either a sampling episode or the facility's self-monitoring (DMR)
data. However, for a few facilities, EPA has data from both a sampling
episode and self-monitoring data. The statistical analyses for the NODA
treat each sample episode and self-monitoring data set separately. For
example, if EPA had sampling episode and self-monitoring data sets for
a facility, it would have calculated two long-term averages from the
facility's data, one from the sampling episode data set and the other
from the self-monitoring data set. This practice is consistent with
other guidelines and is used because the data tend to be associated
with different time periods and/or analytical methods. For any
facilities with EPA sampling data and self-monitoring data for the same
time period, EPA intends to evaluate whether the data should be
combined into a single data set or continue to be analyzed as two
separate data sets for the final rule. For facilities that submitted
self-monitoring data over an extended period, if there are substantial
differences between certain time intervals, EPA intends to reevaluate
whether each time interval should be treated separately in the data
analyses.
In its review of the self-monitoring data, EPA will verify that the
concentrations were determined by an analytical method approved for
compliance monitoring in 40 CFR part 136. If the facility has
identified a different method, EPA may decide to contact the facility
for more information about the laboratory analysis to determine if the
results would be comparable to those generated by approved methods. It
is likely that EPA would need to perform a full review of the
laboratory reports such as initial precision and recovery (IPR)
analyses, instrument tunes, calibrations, blanks, laboratory control
sample (LCS) analyses, matrix spikes, surrogates, and all sample data.
Without the necessary information, EPA may choose to exclude
measurements from non-approved analytical methods.

D. Evaluation of Final Variability Factors

As explained in the introduction to Section VIII, the NODA record
does not include the option-level variability factors used to calculate
limitations/standards. For the final rule, EPA intends to use the same
data and methodology described in Section VIII.A. The section below
describes EPA's plans for reviewing and possibly transferring option-
level variability factors for the final limitations and standards.
To identify situations producing unexpected results, EPA reviews
all of the episode variability factors and compares daily to monthly
variability factors. One criterion is that the daily and monthly
variability factors should be greater than 1.0. A variability factor
less than 1.0 would result in a unexpected situation where the
estimated 99th percentile would be less than the long-term average. A
second criterion is that the daily variability factor should be greater
than the monthly variability factor so that the daily limitation will
be numerically greater than the monthly average limitation. A third
criterion is that not all of the measured (non-censored) results can be
below the sample-specific detection limits. While such data sets can be
modeled using statistical techniques, the results can be difficult to
interpret because the model is generally used for data sets where non-
censored values are expected to be larger than non-detected values. A
fourth criterion relates to the reasonableness of calculated
variability factors. For example, EPA may further evaluate data sets
for daily variability factors less than 1.1 and above 7 to determine if
any anomalies existed in the data. As a result of this review, EPA may
determine that a variability factor does not represent a reasonableness
range of variation from well-operated systems, but rather may indicate
a situation where better process control is needed. Any reduction in
variability factors based on tighter operational control would also be
reflected in higher cost estimates to achieve this control if
necessary.
For some subcategories, EPA may be unable to calculate variability
factors. This could occur for a pollutant in an option where the
episode data sets had too few noncensored measurements (e.g., the
pollutant was not detected at measurable levels) or no data were
available. For example, if a pollutant had all nondetected values for
all of the episodes in an option, then it would not be possible to
calculate the variability factors for that option. In such cases, EPA
will transfer the variability factors from other options, subcategories
and/or similar pollutants as appropriate.

E. Evaluation of Achievability of Final Limitations and Standards

If a facility operates the model technology for an option to
achieve the relevant long-term average, EPA expects that the facility
will be able to reliably and consistently comply with the limitations
EPA may promulgate. Because EPA's option variability factors account
for reasonable excursions above the option long-term average, the
limitations promulgated by EPA are intended to correspond to levels
(above the actual long-term averages) that well-operated systems can
reliably and consistently achieve. In order to meet the monthly average
limitation, a facility would need to counterbalance a value near the
daily maximum limitation with one or more values well below the daily
maximum limitation.

[[Page 48498]]

EPA recognizes the importance of promulgating achievable limitations;
thus, as described in this section, EPA intends to perform a series of
steps to compare the available data and information to the limitations
and standards. The following paragraphs describe those steps.
First, EPA intends to perform statistical reviews of the data and
its statistical model. In this step, EPA intends to compare the
limitations and standards to the data used to calculate the limitations
and standards. EPA performs this comparison to determine whether it
used appropriate distributional assumptions for the data used to
develop the limitations and standards (i.e., whether the curves EPA
used provide a reasonable ``fit'' to the actual effluent data). This
comparison should not be interpreted to mean that EPA expects values
that exceed the limitations to occur at some fixed rate. Furthermore,
because EPA has used data from facilities that were not required to
comply with the final limitations at the time the data were collected,
the observed data cannot be interpreted as supporting estimates of
compliance rates. Rather, in conjunction with the engineering review
(step 2 below), the results from this step allow EPA to determine if it
has used reasonable statistical assumptions in developing the
limitations. This is also explained in Section 13.6 of the proposal
development document.
Second, EPA intends to perform a detailed engineering evaluation of
the data and facilities used as a basis for the final limitations and
standards. For facilities with higher or consistently lower discharges
than the option long-term averages used to calculate the limitations/
standards, EPA will verify that the facilities have the relevant
treatment technology and are operating it appropriately. For example,
upon contacting a facility with considerably less concentrated
discharges, EPA may discover that the facility has a component in its
treatment train that is not part of the model technology. In such a
situation, EPA would be likely to exclude the facility's data from its
final calculation of the limitations and standards, because the
facility's treatment capabilities are better than the model technology.
For facilities with more concentrated discharges that are operating the
model technology, EPA may determine that such values can be eliminated
through improved operation of the treatment system. In such cases, EPA
may adjust its cost estimates for the facility for any upgrades and
improved operations and maintenance (O&M) necessary to reliably and
consistently meet the final limitations/standards. As part of the
engineering evaluation, EPA also will investigate excessive variations
that could indicate exceptional incidents or upsets that are not
typical of good performance. Based on thorough technical review of the
data, EPA may exclude data that do not represent proper process
operations or treatment control and would adjust its cost estimates
appropriately. For the final rule, the record will clearly state which,
if any, data points were excluded and the rationale for the exclusion.
Third, in some cases, EPA calculated the arithmetic average of the
concentration values from two or more samples to obtain a single daily
value that could be used in other calculations. EPA's approach of
averaging multiple analytical results to obtain a single daily value is
consistent with standard, conventional practice in environmental
analytical work. This approach also gives one day's sampling
information appropriate weight in determining effluent limitations and
is consistent with requirements of NPDES regulations at 40 CFR part 122
which define the daily discharge. Multiple daily values resulted from
measurements of field duplicates and grab samples during EPA sampling
episodes. As explained in Section 13 of the proposal technical
development document, field duplicates are two samples collected for
the same sampling point at the same time, and thus, characterize the
same conditions at that time at a single sampling point. Also as
explained in Section 13, EPA collected multiple (usually four) grab
samples for HEM during a sampling day at a sample point, because Method
1664 requires that grab samples rather than composite samples be used
in the laboratory analysis. For the final rule, EPA will continue to
model daily values in calculating the limitations and standards. EPA
also intends to: (1) review the individual measurements from field
duplicate pairs and individual grab samples; and (2) compare the
individual measurements to the final limitations and standards. If EPA
finds extreme discrepancies, EPA may reevaluate its data aggregation
procedure (i.e., arithmetic averaging) or data selection used to
develop the final limitations and standards.
Fourth, EPA intends to compare the limitations and standards to
other EPA sampling data that were not used as a basis of the
limitations and standards. For example, EPA would expect that a more
sophisticated treatment system would result in effluent concentrations
that have lower concentration values than the limitations based upon
the less sophisticated, model technology. If EPA notes a different
trend, it may perform a more detailed engineering review of the
treatment technologies and data selection.
Fifth, EPA intends to verify that 40 CFR part 136 contains approved
analytical methods that will be appropriate for compliance monitoring
with the final limitations and standards. If EPA determines that the
limitations are based upon data from some laboratories that, under
certain conditions, had measured to levels lower than the nominal
quantitation limits specified in some methods, EPA will evaluate
whether those results are quantitatively reliable. In some cases, EPA
may discover, for example, that the laboratory had used an approved
technique that can reliably measure lower levels, but might not be
commonly used. If EPA concludes that the results are quantitatively
reliable, it will continue to use the data to calculate loadings, long-
term averages and variability factors. To ensure the final limitations
and standards reflect ``typical'' laboratory reporting levels for
approved methods, EPA may choose to establish the option long-term
averages or limitations at values equal to or greater than the nominal
quantitation limits specified in the analytical methods. Or, EPA may
instead choose to provide guidance about the appropriate set of method
options and a calibration range that will provide sufficient
sensitivity to meet the effluent guideline limitations and standards.
Sixth, EPA intends to compare the limitations and standards to
averages and daily values from discharge monitoring reports (DMRs). In
the preamble to the proposal, EPA referred to this as a ``real-world''
check, although it is important to remember that many facilities for
which DMR data are available may not have the technology installed on
which the limits were based. For this reason, EPA intends to classify
the facilities into three groups using the information in the detailed
surveys and responses to the request for individual weekly/daily DMR
data. The groups would contain the DMR data from facilities with: (1)
The model or comparable technologies; (2) more sophisticated
technologies; and (3) treatment that would require upgrades as a
consequence of the rule. For the first group, EPA would expect the DMR
data to have values generally less than the limitations and standards.
For the second group, EPA would expect generally lower values than
group 1. For the third group, EPA still intends to evaluate the data,
although it expects that the data will generally have higher
concentration values than the

[[Page 48499]]

limitations and standards. (EPA has included costs for these facility
upgrades as part of the rule.) For any unexpected results, EPA may
perform a more detailed engineering review of the processes and
treatment technologies underlying the DMR data. Depending on the
results of that review, EPA might evaluate whether any additional
modifications to the model technology and/or limitations and standards
were necessary.

F. Errors in Current 40 CFR Part 432 and the February 2002 Proposed
Rule Text

In researching the derivation of existing limitations and
standards, EPA has preliminarily identified what appear to be errors in
the current 40 CFR part 432 and/or the February 25, 2002, proposed rule
text. EPA intends to evaluate these discrepancies in further detail and
correct the CFR as part of the MPP final rule. This section describes
the discrepancies that EPA has identified.
40 CFR part 432 currently specifies monthly average limitations and
standards for fecal coliforms and pH, while the text of the final rules
published in the Federal Register (39 FR 7900; February 28, 1974 and 40
FR 906; January 3, 1975) includes only daily maximum limitations and
standards for those parameters. For the subparts regulating the
discharge of fecal coliforms, the daily maximum limitation/standard is
``Maximum at any time 400 mpn/100 ml.'' For the subparts regulating pH,
the daily maximum limitation/standard is ``within the range of 6.0 to
9.0.'' For Subparts A through J, the current 40 CFR part 432 specifies
monthly average limitations/standards as well as daily maximum
limitations/standards for fecal coliforms and pH. The monthly values
are the same as the daily maximum values. This appears to be incorrect.
Because the values are the same for the daily maximum limitations/
standards and the monthly average limitations/standards, EPA does not
expect that any facility will need to change its operations if EPA
eliminates the monthly average limitations/standards currently codified
in the CFR for fecal coliforms and pH. Before promulgating the final
rule, EPA intends to further investigate the derivation of the existing
limitations/standards.
EPA also notes that the tables (in the existing CFR) of NSPS in
sections 432.65 and 432.75, provide different values for the standards
depending on whether the units are kg/kkg or lb/1000 lbs. For example,
the TSS daily maximum standard is 0.044 kg/kkg or 0.036 lb/1000 lbs in
section 432.65, when the two numerical values should be the same,
regardless of the units. A review of the final rule (40 CFR parts 906-
907; January 3, 1975) and the 1974 development document for the
processor segment of the meat processor point source category indicates
that NSPS was set equal to the BPT limitations for all pollutant
parameters. Based upon this assessment, EPA preliminarily concludes
that the NSPS in the kg/kkg units are correct because they have the
same values as the BPT limitations. In sections 432.65 and 432.75 of
the February 25, 2002, proposed rule, EPA selected the values
associated with the units of lb/1000 lbs. Thus, after further
investigation, if these values associated with units of lbs/1000 lbs
are indeed incorrect, EPA will use the standards in units of kg/kkg in
its final rule.
Two errors exist in the current 40 CFR 432.62 for the BPT
limitations for Subpart F. The first error is in the monthly average
limitation in units of kg/kkg for oil and grease which has a value of
``0.000'' which should be ``0.006.'' The second error is in the daily
maximum limitation for TSS which has a value of ``10.044 lb/1000 lbs''
which should be ``0.044 lb/1000 lbs.'' EPA corrected these errors in
the February 25, 2002, proposed rule.
EPA has identified three errors in the limitations and standards in
the proposed rule. First, we inadvertently omitted the existing pH
limitations and standards. As explained in the preamble to the proposal
(67 FR 8629), EPA had intended to retain these pH limitations and
standards. Second, we inadvertently assigned incorrect units of
measurement in footnote (1) to the values listed in 432.63(b) and
432.73(b). The units listed in these parts were ``mg/l (ppm)'' and
should have been ``pounds per 1000 pounds (or g/kg) of finished
product.'' Finally, in sections 432.82(b) and 432.92(b), the proposed
rule refers to 432.62(b) for COD limitations in error. The referral
should be to section 432.72(b).

IX. Consideration of Options

EPA is presenting revised cost, pollutant reduction, and economic
impact estimates in Section X of today's notice. These estimates are
based on the following: additional data from surveys received after the
initial cut-off date, data received with comments or through requests
from EPA Regions and States, data revisions to reflect follow-up with
survey recipients, and changes that result from certain methodological
revisions. EPA will base its determinations for the final rule on these
revised results and any further revisions that result from comment on
today's notice. In the sections below, EPA discusses options it is
considering for the different regulatory levels of control (e.g., BPT,
BAT, NSPS) for the subcategories of the MPP industry (See summary in
Table IX-1).

A. Description of Modified Options

Commenters requested that EPA consider modifications to the
preferred options selected as the basis for the proposed limitations
and standards for certain subcategories. As a result of additional data
and comments, EPA is reconsidering the technology options for BPT, BAT,
and NSPS limitations (or standards) that EPA evaluated for the proposed
rule. EPA is now considering two options for the final limitations that
represent modifications of those considered in the proposal. In
addition, EPA is considering not adopting further regulation for
certain subcategories. EPA notes that all technology-based options it
considered for the proposal and is evaluating for the final rule (for
all subcategories) would include primary and secondary biological
treatment and disinfection.
The first modified option EPA is considering is based on treatment
systems employing partial denitrification of the MPP wastewater. This
option does not achieve the same degree of denitrification as the
proposed Option 3 (i.e., complete denitrification). EPA defined
``complete'' denitrification based on achieving a low effluent Nitrate
+ Nitrite concentration. EPA has designated this modified option as
Option 2.5. Discussions with industry representatives and evaluation of
sampling and DMR data led to consideration of Option 2.5. Industry
representatives commented that they often are able to achieve some
degree of denitrification, but could not achieve the levels considered
in the proposal without a significant increase in costs. EPA identified
several facilities which are achieving partial denitrification by
evaluating the long-term average Nitrate + Nitrite (or Total Nitrogen)
effluent concentration and each facility's treatment in place. EPA is
considering Option 2.5 as a basis for BPT, BAT and NSPS for the final
rule based on data from these facilities.
The second modified option under review builds on the partial
denitrification technology in Option 2.5 by adding chemical phosphorus
removal to the treatment train. EPA has designated this option as
Option 2.5 + P. Option 2.5 + P adds a treatment unit consisting of a
chemical addition using alum which aids in precipitating and settling
phosphorus. EPA notes that it evaluated phosphorus removal as an

[[Page 48500]]

additional treatment step at proposal under Option 4. EPA is still
considering Option 4 as a basis for the final limitations and standards
for certain subcategories. Option 4 includes nitrification, complete
denitrification and chemical phosphorus removal. There are several
facilities currently employing Option 4 (or more advanced technology)
in the MPP industry. EPA is now giving less consideration to Option 3,
because the only MPP facility (a poultry slaughtering facility) to
identify Option 3 technology on their survey was not able to provide
EPA with supporting data (i.e., nitrate/nitrite, TKN, or total nitrogen
effluent concentrations). Therefore, EPA did not have a facility to use
as the basis for establishing long-term average concentrations for
Option 3. The only facilities determined to have complete
denitrification also used chemicals to remove phosphorus. EPA
classified these facilities as Option 4. EPA notes that for the
purposes of comparison it also looked at an option consisting of the
nitrification treatment system of Option 2 followed by phosphorus
removal (referred to as Option 2 + P). However, EPA is not considering
Option 2 + P further for the final rule because of the considerable
increase in cost as compared to either Option 2 or Option 2.5 (i.e., an
additional $31 million and $23 million, respectively) without the
additional nitrogen removals associated with Option 2.5.
The options EPA is considering for non-small facilities in
Subcategories A-D and K for the final rule are listed in Table IX-1,
below. As discussed previously, EPA is not providing the revised
estimates of costs, pollutant reductions, or economic impacts for small
slaughtering facilities or meat and poultry further processing
(Subcategories F-I and L) and independent rendering (Subcategory J)
facilities in today's notice due to time constraints. However, those
estimates are provided in, Section 21.1, DCNs 125803, 125606, 126002,
and 126003 of the public record. EPA notes that it is considering the
modified options discussed above, in addition to the proposed options,
for those subcategories as well.

Table IX-1.--Options Being Considered for Non-Small Facilities in
Subcategories A-D and K
------------------------------------------------------------------------
Option Description
------------------------------------------------------------------------
2................................... Biological Treatment +
Nitrification
2.5................................. Biological Treatment +
Nitrification + Partial
Denitrification
2.5 + P............................. Biological Treatment +
Nitrification + Partial
Denitrification + Chemical
Phosphorus Removal
4................................... Biological Treatment +
Nitrification + Complete
Denitrification + Chemical
Phosphorus Removal
------------------------------------------------------------------------

B. Options Being Considered for Best Practicable Control Technology
Currently Available (BPT)

As discussed in the proposal (67 FR 8582), in specifying BPT, EPA
looks at a number of factors. EPA first considers the total cost of
applying the control technology in relation to the effluent reduction
benefits. The Agency also considers the age of the equipment and
facilities, the processes employed and any required process changes,
engineering aspects of the control technologies, non-water quality
environmental impacts (including energy requirements), and such other
factors as the EPA Administrator deems appropriate (CWA 304(b)(1)(B)).
Traditionally, EPA establishes BPT effluent limitations based on the
average of the best performances of facilities within the industry of
various ages, sizes, processes or other common characteristics
employing the BPT technology. Where existing performance is uniformly
inadequate, BPT may reflect higher levels of control than currently in
place in an industrial category if the Agency determines that the
technology can be practically applied.
1. Subcategories A-D (Meat Slaughterhouses)
EPA established BPT for the Meat subcategories (A-I) in 1974 based
on biological treatment (e.g. aerobic and anaerobic treatment) to
control five conventional pollutants or pollutant parameters
(BOD₅, TSS, Oil & Grease, fecal coliforms, and pH). The BPT
technology also provided some nitrification in the course of extended
aeration. EPA did not, however, develop limits for ammonia based on
this technology. In 2001, EPA proposed new BPT limitations based on
Option 2 for non-small facilities in Subcategories A-D (meat
slaughterhouses). Option 2 consists of biological treatment followed by
complete nitrification to reduce ammonia. Based on comments and the
completion of the review and incorporation of data from the detailed
surveys, EPA is now also considering establishing limits based on
Option 2.5 for BPT for the final rule. EPA estimates that 38 of 39
direct discharging facilities in these subcategories are currently
employing Option 2 technology, while 13 of 39 facilities employ Option
2.5.
EPA notes that although more than 97 percent of facilities have the
components of Option 2 technology in place, many facilities are not
currently achieving the projected Option 2 target effluent
concentrations presented in this notice. EPA has calculated the actual
baseline discharges using each direct discharge survey recipient's 1999
effluent concentration data (DMR data) and survey information on
treatment technology in place (see Sections III.B and IV.B for
additional discussion of the revised cost and loading methodologies).
When estimating the costs of compliance with Option 2, EPA has included
costs for treatment optimization for a number of facilities to achieve
the Option 2 average target effluent concentration. For example, EPA
has included costs, for example, for increased aeration, increased
chemical addition, increased sludge handling, additional process
controls, in-process sampling and analytical testing, and additional
capacity.
EPA also notes that even though one-third of the meat slaughtering
(i.e., first processing) facilities are performing partial
denitrification (Option 2.5), they are not achieving the target
effluent concentrations that EPA currently projects for this option.
EPA believes these facilities may not be optimizing their performance,
as suggested by reviewing their BOD:TKN ratios (see DCN 100765). Thus,
for developing the estimates of compliance costs and pollutant loadings
presented in today's notice, EPA transferred the target effluent
concentration for Total N from well-operated facilities at Option 2.5
that slaughter poultry (Subcategory K) to red meat facilities in
Subcategory A-D. EPA is aware that some commenters believe that red
meat facilities may not be able to achieve the same limits as poultry
facilities due to higher influent concentrations of nitrogen. EPA is
continuing to explore this issue. After reviewing the detailed surveys,
EPA believes that in many cases facilities may need additional capacity
(through installation of anoxic tanks) and additional pumping (for
nitrate recycle) to perform partial denitrification. EPA notes that
some facilities may also require additional equipment (e.g.,

[[Page 48501]]

carbon source, lagoon bypass). See Section III.B for a discussion on
the revised cost methodology and Section V.D for a discussion on
transferring nitrogen data from poultry to red meat facilities. EPA
notes that references, such as Randall, C., Barnard, J., Stensel, H.,
1992. Design and retrofit of wastewater treatment plants for biological
nutrient removal. Technomic Publishing Co., Inc., Lancaster,
Pennsylvania, can provide guidance on how to upgrade treatment systems
to perform nutrient removal (see DCN 100771 for other references).
EPA estimates that revising BPT to incorporate limits for Total
Nitrogen under Option 2.5 will remove an additional 27.7 million
pounds/year of nitrogen from the discharges of facilities in
Subcategories A-D. In addition, as compared to the baseline (i.e.,
pollutant loadings in 1999), Option 2.5 would also remove approximately
755,000 pounds/year of BOD₅, 1.06 million pounds/year of
TSS, and 2.7 million pounds/year of ammonia (as nitrogen). However,
because Option 2.5 includes the same technology as Option 2 with the
addition of denitrification for Total Nitrogen removal, the reductions
of BOD₅, TSS, and ammonia (as nitrogen) are the same for
Option 2.5 and Option 2 (as revised in today's notice).
In balancing costs against the benefits of effluent reduction, EPA
considers the volume and nature of expected discharges after
application of BPT, the general environmental effects of pollutants,
and the cost and economic impacts of the required level of pollution
control. For the BPT cost-reasonableness (i.e., BPT cost and removal
comparison) calculation for this industry EPA chose to measure effluent
reductions in terms of the sum of removals (in pounds) of
BOD₅, Total Nitrogen, and Total Phosphorus so that it could
capture the incremental changes between technology options (e.g.,
Option 2 reduces BOD₅ but does not reduce Total Nitrogen
(N), while Option 2.5 additionally reduces Total Nitrogen and Option
2.5+P additionally reduces Total Phosphorus (P)). EPA has made an
effort to avoid ``double-counting'' pollutant reductions that would
occur if, for example, EPA summed removals of COD and BOD. In past
effluent limitations guidelines and standards, BPT cost and removal
comparison has been as high as $37/lb-removed in 1999 dollars. As
presented in Section X, EPA estimates the BPT cost and removal
comparison for Option 2.5 (incremental to the baseline) to be $0.43/
pound BOD₅, Total N, and Total P removed (1999$). The
incremental BPT cost and removal comparison for moving from Option 2 to
Option 2.5 is $0.27 per additional pound Total N removed (1999$)
(BOD₅ and Total P would be unchanged from Option 2). Note
that the only difference between these two options is the level of
nitrogen removals. EPA solicits comment on the potential selection of
both Option 2 and Option 2.5 for BPT for the final rule.
EPA is also considering a no further regulation option that would
continue to rely on existing limitations and standards, along with any
more stringent limitations required to attain and maintain water
quality standards, including those derived from a wasteload allocation
in a TMDL (total maximum daily load). EPA solicits comment on a no
further regulation option for facilities in Subcategory A-D.
2. Subcategory K (Poultry Slaughterhouses)
This section describes the options EPA is considering for
developing BPT limitations for non-small facilities in the proposed
Subcategory K. As discussed in Section X.A, EPA is not presenting
revised costs, pollutant reductions, and economic impacts in today's
notice for small Subcategory K facilities; however, those results are
presented in Section 21.1, DCNs 125803 and 126003 in the public record.
Unlike the meat subcategories discussed in Section IX.B.1, there
are no existing effluent guidelines for facilities in the poultry
slaughtering subcategory (Subcategory K). EPA proposed to establish the
BPT level of control based on Option 3 for non-small facilities and
Option 1 for small facilities in this subcategory. Option 1 consists of
primary and secondary biological treatment with partial nitrification
and disinfection while Option 3 includes primary and secondary
biological treatment with complete nitrification, complete
denitrification, and disinfection. As discussed previously in IX.A, EPA
is now giving less consideration to Option 3. Based on additional
review and evaluation of the data and comments, EPA is considering
whether to base BPT limitations on Option 2, Option 2.5 or 2.5 + P for
non-small facilities in this subcategory for the final rule. EPA is
also considering a no-regulation option, in which facilities in
Subcategory K would continue to be regulated based on facility-specific
BPJ limitations established by the permitting authority, along with any
more stringent water-quality based limitations that might be required
to attain and maintain water-quality standards, including limitations
based on a wasteload allocation in a TMDL.
EPA estimates that 111 of 118 non-small direct discharging
facilities in this subcategory currently employ Option 2 technology or
more advanced technology, while 45 employ Option 2.5 or more advanced
technology, and 17 facilities employ Option 2.5 + P or more advanced
technology. As noted above, many of the facilities employing these
technology options do not currently achieve the target effluent
concentrations that EPA is projecting and so would likely have to
undertake additional upgrades, optimization, and process control
measures.
EPA estimates that establishing Option 2.5 for BPT would reduce
discharges of BOD₅, TSS, COD, Ammonia, and Total N by
approximately pounds/year, 1.4 million pounds/year, 6.3 million pounds/
year, 470,000 pounds/year, and 3.5 million pounds/year, respectively.
Option 2 would remove the same amounts of all pollutants except Total
N, which Option 2 is not designed to remove (i.e., Option 2 removes 0
pounds/year of Total N). As discussed above, for the BPT cost and
removal comparison calculation for this industry EPA chose to measure
effluent reductions in terms of the sum of removals (in pounds) of
BOD₅, Total Nitrogen, and Total Phosphorus in assessing
effluent reduction benefits. As presented in Section X, EPA estimates
the BPT cost and removal comparison for Option 2 (incremental to the
baseline) to be $12.89/pound BOD₅, Total N, and Total P
removed (1999$). The average BPT cost and removal comparison for Option
2.5 would be $3.93/pound BOD₅, Total N, and Total P removed
(1999$). While the incremental BPT cost and removal comparison of
Option 2.5 versus Option 2 would be $2.28 per additional pound of Total
N (1999$; BOD₅ and Total P would be unchanged from Option
2).
EPA estimates that establishing Option 2.5 + P for BPT would result
in the same reductions of BOD₅, TSS, COD, Ammonia, and Total
N as Option 2.5 but would also reduce Total Phosphorus by 3.8 million
pounds/year. As presented in Section X, EPA estimates the BPT cost and
removal comparison for Option 2.5 + P (incremental to the baseline) to
be $5.70/pound BOD₅, Total N, and Total P removed (1999$).
The incremental cost and removal comparison from Option 2.5 to Option
2.5+P is $7.61/pound Total P removed (1999$) (Total N and
BOD₅ would be the same as under Option 2.5). EPA solicits
comment on the potential selection of Option 2, Option 2.5, and Option
2.5 + P for BPT for this subcategory for the final rule, and on a no-
regulation option

[[Page 48502]]

that continues to rely on site-specific BPJ permit limitations.

C. Options Being Considered for Best Available Technology Economically
Achievable (BAT)

BAT effluent limitations guidelines represent the best economically
achievable performance of facilities in the industrial subcategory or
category. The CWA establishes BAT principally as a means of controlling
the direct discharge of toxic and nonconventional pollutants.
Generally, EPA determines economic achievability on the basis of total
costs to the industry to implement the BAT options and the effect of
these costs on overall industry and subcategory financial conditions.
As with BPT, where existing performance is uniformly inadequate, BAT
may reflect a higher level of performance than is currently being
achieved based on technology transferred from a different subcategory
or category. BAT may be based upon process changes or internal
controls, even when these technologies are not common industry
practice.
As discussed in the proposal (67 FR 8619), in recently promulgated
effluent guidelines, EPA has relied primarily on the toxic pollutant
cost-effectiveness measure for evaluating BAT, however, that measure is
less appropriate for evaluating different options to control pollutants
from the meat and poultry products industry because this industry's
discharges consist of relatively more conventional pollutants and
nutrients than toxic pollutants. Therefore, in addition to looking at
economic impacts, EPA focused primarily on cost-reasonableness (for
total pounds) for BPT, as described above, and nutrient cost-
effectiveness in evaluating options for BAT.
EPA calculated the cost-effectiveness of the removal of nutrients
for the options considered in the proposal and has done so for the
modified options that EPA is considering for the final rule. As a basis
of comparison, EPA estimated that the average cost-effectiveness of
nutrient removal by POTWs with biological nutrient removal to be $4/lb
for nitrogen and $10/lb for phosphorus (67 FR 8622). This is a rough
average based on a range of removal costs at POTWs, and is not intended
to be a bright line CE cutoff. Rather, it provides a general sense of
how the BAT options under consideration for the MPP rule perform
relative to POTWs in removing nutrients. The sections below described
the options being considered for BAT for the final rule.
1. Subcategories A-D (Meat Slaughterhouses)
EPA proposed to establish the BAT level of regulatory control based
on Option 3 (complete nitrification). As discussed in Section IX.A, EPA
is now giving less consideration to Option 3. After review and
evaluation of the revised and new data, EPA is considering establishing
BAT for the non-small meat slaughterhouses based on Option 2.5, Option
2.5 + P or Option 4. EPA is also considering not establishing BAT
limitations for these subcategories.
EPA evaluated Option 4 as a basis for establishing BAT more
stringent than the BPT level of control. EPA estimates that there are
no direct discharge facilities in these subcategories currently
operating Option 4 technology. However, there is one indirect
discharger in these subcategories and 5 poultry slaughtering facilities
(Subcategory K) operating Option 4 technology (or more advanced
technology). EPA is considering using data from the indirect discharge
facility or transferring data (as is allowed by the CWA) from
Subcategory K Option 4 facilities as the basis for BAT for
Subcategories A-D. EPA notes that commenters raised concerns over the
representativeness of the one indirect discharger facility. EPA has
performed a comparison of the influent wastewater characteristics of
this facility to the direct discharge facilities in these
subcategories. This comparison suggests that the wastewater at this
facility may be sufficiently similar to the wastewater at the direct
discharge red meat facilities in Subcategories A-D to justify
transferring data for development of limitations (see DCN 100766). EPA
has addressed differences in treatment performance between the indirect
discharger and the direct discharge sites in the cost model through its
costing methodology. For example, EPA included costs for a lagoon
bypass and additional anoxic tanks, mixers, pumps for facilities with a
BOD:TKN ratio below 3 (see Section III.B for additional details on the
revised cost methodology).
EPA estimates the pre-tax annualized compliance costs for Option 4
to be $47.6 million (1999$) (which is $5.6 million more than Option 2.5
+ P and $35.2 million more than Option 2.5). EPA estimates no closures
as a result of BAT based on Option 4, using the closure methodology
discussed in Section VI. As a sensitivity analysis, EPA also estimated
closures using a less stringent decision rule (closure under 1 out of 5
methodologies rather than at least 3 out of 5). Using this decision
rule, EPA estimates one facility closure under Option 4. EPA notes that
these estimates only include the 18 estimated total facilities in these
subcategories for which EPA has sufficient data to conduct the closure
analysis. There may be additional closures in the remaining 21
facilities.
EPA estimates that Option 4 removes 31.3 million pounds/year of
nitrogen (3.7 million more pounds/year than Option 2.5 or Option 2.5 +
P) and 5.66 million pounds/year of phosphorus (530,000 more pounds/year
than Option 2.5 + P). As discussed above, in Subcategories A-D, there
is one indirect discharge facility that currently operates Option 4.
EPA is also considering nutrient removal cost-effectiveness when
evaluating potential BAT options for this industry. EPA estimates the
nutrient cost-effectiveness (based of pounds of nitrogen removed) for
Option 4 to be $9.68/pound nitrogen removed (incremental to BPT Option
2.5). EPA estimates the nutrient cost-effectiveness (based on pounds of
phosphorus removed) for Option 4 to be $10.59/pound phosphorus removed
(incremental to BPT Option 2.5+P). EPA notes that incremental results
are presented somewhat differently in this section than in Section X.
This section specifically compares the potential BAT option with the
potential BPT option(s). EPA solicits comment on the potential
selection of Option 4 as the basis of BAT for these subcategories.
EPA is also considering establishing BAT for these subcategories
based on Option 2.5 + P. EPA estimates the pre-tax annualized
compliance costs for Option 2.5 + P to be approximately $42 million
(1999$). EPA estimates that no facilities (out of the 18 facilities
analyzed) will close as a result of BAT based on Option 2.5 + P in
these subcategories. Under the closure sensitivity analysis discussed
above, one of the analyzed facilities would close as a result of Option
2.5+P. EPA estimates that Option 2.5 + P removes the same 2.7 million
pounds/year of ammonia (as nitrogen) and 27.7 million pounds/year of
total nitrogen as Option 2.5 but removes an additional 5.1 million
pounds/year of phosphorus. In Subcategories A-D, there are 13 of 39
direct discharge facilities that currently operate Option 2.5
technology (though not necessarily achieving the projected Option 2.5
target effluent concentrations) and there are 6 direct dischargers and
one indirect discharger that employ phosphorus removal (under option 2
+ P or Option 4). However, EPA notes there are no facilities that

[[Page 48503]]

employ Option 2.5 + P in these subcategories, although this combination
is well demonstrated in the poultry industry (10 direct discharge
facilities operate Option 2.5 + P).
As discussed above, EPA is also considering nutrient removal cost-
effectiveness when evaluating potential BAT options for this industry.
EPA estimates the nutrient cost-effectiveness (based on pounds of
phosphorus removed) for Option 2.5 + P to be $5.78/pound phosphorus
removed (incremental to BPT Option 2.5). EPA solicits comment on the
potential selection of Option 2.5 + P as the basis of BAT for these
subcategories.
EPA is also evaluating whether it should establish BAT equal to
Option 2.5. Under this approach, the cost of the BAT limitations would
be $12.4 million (1999$). Moreover, there are no facility closures (out
of the 18 facilities analyzed) associated with the option under the
primary closure analysis and one facility closure under the sensitivity
analysis. BAT limitations based on Option 2.5, as explained above,
would result in removal of 2.7 million pounds/year of ammonia as
nitrogen and 27.7 million pounds/year of total nitrogen. The nutrient
cost-effectiveness of Option 2.5 relative to BPT Option 2 would be
$0.27/pound total nitrogen removed. EPA solicits comment on the
potential selection of Option 2.5 as the basis for BAT for these
subcategories.
In its evaluation of effluent limitations guidelines for this
subcategory, one option EPA is reviewing is the option not to establish
BAT limitations. Section 301(b)(2)(A) of the CWA authorizes EPA to
establish BAT limitations for categories of sources that limit
discharges of toxic and non-conventional pollutants. In establishing
BAT limitations, EPA considers a number of factors specified in the
statute (e.g., age of equipment and facilities, engineering aspects of
various types of controls, non-water quality environmental impacts),
including other factors deemed appropriate by the Administrator.
Section 304(b)(2)(B). The bulk of the pollutant discharges from this
category are conventional and non-conventional pollutant discharges,
with no significant discharges of toxic pollutants. The non-
conventional pollutant discharges from this category consist largely of
nutrients. In certain cases, nutrients may represent a significant
water quality problem for specific water bodies. Where necessary to
protect local water quality, individual dischargers may currently be
subject to water quality-based effluent limitations for nutrient
discharges. EPA is evaluating whether it is appropriate to establish
national BAT limitations for this subcategory more stringent than BPT
limitations or whether these nutrient discharges are more appropriately
addressed on a case-by-case basis in individual permits based on
applicable water quality standards. EPA will be examining data on water
quality impacts from MPP facilities as part of its benefits analysis
and specifically the extent to which such discharges significantly
contribute to water quality impairments from nutrients. EPA requests
comment on not establishing BAT limitations for these subcategories.
2. Subcategory K (Poultry Slaughterhouses)
This section describes the options EPA is considering for BAT for
non-small facilities in the proposed Subcategory K. As discussed in
Section IX.A, EPA is not presenting revised costs, pollutant
reductions, and economic impacts in today's notice for small
Subcategory K facilities; however, those results are presented in
Section 21.1, DCNs 125803 and 126003 of the public record.
EPA proposed to establish the BAT level of regulatory control based
on Option 3 (complete nitrification) for non-small facilities in this
subcategory. As discussed in Section IX.A, EPA is now giving less
consideration to Option 3. After review and evaluation of the revised
and new data, EPA is considering establishing BAT for these facilities
based on either Option 2.5, Option 2.5 + P, or Option 4. As with
Subcategories A-D, discussed above, EPA is also considering not
establishing BAT limitations for this subcategory.
EPA is considering establishing BAT for this subcategory based on
Option 4. EPA estimates the pre-tax annualized compliance costs for
Option 4 to be $83.4 million (1999$) (which is $37.9 million more than
Option 2.5 + P and $67 million more than Option 2.5). EPA estimates
that 7 facilities and 1 company will close as a result of BAT based on
Option 4 under both the primary and sensitivity closure analysis. Note
that these estimates only include the 34 estimated total facilities in
this subcategory for which EPA has sufficient data to conduct the
closure analysis. There may be additional closures in the remaining 84
facilities. The company level results are based on the analysis of 26
companies. While EPA does not have an estimate of the total number of
companies operating facilities in this subcategory, EPA believes these
26 companies account for the majority of Subcategory K facilities (see
Section X.A.2.c for further discussion). As discussed in Section X,
based on EPA's market analysis, the maximum projected price increase
occurs under Option 4 but is less than 0.1 percent of baseline price
for chicken and turkey. In addition, the domestic production of meat
products, and therefore industry employment, is projected to decrease
by about 0.04 percent under Option 4.
EPA estimates that Option 4 removes an additional 10.9 million
pounds/year of nitrogen compared to Option 2.5 or Option 2.5 + P and an
additional 534,000 pounds/year of phosphorus compared to Option 2.5 +
P. In Subcategory K, there are 5 of 118 direct discharge facilities
that currently operate with Option 4 pollution control technology (or
more advanced technology).
As discussed above, EPA is also considering nutrient removal cost-
effectiveness when evaluating potential BAT options for this industry.
EPA estimates the nutrient cost-effectiveness (based on pounds of
nitrogen removed) for Option 4 to be $6.14/pound nitrogen removed
(incremental to BPT Option 2.5). EPA estimates the nutrient cost-
effectiveness (based on pounds of phosphorus removed) for Option 4 to
be $70.96/pound phosphorus removed (incremental to BPT Option 2.5 + P).
EPA solicits comment on the potential selection of Option 4 as the
basis of BAT for this subcategory.
EPA is also considering establishing BAT for this subcategory based
on Option 2.5 + P. EPA estimates the pre-tax annualized compliance
costs for Option 2.5 + P to be approximately $45.5 million (1999$)
(which is approximately $29 million more than Option 2.5). EPA
estimates that no facilities (of the 34 facilities analyzed) and one
company (if the 13 poultry companies analyzed) will close as a result
of BAT based on Option 2.5 + P under either the primary or sensitivity
closure analyses. EPA notes that the poultry company that is projected
to close did not provide facility level financial information;
therefore, the facilities owned by this company could not be analyzed.
EPA estimates that Option 2.5 + P removes an additional 3.8 million
pounds/year of phosphorus as compared to Option 2.5. In Subcategory K,
there are 17 of 118 direct discharge facilities that currently operate
Option 2.5 + P technology (or more advanced technology). EPA estimates
the nutrient cost-effectiveness (based on pounds of phosphorus removed)
for Option 2.5 + P to be $7.61/pound phosphorus removed (incremental to
BPT Option 2.5). EPA solicits comment on the potential

[[Page 48504]]

selection of Option 2.5 + P as the basis of BAT for this subcategory.
EPA is also considering whether it should base BAT limitations on
Option 2.5. As previously noted, EPA estimates the pre-tax annualized
compliance costs for Option 2.5 to be approximately $16.3 million
(1999$). EPA estimates that none of the analyzed facilities will close
as a result of compliance with Option 2.5 limitations in this
subcategory under either the primary or sensitivity closure analyses.
This option would remove an additional 3.5 million pounds of Total N
per year relative to Option 2 (as Option 2 is not designed to remove
Total N), for an incremental nutrient cost effectiveness of $2.28/pound
Total N removed (1999$). EPA solicits comment on the potential
selection of Option 2.5 as the basis of BAT for this subcategory. EPA
is also considering not establishing BAT limitations for this
subcategory for the same reasons discussed above for Subcategories A-D,
and solicits comment on this option.

D. Options Being Considered for New Source Performance Standards (NSPS)

When establishing the NSPS level of control, EPA considers the
barrier that compliance costs due to the effluent guidelines regulation
pose to entry into the industry for a new facility. The barrier to
entry analysis compares estimated average incremental facility or
company capital costs incurred to meet the effluent guidelines to
average total assets of existing facilities or companies. To the extent
that potential new entrants have similar total assets to existing
industry participants, this provides a proxy for the potential barrier
to entry that new facility compliance costs may represent. EPA does not
have data on the assets of potential new entrants because in general
they cannot be identified in advance. The analysis was performed to
evaluate the effect of the MPP rule on the costs faced by new entrants
into the meat and poultry products industry. Increased start-up costs
resulting from the capital costs of the MPP regulation (as revised in
this notice) may prevent entrepreneurs from entering the industry. The
calculated ratio of average capital costs to average total assets
measures the potential for barriers to entry due to the MPP rule. If
the barrier to entry ratio is large, then the possibility exists that
the rule will discourage entry into the meat and poultry products
market. EPA solicits comment on other measures of ``barrier to entry''
that would be appropriate for this industry.
For both the red meat (Subcategories A-D) and Poultry (Subcategory
K) slaughtering facilities, EPA is considering setting the NSPS
limitations equivalent to BAT or the next level of stringency. For
example, if Option 2.5 is the basis for BAT for the final rule, then
EPA would consider Option 2.5 as well as Option 2.5 + P for new sources
and if Option 2.5 + P is the basis for BAT, then EPA would consider
Option 2.5 + P as well as Option 4 for new sources. EPA has estimated
the ratio of capital costs to assets for each of the options (see
Section X of today's notice). If EPA did not establish BAT limitations
for existing facilities then EPA would establish NSPS equivalent to BPT
or the next level of stringency. EPA solicits comment on NSPS for all
MPP industry subcategories.

X. Revised Estimates of Costs, Loadings, Economic Impacts and Cost-
Effectiveness

A. Revised National Estimates of Costs, Loadings, and Economic Impacts

EPA is providing the results of its preliminary economic analysis
based on revised costs and selected changes in methodologies discussed
above in Sections III and IV. All other aspects of the economic
analysis methodology remain as described at proposal. Analyses
presented in this section incorporate costs and loadings that reflect
the sample weights discussed in Section III.B.3. of this document.
Results presented here remain in 1999 dollars, for purpose of
comparison with the results of the proposed rule analysis. The analysis
EPA will prepare for the final rule will be presented in 2002 dollars.
1. Results Using the Economic Impact Analysis Methodologies
Many of the surveyed facilities did not provide enough financial
data for EPA to perform an adequate economic impact analysis. Thus, the
total number of facilities in each class or subcategory is not
equivalent to the number of facilities analyzed. In Subcategories A
through D, 21 of 39 facilities in the national estimate could not be
analyzed due to lack of data. In Subcategory K, 84 of 118 facilities in
the national estimate were not analyzed due to lack of data. Thus, the
facility closure analysis represents projected closures at only 46
percent (18/39) of facilities in Subcategories A-D and 29 percent (34/
118) of facilities in Subcategory K nationally. There may be additional
closures at the remaining 54 percent and 71 percent of Subcategory A-D
facilities and Subcategory K facilities, respectively, that could not
be analyzed.
For cost annualization and the closure analysis, a 6.6 percent
discount rate was used if facilities did not provide a usable discount
rate in their survey data. The 6.6 percent discount rate is a weighted
average of the discount rate data provided in the surveys. If the
facility provided a nominal discount rate greater than 3 percent but
less than 19 percent in their survey then that value was used to run
the impact analysis. Discount rates outside that range were deemed to
reflect internal hurdle rates rather than the opportunity cost of
capital.
2. Summary of Results
a. National Costs
Total pretax annualized costs of the rule range from $13 million
under Option 2 to $131 million under Option 4. Pretax annualized costs
per facility are consistently larger in Subcategories A though D
($127,000 to $1.2 million) than in Subcategory K ($71,000 to $707,000).
See Table X.A-1 for compliance costs by subcategory and treatment
option.

Table X.A--1.--Total and Average Compliance Costs by Subcategory and Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total costs ($000) Average costs ($000)
-----------------------------------------------------------------------------------------------
Option Post-tax Pre-tax Post-tax Pre-tax
Capital annualized annualized Capital annualized annualized
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subcategories A through D (39 facilities)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................ $6,646 $3,037 $4,951 $170.4 $77.9 $127.0
Option 2.5.............................................. 67,885 8,986 12,359 1,740.6 230.4 316.9
Option 2 + P............................................ 36,385 23,089 35,574 933.0 592.0 912.1
Option 2.5 + P.......................................... 86,118 27,875 42,004 2,208.1 714.7 1,077.0

[[Page 48505]]

Option 4................................................ 104,090 31,418 47,627 2,669.0 805.6 1,221.2
---------------------------------------------------------
Subcategory K (118 facilities)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................ 18,856 6,656 8,333 159.8 56.4 70.6
Option 2.5.............................................. 74,219 13,321 16,329 629.0 112.9 138.4
Option 2 + P............................................ 65,644 29,683 38,999 556.3 251.6 330.5
Option 2.5 + P.......................................... 99,509 34,743 45,492 843.3 294.4 385.5
Option 4................................................ 299,178 65,400 83,368 2,535.4 554.2 706.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. National Loadings
Table X.A-2 shows estimated pollutant reductions for each treatment
option. The conventional pollutant loadings (i.e. 5-Day Biological
Oxygen Demand, Total Suspended Solids and Oil and Grease) removed for
Options 2, 2+P, 2.5 and 2.5+P are identical for Subcategories A through
D and Subcategory K, respectively. Options 2+P, 2.5 and 2.5+P represent
additional removals of nutrients, not conventional pollutants, over
Option 2. Option 4 provides additional removals of both nutrients and
conventional pollutants relative to other options.

Table X.A-2.--Removal of Specified Pollutants by Subcategory and Option \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Removals (pounds per year)
Subcategory Pollutant -------------------------------------------------------------------------------
Option 2 Option 2.5 Option 2+P Option 2.5+P Option 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
A through D............................. 5-Day Biochemical Oxygen 755,213 755,213 755,213 755,213 795,121
Demand.
Total Suspended Solids........ 1,058,991 1,058,991 1,058,991 1,058,991 1,236,504
Chemical Oxygen Demand........ 0 0 0 0 0
Carbonaceous Biochemical 633,168 633,168 633,168 633,168 633,168
Oxygen Demand.
Ammonia as Nitrogen........... 2,717,147 2,717,147 2,717,147 2,717,147 2,789,738
Total Nitrogen................ 0 27,688,678 0 27,688,678 31,331,318
Total Phosphorus.............. 0 0 5,128,793 5,128,793 5,659,799
Nitrate/Nitrite............... 0 26,910,414 0 26,910,414 28,762,544
Total Kjeldahl Nitrogen....... 2,669,042 2,669,042 2,669,042 2,669,042 2,690,827
Oil & Grease (HEM)............ 0 0 0 0 0
K....................................... 5-Day Biochemical Oxygen 646,527 646,527 646,527 646,527 846,484
Demand.
Total Suspended Solids........ 1,420,573 1,420,573 1,420,573 1,420,573 2,728,104
Chemical Oxygen Demand........ 6,278,429 6,278,429 6,278,429 6,278,429 10,788,159
Carbonaceous Biochemical 707,270 707,270 707,270 707,270 707,270
Oxygen Demand.
Ammonia as Nitrogen........... 469,249 469,249 469,249 469,249 664,527
Total Nitrogen................ 0 3,509,950 0 3,509,950 14,427,113
Total Phosphorus.............. 0 0 3,830,011 3,830,011 4,363,815
Nitrate/Nitrite \2\........... 0 6,156,008 0 6,156,008 13,325,056
Total Kjeldahl Nitrogen....... 307,004 307,004 307,004 307,004 975,539
Oil & Grease (HEM)............ 320,986 320,986 320,986 320,986 346,840
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Incremental to baseline of current performance. Current performance based on summarized 1999 DMR data provided in response to detailed surveys.
Pollutant loading for various treatment options based on sampling data, survey information, and DMR data. (See Section IV for discussion of loadings
methodology).
\2\ EPA recognizes that, in theory, total nitrogen should be less than nitrate/nitrite as nitrogen because total nitrogen is the sum of nitrate/nitrite
as nitrogen and total kjeldahl nitrogen. However, the target effluent concentrations were taken from different sets of facilities (i.e. those that
provided total nitrogen data and those that provided nitrate/nitrite as nitrogen data). EPA anticipates regulating total nitrogen, not nitrate/nitrite
nitrogen for the final rule.

c. Closure Analysis
A facility (or company) forecast to have a negative net present
value (NPV) of net income under at least 3 of 5 methods (described in
Section VI.A) prior to regulatory costs are called ``baseline
closures.'' In Subcategories A through D there are two baseline
closures; in Subcategory K there are 10 baseline closures. The economic
impact of the rule on ``baseline closures'' cannot be assessed using
the closure model. Under the sensitivity analysis, in which a negative
NPV under only 1 method is sufficient to project a closure, EPA
estimates that 7 facilities are baseline closures in Subcategories A-D
and 15 facilities are baseline closures in Subcategory K.
In the facility level closure analysis, no facility closures are
projected under any options for Subcategories A through D under the
primary analysis for the 18 out of 39 facilities analyzed and 1
facility closure is projected for all options under the sensitivity
analysis. For Subcategory K, under either the primary or sensitivity
analysis seven facilities from the 34 facilities out of the

[[Page 48506]]

118 analyzed are projected to close under Option 4 and no facility
closures are projected under other treatment options.

Table X.A-3.--Summary of Projected Facility Closure Impacts by Subcategory and Option (Primary Analysis)
----------------------------------------------------------------------------------------------------------------
Number of
Option facilities Total revenues ($000) Employees
----------------------------------------------------------------------------------------------------------------
Subcategories A through D
----------------------------------------------------------------------------------------------------------------
Total Facilities Analyzed \1\....................... 18 $9,303,506 48,114
Baseline Closures................................... 2 1,000,000-2,500,000 5,000-7,500
Option 2 Closures................................... 0 0 0
Option 2 + P Closures............................... 0 0 0
Option 2.5 Closures................................. 0 0 0
Option 2.5 + P Closures............................. 0 0 0
Option 4 Closures................................... 0 0 0
-----------------------------------------------------
Subcategory K
----------------------------------------------------------------------------------------------------------------
Total Facilities Analyzed \2\....................... 34 $4,023,230 112,491
Baseline Closures................................... 10 1,584,600 13,260
Option 2 Closures................................... 0 0 0
Option 2 + P Closures............................... 0 0 0
Option 2.5 Closures................................. 0 0 0
Option 2.5 + P Closures............................. 0 0 0
Option 4 Closures................................... 7 250,000-500,000 2,500--5,000
----------------------------------------------------------------------------------------------------------------
\1\ Of the 39 facilities estimated to be in Subcategories A through D, EPA was able to analyze data from surveys
representing 18 facilities; the remaining surveys (representing 21 facilities) did not provide sufficient data
to be analyzed, and therefore, the number of closures among these facilities is not reflected in the table and
is unknown.
\2\ Of the 118 facilities estimated to be in Subcategory K, EPA was able to analyze data from surveys
representing 34 facilities; the remaining surveys (representing 84 facilities) did not provide sufficient data
to be analyzed, and therefore, the number of closures among these facilities is not reflected in the table and
is unknown.

In the primary company level closure analysis, one poultry company
is projected to close under Option 2 + P, Option 2.5 + P, and Option 4.
This company employs between 2,500 and 5,000 workers. The poultry
company that is projected to close did not provide facility level
financial information, therefore the facilities owned by this company
could not be analyzed. Under the sensitivity analysis, the same poultry
company (under the same options) is projected to close as well as one
red meat company under all treatment options and one mixed meat (i.e.,
company owns both poultry and red meat facilities) company under
Options 2 + P, 2.5 + P, and Option 4.

Table X.A-4.--Summary of Projected Company Closure Impacts by Subcategory and Option (Primary Analysis)
----------------------------------------------------------------------------------------------------------------
Baseline conditions and projected incremental
closure impacts \1\
Option -----------------------------------------------
Number of Total revenues
companies ($millions) Employees
----------------------------------------------------------------------------------------------------------------
Red Meat (Predominantly Own Facilities in Subcategories A through I)
----------------------------------------------------------------------------------------------------------------
Total Companies Analyzed........................................ 9 $29,949 80,755
Baseline Closures............................................... 1 250-500 1,000-4,000
Option 2 Closures............................................... 0 0 0
Option 2 + P Closures........................................... 0 0 0
Option 2.5 Closures............................................. 0 0 0
Option 2.5 + P Closures......................................... 0 0 0
Option 4 Closures............................................... 0 0 0
-----------------------------------------------------------------
Poultry (Predominantly Own Facilities in Subcategories K and L)
----------------------------------------------------------------------------------------------------------------
Total Companies Analyzed........................................ 13 $15,455 136,000
Baseline Closures............................................... 6 3,400 31,190
Option 2 Closures............................................... 0 0 0
Option 2 + P Closures........................................... 1 100-150 2,500-5,000
Option 2.5 Closures............................................. 0 0 0
Option 2.5 + P Closures......................................... 1 100-150 2,500-5,000
Option 4 Closures............................................... 1 100-150 2,500-5,000
-----------------------------------------------------------------
Mixed (Own Facilities in Both Red Meat and Poultry Subcategories)
----------------------------------------------------------------------------------------------------------------
Total Companies Analyzed........................................ 4 89,439 184,834

[[Page 48507]]

Baseline Closures............................................... 0 N/A N/A
Option 2 Closures............................................... 0 0 0
Option 2 + P Closures........................................... 0 0 0
Option 2.5 Closures............................................. 0 0 0
Option 2.5 + P Closures......................................... 0 0 0
Option 4 Closures............................................... 0 0 0
----------------------------------------------------------------------------------------------------------------
\1\ Projected revenue and employment impacts are presented as a range to prevent the disclosure of confidential
business information.

Company level results are unweighted because the survey sampling
frame was stratified on the basis of facility level data. Therefore,
the facility level and company level results are not additive. Because
of the large number of facilities that were unable to submit financial
data in their survey, EPA performed a subsidiary company level analysis
to provide a consistency check on the primary facility level analysis.
EPA has estimated that the 26 companies in the company level analysis
own at least 117 of the 157 in-scope facilities that EPA project will
be subject to regulation in Subcategories A-D and K.
d. Altman Z' Analysis
EPA used the Altman Z' ratio to assess the baseline financial
condition of MPP firms and the incremental impacts of the rule on their
financial health. Note this analysis includes the same 26 companies
analyzed for company closure analysis. In the baseline, the Altman Z'
analysis shows that 7 red meat companies and 8 poultry companies are
considered financially healthy. One red meat company, 5 poultry
companies, and 3 mixed meat companies have Altman Z' scores in the
indeterminate range for financial health; 1 red meat company and 1
mixed meat company are considered financially stressed. Under Option 4,
the Altman Z' score for one poultry company changed from the
financially healthy to the indeterminate range (represented by the +1
and -1 on Table X.A-5).

Table X.A-5.--Projected Impacts on Company Altman Z' Score by Meat Type and Option
----------------------------------------------------------------------------------------------------------------
Number of companies with baseline Altman Z'
score in specified range and incremental
changes in score
Option -----------------------------------------------
Financially Bankruptcy
healthy Indeterminate likely
----------------------------------------------------------------------------------------------------------------
Red Meat (predominantly own facilities in Subcategories A through I)
----------------------------------------------------------------------------------------------------------------
Baseline........................................................ 7 1 1
Option 2........................................................ 0 0 0
Option 2 + P.................................................... 0 0 0
Option 2.5...................................................... 0 0 0
Option 2.5 + P.................................................. 0 0 0
Option 4........................................................ 0 0 0
-----------------------------------------------------------------
Poultry (predominantly own facilities in Subcategories K and L)
----------------------------------------------------------------------------------------------------------------
Baseline........................................................ 8 5 0
Option 2........................................................ 0 0 0
Option 2 + P.................................................... 0 0 0
Option 2.5...................................................... 0 0 0
Option 2.5 + P.................................................. 0 0 0
Option 4........................................................ -1 +1 0
-----------------------------------------------------------------
Mixed (own facilities in both red meat and poultry subcategories)
----------------------------------------------------------------------------------------------------------------
Baseline........................................................ 0 3 1
Option 2........................................................ 0 0 0
Option 2 + P.................................................... 0 0 0
Option 2.5...................................................... 0 0 0
Option 2.5 + P.................................................. 0 0 0
Option 4........................................................ 0 0 0
----------------------------------------------------------------------------------------------------------------
Note: A change from one state (e.g., financially healthy) to another state (e.g., indeterminate) is indicated by
``-1'' and ``+1''.

e. Sales Test
None of the analyzed facilities are projected to incur costs
exceeding 3 percent of revenues (pre-tax). In addition, none of the
analyzed facilities in Subcategories A through D are projected to incur
costs exceeding 1 percent of revenues under any option. In Subcategory
K, no analyzed facilities

[[Page 48508]]

are projected to incur costs exceeding 1 percent of revenues under
Option 2, Option 2 + P, or Option 2.5, while 4 analyzed facilities are
projected to incur costs exceeding 1 percent of revenues under Option
2.5 + P and 17 analyzed facilities under Option 4.

Table X.A-6.--Facilities With Annualized Costs Exceeding 3 Percent of Revenues by Subcategory and Option
----------------------------------------------------------------------------------------------------------------
Facilities with annualized Facilities with annualized
costs exceeding 3 percent of costs exceeding 1 percent of
Option revenues revenues
---------------------------------------------------------------
Pre-tax Post-tax Pre-tax Post-tax
----------------------------------------------------------------------------------------------------------------
Subcategories A through D (18 facilities
analyzed) 1
-------------------------------------------------
Option 2........................................ 0 0 0 0
Option 2 + P.................................... 0 0 0 0
Option 2.5...................................... 0 0 0 0
Option 2.5 + P.................................. 0 0 0 0
Option 4........................................ 0 0 0 0
-------------------------------------------------
Subcategory K (34 facilities analyzed) 2
----------------------------------------------------------------------------------------------------------------
Option 2........................................ 0 0 0 0
-------------------------------------------------
Option 2 + P.................................... 0 0 0 0
Option 2.5...................................... 0 0 0 0
Option 2.5 + P.................................. 0 0 4 0
Option 4........................................ 0 0 17 7
----------------------------------------------------------------------------------------------------------------
1 Of the 39 facilities estimated to be in Subcategories A through D, EPA was able to analyze data from surveys
representing 18 facilities; the remaining surveys (representing 21 facilities) did not provide sufficient data
to be analyzed, and therefore, the number of closures among these facilities is not reflected in the table and
is unknown.
₂ Of the 118 facilities estimated to be in Subcategory K, EPA was able to analyze data from surveys representing
34 facilities; the remaining surveys (representing 84 facilities) did not provide sufficient data to be
analyzed, and therefore, the number of closures among these facilities is not reflected in the table and is
unknown.

f. Market Level Impacts
EPA analyzed the impact of the rule on market price, domestic
supply, domestic consumption, and international trade of four meat
types (beef, pork, chicken, and turkey). Pre-tax annualized compliance
costs per pound of carcass weight for each of the four meat types
measures the vertical shift in the supply curve in response to the
effluent limitations guidelines. The most appropriate measure of the
shift in supply is the cost per pound of total industry production
because: (1) The majority of facilities incur no costs, and (2) the
competition from facilities that do not incur costs will discourage
affected facilities from increasing price by the full cost per pound of
the ELG.
The results of the market analysis show that the decrease in supply
will be smallest for pork, where the costs per pound of total
production range from $0.000014 under Option 2 to $0.0005 under Option
4, and largest for turkey with costs per pound of total production
ranging from $0.00036 under Option 2 to $0.0019 under Option 4. The
maximum projected price increase is less than 0.1 percent of baseline
price for chicken and turkey (under Option 4); price is projected to
increase less than 0.04 percent of baseline for beef and pork under any
option.
The domestic production of meat products, and therefore industry
employment, is projected to decrease by about 0.04 percent under Option
4, and by lesser amounts under all other options for all meat types. In
general, impacts to domestic consumption of meat products are somewhat
smaller than impacts to domestic supply due to partially offsetting
increases in meat imports.
Impacts on meat exports are of particular concern to the poultry
sector. Exports are the means the poultry industry has used to sustain
growth. Exports are also used to balance domestic preferences for white
meat poultry products with the necessary production of dark meat as a
byproduct of white meat production; dark poultry meat is preferred in
other parts of the world. Meat exports are projected to decrease by
less than 0.06 percent for poultry meat under all options except Option
4 which decreases by 0.11 percent.

Table X.A-7.--Projected Impacts on Meat Product Markets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quantity Quantity
Domestic Domestic imported exported Compliance
Option Price ($/lb.) supply (lbs. demand (lbs. (lbs. x 1 (lbs. x 1 costs per
x 1 mil.) x 1 mil.) mil.) mil.) pound
--------------------------------------------------------------------------------------------------------------------------------------------------------
Beef
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................................ $1.11050 26,386.0 26,843.0 2,874.0 2,417.0 ..............
Option 2................................................ 1.11058 26,384.1 26,841.8 2,874.4 2,416.7 $0.00016
Option 2 + P............................................ 1.11085 26,378.7 26,838.7 2,875.8 2,415.8 0.00065
Option 2.5.............................................. 1.11065 26,382.9 26,841.2 2,874.8 2,416.5 0.00028
Option 2.5 + P.......................................... 1.11092 26,377.3 26,837.8 2,876.2 2,415.6 0.00078
Option 4................................................ 1.11098 26,376.2 26,837.3 2,876.5 2,415.4 0.00088
---------------------------------------------------------

[[Page 48509]]

Pork
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................................ 1.00380 19,278.00 18,827.0 827.00 1,278.00 ..............
Option 2................................................ 1.00382 19,278.04 18,827.1 827.02 1,277.97 0.00001
Option 2 + P............................................ 1.00402 19,275.6 18,825.3 827.24 1,277.56 0.00042
Option 2.5.............................................. 1.00390 19,277.0 18,826.3 827.11 1,277.81 0.00018
Option 2.5 + P.......................................... 1.00407 19,275.1 18,825.0 827.29 1,277.47 0.00050
Option 4................................................ 1.00410 19,274.9 18,824.8 827.33 1,277.39 0.00056
---------------------------------------------------------
Chicken
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................................ 0.5807 29,741.0 24,826.0 5.0000 4,920.0 ..............
Option 2................................................ 0.5808 29,739.8 24,825.3 5.0005 4,919.5 0.00016
Option 2 + P............................................ 0.5810 29,734.9 24,822.6 5.0026 4,917.3 0.00086
Option 2.5.............................................. 0.5808 29,738.6 24,824.7 5.0010 4,919.0 0.00033
Option 2.5 + P.......................................... 0.5810 29,733.9 24,822.1 5.0031 4,916.9 0.00100
Option 4................................................ 0.5812 29,727.8 24,818.3 5.0054 4,914.5 0.00184
---------------------------------------------------------
Turkey
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................................ 0.6898 5,297.0 4,919.2 1.2500 379.0 ..............
Option 2................................................ 0.6899 5,296.6 4,918.9 1.2502 378.9 0.00036
Option 2 + P............................................ 0.6900 5,296.1 4,918.5 1.2505 378.8 0.00085
Option 2.5.............................................. 0.6900 5,296.3 4,918.7 1.2503 378.9 0.00058
Option 2.5 + P.......................................... 0.6901 5,295.8 4,918.3 1.2506 378.8 0.00106
Option 4................................................ 0.6903 5,294.8 4,917.4 1.2510 378.7 0.00191
--------------------------------------------------------------------------------------------------------------------------------------------------------

B. Revised National Estimates of Cost Reasonableness and Cost-
Effectiveness

EPA performed a revised cost reasonableness and nutrient cost-
effectiveness analysis based on the revised estimates of costs,
loadings and removals described previously. As noted in Section X,
incremental results are presented somewhat differently here than in
that section, reflecting changes associated with increasingly stringent
options irrespective of which technology standard (BPT vs. BAT) they
are being considered under.
1. Cost Reasonableness of Pollutant Removals: BPT Cost and Removal
Comparison
Based on BOD, total phosphorus, and total nitrogen, average BPT
cost and removal comparison of pollutant removals ranges from $0.43 per
pound (Option 2.5) to $6.56 per pound (Option 2) in Subcategories A
through D, and from $3.93 per pound (Option 2.5) to $12.89 per pound
(Option 2) in Subcategory K.

Table X.B-1.--BPT Cost & Removal Comparison
----------------------------------------------------------------------------------------------------------------
Average BPT cost Incremental BPT
Pre-tax Total pounds & removal cost & removal
Option annualized costs removed \1\ comparison comparison
(1999$) (1999$/pound) (1999$/pound)
----------------------------------------------------------------------------------------------------------------
Subcategories A through D
----------------------------------------------------------------------------------------------------------------
Baseline................................ 0 0 NA NA
Option 2................................ $4,951,238 755,213 $6.56 $6.56
Option 2.5.............................. 12,359,499 28,443,891 0.43 0.27
Option 2 + P............................ 35,573,746 5,884,007 6.05 DOM
Option 2.5 + P.......................... 42,004,409 33,572,685 1.25 0.23
Option 4................................ 47,626,564 37,786,238 1.26 1.33
-----------------------------------------
Subcategory K
----------------------------------------------------------------------------------------------------------------
Baseline................................ 0 0 NA NA
Option 2................................ 8,333,047 646,527 12.89 12.89
Option 2.5.............................. 16,328,846 4,156,478 3.93 2.28
Option 2 + P............................ 38,998,615 4,476,538 8.71 70.83
Option 2.5 + P.......................... 45,492,024 7,986,488 5.70 1.85
Option 4................................ 83,368,375 19,637,412 4.25 3.25
----------------------------------------------------------------------------------------------------------------
\1\ Total pounds of: BOD, Total Phosphorus, and Total Nitrogen.
DOM: Option is dominated because it has higher cost and lower removals. Note however that the composition of
removals is different with Option 2 + P having higher Total P and lower Total N removals than Option 2.5 (see
Section X.B.2).

[[Page 48510]]

2. Cost Effectiveness of Nitrogen and Phosphorus Removals
The tables in this section provide both the incremental and average
nutrient cost-effectiveness values. As a basis of comparison, EPA
estimated that the average cost-effectiveness of nutrient removal by
POTWs with biological nutrient removal to be $4/lb for nitrogen and
$10/lb for phosphorus (67 FR 8622). EPA notes that Table X.B-2 displays
the results for the nitrogen cost-effectiveness and, therefore,
includes only options specifically designed to remove total nitrogen
(i.e., Option 2.5 and Option 4). Similarly, Table X.B-3 displays the
results for the phosphorus cost-effectiveness and, therefore, only
includes those options with a chemical phosphorus treatment step (i.e.,
Option 2 + P and Option 4). Option 2.5 + P is also omitted from Table
X.B-2 and Table X.B-3 because it provides no additional Total N
removals relative to Option 2.5 and no additional Total P removals
relative to Option 2 + P, respectively. Average cost-effectiveness
(cost per pound of nitrogen removed) ranges from $0.45 (Option 2.5) to
$1.52 (Option 4) in Subcategories A through D, and from $4.65 (Option
2.5) to $5.78 per pound (Option 4) in Subcategory K. The incremental
cost-effectiveness from Option 2.5 to Option 4 is $9.68/pound of
nitrogen removed for Subcategories A-D and $6.14/pound nitrogen removed
for Subcategory K. Average cost-effectiveness (cost per pound of
phosphorus removed) ranges from $6.94 (Option 2+P) to $8.41 (Option 4)
in Subcategories A through D, and from $10.18 (Option 2+P) to $19.10
per pound (Option 4) in Subcategory K. The incremental cost-
effectiveness from Option 2 + P to Option 4 is $22.70/pound of
phosphorus removed for Subcategories A-D and $83/pound phosphorus
removed for Subcategory K. EPA notes that the nutrient cost-
effectiveness numbers presented below represent upper bounds because
they assign all the costs for an option to either Total N or Total P
removal even though the options also remove other pollutants. EPA used
this approach to provide a conservative estimate of cost-effectiveness
and because it does not have a good basis to divide up removal costs
among pollutants.

Table X.B-2.--Nutrient Cost-Effectiveness: Total Nitrogen
----------------------------------------------------------------------------------------------------------------
Pre-tax Average cost Incremental cost
Option annualized costs Pounds removed effectiveness effectiveness
(1999$) (1999$/pound) (1999$/pound)
----------------------------------------------------------------------------------------------------------------
Subcategories A through D
----------------------------------------------------------------------------------------------------------------
Baseline................................ $0 0 NA NA
Option 2.5.............................. 12,359,499 27,688,678 $0.45 $0.45
Option 4................................ 47,626,564 31,331,318 1.52 9.68
-----------------------------------------
Subcategory K
----------------------------------------------------------------------------------------------------------------
Baseline................................ 0 0 NA NA
Option 2.5.............................. 16,328,846 3,509,950 4.65 4.65
Option 4................................ 83,368,375 14,427,113 5.78 6.14
----------------------------------------------------------------------------------------------------------------

Table X.B-3.--Nutrient Cost-Effectiveness: Total Phosphorus
----------------------------------------------------------------------------------------------------------------
Pre-tax Average cost Incremental cost
Option annualized costs Pounds removed effectiveness effectiveness
(1999$) (1999$/pound) (1999$/pound)
----------------------------------------------------------------------------------------------------------------
Subcategories A through D
----------------------------------------------------------------------------------------------------------------
Baseline................................ $0 0 NA NA
Option 2 + P............................ 35,573,746 5,128,793 $6.94 $6.94
Option 4................................ 47,626,564 5,659,799 8.41 22.70
-----------------------------------------
Subcategory K
----------------------------------------------------------------------------------------------------------------
Baseline................................ 0 0 NA NA
Option 2 + P............................ 38,998,615 3,830,011 10.18 10
Option 4................................ 83,368,375 4,363,815 19.10 83
----------------------------------------------------------------------------------------------------------------

C. Results of Barrier to Entry Analysis for New Sources

As discussed in Section X.D, when establishing the NSPS level of
control, EPA considers the barrier that compliance costs due to the
effluent guidelines regulation pose to entry into the industry for a
new facility. The barrier to entry analysis compares estimated average
incremental facility or company capital costs incurred to meet the
effluent guidelines to average total assets of existing facilities.
Tables X.C-1 and X.C-2, below, provide the results of the facility
level and company level ratios. The facility level ratio of capital
costs to total assets ranges from 0.1 percent under Option 2 to 2.1
percent under Option 4 in Subcategories A through D, and from 0.4
percent under Option 2 to 7.8 percent under Option 4 in Subcategory K.
Average capital costs of $3.0 million per facility in Subcategories A
through D result in a 2.1 percent ratio and average capital costs of
$3.1 million per facility in Subcategory K result in a 7.8 percent
ratio. The company level ratio of capital costs to total assets ranges
from 0.02 percent under Option 2 to 0.3 percent under Option 4 for red
meat, and from 0.1 percent under Option 2 to 1.7 percent under Option 4
for poultry companies. EPA notes that companies may own both red meat
and poultry facilities across more than one subcategory. Poultry
companies show the larger impacts as compared to red meat and mixed
meat companies.

[[Page 48511]]

Table X.C-1.--Summary of Facility Level Ratio of Capital Costs to Assets (Barrier to Entry)
[In percent]
----------------------------------------------------------------------------------------------------------------
Subcategory Option 2 Option 2.5 Option 2.5 + P Option 4
----------------------------------------------------------------------------------------------------------------
A-D............................................. 0.1 1.2 1.6 2.1
K............................................... 0.4 1.5 1.7 7.8
----------------------------------------------------------------------------------------------------------------
Note: Percentages are based on those facilities for which EPA had asset data and compliance costs.

Table X.C-2.--Summary of Company Level Ratio of Capital Costs to Assets (Barrier to Entry)
[In percent]
----------------------------------------------------------------------------------------------------------------
Subcategory Option 2 Option 2.5 Option 2.5 + P Option 4
----------------------------------------------------------------------------------------------------------------
Red Meat........................................ 0.02 0.2 0.3 0.3
Poultry......................................... 0.1 0.4 0.6 1.7
Mixed Meat...................................... 0.0 0.2 0.2 0.3
----------------------------------------------------------------------------------------------------------------
Note: Percentages are based on those companies for which EPA had complete asset data and compliance costs.

XI. Solicitation of Comment

The following discussion summarizes some of those issues raised by
new information and comments on the proposal for which EPA is
requesting comment. Other solicitations for information, data, or
comment are contained within the text of the notice. Note that several
of the solicitations for comment/data below have not been previously
discussed elsewhere in this NODA.
1. Concentration-based limits. EPA proposed to set mass-based
limitations and standards (e.g., kg/1,000 kg live weight killed).
Based, however, on comments received on the proposed rule, EPA is
considering setting concentration-based limitations and standards in
the final rule. EPA is considering such limitation rather than limiting
facility flows, and, as a result, potentially hindering their ability
to reduce pathogens that can cause foodborne illness. Use of
concentration-based limitations would also obviate the need for
facilities to report production data when applying for coverage under
an NPDES permit and the necessity for the permit writer to establish a
reasonable measure of long-term production that applies to a particular
facility. EPA solicits comment on this issue. EPA is particularly
interested in comments on whether adoption of such concentration
limitations rather than mass-based limitations is appropriate in light
of the Agency's expressed interest in conservation of water. EPA notes
that it has already received and is evaluating comments on the proposed
rule concerning increased water usage as a result of the implementation
of USDA's Hazard Analysis and Critical Control Point (HACCP) systems
final rule.
2. Combining of poultry subcategories. EPA is considering combining
the proposed Poultry Slaughtering and Poultry Further Processing
subcategories into one subcategory. EPA currently identified only one
stand-alone poultry further processing facility. This facility is
employing more advanced wastewater treatment technology than most
facilities in the Poultry Slaughtering subcategory. EPA notes that in
addition to using data from poultry slaughtering facilities, the limits
for Subcategory K were developed using facilities that were treating
further processing and rendering wastewater in addition to their
slaughtering wastewater. Therefore, EPA believes that the data for
Subcategory K may reasonably characterize the treatability of
Subcategory L wastewater and is considering combining subcategories K
and L into one subcategory for the final rule. EPA solicits comment on
this approach.
3. Chemical or Biological Phosphorus Removal. EPA has based its
cost module for phosphorus removal on the chemical removal of
phosphorus using alum. However, there are facilities using biological
phosphorus removal including one poultry facility which EPA is using to
develop limitations. However, EPA has determined that it is unlikely
that biological phosphorus removal (without the use of a chemical
removal polishing step) would consistently achieve the target effluent
concentrations that EPA is currently projecting for chemical phosphorus
removal. EPA solicits comment and data on treatability of poultry or
red meat wastewater using biological phosphorus removal as well as data
on the associated costs. EPA also requests comment on developing
limitations for the final rule based on performance of biological
phosphorus removal, in order to provide greater compliance flexibility
to facilities.
4. Filters and Storage Ponds. EPA received comment concerning the
achievability of the proposed limits and the need for either filters or
``emergency'' storage ponds to consistently achieve the total suspended
solids limits. EPA is considering whether costs for polishing filters
or additional storage/diversion capacity may need to be included for
one or more options or subcategories. EPA has received some information
regarding the number of red meat facilities that may have ``emergency''
storage ponds. EPA is specifically considering whether or not to
include costs for such a storage pond to receive wastewater prior to
discharge when the TSS limits have not been achieved through an
existing ``BAT'' or ``BPT'' treatment system. EPA intends to perform a
sensitivity analysis to estimate additional costs for those sites that
currently do not have this capacity. EPA is also considering adding
costs for a polishing filter. EPA solicits comments and data on the
performance of storage/diversion ponds and filters for polishing final
effluent at red meat or poultry facilities and the associated costs.
5. BOD to TKN Ratio. EPA has worked with stakeholders during the
development of the revised cost model discussed in Section III of
today's notice. EPA is using a BOD to TKN ratio of 3 to 1 in designing
the denitrification treatment. Stakeholders commented that this ratio
is too low. EPA calculated this ratio from information in comments from
industry, where EPA converted a COD to TKN ratio to a BOD to TKN ratio
and then built in an additional safety margin. Specific details
regarding this conversion can be found in the cost report, DCN 100782.
To further investigate this issue, EPA is soliciting influent and
effluent data from the direct discharge detail survey facilities

[[Page 48512]]

who are currently employing denitrification technology. This would
enable EPA to calculate the actual BOD to TKN ratio for each
subcategory for use in the final rule. EPA would specifically like
monitoring data from the influent to the biological treatment system
for BOD and TKN and information on the level of denitrification that is
occurring in the system (e.g., data on Total Nitrogen at the influent
and effluent or nitrate+nitrite at the influent and effluent of the
system).
6. Lagoon Bypass. As discussed in Section III, EPA has estimated
costs for facilities to bypass some of the wastewater around the
anaerobic lagoons if data indicated that the concentration of BOD
leaving the anaerobic lagoon is not at least three times the
concentration of TKN. Stakeholders reviewing EPA's cost model commented
that EPA underestimated the costs for lagoon bypass. EPA's cost
estimates were based on the lagoon bypass observed at one of the
facilities EPA has sampled which may be less complex than the lagoon
bypass discussed by commenters. EPA solicits comment on the capital and
operating and maintenance costs associated with less complex and more
complex systems used to bypass anaerobic lagoons.
7. Use of Methanol as Carbon Source. EPA includes costs, as
necessary, for facilities to use methanol on weekends (when the plant
is not in operation) as a carbon source for the biomass. Commenters are
concerned that methanol would cause biomass upset if the biomass is not
acclimated to it. EPA does not believe that the quantity of methanol
that it estimates to be used over the weekends is sufficient to cause
toxicity to the biomass. EPA solicits comment on the quantity of
methanol found to be ``toxic'' to biological systems used to treat red
meat and poultry processing wastewater.
8. EPA received a request from permitting authorities to clarify
the distinction between animal feeding operations (AFOs)/CAFOs and
animal holding areas in the MPP industry. Animal holding areas at MPP
facilities where animals are held for short durations (one to several
days) prior to slaughter are not considered AFOs, but rather are
considered part of the MPP facility and any process wastewater from
these areas is subject to MPP effluent guidelines. EPA solicits comment
on an approach that would articulate these clarifying points in the
regulatory text of the Meat and Poultry Products ELG. (See Section V.A
for the relevant discussion.)
9. EPA is considering revising the existing and proposed
limitations and standards for fecal coliforms to allow for results to
be reported in either MPN units or CFU units per 100 ml. EPA solicits
comment on this possible revision. (See Section V.C for the relevant
discussion.)
10. Some facilities use ultraviolet (UV) technology to disinfect
their wastewater before discharge instead of using chlorine or other
chemical disinfectants. EPA intends to further review sampling episode
data and to consider the self-monitoring data from facilities that use
UV technology. EPA solicits comments and data on UV performance and
costs for reducing fecal coliforms in MPP wastewaters. EPA also
solicits comment on the extent to which water quality standards are
driving the MPP industry to shift from chlorination/dechlorination to
UV to achieve water quality standards for chlorine and chlorination
byproducts and whether this shift necessitates a revised fecal
coliforms limit that is consistently achievable with UV technology.
(See Section V.C for the relevant discussion.)
11. EPA is considering using five forecasting methods when
determining facility closures for the final rule. A facility would be
projected to close if the present value (PV) of future compliance costs
exceeds the forecast PV of net income under three of the five
forecasting methods. Alternately, EPA might use some subset of the five
forecasting methods. EPA solicits comment on the appropriate use of
these forecasting methods for future facility income in the MPP
industry. (See Section VI.A.1 for the relevant discussion.)
12. Because fewer than 40 percent of direct discharging facilities
provided facility-level financial data in the detailed survey, EPA is
considering a closure analysis at the company level in addition to the
facility level. EPA solicits comment on the aggregation of facility-
level compliance costs to the company level, and the use of a company-
level closure analysis. In addition, EPA solicits comment on the
methodology used to estimate compliance costs for the closure analysis
for the 70 non-surveyed facilities which are owned by the same parent
companies as the 55 detailed survey recipients. (See Section VI.A.3 for
the relevant discussion.) EPA also solicits comment on appropriate
methods for ``scaling-up'' the facility-level and company-level closure
analyses to provide national projections given that there are
sufficient data to analyze only a subset of facilities/companies.
13. To address commenters' concerns about the effect of the
proposed rule on poultry exports, EPA derived its trade elasticities
based on Armington's framework in which one country's meat products are
an imperfect substitute for those of other countries. EPA solicits
comment on its revised trade elasticity methodology. (See Section VI.B
for the relevant discussion.)
14. Based on public comments received on the proposed rule, EPA is
considering possible revisions to its approach for determining
environmental benefits. For modeling water quality, EPA solicits
comment on the use of the six-parameter Water Quality Index (instead of
the four-parameter Index) to assess the environmental improvements from
the MPP regulation. In particular, EPA solicits comment on the
inclusion of nitrogen and phosphorous in the kinetics model. EPA also
solicits comment on the use of NAWQA data to calibrate the baseline,
and solicits other sources of data to use in the calibration effort.
(See Section VII.A.1 for the relevant discussion.)
15. EPA is considering site-specific or watershed-specific models
to evaluate the effects of nutrients and pollutants on receiving
waterbodies from individual representative MPP facilities. EPA solicits
comment on the applicability of the AQUATOX, QUAL2E and BASINS models
to model the environmental benefits of the MPP regulation. (See Section
VII.A.2 for the relevant discussion.)
16. EPA solicits comment on the use of Mitchell and Carson's
valuation function for estimating the monetized benefit for the MPP
industry. If more site-specific valuation information becomes
available, EPA may decide to incorporate those site-specific values for
estimating the monetized benefit. (See Section VII.B.1 for the relevant
discussion.)
17. EPA solicits comment on its approach to estimating monetized
benefits associated with reduced TSS concentrations at drinking water
intakes. (See Section VII.D.1 for the relevant discussion.)
18. EPA solicits comment on the use of a regional vulnerability
assessment for the MPP environmental assessment. (See Section VII.D.3
for the relevant discussion.)
19. EPA did not use data from two pre-proposal sampling episodes
(6335 and 6446) in its analyses presented in today's notice. EPA
solicits comment on the potential use of data from Episodes 6446 and
6335 for use in developing pollutant loading estimates and limitations
and standards for the final

[[Page 48513]]

rule. (See Section VIII.A.2 for the relevant discussion.)
20. EPA is considering reducing the assumed monitoring frequency
from daily to weekly for any new limitations and standards promulgated
in this rulemaking. EPA incorporated a weekly monitoring frequency into
the monitoring costs for this notice. EPA solicits comment on changing
the monitoring frequency to weekly. (See Section VIII.B for the
relevant discussion.)
21. EPA solicits comment on a no further regulation option for red
meat processing facilities and a no regulation option for poultry
processing facilities (See Section IX.B for the relevant discussion).
22. For developing the estimates of compliance costs and pollutant
loadings presented in today's notice, EPA transferred the target
effluent concentration for Total Nitrogen from well-operated facilities
at the Option 2.5 level that slaughter poultry (Subcategory K) to red
meat facilities in Subcategories A-D. EPA solicits comment on this data
transfer from poultry to meat slaughtering for the final rule. (See
Section V.D for the relevant discussion.)
23. When establishing the New Source Performance Standard (NSPS)
level of control, EPA considers the potential barrier that compliance
costs due to the effluent guidelines regulation pose to new facilities
entering the industry. The barrier to entry analysis compares estimated
average incremental facility or company capital costs incurred to meet
the effluent guidelines to average total assets of existing facilities
or companies. The ratio of average capital costs to average total
assets is a proxy for potential barriers to entry due to the MPP rule.
EPA solicits comment on other measures of ``barrier to entry'' that
would be appropriate for this industry. (See Section X.D for relevant
discussion.)

Dated: August 5, 2003.
G. Tracy Mehan, III,
Assistant Administrator, Office of Water.
[FR Doc. 03-20524 Filed 8-12-03; 8:45 am]
BILLING CODE 6560-50-P

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Effluent Limitations Guidelines and New Source Performance Standards for the Meat and Poultry Products Point Source Category; Notice of Data Availability

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