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

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

[Federal Register: July 9, 2004 (Volume 69, Number 131)]
[Rules and Regulations]
[Page 41575-41624]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09jy04-31]
[[Page 41576]]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 122, 123, 124, and 125
[FRL-7625-9]
RIN 2040-AD62

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

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

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SUMMARY: Today's final rule implements section 316(b) of the Clean
Water Act (CWA) for certain existing power producing facilities that
employ a cooling water intake structure and are designed to withdraw 50
million gallons per day (MGD) or more of water from rivers, streams,
lakes, reservoirs, estuaries, oceans, or other waters of the United
States for cooling purposes. This final rule constitutes Phase II of
EPA's section 316(b) regulation development and establishes national
requirements, and procedures for implementing those requirements,
applicable to the location, design, construction, and capacity of
cooling water intake structures at these facilities. The rule applies
to existing facilities that, as their primary activity, both generate
and transmit electric power or generate electric power but sell it to
another entity for transmission. The national requirements, which will
be implemented through National Pollutant Discharge Elimination System
(NPDES) permits, are based on the best technology available to minimize
the adverse environmental impact associated with the use of cooling
water intake structures.
Today's final rule establishes performance standards that are
projected to reduce impingement mortality by 80 to 95 percent and, if
applicable, entrainment by 60 to 90 percent. With the implementation of
today's final rule, EPA intends to minimize the adverse environmental
impact of cooling water intake structures by reducing the number of
aquatic organisms lost as a result of water withdrawals associated with
these structures.

DATES: This regulation is effective September 7, 2004. For judicial
review purposes, this final rule is promulgated as of 1 p.m. Eastern
Standard Time (EST) on July 23, 2004, as provided in 40 CFR 23.2.

ADDRESSES: The docket for today's final rule is available for public
inspection at the Water Docket in the EPA Docket Center, (EPA/DC) EPA
West, Room B102, 1301 Constitution Ave., NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: For additional technical information
contact Martha Segall at (202) 566-1041 or Debra Hart at (202) 566-
6379. The e-mail address for the above contacts is rule.316b@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. What Entities Are Regulated by This Action?

This final rule applies to Phase II existing facilities that are
point sources; as their primary activity both generate and transmit
electric power or generate electric power for sale to another entity
for transmission; use or propose to use one or more cooling water
intake structures with a total design intake flow of 50 million gallons
per day (MGD) or more to withdraw water from waters of the United
States; and use 25 percent of water withdrawn exclusively for cooling
water purposes. This rule defines ``existing facility'' as any facility
that commenced constructions on or before January 17, 2002, and any
modification of, or any addition of a unit at such a facility that does
not meet the definition of a new facility at Sec. 125.83.
This rule defines the term ``cooling water intake structure'' to
mean the total physical structure and any associated constructed
waterways used to withdraw cooling water from waters of the United
States. The cooling water intake structure extends from the point at
which water is withdrawn from the surface water source up to, and
including, the intake pumps.

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Examples of regulated Standard Industrial Classification (SIC) North American Industry Classification
Category entities codes System (NAICS) codes
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Federal, State, and Local Government.. Steam electric 4911 and 493.............................. 221112, 221113, 221119, 221121, 221122
generating point source
dischargers that employ
cooling water intake
structures.
Industry.............................. Steam electric 4911 and 493.............................. 221112, 221113, 221119, 221121, 221122
generating industrial
point source
dischargers that employ
cooling water intake
structures (this
includes utilities and
nonutilities).
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This exhibit is not intended to be exhaustive, but rather provides
a guide for readers regarding entities likely to be regulated by this
action. This exhibit lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the exhibit could also be regulated. To determine whether
your facility is regulated by this action, you should carefully examine
the applicability criteria in Sec. 125.91 of the rule. If you have
questions regarding the applicability of this action to a particular
entity, consult 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 2002-0049. The official public docket consists of the
documents specifically referenced in this action, any public comments
received, and other information related to this action. Although a part
of the official docket, the public docket does not include information
claimed as Confidential Business Information (CBI) or other information
the disclosure of which is restricted by statute. 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. To view docket materials,

[[Page 41577]]

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 for each page over the 266-page limit plus an administrative
fee of $25.00.
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 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. 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
I.B.1. Once in the system, select ``search,'' then key in the
appropriate docket identification number.

C. Supporting Documentation

The final regulation is supported by three major documents:
1. Economic and Benefits Analysis for the Final Section 316(b)
Phase II Existing Facilities Rule (EPA-821-R-04-005), hereafter
referred to as the Economic and Benefits Analysis. This document
presents the analysis of compliance costs, closures, energy supply
effects, and benefits associated with the final rule.
2. Regional Analysis for the Final Section 316(b) Phase II Existing
Facilities Rule (EPA-821-R-04-006), hereafter referred to as the
Regional Analysis Document or the Regional Study(ies) Document. This
document examines cooling water intake structure impacts and regulatory
benefits at the regional level.
3. Technical Development Document for the Final Section 316(b)
Phase II Existing Facilities Rule (EPA-821-R-04-007), hereafter
referred to as the Technical Development Document. This document
presents detailed information on the methods used to develop unit costs
and describes the set of technologies that may be used to meet the
final rule's requirements.

D. Table of Contents

I. General Information
A. What Entities Are Regulated By This Action?
B. How Can I Get Copies Of This Document and Other Related
Information?
C. Supporting Documentation
D. Table of Contents
II. Scope and Applicability of the Final Rule
A. What is an ``Existing Facility'' for Purposes of the Section
316(b) Phase II Rule
B. What is ``Cooling Water'' and What is a ``Cooling Water
Intake Structure?''
C. Is My Facility Covered if it Withdraws from Waters of the
United States?
D. Is My Facility Covered if it is a Point Source Discharger?
E. What Cooling Water Use and Design Intake Flow Thresholds
Result in an Existing Facility Being Subject to This Rule?
III. Legal Authority, Purpose, and Background of Today's Regulation
A. Legal Authority
B. Purpose of Today's Regulation
C. Background
IV. Environmental Impacts Associated With Cooling Water Intake Structures
V. Description of the Final Rule
VI. Summary of Most Significant Revisions to the Proposed Rule
A. Data Updates
B. Regulatory Approach, Calculation Baseline, and Measuring Compliance
VII. Basis for the Final Regulation
A. Why is EPA Establishing a Multiple Compliance Alternative
Approach for Determining Best Technology Available for Minimizing
Adverse Environmental Impact?
B. Why and How Did EPA Establish the Performance Standards at
These Levels?
C. What Is the Basis for the Five Compliance Alternatives That
EPA Selected for Establishing Best Technology Available?
D. How Has EPA Assessed Economic Practicability?
E. What are the Major Options Considered for the Final Rule and
Why did EPA Reject Them?
F. What is the Role of Restoration and Trading Under Today's
Final Rule?
VIII. Summary of Major Comments and Responses to the Proposed Rule
and Notice of Data Availability (NODA)
A. Scope and Applicability
B. Environmental Impact Associated with Cooling Water Intake
Structures
C. Performance Standards
D. Site-Specific Approach
E. Implementation
F. Restoration
G. Costs
H. Benefits
I. EPA Legal Authority
IX. Implementation
A. When Does the Final Rule Become Effective?
B. What Information Must I Submit to the Director When I Apply
for My Reissued NPDES Permit?
C. How Will the Director Determine the Appropriate Cooling Water
Intake Structure Requirements?
D. What Will I Be Required to Monitor?
E. How Will Compliance Be Determined?
F. What Are the Respective Federal, State, and Tribal Roles?
G. Are Permits for Existing Facilities Subject to Requirements
Under Other Federal Statutes?
H. Alternative Site-Specific Requirements
X. Engineering Cost Analysis
A. Technology Cost Modules
B. Model Facility Cost Development
C. Facility Flow Modifications
XI. Economic Analysis
A. Final Rule Costs
B. Final Rule Impacts
XII. Benefits Analysis
A. Introduction
B. Regional Study Design
C. The Physical Impacts of Impingement and Entrainment
D. National Benefits of Rule
E. Other Considerations
XIII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income Populations
K. Executive Order 13158: Marine Protected Areas
L. Congressional Review Act

II. Scope and Applicability of the Final Rule

This rule applies to owners and operators of existing facilities,
as defined in Sec. 125.93 of today's rule that meet all of the
following criteria:
? The facility's primary activity is to generate electric
power. The facility either transmits the electric power itself, or
sells the electric power to another entity for transmission;
? The facility is a point source that uses or proposes to
use one or more cooling water intake structures, including a cooling
water intake structure operated by an independent supplier that
withdraws water from waters of the United States and provides cooling
water to the facility by any sort of contract or other arrangement;
? The cooling water intake structure(s) withdraw(s) cooling
water from waters of the United States and at least twenty-five (25)
percent of the water withdrawn is used exclusively for cooling purposes
measured on an average annual basis;
? The facility is a point source; and
? The cooling water intake structures have a total design
intake flow of 50

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million gallons per day (MGD) or greater.
In the case of a Phase II existing facility that is co-located with
a manufacturing facility, only that portion of the cooling water flow
that is used by the Phase II facility to generate electricity for sale
to another entity will be considered when determining whether the 50
MGD and 25 percent criteria are met. Facilities subject to this final
rule are referred to as ``Phase II existing facilities.'' Existing
facilities with design flows below the 50 MGD threshold, as well as
most existing manufacturing facilities, offshore seafood processors,
and offshore and coastal oil and gas extraction facilities are not
subject to this rule. Those facilities have different characteristics
as compared to the large, power-generating facilities subject to
today's rule. If an existing facility is a point source and has or is
required to have an NPDES permit, but does not meet the applicability
thresholds in today's rule, it is subject to permit conditions
implementing section 316(b) of the CWA set by the permit director on a
case-by-case basis, using best professional judgment. EPA expects to
address at least some of these facilities in a separate rulemaking,
referred to as Phase III.
In the preamble to the proposed rule EPA indicated that its intent
was to exclude from regulation under the Phase II rule existing
facilities whose primary business is manufacturing. See, e.g., 67 FR
17124 (April 9, 2002). At the same time, in Sec. 125.91(a)(3) of the
proposed rule, the applicability criteria covered facilities that both
generate and transmit electric power, or generate electric power but
sell it to another entity for transmission. Numerous commenters
indicated concerns that, as proposed, Sec. 125.91(a)(3) would not
clearly exclude all existing manufacturing facilities from the Phase II
rule since some facilities generate electric power primarily for their
own use, but transmit or sell any surplus. Therefore, for the final
rule, EPA revised Sec. 125.91 so that it reaches only those existing
facilities that generate and transmit or sell electric power as their
primary activity. The final rule does not apply to existing
manufacturing facilities, including manufacturing facilities that
generate power for their own use and transmit any surplus power, or
sell it for transmission, provided the primary activity of the facility
is not electric power generation.

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

In today's rule, EPA is defining the term ``existing facility'' to
include any facility that commenced construction as described in 40 CFR
122.29(b)(4) \1\ on or before January 17, 2002. EPA established January
17, 2002 as the date for distinguishing new facilities from existing
ones because that is the effective date of the Phase I new facility
rule. In addition, EPA is defining the term ``existing facility'' in
this rule to include modifications and additions to such facilities,
the construction of which commences after January 17, 2002, that do not
meet the definition of a new facility at 40 CFR 125.83, the definition
used to define the scope of the Phase I rule. That definition states:
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\1\ Construction is commenced if the owner or operator has
undertaken certain installation and site preparation activities that
are part of a continuous on-site construction program, and it
includes entering into certain specified binding contractual
obligations as one criterion (40 CFR 122.29(b)(4)).

``New facility means any building, structure, facility, or
installation that meets the definition of a `new source' or `new
discharger' in [other NPDES regulations]
and is a greenfield or
stand-alone facility; commences construction after January 17, 2002;
and uses either a newly constructed cooling water intake structure,
or an existing cooling water intake structure whose design capacity
is increased to accommodate the intake of additional cooling water.
New facilities include only `greenfield' and `stand-alone'
facilities. A greenfield facility is a facility that is constructed
at a site at which no other source is located or that totally
replaces the process or production equipment at an existing facility
(see 40 CFR 122.29(b)(1)(i) and (ii). A stand-alone facility is a
new, separate facility that is constructed on property where an
existing facility is located and whose processes are substantially
independent of the existing facility at the same site (see 40 CFR
122.29(b)(1)(iii). New facility does not include new units that are
added to a facility for purposes of the same general industrial
operation (for example, a new peaking unit at an electrical
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generating station).'' \2\

\2\ The Phase I rule also listed examples of facilities that
would be ``new'' facilities and facilities that would ``not be
considered a `new facility' in two numbered paragraphs. These read
as follows:
``(1) Examples of `new facilities' include, but are not limited
to: the following scenarios:
(i) A new facility is constructed on a site that has never been
used for industrial or commercial activity. It has a new cooling
water intake structure for its own use.
(ii) A facility is demolished and another facility is
constructed in its place. The newly-constructed facility uses the
original facility's cooling water intake structure, but modifies it
to increase the design capacity to accommodate the intake of
additional cooling water.
(iii) A facility is constructed on the same property as an
existing facility, but is a separate and independent industrial
operation. The cooling water intake structure used by the original
facility is modified by constructing a new intake bay for the use of
the newly constructed facility or is otherwise modified to increase
the intake capacity for the new facility.
(2) Examples of facilities that would not be considered a `new
facility' include, but are not limited to, the following scenarios:
(i) A facility in commercial or industrial operation is modified
and either continues to use its original cooling water intake
structure or uses a new or modified cooling water intake structure.
(ii) A facility has an existing intake structure. Another
facility (a separate and independent industrial operation), is
constructed on the same property and connects to the facility's
cooling water intake structure behind the intake pumps, and the
design capacity of the cooling water intake structure has not been
increased. This facility would not be considered a `new facility'
even if routine maintenance or repairs that do not increase the
design capacity were performed on the intake structure.''
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The preamble to the final Phase I rule discusses this definition at
66 FR 65256; 65258-65259; 65285-65287, December 18, 2001.
EPA included in its Phase II proposed rule a freestanding
definition of ``existing facility.'' That definition read as follows:
``Existing facility means any facility that commenced construction
before January 17, 2002; and

(1) Any modification of such a facility;
(2) Any addition of a unit at such a facility for purposes of the
same industrial operation;
(3) Any addition of a unit at such a facility for purposes of a
different industrial operation, if the additional unit uses an existing
cooling water intake structure and the design capacity of the intake
structure is not increased; or
(4) Any facility constructed in place of such a facility, if the
newly constructed facility uses an existing cooling water intake
structure whose design intake flow is not increased to accommodate the
intake of additional cooling water.'' 67 FR 17221.
Upon further consideration, EPA has decided that it would be
clearest to define existing facility primarily by stating that any
facility that is not a new facility under 40 CFR 125.83 is an existing
facility for purposes of this subpart. Accordingly, the language in
this final rule is intended to be clear and consistent with EPA's
definition of new facility in the Phase I rule at 40 CFR 125.83. In
addition, the definition in today's regulation is also intended to
ensure that sources excluded from the definition of new facility in the
Phase I rule are captured by the definition of existing facility for
the purposes of today's rule. At the same time, EPA believes that the
approach taken in

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today's rule is identical in terms of effect to the approach in the
proposed rule. Thus, the approach taken in today's final rule is in no
way intended to change the scope of the rule as compared with the
proposal as far as the facilities treated as ``existing'' facilities
under the rule. The change is in drafting technique, not in meaning.
The facility encompassed by today's regulation is the point source
that uses a cooling water intake structure to generate electric power.
This is because the requirements of CWA section 316(b) are implemented
through NPDES permits, which are issued only to point source
dischargers of pollutants to waters of the United States. A point
source generating electric power would be subject to Phase I or Phase
II even if the cooling water intake structure it uses is located
elsewhere. Similarly, modifications or additions to the cooling water
intake structure (or even the total replacement of an existing cooling
water intake structure with a new one) does not convert an otherwise
unchanged existing facility into a new facility, regardless of the
purpose of such changes (e.g., to comply with today's rule or to
increase capacity). Rather, the determination as to whether a facility
is new or existing focuses on the power-generating point source itself,
i.e., whether it is a greenfield facility or a stand-alone facility.
This focus on the point source discharger is consistent with section
316(b), which by its express terms applies only to point sources.
Under this rule, an existing power generating facility that uses a
cooling water intake structure and repowers by either replacing or
modifying an existing generating unit would remain subject to
regulation as a Phase II existing facility, unless the existing
facility were completely demolished and another facility constructed in
its place that used either a new intake structure or the existing
structure with an increased design capacity. For example, the following
facility modifications or additions would result in a facility being
characterized as an existing facility under today's rule:
? An existing power generating facility undergoes a
modification of its process short of total replacement of the process
and concurrently increases the design capacity of its existing cooling
water intake structures;
? An existing power generating facility builds a new process
at its site for purposes of the same industrial operation and
concurrently increases the design capacity of its existing cooling
water intake structures;
? An existing power generating facility completely rebuilds
its process but uses the existing cooling water intake structure with
no increase in design capacity.
Phase II existing facilities subject to today's rule include point
sources that do not presently use, but propose to use, cooling water
intake structures and do not meet the definition of new facility at
Sec. 125.83. This is appropriate because there may be some cases in
which an existing facility historically withdrew its cooling water from
a municipal or other source, but then decides to withdraw cooling water
from a water of the United States. In these cases, the facility may not
previously have met all of the criteria applicable to an existing
facility under today's rule (i.e., the facility did not previously
withdraw cooling waters from a water of the United States) but may make
changes that would place the facility within the scope of today's rule.
A comparable situation would be when a facility previously relied on
units that do not require cooling water, and then adds or modifies a
unit for purposes of the same industrial operation (i.e., power
generation) such that cooling water is subsequently required. For
example, an existing power generating facility that adds a new
generating unit at the same site for purposes of repowering and
concurrently increases the design capacity of its existing cooling
water intake structure(s), or adds a new intake structure where it did
not previously need one, for example when converting a gas turbine to a
combined cycle unit, would be considered an existing facility.
In the preamble to the Phase I rule, EPA noted that it had defined
``existing facility'' in a manner consistent with existing NPDES
regulations with a limited exception. EPA noted that it had generally
deferred regulation of new sources constructed on a site at which an
existing source is located until the Agency had completed analysis of
its survey data on existing facilities. 66 FR 65286. Accordingly, the
Phase I rule treated almost all changes to existing facilities for
purposes of the same industrial operation as existing facilities. These
included the addition of new generating units at the same site, even
where they required an increase in cooling water intake structure
design capacity or the construction of a new cooling water intake
structure, as well as the complete demolition of an existing facility
and its replacement with a new facility, so long as it did not increase
the design capacity of the cooling water intake structure. The only
exception was the demolition of an existing facility and its
replacement with a new facility accompanied by an increase in design
capacity of the cooling water intake structure. As the preamble
explained: ``The definition of a new facility in the final rule applies
to a facility that is repowered only if the existing facility has been
demolished and another facility is constructed in its place, and
modifies the existing cooling water intake structure to increase the
design intake capacity.'' Id.\2a\ By contrast, the Phase I rule treated
the addition of a new unit for purposes of a different industrial
operation as an existing facility only if it used an existing cooling
water intake structure whose design intake flow was not increased.
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\2a\ Because they are part of the same ``industrial operation,''
such units are not ``stand-alone'' facilities for purposes of the
``new facility'' definition. As the fifth sentence of the definition
of ``new facility'' explains, they are categorically treated as
``existing facilities'' regardless of any other considerations
unless they completely replace an existing facility and its cooling
water design intake capacity is increased. Accordingly, there is
thus no need to make a determination whether they are
``substantially independent'' of the existing facility at the same
site under the fourth sentence of the definition in order to
determine whether they are ``existing'' or ``new facilities.'' The
fifth sentence alone controls that question.
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The Phase II proposed rule continued this approach in its
definition of ``existing facility.'' It continued to treat all changes
to existing facilities for purposes of the same industrial operation as
an existing facility unless the change was a complete demolition and
replacement of the facility accompanied by an increase in cooling water
intake design capacity. It also continued to treat the addition of new
units for purposes of a different industrial operation differently,
only allowing them to be ``existing facilities'' if they used an
existing cooling water intake structure and did not increase its design
intake flow. 67 FR 17221. In putting forth this proposed definition,
EPA noted that it had collected data from a variety of sources,
including survey data, specifically relating to repowering facilities.
Id. at 17131-17135. It also made a point of explaining the wide variety
of repowering activities that an existing facility could undertake
under the proposed rule--anything short of demolition of an existing
facility and its replacement with a new facility combined with
increasing the design capacity of a cooling water intake structure--
while still being regulated as an ``existing facility'' rather than a
``new facility.'' Id. at 17128.
On the basis of the analysis of the survey data and other
information in the record, the Agency now has concluded that it should
adhere to its provisional

[[Page 41580]]

decision generally giving wide latitude to existing facilities to make
changes or additions to their facilities at the same site. In
particular, new units that are added to a facility for purposes of the
same general industrial operation should be treated as existing
facilities because limitations associated with an existing site make it
inappropriate to subject such units to new facility requirements. These
limitations include space, existing location on a waterbody, location
in already congested areas which could affect (if Phase 1 requirements
were applied) visibility impairment, highway and airport safety issues,
noise abatement issues, salt drift and corrosion problems and
additional energy requirements. Moreover, power generation facilities
should not be discouraged from making any upgrade, modification, or
repowering that would increase energy efficiency or supply out of
concern that they would be considered a new facility for purposes of
section 316(b). Additional benefits will be realized in terms of
reducing industrial sprawl if incremental power generation is not
discouraged at existing power generation sites. These considerations
counsel in favor of treating new units locating at existing sites as
existing rather than new facilities. EPA also noted when it promulgated
the Phase I rule (see 66 FR 65286) that it is not feasible for the
permit authority to judge whether the facility could have been located
elsewhere for the purpose of determining whether the facility is
subject to the new facility rules. Accordingly, EPA has decided to
retain the Phase I definition's provision that a new facility does not
include new units that are added to a facility for purposes of the same
general industrial operation. As noted above, this decision is fully
consistent with the approach to this issue laid out in the proposed
Phase II rule.
The final rule definition of ``existing facility'' is sufficiently
broad that it encompasses facilities that will be addressed under the
Phase III rule (e.g., existing power generating facilities with design
flows below the 50 MGD threshold, certain existing manufacturing
facilities, seafood processors, and offshore and coastal oil and gas
extraction facilities). EPA notes, however, that these facilities are
not covered under this rule because they do not meet the requirements
of Sec. 125.91.

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

Today's rule adopts for Phase II existing facilities the same
definition of a ``cooling water intake structure'' that applies to new
facilities. A cooling water intake structure is defined as the total
physical structure and any associated constructed waterways used to
withdraw cooling water from waters of the United States. Under the
definition in today's rule, the cooling water intake structure extends
from the point at which water is withdrawn from the surface water
source up to, and including, the intake pumps. Today's rule adopts the
new facility rule's definition of ``cooling water'': Water used for
contact or noncontact cooling, including water used for equipment
cooling, evaporative cooling tower makeup, and dilution of effluent
heat content. The definition specifies that the intended use of cooling
water is to absorb waste heat rejected from the processes used, or
auxiliary operations on the facility's premises. The definition also
indicates that water used in a manufacturing process either before or
after it is used for cooling is process water for both cooling and non-
cooling purposes and would not be considered cooling water for purposes
of determining whether 25 percent or more of the flow is cooling water.
This clarification is necessary because cooling water intake structures
typically bring water into a facility for numerous purposes, including
industrial processes; use as circulating water, service water, or
evaporative cooling tower makeup water; dilution of effluent heat
content; equipment cooling; and air conditioning. EPA notes that this
clarification does not change the fact that only the intake water used
exclusively for cooling purposes is counted when determining whether
the 25 percent threshold in Sec. 125.91(a)(4) is met.
This definition of ``cooling water intake structure'' differs from
the definition provided in the 1977 Draft Guidance for Evaluating the
Adverse Impact of Cooling Water Intake Structures on the Aquatic
Environment: Section 316(b) P.L. 92-500 (U.S. EPA, 1977). The final
rule definition clarifies that the cooling water intake structure
includes the physical structure that extends from the point at which
water is withdrawn from the surface water up to and including the
intake pumps. Inclusion of the term ``associated constructed
waterways'' in today's rule is intended to clarify that the definition
includes those canals, channels, connecting waterways, and similar
structures that may be built or modified to facilitate the withdrawal
of cooling water. The explicit inclusion of the intake pumps in the
definition reflects the key role pumps play in determining the capacity
(i.e., dynamic capacity) of the intake. These pumps, which bring in
water, are an essential component of the cooling water intake structure
since without them the intake could not work as designed.

C. Is My Facility Covered if It Withdraws From Waters of the United
States?

The requirements finalized today apply to cooling water intake
structures that have the design capacity to withdraw amounts of water
equal to or greater than the specified intake flow threshold from
``waters of the United States.'' Waters of the United States include
the broad range of surface waters that meet the regulatory definition
at 40 CFR 122.2, which includes lakes, ponds, reservoirs, nontidal
rivers or streams, tidal rivers, estuaries, fjords, oceans, bays, and
coves. These potential sources of cooling water may be adversely
affected by impingement and entrainment.
Some facilities discharge heated water to cooling ponds, then
withdraw water from the ponds for cooling purposes. EPA recognizes that
cooling ponds may, in certain circumstances, constitute part of a
closed-cycled cooling system. See, e.g., 40 CFR 125.83. However, EPA
does not intend this rule to change the regulatory status of cooling
ponds. Cooling ponds are neither categorically included nor
categorically excluded from the definition of ``waters of the United
States'' at 40 CFR 122.2. EPA interprets 40 CFR 122.2 to give permit
writers discretion to regulate cooling ponds as ``waters of the United
States'' where cooling ponds meet the definition of ``waters of the
United States.'' The determination whether a particular cooling pond is
or is not a water of the United States is to be made by the permit
writer on a case-by-case basis, informed by the principles enunciated
in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army
Corps of Engineers, 531 U.S. 159 (2001). Therefore, facilities that
withdraw cooling water from cooling ponds that are waters of the United
States and that meet today's other criteria for coverage (including the
requirement that the facility has or will be required to obtain an
NPDES permit) are subject to today's rule. The EPA and the U.S. Army
Corps of Engineers have jointly issued jurisdictional guidance
concerning the term ``waters of the United States'' in light of the
Supreme Court's decision in Solid Waste Agency of Northern Cook County
v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). A copy
of that guidance was published as an Appendix to an Advanced Notice of
Proposed

[[Page 41581]]

Rulemaking on the definition of the phrase ``waters of the U.S.,'' see
68 FR 1991 (January 15, 2003), and may be obtained at (http://
www.epa.gov/owow/wetlands/ANPRM-FR.pdf). Section 125.91(d) also
provides, similar to the new facility rule, that facilities that obtain
cooling water from a public water system or use treated effluent are
not deemed to be using a cooling water intake structure for purposes of
this rule.

D. Is My Facility Covered if It Is a Point Source Discharger?

Today's rule applies only to facilities that are point sources
(i.e., have an NPDES permit or are required to obtain one) because they
discharge or might discharge pollutants, including storm water, from a
point source to waters of the Unites States. This is the same
requirement EPA included in the Phase I new facility rule at 40 CFR
125.81(a)(1). Requirements for complying with section 316(b) will
continue to be applied through NPDES permits.
Based on the Agency's review of potential Phase II existing
facilities that employ cooling water intake structures, the Agency
anticipates that most existing power generating facilities that will be
subject to this rule will control the intake structure that supplies
them with cooling water, and discharge some combination of their
cooling water, wastewater, and storm water to a water of the United
States through a point source regulated by an NPDES permit. In this
scenario, the requirements for the cooling water intake structure will
be specified in the facility's NPDES permit. In the event that a Phase
II existing facility's only NPDES permit is a general permit for storm
water discharges, the Agency anticipates that the Director would write
an individual NPDES permit containing requirements for the facility's
cooling water intake structure. Alternatively, requirements applicable
to cooling water intake structures could be incorporated into general
permits. If requirements are placed into a general permit, they must
meet the criteria set out at 40 CFR 122.28.
The Agency also recognizes that some facilities that have or are
required to have an NPDES permit might not own and operate the intake
structure that supplies their facility with cooling water. For example,
electric power-generating facilities operated by separate entities
might be located on the same, adjacent, or nearby property(ies); one of
these facilities might take in cooling water and then transfer it to
other facilities prior to discharge of the cooling water to a water of
the United States. Section 125.91(c) of today's rule addresses such a
situation. It provides that use of a cooling water intake structure
includes obtaining cooling water by any sort of contract or arrangement
with one or more independent suppliers of cooling water if the supplier
or suppliers withdraw water from waters of the United States but that
is not itself a Phase II existing facility. This provision is intended
to prevent facilities from circumventing the requirements of today's
rule by creating arrangements to receive cooling water from an entity
that is not itself a Phase II existing facility.
In addressing facilities that have or are required to have an NPDES
permit that do not directly control the intake structure that supplies
their facility with cooling water, section 125.91(d) also provides,
similar to the new facility rule, that facilities that obtain cooling
water from a public water system or use treated effluent are not deemed
to be using a cooling water intake structure for purposes of this rule.
As EPA stated in the preamble to the final Phase I rule (66 FR
65256 December 18, 2001), the Agency encourages the Director to closely
examine scenarios in which a facility withdraws significant amounts of
cooling water from waters of the United States but is not required to
obtain an NPDES permit. As appropriate, the Director should apply other
legal requirements, such as section 404 or 401 of the Clean Water Act,
the Coastal Zone Management Act, the National Environmental Policy Act,
the Endangered Species Act, or similar State or Tribal authorities to
address adverse environmental impact caused by cooling water intake
structures at those facilities.

E. What Cooling Water Use and Design Intake Flow Thresholds Result in
an Existing Facility Being Subject to This Rule?

This final rule applies to existing facilities that are point
sources and use cooling water intake structures that (1) withdraw
cooling water from waters of the United States and use at least twenty-
five (25) percent of the water withdrawn exclusively for cooling
purposes, and (2) have a total design intake capacity of 50 MGD or more
measured on an average annual basis (see Sec. 125.91). Today's rule
further provides that where a Phase II existing facility is co-located
with a manufacturing facility, only that portion of the cooling water
intake flow that is used by the Phase II facility to generate
electricity for sale to another entity will be considered for purposes
of determining whether the 50 MGD and 25 percent criteria have been
exceeded.
EPA chose the 50 MGD threshold to focus the rule on the largest
existing power generating facilities. EPA estimates that the 50 MGD
threshold will subject approximately 543 of 902 (60 percent) existing
power generating facilities to this final rule and will address
approximately 90 percent of the total flow withdrawn by these
facilities. EPA established the 50 MGD threshold because the regulation
of existing facilities with flows of 50 MGD or greater in Phase II will
address those existing power generating facilities with the greatest
potential to cause or contribute to adverse environmental impact. In
addition, EPA has limited data on impacts at facilities withdrawing
less than 50 MGD. Deferring regulation of such facilities to Phase III
provides an additional opportunity for the Agency to collect
impingement and entrainment data for these smaller facilities.
Similarly, because Phase II existing facilities typically use far
more than 25 percent of the water they withdraw for cooling purposes,
EPA established the 25 percent threshold to ensure that nearly all
cooling water and the largest existing facilities using cooling water
intake structures are addressed by today's requirements. As in the
Phase I rule, water used for both cooling and non-cooling purposes does
not count towards the 25 percent threshold. Thus, the rule does not
discourage the reuse of cooling water as process water or vice versa.
Water that serves as cooling water but is either previously or
subsequently used as process water is not considered cooling water for
purposes of determining the percentage of the water withdrawn that is
used for cooling and whether that percentage equals or exceeds 25
percent. Water withdrawn for non-cooling purposes includes water
withdrawn for warming by liquified natural gas facilities and water
withdrawn for public water systems by desalinization facilities.

III. Legal Authority, Purpose, and Background of Today's Regulation

A. Legal Authority

Today's final rule is issued under the authority of sections 101,
301, 304, 308, 316, 401, 402, 501, and 510 of the Clean Water Act
(CWA), 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and
1370. This rule partially fulfills the obligations of the U.S.
Environmental Protection Agency (EPA) under a consent decree in
Riverkeeper, Inc. v. Leavitt, No. 93 Civ. 0314, (S.D.N.Y).

[[Page 41582]]

B. Purpose of Today's Regulation

Section 316(b) of the CWA provides that any standard established
pursuant to section 301 or 306 of the CWA and applicable to a point
source must require that the location, design, construction, and
capacity of cooling water intake structures reflect the best technology
available (BTA) for minimizing adverse environmental impact. Today's
rule establishes requirements reflecting the best technology available
for minimizing adverse environmental impact, applicable to the
location, design, construction, and capacity of cooling water intake
structures at Phase II existing power generating facilities that have
the design capacity to withdraw at least fifty (50) MGD of cooling
water from waters of the United States and use at least twenty-five
(25) percent of the water they withdraw exclusively for cooling purposes.

C. Background

1. The Clean Water Act
The Federal Water Pollution Control Act, also known as the Clean
Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to ``restore and
maintain the chemical, physical, and biological integrity of the
nation's waters.'' 33 U.S.C. 1251(a). The CWA establishes a
comprehensive regulatory program, key elements of which are (1) a
prohibition on the discharge of pollutants from point sources to waters
of the United States, except as authorized by the statute; (2)
authority for EPA or authorized States or Tribes to issue National
Pollutant Discharge Elimination System (NPDES) permits that regulate
the discharge of pollutants; (3) requirements for limitations in NPDES
permits based on effluent limitations guidelines and standards and
water quality standards.
Today's rule implements section 316(b) of the CWA as it applies to
``Phase II existing facilities'' as defined in this rule. Section
316(b) addresses the adverse environmental impact caused by the intake
of cooling water, not discharges into water. Despite this special
focus, the requirements of section 316(b) are closely linked to several
of the core elements of the NPDES permit program established under
section 402 of the CWA to control discharges of pollutants into
navigable waters. For example, while effluent limitations apply to the
discharge of pollutants by NPDES-permitted point sources to waters of
the United States, section 316(b) applies to facilities subject to
NPDES requirements that withdraw water from waters of the United States
for cooling and that use a cooling water intake structure to do so.
Section 402 of the CWA provides authority for EPA or an authorized
State or Tribe to issue an NPDES permit to any person discharging any
pollutant or combination of pollutants from a point source into waters
of the United States. Forty-five States and one U.S. territory are
authorized under section 402(b) to administer the NPDES permitting
program. NPDES permits restrict the types and amounts of pollutants,
including heat, that may be discharged from various industrial,
commercial, and other sources of wastewater. These permits control the
discharge of pollutants primarily by requiring dischargers to meet
effluent limitations established pursuant to section 301 or section
306. Effluent limitations may be based on promulgated Federal effluent
limitations guidelines, new source performance standards, or the best
professional judgment of the permit writer. Limitations based on these
guidelines, standards, or best professional judgment are known as
technology-based effluent limits. Where technology-based effluent
limits are inadequate to ensure attainment of water quality standards
applicable to the receiving water, section 301(b)(1)(C) of the Clean
Water Act requires permits to include more stringent limits based on
applicable water quality standards. NPDES permits also routinely
include monitoring and reporting requirements, standard conditions, and
special conditions. In addition, NPDES permits contain conditions to
implement the requirements of section 316(b). Section 301 of the CWA
prohibits the discharge of any pollutant by any person, except in
compliance with specified statutory requirements, including section 402.
Section 510 of the Clean Water Act provides, that except as
provided in the Clean Water Act, nothing in the Act shall (1) preclude
or deny the right of any State or political subdivision thereof to
adopt or enforce any requirement respecting control or abatement of
pollution; except that if a limitation, prohibition or standard of
performance is in effect under the Clean Water Act, such State or
political subdivision may not adopt or enforce any other limitation
prohibition or standard of performance which is less stringent than the
limitation prohibition or standard of performance under the Act. EPA
interprets this to reserve for the States authority to implement
requirements that are more stringent than the Federal requirements
under state law. PUD No. 1 of Jefferson County. Washington Dep't of
Ecology, 511 U.S. 700, 705 (1994).
Sections 301, 304, and 306 of the CWA require that EPA develop
technology-based effluent limitations guidelines and new source
performance standards that are used as the basis for technology-based
minimum discharge requirements in wastewater discharge permits. EPA
issues these effluent limitations guidelines and standards for
categories of industrial dischargers based on the pollutants of concern
discharged by the industry, the degree of control that can be attained
using various levels of pollution control technology, consideration of
various economic tests appropriate to each level of control, and other
factors identified in sections 304 and 306 of the CWA (such as non-
water quality environmental impacts including energy impacts). EPA has
promulgated regulations setting effluent limitations guidelines and
standards under sections 301, 304, and 306 of the CWA for more than 50
industries. See 40 CFR parts 405 through 471. EPA has established
effluent limitations guidelines and standards that apply to most of the
industry categories that use cooling water intake structures (e.g.,
steam electric power generation, iron and steel manufacturing, pulp and
paper manufacturing, petroleum refining, and chemical manufacturing).
Section 316(b) states, in full:

Any standard established pursuant to section 301 or section 306
of [the Clean Water]
Act and applicable to a point source shall
require that the location, design, construction, and capacity of
cooling water intake structures reflect the best technology
available for minimizing adverse environmental impact.

The phrase ``best technology available'' in CWA section 316(b) is
not defined in the statute, but its meaning can be understood in light
of similar phrases used elsewhere in the CWA. See Riverkeeper v. EPA,
slip op. at 11 (2nd Cir. Feb. 3, 2004) (noting that the cross-reference
in CWA section 316(b) to CWA section 306 ``is an invitation to look to
section 306 for guidance in discerning what factors Congress intended
the EPA to consider in determining the `best technology available' ''
for new sources).
In sections 301 and 306, Congress directed EPA to set effluent
discharge standards for new sources based on the ``best available
demonstrated control technology'' and for existing sources based on the
``best available technology economically achievable.'' For new sources,
section 306(b)(1)(B) directs EPA to establish ``standards of
performance.'' The phrase ``standards of performance'' under section
306(a)(1) is defined as being the effluent reduction that is

[[Page 41583]]

``achievable through application of the best available demonstrated
control technology, processes, operating methods or other alternatives
* * *.'' This is commonly referred to as ``best available demonstrated
technology'' or ``BADT.'' For existing dischargers, section
301(b)(1)(A) requires the establishment of effluent limitations based
on ``the application of best practicable control technology currently
available.'' This is commonly referred to as ``best practicable
technology'' or ``BPT.'' Further, section 301(b)(2)(A) directs EPA to
establish effluent limitations for certain classes of pollutants
``which shall require the application of the best available technology
economically achievable.'' This is commonly referred to as ``best
available technology'' or ``BAT.'' Section 301 specifies that both BPT
and BAT limitations must reflect determinations made by EPA under Clean
Water Act section 304. Under these provisions, the discharge of
pollutants from point sources is based not on the impact of the
discharge on the receiving waters, but instead upon the capabilities of
the equipment or ``control technologies'' available to control those
discharges.
The phrases ``best available demonstrated technology''; and ``best
available technology''--like ``best technology available'' in CWA
section 316(b)--are not defined in the statute. However, section 304 of
the CWA specifies factors to be considered in establishing the best
practicable control technology currently available, and best available
technology.
For best practicable control technology currently available, the
CWA directs EPA to consider

the total cost of application of technology in relation to the
effluent reduction benefits to be achieved from such application,
and shall also take into account the age of the equipment and
facilities involved, the process employed, the engineering aspects
of the application of various types of control techniques, process
changes, non-water quality environmental impact (including energy
requirements), and such other factors as [EPA]
deems appropriate.

33 U.S.C. 1314(b)(1)(b).
For ``best available technology,'' the CWA directs EPA to consider:

the age of equipment and facilities involved, the process employed,
the engineering aspects * * * of various types of control
techniques, process changes, the cost of achieving such effluent
reduction, non-water quality environmental impacts (including energy
requirements), and such other factors as [EPA]
deems appropriate.

33 U.S.C. 1314(b)(2)(B).
Section 316(b) expressly refers to section 301, and the phrase
``best technology available'' is very similar to ``best technology
available'' in that section. These facts, coupled with the brevity of
section 316(b) itself, prompted EPA to look to section 301 and,
ultimately, section 304 for guidance in determining the ``best
technology available to minimize adverse environmental impact'' of
cooling water intake structures for existing Phase II facilities.
By the same token, however, there are significant differences
between section 316(b) and sections 301 and 304. See Riverkeeper, Inc.
v. United States Environmental Protection Agency, slip op. at 13, (2nd
Cir. Feb. 3, 2004) (``not every statutory directive contained [in
sections 301 and 306 ]
is applicable'' to a section 316(b) rulemaking).
Section 316(b) requires that cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact. In contrast to the effluent limitations provisions, the object
of the ``best technology available'' is explicitly articulated by
reference to the receiving water: To minimize adverse environmental
impact in the waters from which cooling water is withdrawn. This
difference is reflected in EPA's past practices in implementing
sections 301, 304, and 316(b). While EPA has established effluent
limitations guidelines based on the efficacy of one or more
technologies to reduce pollutants in wastewater in relation to cost
without necessarily considering the impact on the receiving waters, EPA
has previously considered the costs of technologies in relation to the
benefits of minimizing adverse environmental impact in establishing
316(b) limits which historically have been done on a case-by case
basis. In Re Public Service Co. of New Hampshire, 10 ERC 1257 (June 17,
1977); In Re Public Service Co. of New Hampshire, 1 EAD 455 (Aug. 4,
1978); Seacoast Anti-Pollution League v. Costle, 597 F. 2d 306 (1st
Cir. 1979).
For this Phase II rulemaking, EPA therefore interprets CWA section
316(b) as authorizing EPA to consider not only technologies but also
their effects on and benefits to the water from which the cooling water
is withdrawn. Based on these two considerations, EPA has established in
today's rule national requirements for facilities to install technology
that is technically available, economically practicable, and cost-
effective while at the same time authorizing a range of technologies
that achieve comparable reductions in adverse environmental impact.
2. Consent Decree
Today's final rule partially fulfills EPA's obligation to comply
with a consent decree, as amended. The Second Amended Consent Decree,
which is relevant to today's rule, was filed on November 25, 2002, in
the United States District Court, Southern District of New York, in
Riverkeeper, Inc. v. Leavitt, No. 93 Civ 0314, a case brought against
EPA by a coalition of individuals and environmental groups. The
original Consent Decree, filed on October 10, 1995, provided that EPA
was to propose regulations implementing section 316(b) by July 2, 1999,
and take final action with respect to those regulations by August 13,
2001. Under subsequent interim orders, the Amended Consent Decree filed
on November 22, 2000, and the Second Amended Consent Decree, EPA has
divided the rulemaking into three phases and is working under new
deadlines. As required by the Second Amended Consent Decree, on
November 9, 2001, EPA took final action on a rule governing cooling
water intake structures used by new facilities (Phase I). 66 FR 65255
(December 18, 2001). The Second Amended Consent Decree requires that
EPA take final action by February 16, 2004, with respect to Phase II
regulations that are ``applicable to, at a minimum: (1) Existing
utilities (i.e., facilities that both generate and transmit electric
power) that employ a cooling water intake structure, and whose intake
flow levels exceed a minimum threshold to be determined by EPA during
the Phase II rulemaking process; and (2) existing nonutility power
producers (i.e., facilities that generate electric power but sell it to
another entity for transmission) that employ a cooling water intake
structure, and whose intake flow levels exceed a minimum threshold to
be determined by EPA during the Phase II rulemaking process.'' The
consent decree further requires that EPA propose regulations governing
cooling water intake structures used, at a minimum, by smaller-flow
power plants and facilities in four industrial sectors (pulp and paper
making, petroleum and coal products manufacturing, chemical and allied
manufacturing, and primary metal manufacturing) by November 1, 2004,
and take final action by June 1, 2006 (Phase III).
3. What Other EPA Rulemakings and Guidance Have Addressed Cooling Water
Intake Structures?
In April 1976, EPA published a final rule under section 316(b) that
addressed cooling water intake structures. 41 FR

[[Page 41584]]

17387 (April 26, 1976), see also the proposed rule at 38 FR 34410
(December 13, 1973). The rule added a new Sec. 401.14 to 40 CFR
Chapter I that reiterated the requirements of CWA section 316(b). It
also added a new part 402, which included three sections: (1) Sec.
402.10 (Applicability), (2) Sec. 402.11 (Specialized definitions), and
(3) Sec. 402.12 (Best technology available for cooling water intake
structures). Section 402.10 stated that the provisions of part 402
applied to ``cooling water intake structures for point sources for
which effluent limitations are established pursuant to section 301 or
standards of performance are established pursuant to section 306 of the
Act.'' Section 402.11 defined the terms ``cooling water intake
structure,'' ``location,'' ``design,'' ``construction,'' ``capacity,''
and ``Development Document.'' Section 402.12 included the following
language:

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

In 1977, fifty-eight electric utility companies challenged those
regulations, arguing that EPA had failed to comply with the
requirements of the Administrative Procedure Act (APA) in promulgating
the rule. Specifically, the utilities argued that EPA had neither
published the Development Document in the Federal Register nor properly
incorporated the document into the rule by reference. The United States
Court of Appeals for the Fourth Circuit agreed and, without reaching
the merits of the regulations themselves, remanded the rule.
Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later
withdrew part 402. 44 FR 32956 (June 7, 1979). The regulation at 40 CFR
401.14, which reiterates the statutory requirement, remains in effect.
Since the Fourth Circuit remanded EPA's section 316(b) regulations
in 1977, NPDES permit authorities have made decisions implementing
section 316(b) on a case-by-case, site-specific basis. EPA published
draft guidance addressing section 316(b) implementation in 1977. See
Draft Guidance for Evaluating the Adverse Impact of Cooling Water
Intake Structures on the Aquatic Environment: Section 316(b) P.L. 92-
500 (U.S. EPA, 1977). This draft guidance described the studies
recommended for evaluating the impact of cooling water intake
structures on the aquatic environment and recommended a basis for
determining the best technology available for minimizing adverse
environmental impact. The 1977 section 316(b) draft guidance states,
``The environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake
design, location, construction, and capacity must be made on a case-by-
case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4).
This case-by-case approach was also consistent with the approach
described in the 1976 Development Document referenced in the remanded
regulation.
The 1977 section 316(b) draft guidance suggested a general process
for developing information needed to support section 316(b) decisions
and presenting that information to the permitting authority. The
process involved the development of a site-specific study of the
environmental effects associated with each facility that uses one or
more cooling water intake structures, as well as consideration of that
study by the permitting authority in determining whether the facility
must make any changes for minimizing adverse environmental impact.
Where adverse environmental impact is present, the 1977 draft guidance
suggested a stepwise approach that considers screening systems, size,
location, capacity, and other factors.
Although the draft guidance described the information that should
be developed, key factors that should be considered, and a process for
supporting section 316(b) determinations, it did not establish uniform
technology-based national standards for best technology available for
minimizing adverse environmental impact. Rather, the guidance left the
decisions on the appropriate location, design, capacity, and
construction of cooling water intake structures to the permitting
authority. Under this framework, the Director determined whether
appropriate studies have been performed, whether a given facility has
minimized adverse environmental impact, and what, if any, technologies
may be required.
4. Phase I New Facility Rule
On November 9, 2001, EPA took final action on regulations governing
cooling water intake structures at new facilities. 66 FR 65255
(December 18, 2001). On December 26, 2002, EPA made minor changes to
the Phase I regulations. 67 FR 78947. The final Phase I new facility
rule (40 CFR Part 125, Subpart I) establishes requirements applicable
to the location, design, construction, and capacity of cooling water
intake structures at new facilities that withdraw at least two (2)
million gallons per day (MGD) and use at least twenty-five (25) percent
of the water they withdraw solely for cooling purposes. In the new
facility rule, EPA adopted a two-track approach. Under Track I, for
facilities with a design intake flow more than 10 MGD, the intake flow
of the cooling water intake structure is restricted, at a minimum, to a
level commensurate with that which could be attained by use of a
closed-cycle, recirculating cooling system. For facilities with a
design intake flow more than 2 MGD, the design through-screen intake
velocity is restricted to 0.5 ft/s and the total quantity of intake is
restricted to a proportion of the mean annual flow of a freshwater
river or stream, or to maintain the natural thermal stratification or
turnover patterns (where present) of a lake or reservoir except in
cases where the disruption is beneficial, or to a percentage of the
tidal excursions of a tidal river or estuary. If certain environmental
conditions exist, an applicant with intake capacity greater than 10 MGD
must select and implement appropriate design and construction
technologies for minimizing impingement mortality and entrainment.
(Applicants with 2 to 10 MGD flows are not required to reduce intake
flow to a level commensurate with a closed-cycle, recirculating cooling
system, but must install technologies for reducing impingement
mortality at all locations.) Under Track II, the applicant has the
opportunity to demonstrate that impacts to fish and shellfish,
including important forage and predator species, within the watershed
will be comparable to the reduction in impingement mortality and
entrainment it would achieve were it to implement the Track I intake
flow and velocity requirements.
With the new facility rule, EPA promulgated national minimum
requirements for the design, capacity, and construction of cooling
water intake structures at new facilities. EPA believes that the final
new facility rule establishes a reasonable framework that creates
certainty for permitting of new facilities, while providing significant
flexibility to take site-specific factors into account.
5. Proposed Rule for Phase II Existing Facilities
On April 9, 2002, EPA published proposed requirements for cooling
water intake structures at Phase II existing facilities to implement
section 316(b) of the Clean Water Act. EPA proposed to establish
requirements that gave facilities three different compliance options
for meeting performance standards that vary based on waterbody

[[Page 41585]]

type, the percentage of the source waterbody withdrawn, and the
facility capacity utilization rate. 67 FR 17122. EPA received numerous
comments and data submissions concerning the proposal.
6. Notice of Data Availability
On Wednesday, March 19, 2003, EPA published a Proposed Rule Notice
of Data Availability (NODA). 68 FR 13522. This notice presented a
summary of the data EPA had received or collected since proposal, an
assessment of the relevance of the data to EPA's analysis, revisions to
EPA's estimate of the costs and benefits of the proposed rule, new
proposed compliance alternatives, and potential modifications to EPA's
proposed regulatory approach. As part of the NODA, EPA also reopened
the comment period on the complete contents of the proposed rule.
7. Public Participation
EPA has worked extensively with stakeholders from the industry,
public interest groups, State agencies, and other Federal agencies in
the development of this final rule. These public participation
activities have focused on various section 316(b) issues, including
issues relevant to development of the Phase I rule and Phase II rule.
EPA conducted outreach to industry groups, environmental groups,
and other government entities in the development, testing, refinement,
and completion of the section 316(b) survey, which has been used as a
source of data for the Phase II rule. The survey is entitled
``Information Collection Request, Detailed Industry Questionnaires:
Phase II Cooling Water Intake Structures & Watershed Case Study Short
Questionnaire,'' September 3, 1999. In addition, EPA conducted two
public meetings on section 316(b) issues. In June of 1998, in
Arlington, Virginia, EPA conducted a public meeting focused on a draft
regulatory framework for assessing potential adverse environmental
impact from impingement and entrainment. 63 FR 27958 (May 21, 1998). In
September of 1998, in Alexandria, Virginia, EPA conducted a public
meeting focused on technology, cost, and mitigation issues. 63 FR 40683
(July 30, 1998). In addition, in September of 1998, and April of 1999,
EPA staff participated in technical workshops sponsored by the Electric
Power Research Institute on issues relating to the definition and
assessment of adverse environmental impact. EPA staff have participated
in other industry conferences, met upon request on numerous occasions
with representatives of industry and environmental groups.
In the months leading up to publication of the proposed Phase I
rule, EPA conducted a series of stakeholder meetings to review the
draft regulatory framework for the proposed rule and invited
stakeholders to provide their recommendations for the Agency's
consideration. EPA managers have met with the Utility Water Act Group,
Edison Electric Institute, representatives from an individual utility,
and with representatives from the petroleum refining, pulp and paper,
and iron and steel industries. EPA conducted several meetings with
environmental groups attended by representatives from 15 organizations.
EPA also met with the Association of State and Interstate Water
Pollution Control Administrators (ASIWPCA) and, with the assistance of
ASIWPCA, conducted a conference call in which representatives from 17
States or interstate organizations participated. After publication of
the proposed Phase I rule, EPA continued to meet with stakeholders at
their request. Summaries of these meetings are in the docket.
EPA received many comments from industry stakeholders, government
agencies, and private citizens on the Phase I proposed rule 65 FR 49059
(August 10, 2000). EPA received additional comments on the Phase I
Notice of Data Availability (NODA) 66 FR 28853 (May 25, 2001). These
comments informed the development of the Phase II proposal.
In January, 2001, EPA also attended technical workshops organized
by the Electric Power Research Institute and the Utilities Water Act
Group. These workshops focused on the presentation of key issues
associated with different regulatory approaches considered under the
Phase I proposed rule and alternatives for addressing section 316(b)
requirements.
On May 23, 2001, EPA held a day-long forum to discuss specific
issues associated with the development of regulations under section
316(b) of the Clean Water Act. 66 FR 20658 (April 24, 2001). At the
meeting, 17 experts from industry, public interest groups, States, and
academia reviewed and discussed the Agency's preliminary data on
cooling water intake structure technologies that are in place at
existing facilities and the costs associated with the use of available
technologies for reducing impingement and entrainment. Over 120 people
attended the meeting.
In August 21, 2001, EPA staff participated in a technical symposium
sponsored by the Electric Power Research Institute in association with
the American Fisheries Society on issues relating to the definition and
assessment of adverse environmental impact under section 316(b) of the
CWA.
During development of the Phase I final rule and Phase II proposed
rule, EPA coordinated with the staff from the Nuclear Regulatory
Commission (NRC) to ensure that there would not be a conflict with NRC
safety requirements. NRC staff reviewed the proposed Phase II rule and
did not identify any apparent conflict with nuclear plant safety. NRC
licensees would continue to be obligated to meet NRC requirements for
design and reliable operation of cooling systems. NRC staff recommended
that EPA consider adding language which states that in cases of
conflict between an EPA requirement under this rule and an NRC safety
requirement, the NRC safety requirement take precedence. EPA added
language to address this concern in this final rule.
In a concerted effort to respond to a multitude of questions
concerning the data and analyses that EPA developed as part of the
Phase II proposal, EPA held a number of conference calls with multiple
stakeholders to clarify issues and generally provide additional
information. To supplement these verbal discussions, EPA drafted three
supporting documents: one that explained the methodology EPA used to
calculate entrainment rates; and two others that provided specific
examples of how EPA applied this methodology to calculate benefits for
the proposed rule. In addition, EPA prepared written responses to all
questions submitted by the stakeholders involved in the initial
conference calls.
Finally, EPA sponsored a Symposium on Cooling Water Intake
Technologies to Protect Aquatic Organisms, held on May 6-7, 2003, at
the Hilton Crystal City at National Airport in Arlington, Virginia.
This symposium brought together professionals from Federal, State, and
Tribal regulatory agencies; industry; environmental organizations;
engineering consulting firms; science and research organizations;
academia; and others concerned with mitigating harm to the aquatic
environment by cooling water intake structures. Efficacy and costs of
various technologies to mitigate impacts to aquatic organisms from
cooling water intake structures, as well as research and other future
needs, were discussed.
These coordination efforts and all of the meetings described in
this section are documented or summarized in the docket established for
this rule.

[[Page 41586]]

IV. Environmental Impacts Associated With Cooling Water Intake Structures

With the implementation of today's final rule, EPA intends to
minimize the adverse environmental impacts of cooling water intake
structures by minimizing the number of aquatic organisms lost as a
result of water withdrawals associated with these structures or through
restoration measures that compensate for these losses. In the Phase I
new facility rule and proposed Phase II existing facility rule, EPA
provided an overview of the magnitude and type of environmental impacts
associated with cooling water intake structures, including several
illustrative examples of documented environmental impacts at existing
facilities (see 65 FR 49071-4; 66 FR 65262-5; and 67 FR 17136-40).
For the same reasons set forth in the preamble to the Phase I rule
(66 FR 65256, 65291-65297), EPA has determined that there are multiple
types of undesirable and unacceptable environmental impacts that may be
associated with Phase II existing facilities, depending on conditions
at the individual site. These types of impacts include entrainment and
impingement; reductions of threatened and endangered species; damage to
critical aquatic organisms, including important elements of the food
chain; diminishment of a population's compensatory reserve; losses to
populations including reductions of indigenous species populations,
commercial fisheries stocks, and recreational fisheries; and stresses
to overall communities and ecosystems as evidenced by reductions in
diversity or other changes in system structure and function. Similarly,
based on the analyses and for the same reasons set forth in the
preamble to the new facility rule (66 FR 65256, 65291-65297), EPA has
selected reductions in impingement and entrainment as a quick, certain,
and consistent metric for determining performance at Phase II existing
facilities. Further, EPA considered the non-impingement and entrainment
environmental impacts for this rule and found them to be acceptable at
a national level. This section describes the environmental impacts
associated with cooling water withdrawals and why they are of concern
to the Agency.
EPA estimates that facilities under the scope of today's final rule
withdraw on average more than 214 billion gallons of cooling water a
day from waters of the United States.\2\ A report by the U.S.
Geological Survey estimates that the use of water by the thermoelectric
power industry accounted for 47 percent of all combined fresh and
saline withdrawals from waters of the United States in 1995.\3\ The
withdrawal of such large quantities of cooling water in turn has the
potential to affect large quantities of aquatic organisms including
phytoplankton (tiny, free-floating photosynthetic organisms suspended
in the water column), zooplankton (small aquatic animals, including
fish eggs and larvae, that consume phytoplankton and other
zooplankton), fish, and shellfish. Aquatic organisms drawn into cooling
water intake structures are either impinged on components of the
cooling water intake structure or entrained in the cooling water system
itself.
---------------------------------------------------------------------------

\2\ EPA 1999. Detailed Industry Questionnaires: Phase II Cooling
Water Intake Structures & Watershed Case Study Short Questionnaire.
U.S. Environmental Protection Agency, Office of Wastewater
Management, Washington, D.C. OMB Control No. 2040-0213.
\3\ Solley, W.B., R.R. Pierce and H.A. Perlman. 1998. Estimated
Use of Water in the United States in 1995. U.S. Geological Survey
Circular 1200.
---------------------------------------------------------------------------

Impingement takes place when organisms are trapped against intake
screens by the force of the water being drawn through the cooling water
intake structure. The velocity of the water withdrawal by the cooling
water intake structure may prevent proper gill movement, remove fish
scales, and cause other physical harm or death of affected organisms
through exhaustion, starvation, asphyxiation, and descaling. Death from
impingement (``impingement mortality'') can occur immediately or
subsequently as an individual succumbs to physical damage upon its
return to the waterbody.
Entrainment occurs when organisms are drawn through the cooling
water intake structure into the cooling system. Organisms that become
entrained are typically relatively small, aquatic organisms, including
early life stages of fish and shellfish. Many of these small, fragile
organisms serve as prey for larger organisms higher on the food chain
which are commercially and recreationally desirable species. As
entrained organisms pass through a facility's cooling system they may
be subject to mechanical, thermal, and at times, chemical stress.
Sources of such stress include physical impacts in the pumps and
condenser tubing, pressure changes caused by diversion of the cooling
water into the plant or by the hydraulic effects of the condensers,
sheer stress, thermal shock in the condenser and discharge tunnel, and
chemical toxic effects from antifouling agents such as chlorine.
Similar to impingement mortality, death from entrainment can occur
immediately or subsequently as the individual succumbs to the damage
from the stresses encountered as it passed through the cooling water
system once it is discharged back into the waterbody.
The environmental impacts attributable to impingement mortality and
entrainment at individual facilities include losses of early life
stages of fish and shellfish, reductions in forage species, and
decreased recreational and commercial landings. EPA estimates that the
current number of fish and shellfish, expressed as age 1 equivalents,
that are killed from impingement and entrainment from cooling water
intake structures at the facilities covered by this Phase II rule is
over 3.4 billion annually. Expressing impingement mortality and
entrainment losses as age 1 equivalents is an accepted method for
converting losses of all life stages into individuals of an equivalent
age and provides a standard metric for comparing losses among species,
years, and facilities. The largest losses are in the mid-Atlantic,
where EPA estimates 1.7 billion age 1 equivalents are lost annually due
to impingement and entrainment.\4\ Although the number of age 1
equivalent fish killed by impingement and entrainment is very large,
precise quantification of the nature and extent of impacts to
populations and ecosystems is difficult. Population dynamics and the
physical, chemical, and biological processes of ecosystems are
extremely complex. While generally accepted as a simple and transparent
method for modeling losses, the proportional methodology that EPA uses
to estimate impingement and entrainment nationwide has uncertainties
that may result in under or over estimating actual impingement and
entrainment rates.
---------------------------------------------------------------------------

\4\ For more information, please see Chapter D2: Evaluation of
Impingement and Entrainment in the Mid-Atlantic Region in the
Section 316(b) Existing Facilities Regional Studies, Part D: Mid-Atlantic.
---------------------------------------------------------------------------

Decreased numbers of aquatic organisms can disrupt aquatic food
webs and alter species composition and overall levels of biodiversity.
For example, a model that examined the effect of large entrainment
losses of forage fish, such as bay anchovy, predicted subsequent
reductions in predator populations (including commercially and
recreationally important species such as striped bass, weakfish, and
blue fish) as high as 25%.\5\ This is because forage species, which
comprise a majority of

[[Page 41587]]

entrainment losses at many facilities, are often a primary food source
for predator species.
---------------------------------------------------------------------------

\5\ Summers, J.K. 1989. Simulating the indirect effects of power
plant entrainment losses on an estuarine ecosystem. Ecological
Modelling, 49: 31-47.
---------------------------------------------------------------------------

EPA is also concerned about the potential impacts of cooling water
intake structures located in or near habitat areas that support
threatened, endangered, or other species of concern (those species that
might be in need of conservation actions, but are not currently listed
as threatened or endangered under State or Federal law).\6\ In the San
Francisco Bay-Delta Estuary, California, in the vicinity of the
Pittsburg and Contra Costa Power Plants several fish species (e.g.,
Delta smelt, Sacramento splittail, chinook salmon, and steelhead) are
now considered threatened or endangered by State and/or Federal
authorities. EPA evaluated facility data on impingement and entrainment
rates for these species and estimated that potential losses of special
status fish species at the two facilities may average 8,386 age 1
equivalents per year resulting from impingement and 169 age 1
equivalents per year due to entrainment.\7\ In another example, EPA is
aware that from 1976 to 1994, approximately 3,200 threatened or
endangered sea turtles entered enclosed cooling water intake canals at
the St. Lucie Nuclear Generating Plant in Florida.\8\ The facility
developed a capture-and-release program in response to these events.
Most of the entrapped turtles were captured and released alive;
however, approximately 160 turtles did not survive. An incidental take
limit established by NMFS in a 2001 biological opinion for this
facility has been set at no more than 1,000 sea turtles captured in the
intake, with less than one percent killed or injured as a result of
plant operations (only two of those killed or injured may be Kemp's
Ridley sea turtles and none may be hawksbill or leatherback sea
turtles).\9\ Although the extent to which threatened, endangered, and
other special status species are taken by cooling water intake
structures more generally is yet to be determined, EPA is concerned
about potential impacts to such species.
---------------------------------------------------------------------------

\6\ For more information, please see Chapter A12: Threatened &
Endangered Species Analysis Methods in the Regional Studies for the
Final Section 316(b) Phase II Existing Facilities Rule.
\7\ Impingement and entrainment data were obtained from the 2000
Draft Habitat Conservation Plan for the Pittsburg and Contra Costa
facilities. Please see EPA's Regional Studies for the Final Section
316(b) Phase II Existing Facilities Rule for detailed information on
EPA's evaluation of impingement and entrainment at these facilities.
\8\ Florida Power and Light Company. 1995. Assessment of the
impacts at the St. Lucie Nuclear Generating Plant on sea turtle
species found in the inshore waters of Florida.
\9\ Florida Power and Light Company, 2002. Florida Power & Light
Company St. Lucie Plant Annual Environmental Operating Report 2002.
---------------------------------------------------------------------------

Examples of Environmental Impacts Caused by Cooling Water Intakes

1. Hudson River
The power generation facilities on the Hudson River in New York are
some of the most extensively studied in the nation. The fish
populations in the Hudson River have also been studied extensively to
measure the impacts of these power plants. Studies of entrainment at
five Hudson River power plants during the 1980s predicted year-class
reductions ranging from six percent to 79 percent, depending on the
fish species.\10\ A Draft Environmental Impact Statement (DEIS)
prepared by industry of entrainment at three Hudson River facilities
(Roseton, Bowline, and Indian Point) predicted year-class reductions of
up to 20 percent for striped bass, 25 percent for bay anchovy, and 43
percent for Atlantic tomcod.\11\ The New York State Department of
Environmental Conservation (NYSDEC) concluded that any ``compensatory
responses to this level of power plant mortality could seriously
deplete any resilience or compensatory capacity of the species needed
to survive unfavorable environmental conditions.'' \12\ In the DEIS,
the facilities argue that their operation has not harmed the local
aquatic communities, because all observed population changes are
attributable to causes other than the operation of the power plants,
such as water chestnut growth, zebra mussel invasion, changes in
commercial fishing, increases in salinity and improved water quality in
the New York Harbor.
---------------------------------------------------------------------------

\10\ Boreman J. and P. Goodyear. 1988. Estimates of entrainment
mortality for striped bass and other fish species inhabiting the
Hudson River Estuary. American Fisheries Society Monograph 4:152-
160.
\11\ Consolidated Edison Company of New York. 2000. Draft
environmental impact statement for the state pollutant discharge
elimination system permits for Bowline Point, Indian Point 2 & 3,
and Roseton steam electric generating stations.
\12\ New York State Department of Environmental Conservation
(NYSDEC). 2000. Internal memorandum provided to the USEPA on NYDEC's
position on SPDES permit renewals for Roseton, Bowline Point 1 & 2,
and Indian Point 2 & 3 generating stations.
---------------------------------------------------------------------------

In contrast, the Final Environmental Impact Statement (FEIS)
prepared by NYSDEC for these three facilities concludes that impacts
are associated with the power plants and notes that these impacts are
more like habitat degradation than the ``selective cropping'' of fish
that occurs during regulated fishing because the entire community is
impacted rather than specific species higher on the food chain.\13\ The
multiple facilities on the Hudson River act cumulatively on the entire
aquatic community. New York State's 2002 section 316(b) report lists
the Hudson River downstream from the Federal dam at Troy, New York, as
impacted by cooling water use by power plants due to the loss each year
of a substantial percentage of annual fish production. The FEIS
estimates, from samples collected between 1981 and 1987, that the
average annual entrainment losses from these three facilities includes
16.9 million American shad, 303.4 million striped bass, 409.6 million
bay anchovy, 468 million white perch, and 826.2 million river
herring.\14\ In addition, related studies have found a small long-term
decline in both species richness and diversity within the resident fish
community. A commenter on the DEIS cited further evidence that Atlantic
tomcod, Atlantic sturgeon, bluefish, weakfish, rainbow smelt, white
perch and white catfish are showing long-term trends of declining
abundance of 5 to 8% per annum.\15\ Declines in abundances of several
species and changes in species composition have raised concerns about
the overall health of the community. The FEIS concluded that additional
technology was necessary to minimize the adverse environmental impact
from these three once-through systems.\16\
---------------------------------------------------------------------------

\13\ New York State Department of Environmental Conservation
(NYSDEC). 2003. Final Environmental Impact Statement: Concerning the
Applications to Renew NYSPDES Permits for the Roseton 1 & 2, Bowling
1 & 2 and Indian Point 2 & 3 Steam Electric Generating Stations,
Orange, Rockland and Westchester Counties.
\14\ Ibid.
\15\ Henderson, P.A. and R.M. Seaby. 2000. Technical comments on
the Draft Environmental Impact Statement for the State Pollution
Discharge Elimination System Permit Renewal for Bowline Point 1 & 2,
Indian Point 2 & 3, and Roseton 1 & 2 Steam Generating Stations.
Pisces Conservation Ltd.
\16\ New York State Department of Environmental Conservation
(NYSDEC). 2003. Final Environmental Impact Statement: Concerning the
Applications to Renew NYSPDES Permits for the Roseton 1 & 2, Bowline
1 & 2 and Indian Point 2 & 3 Steam Electric Generating Stations,
Orange, Rockland and Westchester Counties.
---------------------------------------------------------------------------

The FEIS further concluded that entrainment at these facilities has
diminished the forage base for each species so there is less food
available for the survivors. This disruption of the food chain
compromises the health of the entire aquatic community. The FEIS used,
as a simplified hypothetical example, the loss of an individual bay
anchovy that would ordinarily serve as prey for a juvenile striped
bass. If this individual bay anchovy is killed via entrainment and
disintegrated upon

[[Page 41588]]

passage through a CWIS, it is no longer available as food to a striped
bass, but rather it is only useful as food to lower trophic level
organisms, such as detritivores (organisms that feed on dead organic
material). Further, the bay anchovy would no longer be available to
consume phytoplankton, which upsets the distribution of nutrients in
the ecosystem.\17\
---------------------------------------------------------------------------

\17\ Ibid.
---------------------------------------------------------------------------

The Hudson River, like many waterbodies in the nation, has
undergone many changes in the past few decades. These changes, which
have affected fish populations either positively or negatively, include
improvements to water quality as a result of upgrades to sewage
treatment plants, invasions by exotic species such as zebra mussels,
chemical contamination by toxins such as PCBs and heavy metals, global
climate shifts such as increases in annual mean temperatures and higher
frequencies of extreme weather events (e.g., the El Nino-Southern
Oscillation), and strict management of individual species stocks such
as striped bass.\18\ In addition, there are dramatic natural changes in
fish populations on an annual basis and in the long term due to natural
phenomena because the Hudson River, like many waterbodies, is a dynamic
system with many fundamental, fluctuating environmental parameters--
such as flow, temperature, salinity, dissolved oxygen, nutrients, and
disease--that cause natural variation in fish populations each
year.\19\ The existence of these interacting variables makes it
difficult to determine the exact contribution of impingement and
entrainment losses on a population's relative health. Nonetheless, as
described later in this section, EPA is concerned about the potential
for cumulative impacts resulting from multiple facility intakes that
collectively impinge and/or entrain aquatic organisms within a specific
waterbody.
---------------------------------------------------------------------------

\18\ Ibid.
\19\ Ibid.
---------------------------------------------------------------------------

2. Mount Hope Bay
Environmental impacts were also studied in another recent permit
reissuance for the Brayton Point Station in Somerset, Massachusetts,
where EPA is the permitting authority. EPA determined that, among other
things, the facility's cooling water system had contributed to the
collapse of the fishery and inhibited its recovery despite stricter
commercial and recreational fishing limits and improved water quality
due to sewage treatment upgrades. The facility currently withdraws
nearly one billion gallons of water each day and the average annual
losses of aquatic organisms due to impingement and entrainment are
estimated in the trillions, including 251 million winter flounder, 375
million windowpane flounder, 3.5 billion tautog and 11.8 billion bay
anchovy. A dramatic change in the fish populations in Mount Hope Bay is
apparent after 1984 with a decline by more than 87 percent, which
coincides with a 45 percent increase in cooling water withdrawal from
the bay due to the modification of Unit 4 from a closed-cycle
recirculating system to a once-through cooling water system and a
similar increase in the facility's thermal discharge.\20\ \21\ The
downward trend of finfish abundance in Mount Hope Bay is significantly
greater than declines in adjacent Narragansett Bay that is not
influenced by the operation of Brayton Point Station.\22\ Despite
fishing restrictions, fish stocks have not recovered.
---------------------------------------------------------------------------

\20\ Ibid.
\21\ T Gibson, M. 1995 (revised 1996). Comparison of trends in
the finfish assemblages of Mt. Hope Bay and Narragansett Bay in
relation to operations for the New England Power Brayton Point
station. Rhode Island Division of Fish and Wildlife, Marine
Fisheries Office.
\22\ EPA-New England. 2002. Clean Water Act NPDES Permitting
Determinations for Thermal Discharge and Cooling Water Intake from
Brayton Point Station in Somerset, MA (NPDES Permit No. MA 0003654),
July 22, 2002.
---------------------------------------------------------------------------

3. Southern California Bight
At the San Onofre Nuclear Generating Station (SONGS), in a normal
(non-El Ni[ntilde]o) year, an estimated 57 tons of fish were killed per
year when all units were in operation.\23\ The amount lost per year
included approximately 350,000 juveniles of white croaker, a popular
sport fish; this number represents 33,000 adult equivalents or 3.5 tons
of adult fish. In shallow water, densities of queenfish and white
croaker decreased 60 percent within one kilometer of SONGS and 35
percent within three kilometers from SONGS as compared to densities
prior to facility operations. Densities of local midwater fish
decreased 50 to 70 percent within three kilometers of the facility. In
contrast, relative abundances of some bottom-dwelling species in the
same areas were higher because of the enriched nature of the SONGS
discharge, which in turn supported elevated numbers of prey items for
bottom-dwelling fish.
---------------------------------------------------------------------------

\23\ Murdoch, W.W., R.C. Fay, and B.J. Mechalas. 1989. Final
Report of the Marine Review Committee to the California Coastal
Commission. August 1989, MRC Document No. 89-02.
---------------------------------------------------------------------------

4. Missouri River
In contrast to these examples, facilities sited on waterbodies
previously impaired by anthropogenic activities such as channelization
demonstrate limited entrainment and impingement losses. The Neal
Generating Complex facility, located near Sioux City, Iowa, on the
Missouri River is coal-fired and utilizes once-through cooling systems.
According to a ten-year study conducted from 1972-82, the Missouri
River aquatic environment near the Neal complex was previously heavily
impacted by channelization and very high flow rates meant to enhance
barge traffic and navigation.\24\ These anthropogenic changes to the
natural river system resulted in significant losses of fish habitat. At
this facility, there was found to be little impingement and entrainment
by cooling water intakes.
---------------------------------------------------------------------------

\24\ Tondreau, R., J. Hey and E. Shane, Morningside College.
1982. Missouri River Aquatic Ecology Studies: Ten Year Summary
(1972-1982). Prepared for Iowa Public Service Company, Sioux City, Iowa.
---------------------------------------------------------------------------

Studies like those described in this section provide only a partial
picture of the range of environmental impacts associated with cooling
water intake structures. Although numerous studies were conducted to
determine the environmental impacts caused by impingement and
entrainment at existing facilities, many of them are based on limited
data that were collected as long as 25 years ago. EPA's review of
available facility impingement and entrainment studies identified a
substantial number of serious study design limitations, including data
collections for only one to two years or limited to one season and for
a subset of the species affected by cooling water intakes; limited
taxonomic detail (i.e., many losses not identified to the species
level); a general lack of statistical information such as inclusion of
variance measures in impingement and entrainment estimates; and the
lack of standard methods and metrics for quantifying impingement and
entrainment, which limits the potential for evaluating cumulative
impacts across multiple facilities. Further, in many cases it is likely
that facility operating conditions and/or the state of the waterbody
itself has changed since these studies were conducted. Finally, the
methods for monitoring impingement and entrainment used in the 1970s
and 1980s, when most section 316(b) evaluations were performed, were
often inconsistent and incomplete, making quantification of impacts
difficult in some cases. Recent advances in environmental assessment
techniques

[[Page 41589]]

provide new and in some cases better tools for monitoring impingement
and entrainment and quantifying the current magnitude of the
impacts.25 26
---------------------------------------------------------------------------

\25\ Schmitt, R.J. and C.W. Osenberg. 1996. Detecting Ecological
Impacts. Academic Press, San Diego, CA.
\26\ EPRI 1999. Catalog of Assessment Methods for Evaluating the
Effects of Power Plant Operations on Aquatic Communities. TR-112013,
EPRI, Palo Alto, CA.
---------------------------------------------------------------------------

EPA is also concerned about the potential for cumulative impacts
related to cooling water withdrawal. Cumulative impacts may result from
(1) multiple facility intakes impinging and/or entraining aquatic
organisms within a specific waterbody, watershed, or along the
migratory pathway of specific species; (2) the existence of multiple
stressors within a waterbody/watershed, including cooling water intake
withdrawals; and (3) long-term occurrences of impingement and/or
entrainment losses that may result in the diminishment of the
compensatory reserve of a particular fishery stock.
Historically, environmental impacts related to cooling water intake
structures have been evaluated on a facility-by-facility basis. These
historical evaluations do not consider the potential for a fish or
shellfish species to be concomitantly impacted by cooling water intake
structures belonging to other facilities that are located within the
same waterbody or watershed in which the species resides or along the
coastal migratory route of a particular species. The potential
cumulative effects of multiple intakes located within a specific
waterbody or along a coastal segment are difficult to quantify and are
not typically assessed. (One relevant example is provided for the
Hudson River; see discussion earlier in this section.) Nonetheless, EPA
analyses suggest that almost a quarter of all Phase II existing
facilities are located on a waterbody with another Phase II existing
facility (DCN 4-4009). Thus, EPA is concerned that although the
potential for aquatic species to be affected by cooling water
withdrawals from multiple facility intakes is high, this type of
cumulative impact is largely unknown and has not adequately been
accounted for in evaluating impacts. However, recently the Atlantic
States Marine Fisheries Commission (ASMFC) was requested by its member
States to investigate the cumulative impacts on commercial fishery
stocks, particularly overutilized stocks, attributable to cooling water
intakes located in coastal regions of the Atlantic.\27\ Specifically,
the ASMFC study will evaluate the potential cumulative impacts of
multiple intakes on Atlantic menhaden stock \28\ which range along most
of the U.S. Atlantic coast with a focus on revising existing fishery
management models so that they accurately consider and account for fish
losses from multiple intake structures. Results from these types of
studies, although currently unavailable, will provide significant
insight into the degree of impact attributable to intake withdrawals
from multiple facilities.
---------------------------------------------------------------------------

\27\ Personal communication, D. Hart (EPA) and L. Kline (ASMFC),
2001.
\28\ Personal communication, D. Hart (EPA) and L. Kline (ASMFC),
2003.
---------------------------------------------------------------------------

EPA also considered information suggesting that impingement and
entrainment, in conjunction with other factors, may be a nontrivial
stress on a waterbody. EPA recognizes that cooling water intake
structures are not the only source of human-induced stress on aquatic
systems. Additional stresses to aquatic systems include, but are not
limited to, nutrient, toxics, and sediment loadings; low dissolved
oxygen; habitat loss; and stormwater runoff. Although EPA recognizes
that a nexus between a particular stressor and adverse environmental
impact may be difficult to establish with certainty, EPA believes
stressors that cause or contribute to the loss of aquatic organisms and
habitat such as those described above, may incrementally impact the
viability of aquatic resources. EPA analyses suggest that over 99
percent of all existing facilities with cooling water withdrawal that
EPA surveyed in its section 316(b) survey of existing facilities are
located within two miles of waters that are identified as impaired by a
State or Tribe (see 66 FR 65256, 65297). Thus, the Agency is concerned
that to the extent that many of the aquatic organisms subject to the
effects of cooling water withdrawals reside in impaired waterbodies,
they are potentially more vulnerable to cumulative impacts from an
array of physical and chemical anthropogenic stressors.
Finally, EPA believes that an aquatic population's potential
compensatory ability--the capacity for a species to increase its
survival, growth, or reproduction in response to reductions sustained
to its overall population size--may be compromised by impingement and
entrainment losses in conjunction with all the other stressors
encountered within a population's natural range, as well as impingement
and entrainment losses occurring consistently over extended periods of
time. As discussed in the Phase I new facility rule (see 66 FR 65294),
EPA is concerned that even if there is little evidence that cooling
water intakes alone reduce a population's compensatory reserve, the
multitude of stressors experienced by a species can potentially
adversely affect its ability to recover.\29\ Moreover, EPA notes that
the opposite effect or ``depensation'' (decreases in recruitment as
stock size declines\30\) may occur if a population's size is reduced
beyond a critical threshold. Depensation can lead to further decreases
in population abundances that are already seriously depleted and, in
some cases, recovery of the population may not be possible even if the
stressors are removed. In fact, there is some evidence that depensation
may be a factor in some recent fisheries collapses.\31\ \32\ \33\
---------------------------------------------------------------------------

\29\ Hutchings, J.A. and R.A. Myers. 1994. What can be learned
from the collapse of a renewable resource? Atlantic cod, Gadus
morhus, of Newfoundland and Labrador. Canadian Journal of Fisheries
and Aquatic Sciences 51:2126-2146.
\30\ Goodyear, C.P. 1977. Assessing the impact of power plant
mortality on the compensatory reserve of fish populations. Pages
186-195 in W. Van Winkle, ed., Proceedings of the Conference on
Assessing the Effects of Power Plant Induced Mortality on Fish
Populations. Pergamon Press, New York, NY.
\31\ Myers, R.A., N.J. Barrowman, J.A. Hutchings, and A.A.
Rosenburg. 1995. Population dynamics of exploited fish stocks at low
population levels. Science 26:1106-1108.
\32\ Hutchings, J.A. and R.A. Myers. 1994. What can be learned
from the collapse of a renewable resource? Atlantic cod, Gadus
morhus, of Newfoundland and Labrador. Canadian Journal of Fisheries
and Aquatic Sciences 51:2126-2146.
\33\ Liermann, M. and R. Hilborn. 1997. Depensation in fish
stocks: A hierarchic Bayesian meta-analysis. Can. J. Fish. Aquatic.
Sci. 54:1976-1985.
---------------------------------------------------------------------------

Another problem associated with assessing the environmental impact
of cooling water intakes is that existing fishery resource baselines
may be inaccurate.\34\ There is much evidence that the world's
fisheries are in general decline,\35\ \36\ however, many fishery stocks
have not been adequately assessed. According to a 2002 study, only 23
percent of U.S. managed fish stocks have been fully assessed and of
these, over 40 percent are considered depleted or are being fished
beyond sustainable levels.\37\ Another study estimated that more than
70 percent of commercial fish stocks are fully

[[Page 41590]]

exploited, overfished or collapsed.\38\ Another estimated that large
predatory fish stocks are only a tenth of what they were 50 years
ago.\39\ Most studies of fish populations last only a few years, do not
encompass the entire life span of the species examined, and do not
account for cyclical environmental changes such as ENSO events, and
other long term cycles of oceanographic productivity.\40\
---------------------------------------------------------------------------

\34\ Watson, R. and D. Pauly. 2001. Systematic distortions in
world fisheries catch trends. Nature 414:534-536.
\35\ Ibid.
\36\ Pew Oceans Commission. 2003. America's Living Oceans:
Charting a course for sea change. Summary Report. May 2003. Pew
Oceans Commission, Arlington, VA.
\37\ U.S. Commission on Ocean Policy. 2002. Developing a
National Ocean Policy: Mid-Term Report of the U.S. Commission on
Ocean Policy. Washington, DC.
\38\ Broad, W.J. and A.C. Revkin. 2003. Has the Sea Given Up its
Bounty? The New York Times. July 29, 2003.
\39\ Myers, R.A. and B. Worm. 2003. Rapid worldwide depletion of
predatory fish communities. Nature 423: 280-283.
\40\ Jackson, J.B.C., M.X. Kirby, W.H. Berger, K.A. Bjorndal,
L.W. Botsford, B.J. Bourque, R.H. Bradbury, R. Cooke, J. Erlandson,
J.A. Estes, T.P. Hughes, S. Kidwell, C.B. Lange, H.S. Lenihan, J.M.
Pandolfi, C.H. Peterson, R.S. Steneck, M.J. Tegner, and R.R. Warner.
2001. Historical overfishing and the recent collapse of coastal
ecosystems. Science 293(5530):629-638.
---------------------------------------------------------------------------

Although a clear and detailed picture of the status of all our
fishery resources does not exist,\41\ it is undisputed that fishermen
are struggling to sustain their livelihood despite strict fishery
management restrictions which aim to rebuild fish populations. EPA
shares the concerns expressed by expert fishery scientists that
historical overfishing has increased the sensitivity of aquatic
ecosystems to subsequent disturbance, making them more vulnerable to
other stressors, including cooling water intake structures.
---------------------------------------------------------------------------

\41\ National Marine Fisheries Service (NMFS). 2002. Annual
Report to Congress on the Status of U.S. Fisheries--2001. U.S. Dep.
Commerce, NOAA, Natl. Mar. Fish. Serv., Silver Spring, MD, 142 pp.
---------------------------------------------------------------------------

In conclusion, EPA's mission includes ensuring the sustainability
of communities and ecosystems. Thus, EPA must comprehensively evaluate
all potential threats to resources and work towards eliminating or
reducing identified threats. As discussed in this section, EPA believes
that impingement and entrainment losses attributable to cooling water
intakes do pose a threat to aquatic organisms and through today's rule
is seeking to minimize that threat.

V. Description of the Final Rule

Clean Water Act section 316(b) requires that any standard
established pursuant to section 301 or section 306 of the CWA and
applicable to a point source shall require that the location, design,
construction, and capacity of cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact. Today's final rule establishes national performance
requirements for Phase II existing facilities that ensure such
facilities fulfill the mandate of section 316(b).
This rule applies to Phase II existing facilities that use or
propose to use a cooling water intake structure to withdraw water for
cooling purposes from waters of the United States and that have or are
required to have a National Pollutant Discharge Elimination System
(NPDES) permit issued under section 402 of the CWA. Phase II existing
facilities include only those facilities whose primary activity is to
generate and transmit electric power and who have a design intake flow
of 50 MGD or greater, and that use at least 25 percent of the water
withdrawn exclusively for cooling purposes (see Sec. 125.91).
Applicability criteria for this rule are discussed in detail in section
II of this preamble.
Under this final rule, EPA has established performance standards
for the reduction of impingement mortality and, when appropriate,
entrainment (see Sec. 125.94). The performance standards consist of
ranges of reductions in impingement mortality and/or entrainment (e.g.,
reduce impingement mortality by 80 to 95 percent and/or entrainment by
60 to 90 percent). These performance standards reflect the best
technology available for minimizing adverse environmental impacts
determined on a national categorical basis. The type of performance
standard applicable to a particular facility (i.e., reductions in
impingement only or impingement and entrainment) is based on several
factors, including the facility's location (i.e., source waterbody),
rate of use (capacity utilization rate), and the proportion of the
waterbody withdrawn. Exhibit V-1 summarizes the performance standards
based on waterbody type.
In most cases, EPA believes that these performance standards can be
met using design and construction technologies or operational measures.
However, under the rule, the performance standards also can be met, in
whole or in part, by using restoration measures, following
consideration of design and construction technologies or operational
measures and provided such measures meet restoration requirements (see
Sec. 125.94(c)).
As noted earlier in this section, today's rule generally requires
that impingement mortality of all life stages of fish and shellfish
must be reduced by 80 to 95 percent from the calculation baseline; and
for some facilities, entrainment of all life stages of fish and
shellfish must be reduced by 60 to 90 percent from the calculation
baseline (see Sec. 125.94(b)).

Exhibit V-1.--Performance Standard Requirements
----------------------------------------------------------------------------------------------------------------
Capacity utilization Type of performance
Waterbody type rate Design intake flow standard
----------------------------------------------------------------------------------------------------------------
Freshwater River or Stream........... Less than 15%.......... N/A \1\................ Impingement mortality
only.
Equal to or greater 5% or less mean annual Impingement mortality
than 15%. flow. only.
Greater than 5% of mean Impingement mortality
annual flow. and entrainment.
Tidal river, Estuary or Ocean........ Less than 15%.......... N/A \1\................ Impingement mortality
only.
Equal to or greater N/A.................... Impingement mortality
than 15%. and entrainment.
Great Lakes.......................... Less than 15%.......... N/A.................... Impingement mortality
only.
Equal to or greater N/A................... Impingement mortality
than 15%. and entrainment.

[[Page 41591]]

Lakes or Reservoirs.................. N/A.................... Increase in design Impingement mortality
intake flow must not only.
disrupt thermal
stratification except
where it does not
adversely affect the
management of
fisheries.
----------------------------------------------------------------------------------------------------------------
\1\ Determination of appropriate compliance reductions is not applicable.

This final rule identifies five alternatives a Phase II existing
facility may use to achieve compliance with the requirements for best
technology available for minimizing adverse environmental impacts
associated with cooling water intake structures. Four of these are
based on meeting the applicable performance standards and the fifth
allows the facility to request a site-specific determination of best
technology available for minimizing adverse environmental impacts under
certain circumstances. EPA has established these compliance
alternatives for meeting the performance standards to provide a
significant degree of flexibility to Phase II existing facilities, to
ensure that the rule requirements are economically practicable, and to
provide the ability for Phase II existing facilities to address unique
site-specific factors. Application requirements vary based on the
compliance alternative selected and, for some facilities, include
development of a Comprehensive Demonstration Study. Application
requirements are discussed later in this section. The five compliance
alternatives are described in the following paragraphs.
Under Sec. 125.94(a)(1)(i) and (ii), a Phase II existing facility
may demonstrate to the Director that it has already reduced its flow
commensurate with a closed-cycle recirculating system, or that it has
already reduced its design intake velocity to 0.5 ft/s or less. If a
facility can demonstrate to the Director that it has reduced, or will
reduce, flow commensurate with a closed-cycle recirculating system, the
facility is deemed to have met the performance standards to reduce
impingement mortality and entrainment (see Sec. 125.94 (a)(1)(i)).
Those facilities would not be required to submit a Comprehensive
Demonstration Study with their NPDES application. If the facility can
demonstrate to the Director that is has reduced, or will reduce maximum
through-screen design intake velocity to 0.5 ft/s or less, the facility
is deemed to have met the performance standards to reduce impingement
mortality only. Facilities that meet the velocity requirements would
only need to submit application studies related to determining
entrainment reduction, if subject to the performance standards for
entrainment.
Under Sec. 125.94(a)(2) and (3), a Phase II existing facility may
demonstrate to the Director, either that its current cooling water
intake structure configuration meets the applicable performance
standards, or that it has selected design and construction
technologies, operational measures, and/or restoration measures that,
in combination with any existing design and construction technologies,
operational measures, and/or restoration measures, meet the specified
performance standards in Sec. 125.94(b) and/or the requirements in
Sec. 125.94(c).
Under Sec. 125.94(a)(4), a Phase II existing facility may
demonstrate to the Director that it has installed and is properly
operating and maintaining a rule-specified and approved design and
construction technology in accordance with Sec. 125.99(a). Submerged
cylindrical wedgewire screen technology is a rule-specified design and
construction technology that may be used in instances in which a
facility's cooling water intake structure is located in a freshwater
river or stream and meets other criteria specified at Sec. 125.99(a).
In addition, under this compliance alternative, a facility or other
interested person may submit a request to the Director for approval of
a different technology. If the Director approves the technology, it may
be used by all facilities with similar site conditions under his or her
jurisdiction if allowed under the State's administrative procedures.
Requests for approval of a technology must be submitted to the Director
and include a detailed description of the technology; a list of design
criteria for the technology and site characteristics and conditions
that each facility must possess in order to ensure that the technology
can consistently meet the appropriate impingement mortality and
entrainment performance standards in Sec. 125.94(b); and information
and data sufficient to demonstrate that all facilities under the
jurisdiction of the Director can meet the relevant impingement
mortality and entrainment performance standards in Sec. 125.94(b) if
the applicable design criteria and site characteristics and conditions
are present at the facility. A Director may only approve an alternative
technology following public notice and opportunity for comment on the
approval of the technology (Sec. 125.99(b)).
Under Sec. 125.94(a)(5) (i) or (ii), if the Director determines
that a facility's costs of compliance would be significantly greater
than the costs considered by the Administrator for a like facility to
meet the applicable performance standards, or that the costs of
compliance would be significantly greater than the benefits of meeting
the applicable performance standards at the facility, the Director must
make a site-specific determination of best technology available for
minimizing adverse environmental impact. Under this alternative, a
facility would either compare its projected costs of compliance using a
particular technology or technologies to the costs the Agency
considered for a like facility in establishing the applicable
performance standards, or compare its projected costs of compliance
with the projected benefits at its site of meeting the applicable
performance standards of today's rule (see section IX.H). If in either
case costs are significantly greater, the technology selected by the
Director must achieve an efficacy level that comes as close as
practicable to the applicable performance standards without resulting
in significantly greater costs.
During the first permit term, a facility that chooses compliance
alternatives in Sec. 125.94(a)(2), (3), (4), or (5) may request that
compliance with the requirements of this rule be determined based on
the implementation of a Technology Installation and Operation Plan
indicating how the facility will install and ensure the efficacy, to
the extent practicable, of design and construction

[[Page 41592]]

technologies and/or operational measures, and/or a Restoration Plan
(Sec. 125.95(b)(5)). The Technology Installation and Operation Plan
must be developed and submitted to the Director in accordance with
Sec. 125.95(b)(4)(ii). The Restoration Plan must be developed in
accordance with Sec. 125.95(b)(5). During subsequent permit terms, if
the facility has been in compliance with the construction, operational,
maintenance, monitoring, and adaptive management requirements in its
TIOP and/or Restoration Plan during the preceding permit term, the
facility may request that compliance during subsequent permit terms be
based on its remaining in compliance with its TIOP and/or Restoration
Plan, revised in accordance with applicable adaptive management
requirements if the applicable performance standards are not being met.
Three sets of data are required to be submitted 180 days prior to
expiration of a facility's existing permit by all facilities regardless
of compliance alternative selected (see Sec. 122.21(r)(2)(3) and (5)).
These are:
? Source Water Physical Data: A narrative description and
scaled drawings showing the physical configuration of all source
waterbodies used by the facility, including areal dimensions, depths,
salinity and temperature regimes, and other documentation that supports
your determination of the waterbody type where each cooling water
intake structure is located; identification and characterization of the
source waterbody's hydrological and geomorphological features, as well
as the methods used to conduct any physical studies to determine the
intake's area of influence and the results of such studies; and
locational maps.
? Cooling Water Intake Structure Data: A narrative
description of the configuration of each of its facility's cooling
water intake structures and where it is located in the waterbody and in
the water column; latitude and longitude in degrees, minutes, and
seconds for each of its cooling water intake structures; a narrative
description of the operation of each of its cooling water intake
structures, including design intake flows, daily hours of operation,
number of days of the year in operation, and seasonal changes, if
applicable; a flow distribution and water balance diagram that includes
all sources of water to the facility, recirculating flows, and
discharges; and engineering drawings of the cooling water intake structure.
? Cooling Water System Data: A narrative description of the
operation of each cooling water system, its relationship to the cooling
water intake structures, proportion of the design intake flow that is
used in the system, the number of days of the year the system is in
operation, and seasonal changes in the operation of the system, if
applicable; and engineering calculations and supporting data to support
the narrative description.
In addition to the specified data facilities are require to submit,
some facilities are also required to conduct a Comprehensive
Demonstration Study. Specific requirements for the Comprehensive
Demonstration Study vary based on the compliance alternative selected.
Exhibit II summarizes the Comprehensive Demonstration Study
requirements for each compliance alternative. Specific details of each
Comprehensive Demonstration Study component are provided in section IX
of this preamble.

Exhibit V-2.--Summary of Comprehensive Demonstration Study Requirements for Compliance Alternatives
----------------------------------------------------------------------------------------------------------------
Comprehensive demonstration study requirements (Sec.
Compliance alternative (Sec. 125.94(b)) 125.95(b))
----------------------------------------------------------------------------------------------------------------
1--Demonstrate facility has reduced flow commensurate None.
with closed-cycle recirculating system.
1--Demonstrate facility has reduced design intake No requirements relative to impingement mortality
velocity to < = 0.5 ft/s. reduction. If subject to entrainment performance
standard, the facility must only address entrainment
in the applicable components of its Comprehensive
Demonstration Study, based on the compliance option
selected for entrainment reduction.
2--Demonstrate that existing design and construction Proposal for Information Collection.
technologies, operational measures, and/or restoration Source Waterbody Flow Information.
measures meet the performance standards. Impingement Mortality and/or Entrainment
Characterization Study (as appropriate).
Technology and Compliance Assessment Information
--Design and Construction Technology Plan
--Technology Installation and Operation Plan
Restoration Plan (if appropriate).
Verification Monitoring Plan.
3--Demonstrate that facility has selected design and Proposal for Information Collection.
construction technologies, operational measures, and/ Source Waterbody Flow Information.
or restoration measures that will, in combination with Impingement Mortality and/or Entrainment
any existing design and construction technologies, Characterization Study (as appropriate).
operational measures, and/or restoration measures, Technology and Compliance Assessment Information
meet the performance standards. --Design and Construction Technology Plan
--Technology Installation and Operation Plan
Restoration Plan (if appropriate).
Verification Monitoring Plan.
4--Demonstrate that facility has installed and properly Technology Installation and Operation Plan.
operates and maintains an approved technology. Verification Monitoring Plan.

[[Page 41593]]

5--Demonstrate that a site-specific determination of Proposal for Information Collection.
BTA is appropriate. Source Waterbody Flow Information.
Impingement Mortality and/or Entrainment
Characterization Study (as appropriate).
Technology Installation and Operation Plan.
Restoration Plan (if appropriate).
Information to Support Site Specific Determination of
BTA including:
--Comprehensive Cost Evaluation Study (cost-cost test
and cost-benefit test);
--Valuation of Monetized Benefits of Reducing IM&E
(cost-benefit test only);
--Site-Specific Technology Plan (cost-cost test and
cost-benefit test);
Verification Monitoring Plan.
----------------------------------------------------------------------------------------------------------------

The requirements in today's final rule are implemented through
NPDES permits issued under section 402 of the CWA. Permit applications
submitted after the effective date of the rule must fulfill rule
requirements. However, facilities whose existing permit expires before
[insert four years after date of publication in the FR], may request a
schedule for submission of application materials that is as expeditious
as practicable but does not exceed [insert three years and 180 days
after date of publication in the FR], to provide sufficient time to
perform the required information collection requirements. Phase II
existing facilities must comply with this final rule when they become
subject to an NPDES permit containing these requirements.
Finally, today's rule preserves each State's right to adopt or
enforce more stringent requirements (see Sec. 125.90(d)). It also
provides that if a State demonstrates to the Administrator that it has
adopted alternative regulatory requirements in its NPDES program that
will result in environmental performance within a watershed that is
comparable to the reductions of impingement mortality and entrainment
that would otherwise be achieved under Sec. 125.94, the Administrator
must approve such alternative regulatory requirements (Sec.
125.90(c)).

VI. Summary of Most Significant Revisions to the Proposed Rule

A. Data Updates

Based on comments received, additional information made available,
and the results of subsequent analyses, EPA revised a number of
assumptions that were used in developing the engineering costs, the
information collection costs, the economic analyses, and the benefits
analyses. These new assumptions are presented below and were used in
the analyses in support of this final rule.
1. Number of Phase II Facilities
Since publishing the NODA, EPA continued to verify design flow
information for facilities that had been classified as either Phase II
(large, existing power production) or Phase III (smaller, power
producing or manufacturing) facilities. This verification resulted in
the following changes: One facility that was classified as a Phase II
facility at proposal was reclassified as being out of scope of the
section 316(b) regulation, as it ceased operating. Four facilities that
were classified as Phase III facilities at proposal based on projected
design intake flow were reclassified as Phase II facilities. As a
result, the overall number of Phase II facilities increased from 540 to
543 facilities.\42\ For the final rule, all costs, benefits, and
economic analyses are based on the updated set of Phase II facilities.
---------------------------------------------------------------------------

\42\ Note that these numbers are unweighted. [As with many
surveys, EPA was able to obtain data from most, but not all of the
facilities potentially subject to this rule. To estimate the
characteristics for those facilities that were not surveyed, EPA
assigned a statistically derived sample weight to those facilities
for which data were collected.]
On a sample-weighted basis, the
number of Phase II facilities increased from 551 to 554. The number
of Phase II facilities modeled by the Integrated Planning Model
(IPM) increased from 531 to 535.
---------------------------------------------------------------------------

The reason for the change is that the Agency revised the estimated
design intake flows for facilities that responded to the short-
technical questionnaire EPA used to collect information for this rule.
The Agency has now adopted a more robust set of annual flow data (using
all the years of data collected for the final rule, rather than only
flows for 1998 as reported at proposal). This change altered the
calculated design intake flows for the facilities that provided
responses to the short-technical questionnaire that EPA used to collect
data. Facilities that provided responses to the detailed questionnaire
were unaffected, as the Agency collected maximum design intake flows
directly through the detailed questionnaire.
2. Technology Costs
Since publishing the NODA, EPA used new information to revise the
capital and operation and maintenance (O&M) costs for several
compliance technologies, including those used as the primary basis for
the final rule. Overall, the cost updates resulted in the following
changes: total capital costs decreased by 5 percent and total operation
and maintenance costs decrease by 3 percent. These comparisons are
based on the raw costs, adjusted to year-2002 dollars, which have not
been discounted or annualized.\43\ The revised costing assumptions are
discussed in detail in section VI.3.
---------------------------------------------------------------------------

\43\ Based on additional research conducted after NODA
publication and prior to issuance of the final rule, EPA changed the
projected compliance response for some facilities. These changes,
together with the increase in the number of in-scope Phase II
facilities, contributed to the change in total compliance costs.
---------------------------------------------------------------------------

3. Permitting and Monitoring Costs
Since proposal, EPA made several corrections and revisions to its
burden and cost estimates for implementing the information collection
requirements of today's rule, based on comments received and additional
analysis. The following corrections and revisions were made since proposal:
? EPA corrected the hourly rates for the statistician and
biological technician labor categories, which were inadvertently
transposed at proposal.
? EPA increased the burdens associated with impingement and
entrainment monitoring for the Impingement Mortality and Entrainment
Characterization Study.

[[Page 41594]]

? EPA revised the pilot study costs to assume that only a
subset of facilities which are projected to install new technologies
will perform pilot studies, and to be proportional to the projected
capital costs for installing these new technologies in order to comply
with the rule. EPA also developed an alternative national cost estimate
using slightly different assumptions with regard to pilot study costs
(see section XI).
? EPA adjusted the facility-level costs to account for
facilities that were projected to demonstrate compliance through the
installation of a wedge-wire screen in a freshwater river under the
compliance alternative in 125.94(a)(4).
4. Net Installation Downtime for Non-recirculating Cooling Tower
Compliance Technologies
In developing the proposal for this rule, the Agency estimated that
technologies other than recirculating cooling towers would not require
installation downtime for construction. However, the Agency amended
this outlook for the NODA and published revised estimates of net
construction downtimes for complying facilities installing a subset of
technologies analyzed and developed as candidates for best technology
available (BTA). Based on comments received on the NODA, the Agency has
conducted further research into the construction downtimes that it used
in the NODA for certain technologies. For the final regulation
analysis, the Agency has adopted minor revisions to the construction
downtimes for certain technologies, with the general effect being an
increase in the net construction downtimes for a few technologies that
the Agency views as candidates for reducing entrainment. (Net downtime
was estimated by subtracting 4 weeks from total downtime, based on an
assumption that facilities will schedule construction downtime during a
4 week period of normal downtime unrelated to the rule, for example,
for routine maintenance.) As such, the Agency projects that a
significant number of facilities expected to comply with the
entrainment reduction requirements of the rule will have increased
downtime costs compared to the NODA and the proposal analyses. The
final costs of this rule reflect these changes, which are further
discussed in Section X and the Technical Development Document.

B. Regulatory Approach, Calculation Baseline, and Measuring Compliance

1. Regulatory Approach
EPA has largely adopted the proposed rule with some restructuring
and one significant change: an additional compliance alternative, the
approved technology option (Sec. 125.94(a)(4)) which was discussed in
detail in the NODA (68 FR 13539). The restructuring of the rule
language now makes the reduction of flow commensurate with a closed-
cycle recirculating system a separate compliance alternative, such that
the rule now includes five compliance alternatives. In addition, EPA
has clarified that facilities may comply with the rule requirement in
section 125.94 by successfully implementing the construction,
operational, maintenance, monitoring, and adaptive management
requirements in a Technology Installation and Operation Plan developed
in accordance with Sec. 125.95(b)(4)(ii) and/or a Restoration Plan
developed in accordance with Sec. 125.95(b)(5). These plans must be
designed and adaptively managed to meet the applicable performance
standards in Sec. 125.94(b) and (c). The following discussion
describes the regulatory approach of the final rule, as developed
through the proposed rule and the NODA.
EPA proposed requirements for the location, design, construction,
and capacity of cooling water intakes based on the waterbody type and
the volume of water withdrawn by a facility (67 FR 17122). EPA grouped
waterbodies into five categories, as in the Phase I regulation--
freshwater rivers and streams, lakes and reservoirs, Great Lakes,
estuaries and tidal rivers, and oceans. In general, the more sensitive
or biologically productive the waterbody, the more stringent were the
requirements proposed. The proposed requirements also varied based on
the percentage of the source waterbody withdrawn and the capacity
utilization rate.
Under the proposed rule, a facility could choose one of three
compliance options: (1) Demonstrate that the facility currently meets
the specified performance standards, (2) select and implement design
and construction technologies, operational measures, or restoration
measures that will, in combination with any existing design and
construction technologies, operational measures, or restoration
measures, meet the specified performance standards, and/or (3)
demonstrate that the facility qualifies for a site-specific
determination of best technology available, because its costs of
compliance are significantly greater than those considered by EPA
during the development of the proposed rule or the facility's costs of
compliance would be significantly greater than the benefits of
compliance with the proposed performance standards at the facility. A
facility could also use restoration measures in addition to or in lieu
of design and construction technologies and/or operational measures to
achieve compliance under any of the compliance options.
In the NODA, EPA sought comment on a proposed fourth compliance
option (68 FR 13522, 1359-41). In response to comments expressing
concern that the proposed Comprehensive Demonstration Study
requirements (at Sec. 125.95(b)) would impose a significant burden on
permit applicants, EPA examined an additional, more streamlined
compliance option under which a facility could implement certain
specified technologies that have been predetermined by EPA or the
permitting authority to be highly likely to meet applicable performance
standards, in exchange for not having to perform most of the elements
of the proposed Comprehensive Demonstration Study.
Two variations were offered in the NODA: (1) EPA would evaluate the
effectiveness of specific technologies in achieving an 80 to 95 percent
reduction in impingement mortality and a 60 to 90 percent reduction in
entrainment and then specify applicability criteria to ensure that the
technology would meet the performance standards at facilities
satisfying the criteria, or (2) EPA would establish the criteria and a
process for States to pre-approve intake structure control technologies
as likely to meet the performance standards. For facilities located on
freshwater rivers and streams and meeting specified criteria, wedgewire
screens would be expected to meet the proposed performance standards.
EPA also recognized that these two variations are not mutually
exclusive and either or both could be adopted in the final rule.
To a large extent, EPA is adopting the regulatory framework put
forth in the proposed rule and supplemented by the NODA. To the three
compliance alternatives originally proposed, EPA has added an approved
technology alternative discussed in the NODA and included reduction of
flow commensurate with closed-cycle cooling as a distinct alternative.
2. Calculation Baseline
Also, in response to comments that the proposed definition for the
calculation baseline was overly vague,

[[Page 41595]]

EPA published in the NODA a series of additional considerations
regarding the calculation baseline and a new definition of it taking
these considerations into account (68 FR 13522, 13580-81). The
specifications are as follows and the new definition is in today's
final rule at Sec. 125.93.
? Baseline cooling water intake structure is located at, and
the screen face is parallel to, the shoreline or another depth if this
would result in higher baseline impingement mortality and entrainment
than the surface. EPA believes it is appropriate to allow credit in
reducing impingement mortality from screen configurations that employ
angling of the screen face and currents to guide organisms away from
the structure before they are impinged.
? Baseline cooling water intake structure opening is located
at or near the surface of the source waterbody. EPA believes it is
appropriate to allow credit in reducing impingement mortality or
entrainment due to placement of the opening in the water column.
? Baseline cooling water intake structure has a traveling
screen with the standard 3/8 inch mesh size commonly used to keep
condensers free from debris. This allows a more consistent estimation
of the organisms that are considered ``entrainable'' vs.
``impingeable'' by specifying a standard mesh size that can be related
to the size of the organism that may potentially come in contact with
the cooling water intake structure.
? Baseline practices, procedures, and structural
configurations are those that the facility would maintain in the
absence of any structural or operational controls implemented in whole
or in part for the purpose of reducing impingement mortality and
entrainment. This recognizes and provides credit for any structural or
operational controls, including flow or velocity reductions, a facility
had adopted that reduce impingement mortality or entrainment.
EPA also requested comment on allowing an ``as built'' approach
under which facilities could choose to use the existing level of
impingement mortality and entrainment as the calculation baseline if
they did not wish to take credit for the previously adopted measures.
This could significantly simplify the monitoring and calculations
necessary to determine the baseline.
In the NODA, EPA also discussed an approach to compliance under
which facilities would have an ``optimization period'' during which
they would not be required to meet performance standards but, rather,
would install, operate and maintain the selected control technologies
to minimize impingement mortality and entrainment. EPA suggested
several possible durations for this optimization period, and also
requested comment on not specifying the duration, but instead leaving
it up to the Director. 68 FR 13586 (March 19, 2003).
For the final rule, EPA adopted the NODA definition of calculation
baseline with some modifications. More specifically, EPA clarified the
calculation baseline to include consideration of intake depth other
than at or near the surface in determining the baseline. EPA also
adopted the ``as built'' approach for the calculation baseline, which
allows facilities to use current levels of impingement mortality and
entrainment as the calculation baseline if the facility is configured
similarly to the criteria set up for the calculation baseline.
Finally, EPA clarified how compliance with the requirements in
Sec. 125.94 should be determined. In particular, the final rule
provides that compliance during the first permit term (and subsequent
permit terms if specified conditions are met) may be determined based
on compliance with the construction, operational, maintenance,
monitoring, and adaptive management requirements in an approved
Technology Installation and Operation Plan and/ or an approved
Restoration Plan, that has been developed in accordance with specified
requirements to meet the applicable performance standards.
3. Measuring Compliance
EPA has clarified how compliance will be measured. At proposal, EPA
received comment from the industry that there were uncertainties
associated with how compliance with the proposed requirements,
particularly the numeric impingement mortality and entrainment
performance standards, would be determined. Under the proposed rule and
NODA, determining compliance, while obviously dependent on the
compliance alternative selected, would, in general, require the
development of waterbody characterization data, including key criteria
(species, parameters, etc.) to be measured and monitored; a
determination of baseline environmental impacts; implementation of
cooling water intake technologies (assuming the facility does not
already meet applicable performance standards and pursues this
alternative); monitoring the selected criteria; and an evaluation of
compliance with the applicable numeric impingement mortality and/or
entrainment permit standard. The industry stakeholders were concerned
that using the performance standard to set enforceable performance
requirements would require facilities to collect and analyze greater
amounts of data than EPA projected to be able to account for the
variability inherent in biological and efficacy data needed to support
compliance determinations in spite of overall good technology
performance. These stakeholders stated that setting enforceable
performance standards would lead to greater administrative burdens and
delays when determining numeric standards and monitoring requirements
to determine compliance. They were also concerned that establishing
numeric standards would stifle innovation because of fears that a
technology would not perform as anticipated. These stakeholders
suggested that the performance standards in the rule serve as a
consistent basis for setting permit conditions and for identifying
technologies; installing, operating, and maintaining the chosen
technology; performing compliance monitoring; and refining or adjusting
operation, maintenance, or other factors in light of initial monitoring.
Today's rule allows facilities to develop and implement a
Technology Installation and Operation Plan that would, when used, serve
as the primary mechanism upon which compliance with the performance
standard requirements of this rule is determined. EPA has established
this compliance mechanism because it will ensure that Phase II existing
facilities will continually be required to achieve a level of
performance that constitutes, for them, best technology available for
minimizing adverse environmental impact. For facilities that choose to
comply with applicable requirements in whole or in part through the use
of restoration measures, the Restoration Plan would serve a similar
function. The Restoration Plan is discussed in detail in section IX.
An existing facility that chooses to use a Technology Installation
and Operation Plan must (1) select design and construction
technologies, operational measures, and/or restoration measures that
will meet the performance standards, and (2) prepare a Technology
Installation and Operation Plan documenting what, how and when it will
install, operate, maintain, monitor, assess, and adaptively manage the
design and construction technologies and operational measures to meet
the performance standards, including operational parameters and

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inspection schedules, etc. Each facility using a Technology
Installation Operation Plan must specify key parameters regarding
monitoring (e.g., parameters to be monitored, location, and frequency),
optimization activities and schedules for undertaking them, ways of
assessing efficacy (including adaptive management plan for revising
design and construction technologies or operational measures) that
ensure that such technologies and measures are effectively implemented,
and revised as needed to meet performance standards. This plan must be
reviewed and approved by the Director and evaluated for sufficiency
and/or revised at each permit term to ensure that the facility is
moving expeditiously toward attainment of the applicable performance
standards. Once approved, each Phase II existing facility must
implement the plan according to its terms. Compliance with the final
rule's performance standards during the permit term will be assessed
based on the terms of the plan. If a facility does not comply with the
plan, the Director has discretion to implement the performance
standards or requirements through specifying numeric impingement
mortality and entrainment requirements or technology prescription (for
the site-specific alternative) in the permit. In addition, a facility
that is unable to meet the applicable performance standards using the
Technology Installation and Operation Plan approach may request in a
subsequent permit that the Director make a site-specific determination
of best technology available in accordance with Sec. 125.94(a)(5).
Under these provisions, compliance is determined in terms of
whether the facility is implementing, in accordance with the Technology
Installation and Operation Plan schedule, the technologies, measures
and practices determined by the Director to be the best technologies
available for minimizing adverse environmental impact for that
facility. The Section 316(b) requirements for the facility are
expressed non-numerically, which is analogous to the use of best
management practices under other provisions of the CWA. See, e.g.,
sections 402(a) and 402(p). While EPA has been able to calculate ranges
for national performance standards based on model technologies, EPA has
insufficient data to determine--as it routinely can do in the context
of effluent limitations guidelines and standards--that use of those
model technologies will consistently result in achievement of those
standards.
The record persuades EPA that there is uncertainty associated with
the application and long-term efficacy of these technologies at all
facilities under the multitude of different site-specific factors and
conditions under which these technologies might have to perform. In
addition, even at a single site, there is substantial year-to-year
variability in species abundance and composition, as well as other
natural and anthropogenic factors, that may affect the performance of a
particular technology installed at the facility and it is unclear how
this would affect the efficacy of the technology. The Technology
Installation and Operation Plan provisions are intended to account for
this. For example, meeting numerical reduction standards may not be
possible at some sites either because hydrological conditions are not
conducive to technological effectiveness, or due to species
sensitivity. A Technology Installation and Operation Plan allows a
facility, working with the Director, to identify, install, and
adaptively manage technologies suited to its particular site
conditions. In addition, measuring impingement mortality and
entrainment reduction is difficult and would require a substantial
amount of multi-year biological data and analysis is burdensome for the
facility to develop, is often well beyond the type of information EPA
can expect State Directors to be able to develop when monitoring
compliance. A Technology Installation and Operation Plan simplifies
enforcement: if a facility fails to meet the schedules and other terms
of its plan, it is violating its section 316(b) requirements; there is
no need to engage in extensive debate about the meaning of complex
biological data. This does not mean that biological monitoring and
assessment of success in meeting applicable performance standards is
not important. If fact, it is critical to the compliance approach
adopted in the rule in that it informs facilities and permit
authorities when adaptive management, including revisions to the
Technology Installation and Operation Plan, are needed to meet the
performance standards.
The Technology Installation and Operation Plan provisions also
reflect that there is uncertainty about how long it would take a
facility to adaptively manage the technology and determine the
appropriate operating conditions for the technology to meet the
applicable performance requirements. Data and comments available to EPA
suggest that it is common for existing facilities to adjust
technologies over time in order to achieve optimum performance and,
therefore, an adaptive management approach as specified under a plan is
appropriate. See documentation at DCN#1-3019-BE, 4-1830, and
6-5001. EPA understands that adaptive management is going to be
necessary for a number of facilities because there are relatively few
rigorous evaluations of efficacy under different site and operating
conditions. The available studies may also be limited in the numbers
and types of species that they have evaluated and they may not show the
long term demonstrated effectiveness (and/or consistency of
effectiveness) of the technology with the added uncertainties
associated with the variability of natural biological systems. By
requiring facilities to employ adaptive management principles, EPA
assures that the facility will be implementing, on an ongoing basis,
the best array of technologies available to them.
As noted above, the Technology Installation and Operation Plan
provisions also simplify implementation because they identify the
specific compliance requirements needed to meet the performance
standard ranges and reduce some of the burden associated with measuring
and enforcing compliance with these ranges for both existing facilities
and Directors. Directors and facilities may find use of a Technology
Installation and Operation Plan preferable because it is less feasible
to develop and accurately evaluate biological monitoring data over a
relatively short period, as would be required by measuring compliance
against a numeric performance standard. Rather, the plan provisions
allow implementation to be adaptive, and allow for data development and
assessment to proceed in a manner that is appropriate for the facility,
technology, and waterbody characteristics.
EPA has the legal authority to express section 316(b) requirements
in terms of design criteria, in addition to or in place of enforceable
numeric performance standards. EPA employed a design criterion approach
in the Phase I rule, when EPA was able to identify a single nationally
available and economically practicable technology for the category of
new facilities as a whole, in that case closed-cycle recirculating
cooling technology. In this rule, EPA was not able to identify a
uniform set of technologies that would be available and economically
practicable for all existing facilities, but EPA was able to articulate
a uniform nationally applicable principle in the form of the
performance standards in Sec. 125.94(b), by

[[Page 41597]]

which such technologies could be identified by the Director and
implemented through the use of a Technology Installation and Operation
Plan designed to achieve them. While the technology solution was
different in Phase I and Phase II, the legal principle is the same. In
addition, EPA has the legal authority to identify section 316(b)
requirements as an evolving set of technologies, rather than a single
technology array fixed in time. Section 316(b) requires that any
technology selected under that section must be the best available to
the facility. This term encompasses consideration of effectiveness,
costs, non-water quality environmental impacts, feasibility issues and
a host of other considerations relevant to existing facilities. See
section 304(b)(2)(B). The record indicates that for some facilities,
the question of what are available technologies and, among those, what
is the best technology, may change over time. A Technology Installation
and Operation Plan is intended to assure that at all times a facility
is implementing a technology--or a technology plan--that reflects the
best of all technologies consistent with uniform guiding principles in
the form of performance standards available to them in light of their
site-specific circumstances.
Finally, EPA notes that the way in which performance standards
guide technology selection and implementation varies slightly among the
five compliance options. For facilities complying with Sec.
125.94(a)(1), the technologies identified are so effective that EPA is
confident that any facility employing them will meet the performance
standards, so a Technology Installation and Operation Plan and
performance monitoring are not required. Because these technologies are
not available to all Phase II existing facilities, however, EPA has
provided alternative compliance options. For facilities complying in
accordance with Sec. 125.94(a)(2), (3), or (4), compliance is
generally achieved by implementation of a Technology Installation and
Operation Plan designed to meet applicable performance standards.
Finally, for facilities that comply in accordance with Sec.
125.94(a)(5) for whom even compliance in accordance with Sec.
125.94(a)(2), (3), or (4) is not available because of significantly
higher costs, compliance is achieved by implementation of a Technology
Installation and Operation Plan that achieves an efficacy as close as
practicable to the applicable performance standards.
4. Site-Specific Requirements
a. Costs Significantly Greater Than Costs Considered by the Administrator
In today's final rule, a facility that demonstrates to the Director
that the costs of compliance with the performance standards and/or
restoration requirements would be significantly greater than the costs
considered by the Administrator for a similar facility, will be given a
site-specific determination of best technology available for minimizing
adverse environmental impact. The standards of the rule have not
changed since proposal, with the exception of one clarification: in the
final rule, the alternative site-specific requirements established by
the Director must achieve an efficacy that is as close as practicable
to the performance standards and/or restoration requirements specified
in Sec. 125.94(b) and (c). This was not specified in the proposed rule
language. In addition, today's final rule also explains how a facility
should calculate costs considered by the Administrator for a similar
facility, for comparison with the costs of compliance for the facility.
EPA details these steps in Sec. 125.94(a)(5)(i)(A)-(F).
In the proposed rule, submittal requirements for facilities
requesting a variance based upon a cost-cost test were identical to
those for facilities requesting a variance based on a cost-benefit
test. Thus, a facility requesting a site-specific determination based
on a cost-cost comparison had to submit three studies: the Cost
Evaluation Study, the Valuation of Monetized Benefits of Reducing
Impingement and Entrainment, and the Site-Specific Technology Plan. In
the final rule, by contrast, a facility must submit only the Cost
Evaluation Study and the Site-Specific Technology Plan.
Under the Comprehensive Cost Evaluation Study detailed at proposal,
a facility must submit detailed engineering cost estimates to document
the costs of implementing the technologies and/or operational measures
in the facility's Design and Construction Plan. In the final rule, the
facility must provide, in addition to the engineering cost estimates, a
demonstration that the costs significantly exceed the benefits of
complying with the applicable performance standards. EPA did not make
significant changes to the requirements under the Site-Specific
Technology Plan.
In summary, the major changes in the cost-cost analysis are as follows:
? In the final rule, EPA has specified how a facility must
``calculate costs considered by the Administrator'' for comparison with
the facility's estimate of the costs of compliance with the final rule,
? Elimination of the requirement to submit a Valuation of
Monetized Benefits of Reducing Impingement and Entrainment, and
? Addition of the requirement to demonstrate that the costs
significantly exceed the costs considered by the Administrator for a
similar facility, under the Cost Evaluation Study.
b. Costs Significantly Greater Than Benefits
In today's final rule, a facility that demonstrates to the Director
that the costs of compliance with the performance standards and/or
restoration requirements would be significantly greater than the
benefits will be given a site-specific determination of best technology
available for minimizing adverse environmental impact. The standards of
the rule have not changed since proposal, with the exception of one
clarification: in the final rule, the alternative site-specific
requirements established by the Director must achieve an efficacy that
is as close as practicable to the performance standards and/or
restoration requirements specified in Sec. 125.94(b) and (c). This was
not specified in the proposed rule language.
In the final rule, as in the proposal, a facility requesting a
site-specific determination based on a cost-benefit comparison must
submit three studies: the Cost Evaluation Study, the Benefits Valuation
Study (referred to in proposal as Valuation of Monetized Benefits of
Reducing Impingement and Entrainment), and the Site-Specific Technology
Plan. The final rule has both added and clarified requirements for the
first two components relative to the proposal, but has provided no
substantive changes in the requirements for the Site-Specific
Technology Plan.
Under the Comprehensive Cost Evaluation Study detailed at proposal,
a facility must submit detailed engineering cost estimates to document
the costs of implementing the technologies and/or operational measures
in the facility's Design and Construction Plan. In the final rule, the
facility must provide, in addition to the engineering cost estimates, a
demonstration that the costs significantly exceed the benefits of
complying with the applicable performance standards.
Additional clarifications are found in the Benefits Valuation
Study. In the proposed rule, a facility was required to submit (1) a
description of the

[[Page 41598]]

methodology used to estimate the benefits' value, (2) the basis for
assumptions and quantitative estimates, and (3) an uncertainty
analysis. In the final rule, EPA has retained the three submittal
requirements. Under the first component, EPA has specified the
categories of potential valuation estimates in the final rule, namely
commercial, recreational and ecological benefits. EPA has added that a
facility should include non-use benefits if applicable. To the second
component, EPA has added that the basis may include a determination of
entrainment survival if the Director approved such a study.
Requirements for the uncertainty analysis remain unchanged from
proposal. In the final rule, EPA has added that a facility will be
required to submit peer review of the items submitted (upon the
Director's request) and a narrative description of non-monetized
benefits that would result at the site if the facility was to meet
applicable performance standards.
In summary, the major changes in the cost-benefit analysis are as
follows:
? Facilities will be required to achieve an efficacy that is
``as close as practicable'' to performance standards and/ or
restoration requirements,
? Facilities will need to specifically demonstrate that
costs are significantly greater than the benefits of compliance, and
? Facilities will have additional requirements under the
Benefits Valuation Study.

VII. Basis for the Final Regulation

A. Why Is EPA Establishing a Multiple Compliance Alternative Approach
for Determining Best Technology Available for Minimizing Adverse
Environmental Impact?

Today's final rule authorizes a Phase II existing facility to
choose one of five alternatives for establishing the best technology
available for minimizing adverse environmental impacts at the facility.
A facility may (1) demonstrate that it has reduced or will reduce its
cooling water intake flow commensurate with a closed-cycle,
recirculating system, and or that it has reduced, or will reduce, the
maximum through-screen design intake velocity to 0.5 ft/s or less; (2)
demonstrate that its existing design and construction technologies,
operational measures, and/or restoration measures meet the applicable
performance standards and restoration requirements; (3) demonstrate
that it has selected design and construction technologies, operational
measures, and/or restoration measures that will, in combination with
any existing design and construction technologies, operational
measures, and/or restoration measures, meet the applicable performance
standards and restoration requirements; (4) demonstrate that it will
install or has installed and properly operates and maintains an
approved design and construction technology; or (5) demonstrate that it
has selected, installed, and is properly operating and maintaining, or
will install and properly operate and maintain, design and construction
technologies, operational measures, and/or restoration measures that
the Director has determined to be the best technology available for the
facility based on application of a specified cost-to-cost test or a
cost-to-benefit test. The basis for each of the five compliance
alternatives is explained in section VII.C. of this preamble.
The rule establishes performance standards for the reduction of
impingement mortality and entrainment. EPA established these
performance standards in part based on a variety of technologies, but
the rule does not mandate the use of any specific technology. These
performance standards vary by waterbody type (i.e., freshwater river/
stream, estuary/tidal river, ocean, Great Lake, or lake/reservoir) and
the capacity utilization rate of the facility. They may be met in whole
or in part using restoration measures after demonstrating, among other
things, that the facility has evaluated the use of design and
construction technologies and operational measures at the site. The
basis for the performance standards is explained in section VII.B. of
this preamble and the basis for the restoration requirements is
explained at section VII.F. of this preamble. For a more detailed
description of the rule, see sections V and IX of this preamble. These
requirements reflect the best technology available for minimizing
adverse environmental impact from cooling water intake structures.
EPA adopted this regulatory scheme because it provides a high
degree of flexibility for existing facilities to select the most
effective and efficient approach and technologies for minimizing
adverse environmental impact associated with their cooling water intake
structures. This approach also reflects EPA's judgment that, given the
wide range of various factors that affect the environmental impact
posed by Phase II existing facilities, different technologies or
different combinations of technologies can be used and optimized to
achieve the performance standards.

B. Why and How Did EPA Establish the Performance Standards at These Levels?

1. Overview of Performance Standards
The final rule establishes two types of performance standards, one
that addresses impingement mortality and one that addresses
entrainment. EPA used impingement mortality and entrainment as a metric
for performance because these are primary and distinct types of harmful
impacts associated with the use of cooling water intake structures (see
also section IV). Both the impingement mortality and the entrainment
performance standards apply to facilities demonstrating compliance
under alternatives two, three, and four, described above (Sec.
125.94(a)(2), (3), and (4)). In addition, the Director's site-specific
alternative requirements must be as close as practicable to the
applicable performance standards under Sec. 125.94. Performance
standards for entrainment do not apply to facilities with low
utilization capacity, those with a design intake flow of five percent
or less of the mean annual flow of a freshwater river or stream, and
those that withdraw cooling water from a lake (other than one of the
Great Lakes) or reservoir because such facilities have a low propensity
for causing significant entrainment impacts due to limited facility
operation, low intake flow, or general waterbody characteristics. The
impingement mortality performance standard requires a Phase II existing
facility that complies under Sec. 125.94(a)(2), (3), and (4) to reduce
impingement mortality of all life stages of fish and shellfish by 80 to
95 percent from the calculation baseline.
Both an entrainment performance standard and an impingement
mortality standard apply to facilities with a capacity utilization rate
of 15 percent or greater and that withdraw cooling water from a tidal
river, estuary, ocean, one of the Great Lakes, as well as facilities
that use cooling water from a freshwater river or stream and the design
intake flow of the cooling water intake structure is greater than five
percent of the mean annual flow because EPA believes that these
facilities cause more significant entrainment impacts. The entrainment
standard, where applicable, requires a Phase II facility to reduce
entrainment of all life stages of fish and shellfish by 60 to 90
percent from the calculation baseline.
2. Basis for Performance Standards
Overall, the performance standards that reflect best technology
available under today's final rule are not based on a single technology
but, rather, are

[[Page 41599]]

based on consideration of a range of technologies that EPA has
determined to be commercially available for the industries affected as
a whole and have acceptable non-water quality environmental impacts,
except for some potential regional energy (reliability) impacts that
will be minimized to the extent possible through flexible compliance
options. Because the requirements implementing section 316(b) are
applied in a variety of settings and to Phase II existing facilities of
different types and sizes, no single technology is most effective at
all existing facilities, and a range of available technologies has been
used to derive the performance standards.
EPA developed the performance standards for impingement mortality
reduction based on an analysis of the efficacy of the following
technologies: (1) Design and construction technologies such as fine and
wide-mesh wedgewire screens, as well as aquatic filter barrier systems,
that can reduce mortality from impingement by up to 99 percent or
greater compared with conventional once-through systems; (2) barrier
nets that may achieve reductions of 80 to 90 percent; and (3) modified
screens and fish return systems, fish diversion systems, and fine mesh
traveling screens and fish return systems that have achieved reductions
in impingement mortality ranging from 60 to 90 percent as compared to
conventional once-through systems.
Available performance data for entrainment reduction are not as
comprehensive as impingement data. However, aquatic filter barrier
systems, fine mesh wedgewire screens, and fine mesh traveling screens
with fish return systems have been shown to achieve 80 to 90 percent or
greater reduction in entrainment compared with conventional once-
through systems. EPA notes that screening to prevent organism
entrainment may cause impingement of those organisms instead.
3. Discussion of Key Aspects of Performance Standards
The performance standards at Sec. 125.94(b)(1),(2), and (3) are
based on the type of waterbody in which the intake structure is
located, the volume of water withdrawn by a facility, and the facility
capacity utilization rate. Under the final rule, EPA has grouped
waterbodies into five categories: (1) Freshwater rivers or streams, (2)
lakes or reservoirs, (3) Great Lakes, (4) tidal rivers and estuaries,
and (5) oceans. The Agency considers location, one aspect of which is
waterbody type, to be an important factor in addressing adverse
environmental impact caused by cooling water intake structures. Because
different waterbody types have the potential for different adverse
environmental impacts, the requirements to minimize adverse
environmental impact vary by waterbody type.
The reproductive strategies of tidal river and estuarine species,
together with other physical and biological characteristics of those
waters, make them more susceptible than other waterbodies to impacts
from cooling water intake structures (66 FR 288857-288859; 68 FR
17140). In contrast, many aquatic organisms found in non-tidal
freshwater rivers and streams are less susceptible to entrainment due
to their demersal (bottom-dwelling) nature and the fact that they do
not typically have planktonic (free-floating) egg and larval stages (66
FR 28857; 68 FR 17140). Comments on the proposed Phase II existing
facility rule also acknowledge that waterbody type is an important
factor in assessing the impacts of cooling water intake structures,
although some commenters preferred a site-specific approach, and others
maintained that all waters deserve the most rigorous technology. A
number of States supported EPA's proposed approach.
Absent entrainment control technologies, entrainment at a
particular site is generally proportional to intake flow at that site.
As discussed above, EPA believes it is reasonable to vary performance
standards by the potential for adverse environmental impact in a
waterbody type. EPA is limiting the requirement for entrainment
controls in fresh waters to those facilities that withdraw the largest
proportion of water from freshwater rivers or streams because they have
the potential to impinge and entrain larger numbers of fish and
shellfish and therefore have a greater potential to cause adverse
environmental impact. EPA is not requiring entrainment reductions in
freshwater rivers or streams where facilities withdraw 5 percent or
less of the source water annual mean flow because such facilities
generally have a low propensity for causing significant entrainment
impacts due to the low proportion of intake flow in combination with
the characteristics of the waterbody.
There are additional performance standards for facilities
withdrawing from a lake (other than one of the Great Lakes) or a
reservoir. If such a facility proposes to increase the design intake
flow of the cooling water intake structure, the increase in total
design intake flow must not disrupt the natural thermal stratification
or turnover pattern of the source water except in cases where the
disruption does not adversely affect the management of fisheries Sec.
125.94(b)(3)(iii)). The natural thermal stratification or turnover
pattern of a lake is a key characteristic that is potentially affected
by the intake flow (which can alter temperature and/or mixing of cold
and warm water layers) and location of cooling water intake structures
within such waterbodies. Cooling water intake structures withdrawing
from the Great Lakes are required to reduce fish and shellfish
impingement mortality by 80 to 95 percent and to reduce entrainment by
60 to 90 percent. As described in the Phase I proposed rule (65 FR
49086) and NODA (66 FR 28858), EPA believes that the Great Lakes are a
unique system that should be protected to a greater extent than other
lakes and reservoirs. Similar to oceans, large lakes such as the Great
Lakes can possess estuarine-like environments in the lower reaches of
tributary streams. For example, within the U.S., a total of 1,370
distinct coastal wetlands fringe the Great Lakes and the channels that
connect the lakes. (2-016A Herdendorf, C.E. Great Lakes estuaries.
Estuaries, 13(4): 493-503. 1990, pg. 493). The Agency is therefore
specifying entrainment controls as well as impingement mortality
controls for the Great Lakes. EPA has not applied the entrainment
performance standard to lakes other than the Great Lakes because, in
general, these waterbodies contain aquatic organisms that tend to be
less impacted by entrainment than organisms in estuaries or fresh water
rivers or streams.
The performance standards for facilities with cooling water intake
structures located in a tidal river or estuary and with a capacity
utilization rate of 15 percent or greater are to reduce impingement
mortality by 80 to 95 percent and entrainment by 60 to 90 percent for
fish and shellfish. As discussed previously, EPA believes estuaries and
tidal rivers are more susceptible than other waterbodies to adverse
impacts from impingement and entrainment.
The performance standards for facilities with cooling water intake
structures located in an ocean are to reduce impingement mortality by
80 to 95 percent and entrainment by 60 to 90 percent for fish and
shellfish. EPA is establishing requirements for facilities withdrawing
from oceans that are similar to those for tidal rivers and estuaries
because the coastal zone of oceans (from which coastal cooling water
intake structures withdraw water)

[[Page 41600]]

are highly productive areas for fish and shellfish. (See the Phase I
proposed rule (65 FR 45060) and documents in the record for the Phase I
new facility rule (Docket #W-00-03) such as 2-013A through O,
2-019A-R11, 2-019A-R12, 2-019A-R33, 2-019A-R44, 2-020A, 3-0059). EPA is
also concerned about the extent to which fishery stocks that rely upon
tidal rivers, estuaries and oceans for habitat are overutilized and
seeks to minimize the impact that cooling water intake structures may
have on these species or forage species on which these fishery stocks
may depend. Recent data demonstrate that approximately 78% of the fish
stocks managed by the National Oceanic and Atmospheric Administration's
National Marine Fishery Service (NMFS) are fully exploited, overfished,
or collapsed (America's Living Oceans: Charting a Course for Sea
Change, Pew Oceans Commission, June 4, 2003). (See also documents 2-
019A-R11, 2-019A-R12, 2-019A-R33, 2-019A-R44, 2-020A, 2-024A through O,
and 3-0059 through 3-0063 in the record of the Final New Facility Rule
(66 FR 65256), Docket #W-00-03).
In accordance with the Phase II rule, facilities that operate with
a capacity utilization rate of less than 15 percent are subject to the
performance standard for impingement mortality only. EPA is not
requiring, in today's rule, that these facilities control entrainment.
EPA has several reasons for this. First, EPA has determined that
entrainment control technology is not economically practicable in view
of the reduced operating levels of these facilities. These facilities
also tend to operate most often in mid-winter or late summer, which are
times of peak energy demand but periods of generally low abundance of
entrainable life stages of fish and shellfish. Finally, the total
volume of water withdrawn by these facilities is significantly lower
than for facilities operating at or near peak capacity, and as noted
above, entrainment at a site is generally proportional to flow, absent
entrainment controls. Consequently, EPA determined that it was neither
necessary nor cost-effective for these facilities to reduce entrainment
where the total volume of water withdrawn and the number of organisms
that would be protected from entrainment is likely to be small. EPA is
also allowing facilities with multiple, distinct cooling water intakes
that are exclusively dedicated to different generating units to
determine capacity utilization and applicable performance standards
separately for each intake for the same reasons.
As in the Phase I rule, EPA is setting performance standards for
minimizing adverse environmental impact based on a relatively easy to
measure and certain metric--reduction of impingement mortality and
entrainment. Although adverse environmental impact associated with
cooling water intake structures can extend beyond impingement and
entrainment, EPA has chosen this approach because impingement and
entrainment are primary, harmful environmental effects that can be
reduced through the use of specific technologies. In addition, where
other impacts at the population, community, and ecosystem levels exist,
these will also be reduced by reducing impingement and mortality. Using
impingement mortality and entrainment as a metric provides certainty
about performance standards and streamlines, and thus speeds, the
issuance of permits.
EPA is expressing the performance standard in the form of ranges
rather than a single performance benchmark because of the uncertainty
inherent in predicting the efficacy of any one of these technologies,
or a combination of these technologies, across the spectrum of
facilities subject to today's rule. The lower end of the range is being
established as the percent reduction that EPA, based on the available
efficacy data, expects all facilities could eventually achieve if they
were to implement and optimize available design and construction
technologies and operational measures on which the performance
standards are based. (See Chapter 4, ``Efficacy of Cooling Water Intake
Structure Technologies,'' of the Phase II Existing Facility Technical
Development Document, EPA-821-R-04-007, February 2004. Also, see EPA's
316(b) technology efficacy database, DCN 6-5000.) The lower end of the
range also reflects, in part, higher mortality rates at sites where
there may be more fragile species that may not have a high survival
rate after coming in contact with fish protection technologies at the
cooling water intake structure (e.g., fine mesh screens). The higher
end of the range is a percent reduction that available data show many
facilities can and have achieved with the available technologies upon
which the performance standards are based.
In specifying a range, EPA anticipates that facilities will select
the most cost-effective technologies or operational measures to achieve
the performance level (within the stated range) based on conditions
found at their site, and that Directors will review the facility's
application to ensure that appropriate alternatives were considered.
Proper selection, operation, and maintenance of these technologies
would serve to increase potential efficiencies of the technologies. EPA
also expects that some facilities may be able to meet these performance
requirements by selecting and implementing a suite (i.e., more than
one) of technologies and operational measures and/or, as discussed in
this section, by undertaking restoration measures.
Several additional factors support EPA's expectation that the
impingement mortality and entrainment reduction reflected in the
performance standards can eventually be achieved by all facilities
using the design and construction technologies and measures on which
the standards were based. First, a significant portion of the available
performance data reviewed is from the 1970s and 1980s (when section
316(b) was initially implemented) and does not reflect recent
developments, innovations (e.g., aquatic filter barrier systems, sound
barriers), or experience using these technologies. These data,
developed during early implementation of the CWA, do not fully reflect
today's improved understanding of both how the various control
technologies work and the various factors that reflect what constitutes
and how to measure healthy aquatic conditions. Second, these
conventional barrier and return system technologies have not been
optimized on a widespread level to date, as would be encouraged by this
rule. Available information indicates that facilities that use these
cooling water intake structure technologies often achieve better
results from the technologies through adjusting which technologies are
applied and how they are used. Such optimization, which also benefits
from the advances in understanding noted above, would be promoted under
this rule as facilities work to achieve the performance standards.
Third, EPA believes that some facilities could achieve further
reductions (estimated at 15-30 percent) in impingement mortality and
entrainment by providing for seasonal flow restrictions, variable speed
pumps, systems conversions to closed-cycle, recirculating systems, and
other operational measures and innovative flow reduction alternatives.
Such operational measures could be used to supplement design and
construction technologies where necessary to meet the performance
standards. Facilities also could benefit from combining inexpensive
technologies as a ``suite.'' For additional discussion, see chapter 4
in the Phase II Existing Facility Technical Development Document.
The calculation baseline used to determine compliance with

[[Page 41601]]

performance standards is defined in Sec. 125.93 as an estimate of
impingement mortality and entrainment that would occur at a site
assuming (1) the cooling water system had been designed as a once-
through system; (2) the opening of the cooling water intake structure
is located at, and the face of the standard \3/8\-inch mesh traveling
screen is oriented parallel to, the shoreline near the surface of the
source waterbody; and (3) the baseline practices and procedures are
those that the facility would maintain in the absence of any
operational controls, including flow or velocity reductions,
implemented in whole or in part for the purposes of reducing
impingement mortality and entrainment. In addition, the facility may
choose to use the current level of impingement mortality and
entrainment as the calculation baseline. EPA's definition also
clarifies the range of available information sources for the baseline.
The calculation baseline may be estimated using: historical impingement
mortality and entrainment data from the facility or from another
facility with comparable design, operational, and environmental
conditions; current biological data collected in the waterbody in the
vicinity of the facility's cooling water intake structure; or current
impingement mortality and entrainment data collected at the facility.
Further, a facility may request that the calculation baseline be
modified to be based on a location of the opening of the cooling water
intake structure at a depth other than at or near the surface if it can
demonstrate to the Director that the other depth would correspond to a
higher baseline level of impingement mortality and/or entrainment. EPA
decided to use this definition because it represents the most common
default conditions the Agency could identify to give facilities credit
for design and construction technologies, operational measures, and/or
restoration measures that they have already implemented to minimize
adverse environmental impact, while providing a clear and relatively
simple definition. Based on comments received on the Phase II NODA,
this calculation baseline definition includes additional criteria that
EPA has added to provide clarity to the analysis. (Proposed changes to
the calculation baseline were discussed in the Phase II NODA, see 68 FR
13580). In many cases, existing technologies at the site show some
reduction in impingement and entrainment when compared to this
baseline. In such cases, impingement mortality and entrainment
reductions (relative to the calculated baseline) achieved by these
existing technologies should be counted toward compliance with the
performance standards. In addition, operational measures such as
operation of traveling screens, employment of more efficient return
systems, and even locational choices should be credited for any
corresponding reduction in impingement mortality and entrainment. See
section IX of this preamble for a discussion of how the calculation
baseline is used to compare facility performance with the rule's
performance standards.

C. What Is the Basis for the Five Compliance Alternatives That EPA
Selected for Establishing Best Technology Available?

1. Meeting Performance Standards Through Reducing Intake Flow
Commensurate With a Closed Cycle Recirculating System or Reduced Design
Intake Velocity
Under Sec. 125.94(a)(1)(i), any facility that reduces its flow to
a level commensurate with a closed-cycle, recirculating cooling system
meets the performance standards in today's rule because such a
reduction in flow is deemed to satisfy any applicable impingement
mortality and entrainment performance standards for all waterbodies.
Facilities that select this compliance alternative either through the
use of closed-cycle recirculating system technology at the plant, or by
retrofitting their facility, will not be required to further
demonstrate that they meet the applicable performance standards.
Similarly, under 125.94(a)(1)(ii), any facility that reduces its design
intake velocity to 0.5 ft/s or less is deemed to have met the
performance standards for impingement mortality and is not required to
demonstrate further that it meets the performance standards for
impingement mortality.
Available data described in Chapter 3 of the Phase II Existing
Facility Technical Development Document suggest that closed-cycle,
recirculating cooling systems (e.g., cooling towers or ponds) can
reduce mortality from impingement by up to 98 percent and entrainment
by up to 98 percent when compared with conventional once-through
systems.\44\ Although closed-cycle, recirculating cooling is not one of
the technologies on which the performance standards are based, use of a
closed-cycle, recirculating cooling system would always achieve the
performance standards and therefore, facilities that reduce their flow
commensurate with closed-cycle, recirculating cooling systems are
deemed to have met performance standards. The rule, at Sec.
124.94(a)(1)(i), thus establishes a compliance alternative based on the
use of a closed-cycle, recirculating cooling system. While EPA based
the requirements of the new facility rule on the performance standards
of closed-cycle recirculating systems, EPA has determined that this
technology is not economically practicable for many existing Phase II
facilities. EPA is nonetheless aware that some existing facilities have
installed this highly effective technology and has thus provided a
streamlined alternative for such facilities.
---------------------------------------------------------------------------

\44\ Reducing the cooling water intake structure's capacity is
one of the most effective means of reducing entrainment (and
impingement). For the traditional steam electric utility industry,
facilities located in freshwater areas that have closed-cycle
recirculating cooling water systems can, depending on the quality of
the make-up water, reduce water use by 96 to 98 percent from the
amount they would use if they had once-through cooling water
systems. Steam electric generating facilities that have closed-
cycle, recirculating cooling systems using salt water can reduce
water usage by 70 to 96 percent when make-up and blowdown flows are
minimized. The lower range of water usage would be expected where
State water quality standards limit chloride to a maximum increase
of 10 percent over background and therefore require a 1.1 cycle of
concentration. The higher range should be attainable where cycles of
concentration up to 2.0 are used for the design.
---------------------------------------------------------------------------

Additionally, EPA established a compliance alternative that allows
facilities to reduce intake velocity to meet the impingement mortality
performance standards. As EPA discussed in the proposed rule at 67 FR
17151 and Phase I final rule at 66 FR 65274, intake velocity is one of
the key factors that can affect the impingement of fish and other
aquatic biota, since in the immediate area of the intake it exerts a
direct physical force against which fish and other organisms must act
to avoid impingement and entrainment. As discussed in that notice, EPA
compiled data from three swim speed studies (University of Washington
study, Turnpenny, and EPRI) and these data indicated that a 0.5 ft/s
velocity would protect at least 96 percent of the tested fish. As
further discussed, EPA also identified federal documents (Boreman, DCN
1-5003-PR; Bell (1990); and National Marine Fisheries Service (NMFS),
(1997)), an early swim speed and endurance study performed by
Sonnichsen et al. (1973), and fish screen velocity criteria that are
consistent with this approach.

[[Page 41602]]

2. Meeting Performance Standards Through the Use of Design and
Construction Technologies, Operational Measures, and/or Restoration
Measures
Under the second and third compliance alternatives (Sec.
125.94(a)(2) and (3)), a facility may either demonstrate to the
Director that the facility's existing design and construction
technologies, operational measures, and/or restoration measures already
meet the minimum performance standards specified under Sec. 125.94(b)
and (c), or that it has selected design and construction technologies,
operational measures, and/or restoration measures or some combination
thereof that will meet these performance standards.
Available data indicate that, when considered as a suite of
technologies, barrier and fish handling technologies are available on a
national basis for use by Phase II existing facilities. These
technologies exist and are in use at various Phase II facilities and,
thus, EPA considers them collectively technologically achievable. In
addition, 50 percent of the potentially regulated facilities that do
not already have closed-cycle cooling systems have some other
technology in place that reduces impingement or entrainment. In turn, a
large subset of these facilities (33 percent) also have fish handling
or return systems that reduce the mortality of impinged organisms. The
fact that these technologies are collectively available means that one
or more technologies within the suite is available to each Phase II
facility.
EPA finds that the design and construction technologies necessary
to meet the requirements are commercially available and economically
practicable for existing facilities, because facilities can and have
installed many of these technologies years after a facility began
operation. Typically, additional design and construction technologies
such as fine mesh screens, wedgewire screens, fish handling and return
systems, and aquatic filter fabric barrier systems can be installed
during a scheduled outage (operational shutdown). Referenced below are
examples of facilities that installed these technologies after they
initially started operating.
Lovett Generating Station. A 495 MW facility (gas-fired steam),
Lovett is located in Tomkins Cove, New York, along the Hudson River.
The facility first began operations in 1949 and has three generating
units with once-through cooling systems. In 1994, Lovett began the
testing of an aquatic filter barrier system to reduce entrainment, with
a permanent system being installed the following year. Improvements and
additions were made to the system in 1997, 1998, and 1999, with some
adjustments being accepted as improvements of this vendor's technology
for all subsequent installations at other locations.
Big Bend Power Station. Situated on Tampa Bay, Big Bend is a 1998
MW (coal-fired steam) facility with four generating units. The facility
first began operations in 1970 and added generating units in 1973,
1976, and 1985. Big Bend supplies cooling water to its once-through
cooling water systems via two intake structures. When the facility
added Unit 4 in 1985, regulators required the facility to install
additional intake technologies. A fish handling and return system, as
well as a fine-mesh traveling screen (used only during months with
potentially high entrainment rates), were installed on the intake
structure serving both the new Unit 4 and the existing Unit 3.
Salem Generating Station. A 2381 MW facility (nuclear), Salem is
located on the Delaware River in Lower Alloways Creek Township, New
Jersey. The facility has two generating units, both of which use once-
through cooling and began operations in 1977. In 1995, the facility
installed modified Ristroph screens and a low-pressure spray wash with
a fish return system. The facility also redesigned the fish return
troughs to reduce fish trauma.
Chalk Point Generating Station. Located on the Patuxent River in
Prince George's County, Maryland, Chalk Point has a capacity of 2647 MW
(oil-fired steam). The facility has four generating units and uses a
combination of once-through and closed-cycle, recirculating cooling
systems (two once-through systems serving two generating units and one
recirculating system with a tower serving the other two generating
units). In 1983, the facility installed a barrier net, followed by a
second net in 1985, giving the facility a coarse mesh (1.25[sec]) outer
net and a fine mesh (.75[sec]) inner net. The barrier nets are anchored
to a series of pilings at the mouth of the intake canal that supplies
the cooling water to the facility and serve to reduce both entrainment
and the volume of trash taken in at the facility.
3. Meeting Performance Standards Through Use of an Approved Design and
Construction Technology
Under the fourth compliance alternative, a facility can demonstrate
that it meets specified conditions and that it has installed and
properly operates and maintains a pre-approved technology. EPA is
approving one technology at this time: submerged cylindrical wedgewire
screen technology to treat the total cooling water intake flow. There
are five conditions that must be met in order to use this technology to
comply with the rule: (1) The cooling water intake structure is located
in a freshwater river or stream; (2) the cooling water intake structure
is situated such that sufficient ambient counter currents exist to
promote cleaning of the screen face; (3) the through screen design
intake velocity is 0.5 ft/s or less; (4) the slot size is appropriate
for the size of eggs, larvae, and juveniles of any fish and shellfish
to be protected at the site; and (5) the entire main condenser cooling
water flow is directed through the technology (small flows totaling
less than two MGD for auxiliary plant cooling uses are excluded).
Directors are explicitly authorized in Sec. 125.99 to pre-approve
other technologies for use at facilities with other specified
characteristics within their respective jurisdiction after providing
the public with a notice and an opportunity to comment on the request
for approval of the technology. The Director's authority to pre-approve
other technologies is not limited to technologies for use by facilities
located on freshwater rivers and streams.
EPA has adopted this compliance alternative in response to comments
that suggested that EPA provide an additional, more streamlined
compliance option under which a facility could implement certain
specified technologies that are deemed highly protective in exchange
for reducing the scope of the Comprehensive Demonstration Study. (See
68 FR 13522, 13539; March 19, 2003). EPA evaluated the effectiveness of
specific technologies using the impingement mortality and entrainment
reduction performance standards as assessment criteria. The technology
selected for the approved technology option has a demonstrated ability
to reduce impingement mortality by 80 to 95 percent for fish and
shellfish and, if required, reduce entrainment by 60 to 90 percent for
any stages of fish and shellfish at facilities that meet the conditions
specified in section 125.99(a). Thus, the technology has a demonstrated
ability to meet the most stringent performance standards that would
apply to any facility situated on a freshwater river or stream. (See
DCN 1-3075, 1-5069, 1-5070, 3-0002, and 4-4002B. Also see, DCN 6-5000
and Chapter 3 of the Technical Development Document.) Because
cylindrical wedgewire screens are believed to be effective when
deployed under the

[[Page 41603]]

specified conditions and properly maintained, facilities that select
this compliance option are provided substantially streamlined
requirements for completing the Comprehensive Demonstration Study.
However, facilities selecting this option are still required to prepare
a Technology Installation and Operation Plan to monitor the
effectiveness of the technology at their site in meeting the
performance standards.
4. Site-Specific Determination of Best Technology Available To Minimize
Adverse Environmental Impact
A facility may comply with the rule by seeking a site-specific
demonstration of the best technology available to minimize adverse
environmental impact by demonstrating, to the Director's satisfaction,
that its cost of complying with the applicable performance standards
would be significantly greater than the costs considered by EPA for a
like facility when establishing such performance standards, or that its
costs would be significantly greater than the benefits of complying
with such performance standards at the facility. (See sections
125.94(a)(5)(i) and (ii)). If a facility satisfies one of the two cost
tests in Sec. 125.94(a)(5), then the Director must establish site-
specific alternative requirements based on design and construction
technologies, operational measures, and/or restoration measures that
achieve an efficacy that is, in the judgment of the Director, as close
as practicable to the applicable performance standards without
resulting in costs that are significantly greater than either the costs
considered by the Administrator in establishing the applicable
performance standards, or the benefits at the facility.
In establishing the performance standards in 125.94(b) and the
compliance alternatives in sections 125.94(a)(1)-(4), EPA considered
several factors, including efficacy, availability, ease of
implementation, indirect effects, the costs that EPA expects all
existing facilities to incur (national costs) and the benefits if all
existing facilities meet the performance standards (national benefits).
This provision for alternative requirements is included in the rule to
give facilities flexibility to demonstrate that the best technology
available to minimize adverse environmental impact at their particular
sites may be less stringent than would otherwise be achieved if the
facility selected one of the compliance alternatives in sections
125.94(a)(1)-(4). (For a discussion of EPA's legal authority to
authorize compliance with alternative requirements based on this cost-
cost comparison, see Section VIII. I.).
a. Basis of the Cost-Cost Test
For a number of related reasons, EPA chose to use a comparison of a
facility's actual costs to the costs EPA estimated that facility would
incur to meet the national performance standards (a ``cost-cost test'')
as a basis for obtaining a site-specific determination of best
technology available. EPA's record for this rule shows that, for the
category of existing facilities as a whole, today's rule is technically
achievable and economically practicable. Although EPA collected more
information for this rulemaking than is typical for an effluent
limitation guideline rulemaking, detailed information on some factors
important to the effectiveness and costs of the technologies, such as
debris loading and the presence of navigational channels within the
waterbody at which cooling water intakes are sited, was not requested.
Moreover, the information EPA used to develop its costs was in some
cases limited by the fact that, while EPA sent surveys to all
facilities covered under today's rule, only 42% were sent detailed
questionnaires. The remaining 58% only received a short technical
questionnaire which requested minimal characterization information.
Also, EPA may not have elicited information regarding characteristics
of a particular facility that, if known would have either significantly
changed EPA's national cost estimates or demonstrated that none of the
technologies on which the categorical requirements are based are
economically achievable by the facility. Similarly, existing facilities
have less flexibility than new facilities in selecting the location of
their intakes and technologies for minimizing adverse environmental
impact, and therefore it may be difficult for some facilities to avoid
costs much higher than those EPA considered when establishing the
performance standards. The cost-cost site-specific alternative ensures
that the overall rule remains economically practicable for facilities
subject to today's rule. In short, for certain facilities EPA may not
have anticipated some site-specific costs or the costs for retrofit may
exceed those EPA considered. Despite EPA's best effort, such costs are
difficult to estimate in a national rule. Because of the wide range of
available technologies considered and a number of site-specific factors
that may significantly affect the cost and practicability of installing
particular technologies at particular sites, the site-specific
uncertainty in the cost estimates is higher than for an effluent
limitations guidelines rulemaking. Thus, EPA may not have anticipated
all site-specific costs that a facility could incur. In addition,
existing facilities have less flexibility than new facilities in
selecting the location of their intakes and technologies for minimizing
adverse environmental impact and, therefore, it may be difficult for
some facilities to avoid costs much higher than those EPA considered
when establishing the performance standards in the rule. For all of
these reasons, EPA believes that the cost-cost site-specific compliance
alternative is necessary to ensure that the rule is economically
practicable for existing Phase II facilities. In order to ensure that
this alternative provides only the minimum relaxation of performance
standards that is needed to make the rule economically practicable,
Sec. 125.94(a)(5)(i) requires that the site-specific requirements
achieve an efficacy that is as close as practicable to the applicable
performance standards without resulting in costs that are significantly
greater than those considered by the Administrator for a like facility
when establishing the performance standards.
b. Basis of the Cost-Benefit Test
EPA decided to use a comparison of a facility's costs to the
benefits of meeting the performance standards at the facility (a
``cost-benefit test'') as another basis for obtaining a site-specific
determination of BTA to minimize adverse environmental impact. Section
316(b) authorizes consideration of the environmental benefit to be
gained by requiring that the location, design, construction, and
capacity of cooling water intake structures reflect the best
economically practicable technology available for the purpose of
minimizing adverse environmental impact. Accordingly, in determining
that the technologies on which EPA based the compliance alternatives
and performance standards are the best technologies available for
existing facilities to minimize adverse environmental impact, EPA
considered the national cost of those technologies in comparison to the
national benefits--i.e., the reduction in impingement and entrainment
that EPA estimated would occur nationally if all existing facilities
selected one of the compliance options in sections 125.94(a)(1)-(4).
While EPA believes that there is considerable value in promulgating
national performance standards under section 316(b) based on what EPA
determines, on a national basis, to be the best technology available to
minimize adverse environmental impacts, EPA also recognizes that, at

[[Page 41604]]

times, determining what is necessary to minimize adverse environmental
impacts can necessitate a site-specific inquiry. EPA's comparison of
national costs to national benefits may not be applicable to a specific
site due to variations in (1) the performance of intake technologies
and (2) characteristics of the waterbody in which the intake(s) are
sited, including the resident aquatic biota. For example, there may be
some facilities where the absolute numbers of fish and shellfish
impinged and entrained is so minimal that the cost to achieve the
required percentage reductions would be significantly greater than the
benefits of achieving the required reductions at that particular site.
More specifically, because of the location of the intake, the
characteristics of a particular waterbody, or the behavioral patterns
of the fish or shellfish in that particular waterbody, there may be
little or no impingement mortality or entrainment occurring at the site
(see Neal Generating Complex facility example provided in section IV of
this preamble). For such a facility, the cost of reducing an already
small amount of impingement mortality and entrainment by 80 to 95
percent and 60 to 90 percent, respectively, may be significantly
greater than the benefits. In short, it may not be cost-effective and,
therefore may be economically impracticable for a facility to achieve
percentage reductions when attempting to save a small number of fish or
shellfish. Thus, in a waterbody that is already degraded, very few
aquatic organisms may be subject to impingement or entrainment, and the
costs of retrofitting an existing cooling water intake structure may be
significantly greater than the benefits of doing so. By requiring best
technology available to minimize adverse environmental impact, section
316(b) invites a consideration of both technology and of environmental
conditions, including the potential for adverse impacts, in the
receiving waterbody. EPA believes it is a reasonable interpretation of
the statute to allow the Director to consider the results of meeting
the performance standards in terms of reducing environmental impacts
(i.e., the benefits) in cases where the costs of installing the
technology are significantly greater than the reduction in
environmental impacts would warrant. As with the cost-cost site-
specific provision, EPA also wants to ensure that any relaxation of the
performance standards be the minimum necessary to ensure that the costs
are not significantly greater than the benefits. Section
125.94(a)(5)(i) thus provides that alternative site-specific
requirements must achieve an efficacy that is as close as practicable
to the applicable performance standards without resulting in costs that
are significantly greater than the benefits of meeting the performance
standards at the facility.

D. How Has EPA Assessed Economic Practicability?

The legislative history of section 316(b) indicates that the term
``best technology available'' should be interpreted as ``best
technology available commercially at an economically practicable
cost.'' \45\ This position reflects congressional concern that the
application of best technology available should not impose an
impracticable and unbearable economic burden. Thus, EPA has conducted
extensive analyses of the economic impacts of this final rule, using an
integrated energy market model (the IPM \45\). For a complete
discussion of this analysis, please refer to section XI.B.1 of this
preamble or Chapter B3 of the Economic and Benefits Analysis (EBA) in
support of this final rule (DCN 6-0002).
---------------------------------------------------------------------------

\45\ See 118 CONG. REC 33,762 (1972), reprinted in 1 Legislative
History of the Water Pollution Control Act Amendments of 1972, at
264 (1973) (Statement of Representative Don H. Clausen).
---------------------------------------------------------------------------

EPA believes that the requirements of this rule reflect the best
technology available at an economically practicable cost. EPA examined
the effects of the rule's compliance costs on capacity, generation,
variable production costs, prices, net income, and other measures, both
at the market and facility levels. In addition, the other economic
analyses conducted by EPA showed that the costs for this rule are
economically practicable.
However, EPA believes that a consideration of the relationship of
costs to environmental benefits is an important component of economic
practicability. As discussed in section VIII.C of the proposed Phase I
rule (65 FR 49094) EPA has long recognized that there should be some
reasonable relationship between the cost of cooling water intake
structure control technology and the environmental benefits associated
with its use. As the preamble to the 1976 final rule implementing
section 316(b) stated, neither the statute nor the legislative history
requires a formal or informal cost-benefit assessment (41 FR 17387;
April 26, 1976).

E. What Were the Major Options Considered for the Final Rule and Why
Did EPA Reject Them?

EPA considered a number of options for determining the best
technology available to minimize adverse environmental impact at Phase
II existing facilities and assessed these options based on overall
efficacy, availability, economic practicability, including economic
impact and the relationship of costs with benefits, and non-water
quality environmental impacts, including energy impacts. Under the
options EPA considered, facilities would be allowed to implement
restoration measures to meet the performance standards. Similarly, any
options considered also would allow facilities to request alternative,
less stringent, requirements if the Director had determined that data
specific to the facility indicated that compliance with the relevant
requirement would result in compliance costs significantly greater than
those EPA considered in establishing the applicable requirement, or
compliance costs significantly greater than the benefits of complying
with the applicable performance standards. The alternative requirements
would be no less stringent than justified by the significantly greater
cost or the significant adverse impacts on local air quality or local
energy markets. EPA also considered several site-specific approaches to
establishing best technology available. These include the site-specific
sample rule discussed at 67 FR 17159, an alternative based on EPA's
1977 Draft Guidance, and alternatives suggested by the Utility Water
Act Group (UWAG) and Public Service Electric and Gas Company (PSEG),
respectively (see 67 FR 17162). EPA's reasons for not adopting these
site specific alternatives are discussed in section VII.E.5 of this
preamble. The five major technology options EPA considered but did not
select for the final rule are discussed in greater detail in the next
section. Finally, the costs and benefits presented below are those
developed at proposal because these estimates are most useful for
purposes of comparison. Subsequent analyses, such as those presented in
the NODA, have resulted in higher cost estimates in general, but did
not alter the relative ranking of these options as EPA made
determinations regarding the final rule. Rather, these analyses
indicated that the costs for options that would have required more
extensive retrofitting efforts than the final rule are even higher
relative to the costs of the final

[[Page 41605]]

rule than they were estimated to be at proposal.
1. Intake Capacity Commensurate With Closed-Cycle, Recirculating
Cooling System for All Facilities
EPA considered a regulatory option that would have required Phase
II existing facilities with a design intake flow 50 MGD or more to
reduce the total design intake flow to a level, at a minimum,
commensurate with that which can be attained by a closed-cycle
recirculating cooling system using minimized make-up and blowdown
flows. In addition, facilities in specified circumstances (e.g.,
located where additional protection is needed due to concerns regarding
threatened, endangered, or protected species or habitat; or regarding
migratory, sport or commercial species of concern) would have had to
select and implement additional design and construction technologies to
minimize impingement mortality and entrainment. This option would not
have distinguished between facilities on the basis of the waterbody
type from which they withdraw cooling water. Rather, it would have
required that the same stringent controls be the nationally applicable
minimum for all waterbody types. This is the basic regulatory approach
EPA adopted for new facilities at 40 CFR 125.80.
EPA did not select a regulatory scheme based on the use of closed-
cycle, recirculating cooling systems at existing facilities based on
its generally high costs (due to conversions), the fact that other
technologies approach the performance of this option, concerns for
energy impacts due to retrofitting existing facilities, and other
considerations. Although closed-cycle, recirculating cooling water
systems serve as the basis for requirements applied to Phase I new
facilities, for Phase II existing facilities, a national requirement to
retrofit existing systems is not the most cost-effective approach and
at many existing facilities, retrofits may be impossible or not
economically practicable. EPA estimates that the total capital costs
for individual high-flow plants (i.e., greater than 2 billion gallons
per day) to convert to wet towers generally ranged from $130 to $200
million, with annual operating costs in the range of $4 to $20 million
(see TDD; DCN 6-0004). For purposes of general comparison, EPA
estimated that capital and installation costs for cooling towers under
the Phase I rule would range from approximately $170,000 to $12.6
million per plant (annualized), depending on flow. At proposal, EPA
estimated that the total social cost of compliance for this option for
Phase II existing facilities would be approximately $3.5 billion per
year.
It is significant to note, however, that EPA's estimates did not
fully incorporate costs associated with acquiring land needed for
cooling towers and, therefore, these estimates may not fully reflect
the costs of the option. For example, based on a survey conducted by
one industry commenter, EPA learned that 31 out of 56 plants surveyed
said that they would need to acquire additional property to accommodate
cooling towers, if required by today's rule. EPA recognizes that this
could be a significant cost. EPA also recognizes that there may be
impediments, irrespective of costs, to acquiring land for cooling
towers. Land upon which to construct cooling towers may be difficult or
impossible to obtain, especially in urban areas; some facilities might
even turn to displacement of wetlands as a solution. The Agency did not
include these potential costs in its analysis for the NODA or proposal.
In contrast to new facilities, which can take into account the Phase I
requirements when choosing where to situate their structures (including
cooling towers), existing facilities have far less flexibility and
incur far greater costs. EPA believes that this is a special problem
for existing facilities that is relevant to determining whether, as a
national categorical matter, closed-cycle cooling is the best
technology available for existing facilities for minimizing adverse
environmental impacts associated with cooling water intake structures.
EPA received retrofit cost estimates from a number of commenters that
indicate that such costs could be at least twice those projected by EPA.
Another issue concerns the energy impacts of cooling towers. EPA
examined the information it received after publication of the proposed
rule and NODA, and agrees that the energy penalty associated with
cooling towers, together with other factors, indicates that this
technology is not the best technology available for existing facilities
for minimizing adverse environmental impacts associated with cooling
water intake structures. In reaching this conclusion, EPA relied on
energy penalty information provided by the U.S. Department of Energy.
EPA worked closely with the U.S. Department of Energy in preparing
today's rule because of their expertise in power plant operations and
engineering. The U.S. Department of Energy pointed out to EPA that
existing fossil-fuel facilities converting from once-through cooling
water systems to wet-cooling towers would produce 2.4 percent to 4.0
percent less electricity even while burning the same amount of coal.
For at least one nuclear power plant, which provides 78% of the
electricity consumed by the State of Vermont, the energy penalty
associated with converting to cooling towers was estimated to be 5.3
percent. Expressed differently, DOE estimated that nationally, on
average 20 additional 400-MW plants might have to be built to replace
the generating capacity lost by replacing once-through cooling systems
with wet cooling towers if such towers were required by all Phase II
facilities.
This energy penalty leads to other negative consequences. Because
this deficit is predicted to occur during the summer months (when
energy demand is highest), the net effect would be more consumption of
fossil fuel, which in turn increases the emission of sulfur dioxide,
NO_X, particulate matter, mercury and carbon dioxide.
Increasing fuel consumption at existing coal power plants yields the
largest increase in air emissions because existing systems are less
efficient at producing power (and therefore burn more coal) and because
they generally have less air pollution control equipment in place. EPA
believes that it is reasonable to consider these non-water quality
environmental impacts and the additional costs associated with
controlling these increased emissions in making today's decision. EPA
further believes that it is authorized to do so because of the links
between Sec. 316(b) and sections 301 and 306, which require EPA to
consider both the energy impacts and the air pollution impacts of
technologies when identifying technologies in the effluent guidelines
context. See CWA section 304(b)(2)(B) (cross-referenced in Sec. 301);
CWA section 306(b)(1)(B) (new source performance standards).
Some commenters also assert that EPA underestimated the down time
that the facility would experience as it converts to cooling towers.
This, again, is not an impact that would be experienced by new
facilities. EPA agrees that such down time can be significant. Indeed,
one of the four retrofit case studies EPA developed indicated a down
time of 10 months, and EPA believes it is reasonable to infer that many
other facilities would experience the same loss.
EPA also agrees with the commenters who assert that the empirical
data base of four retrofit cases to which EPA compared cooling tower
retrofit costs and engineering characteristics is not representative of
the broader population of facilities and could be too narrow a set from
which to develop national costs that would be applicable to a wide range

[[Page 41606]]

of facilities. Of the four retrofits EPA studied, two were in a single
state (South Carolina), none were located along a coast, and only one
generated more than 500 MW of electricity. EPA also recognizes that all
of these conversions were performed before 1992. While it is true that
the vast majority of the new, greenfield utility and non-utility
combined cycle plants built in the past 20 years have wet cooling
towers, EPA believes that it is significant that so few existing
facilities retrofitted to the technology during the same period. The
rarity of this technology as a retrofit further indicates that it is
not economically practicable for the vast majority of existing
facilities.
EPA also considered several additional points made by commenters in
rejecting this option. Some commenters asserted that certain facilities
with closed-cycle, recirculating cooling systems often need to address
the impacts of cooling tower plumes, and subsequent fog and icing in
metropolitan areas, and noise abatement. Commenters also asserted that
the costs of retrofitting and operating such systems at facilities
which do not now have them is disproportionate to the potential
benefits derived, particularly given the similarity in the level of
protection provided under this option (all facilities required to
reduce flow commensurate with a closed-cycle, recirculating system) and
the final rule. Finally, they stated that the need for flexibility in a
rule pertaining to existing facilities is critical to allow facility
owners a range of options to meet the fish protection requirements. EPA
does not agree that in all cases the costs of retrofitting a closed-
cycle cooling water system is disproportionate to the benefits derived.
Nevertheless, EPA recognizes that these concerns have merit for many
facilities and that the validity and extent of such concerns often must
be assessed on a case-by-case basis.
Each of these factors has a cost and an economic impact that EPA
believes is appropriate to consider when evaluating whether cooling
towers are the best technology available for existing facilities for
minimizing adverse environmental impacts associated with cooling water
intake structures. The capital costs estimated by EPA at proposal are
already very high; when costs reflecting reasonable changes to EPA's
assumptions are added to them, the total capital cost investment and
associated economic impact is simply too high at this time for EPA to
be able to justify selecting cooling towers as a required technology
for all existing Phase II facilities.
EPA further compared the efficacy of closed-cycle, recirculating
cooling systems with that estimated for design and construction
technologies. Although not identical, the ranges of impingement and
entrainment reduction are similar under both options, such that the
reductions estimated for the design and construction technologies,
particularly when optimized, approach those estimated for closed-cycle,
recirculating cooling systems. Therefore, the use of design and
construction technologies as the basis for this rule is supported since
they can approach closed-cycle, recirculating systems at less cost with
fewer implementation problems. EPA considered this similarity in
efficacy, along with the economic practicability and availability of
each type of technology, in determining that a closed-cycle,
recirculating cooling system is not the required technology for all
Phase II existing facilities.
2. Intake Capacity Commensurate With Closed-Cycle, Recirculating
Cooling Systems Based on Waterbody Type
EPA also considered an alternate technology-based option in which
closed-cycle, recirculating cooling systems would have been required
for all facilities on certain waterbody types. Under this option, EPA
would have grouped waterbodies into the same five categories as in
today's rule: (1) Freshwater rivers or streams, (2) lakes or
reservoirs, (3) Great Lakes, (4) tidal rivers or estuaries; and (5)
oceans. Because oceans, estuaries and tidal rivers contain essential
habitat and nursery areas for the vast majority of commercial and
recreational important species of shell and finfish, including many
species that are subject to intensive fishing pressures, these
waterbody types would have required more stringent controls based on
the performance of closed-cycle, recirculating cooling systems. EPA
discussed the susceptibility of these waters in a Notice of Data
Availability (NODA) for the Phase I rule (66 FR 28853, May 25, 2001)
and invited comment on documents that may support its judgment that
these waters are particularly susceptible to adverse impacts from
cooling water intake structures. In addition, the NODA presented
information regarding the low susceptibility of non-tidal freshwater
rivers and streams to impacts from entrainment from cooling water
intake structures.
Under this alternative option, facilities that operate at less than
15 percent capacity utilization would, as in today's final rule, only
be required to have impingement control technology. Facilities that
have a closed-cycle, recirculating cooling system would have required
additional design and construction technologies to increase the
survival rate of impinged biota or to further reduce the amount of
entrained biota if the intake structure was located within an ocean,
tidal river, or estuary where there are fishery resources of concern to
permitting authorities or fishery managers.
Facilities with cooling water intake structures located in a
freshwater (including rivers and streams, the Great Lakes and other
lakes) would have had the same requirements as under today's final
rule. If a facility for which closed-cycle recirculating technology was
required chose to comply with alternative requirements, then the
facility would have had to demonstrate that alternative technologies
would reduce impingement and entrainment to levels comparable to those
that would be achieved with a closed-loop recirculating system (90%
reduction). If such a facility chose to supplement its alternative
technologies with restoration measures, it would have had to
demonstrate the same or substantially similar level of protection. (For
additional discussion see the Phase I final rule 66 FR 65256, at 65315
columns 1 and 2.)
At proposal, EPA estimated that there would be 109 \46\ facilities
located on oceans, estuaries, or tidal rivers that do not have a
closed-cycle, recirculating cooling system and would need to reduce
intake flow to a level commensurate with that which can be attained by
a closed-cycle, recirculating cooling system or upgrade design and
construction technology (e.g., screens) in order to meet performance
standards for reducing impingement mortality and entrainment.
---------------------------------------------------------------------------

\46\ Sample-weighted.
---------------------------------------------------------------------------

Although EPA estimated the costs of this option to be less
expensive at the national level than an option based on closed-cycle,
recirculating cooling systems everywhere, EPA did not select this
option based on total social costs estimates of greater than $1 billion
per year and its lack of cost-effectiveness, as well as on concerns
regarding potential energy impacts. Facilities located on oceans,
estuaries, and tidal rivers would incur high capital and operating and
maintenance costs for conversions of their cooling water systems.
Furthermore, since impacted facilities would be concentrated in coastal
regions, EPA is concerned that there is

[[Page 41607]]

the potential for short term energy impacts and supply disruptions in
these areas if multiple facilities retrofit concurrently or over a
relatively short time-frame, as would be required by these regulations.
3. Intake Capacity Commensurate With Closed-Cycle, Recirculating
Cooling System Based on Waterbody Type and Proportion of Waterbody Flow
EPA also considered a variation on the above approach that would
have required only facilities withdrawing very large amounts of water
from an estuary, tidal river, or ocean to reduce their intake capacity
to a level commensurate with that which can be attained by a closed-
cycle, recirculating cooling system. For example, for facilities with
cooling water intake structures located in a tidal river or estuary, if
the intake flow is greater than 1 percent of the source water tidal
excursion, then the facility would have had to meet standards for
reducing impingement mortality and entrainment based on the performance
of wet cooling towers. These facilities would instead have had the
choice of reducing cooling water intake flow to a level commensurate
with wet cooling towers or of using alternative technologies to meet
reduction standards based on the performance of wet cooling towers. If
a facility on a tidal river or estuary had intake flow equal to or less
than 1 percent of the source water tidal excursion, the facility would
have only had to meet the same impingement and entrainment performance
standards as in the final Phase II rule. These standards were developed
based on the performance of technologies such as fine mesh screens and
traveling screens with well-designed and operating fish return systems.
The more stringent, closed-cycle, recirculating cooling system-based
requirements would have also applied to a facility that has a cooling
water intake structure located in an ocean with an intake flow greater
than 500 MGD.
This option also would impose much higher costs on a subset of
facilities than the final rule. Based on an analysis of data collected
through the detailed industry questionnaire and the short technical
questionnaire, at proposal, EPA estimated there were potentially 109
Phase II existing facilities located on estuaries, tidal rivers, or
oceans which would incur capital costs under this option. Of these 109
facilities, EPA estimated that 51 would exceed the applicable flow
threshold and be required to meet performance standards for reducing
impingement mortality and entrainment based on a reduction in intake
flow to a level commensurate with that which can be attained by a
closed-cycle recirculating system. Of the 58 \47\ facilities estimated
to fall below the applicable flow threshold, 10 facilities already meet
these performance standards and would not require any additional
controls, whereas 48 \48\ facilities would require entrainment or
impingement controls, or both. Because this option would only require
cooling tower-based performance standards for facilities located on
tidal rivers, estuaries or oceans where they withdraw saline or
brackish waters, EPA does not believe that this option would raise any
significant water quantity issues.
---------------------------------------------------------------------------

\47\ Not sample-weighted.
\48\ Not sample-weighted.
---------------------------------------------------------------------------

At proposal, EPA estimated the total social cost of compliance for
the waterbody/capacity-based option to be approximately $0.97 billion
per year. EPA did not select this option because it was not determined
to be the most cost-effective approach on a national basis. While the
national costs of this option are slightly lower than those of
requiring wet cooling towers-based performance standard for all
facilities located on oceans, estuaries and tidal rivers, the cost for
facilities to meet these standards are still substantial. Although EPA
would provide an opportunity to seek alternative requirements to
address locally significant air quality or energy impacts, EPA does not
believe a framework such as this provides sufficient flexibility to
ensure effective implementation and to minimize non-water quality
(including energy) impacts. In addition, as noted above for the other
cooling tower based options that EPA rejected, facilities can achieve
almost the same level of impingement mortality and entrainment
reductions using the technologies on which this final rule is based as
they can using cooling towers, but at substantially lower cost.
4. Impingement Mortality and Entrainment Controls Everywhere
At proposal, EPA evaluated an option that required impingement
mortality and entrainment controls for all facilities. This option did
not allow for the development of best technology available on a site-
specific basis. This alternative based requirements on the percent of
source water withdrawn and, like today's final rule, also restricted
disruption of the natural thermal stratification of lakes or
reservoirs. It also imposed entrainment performance requirements on
Phase II existing facilities located on freshwater rivers or streams,
and lakes or reservoirs where EPA has determined in today's final rule
that such controls are not necessary. Finally, under this alternative,
restoration could be used, but only as a supplement to the use of
design and construction technologies or operational measures.
This option established clear performance-based requirements that
were based on the use of available technologies to reduce adverse
environmental impact. Such an alternative would be consistent with the
focus on use of best technology required under section 316(b). However,
as indicated above, this option lacks the flexibility of the final rule
in applying the necessary and appropriate available technology and
therefore would be less effective in addressing the specific cooling
water intake structure impacts posed by Phase II facilities in their
various environmental settings.
At proposal, total social cost of compliance for this option was
estimated at approximately $300 million per year. EPA did not select
this option because other options were more cost-effective, in part
because this option requires entrainment controls in freshwater rivers,
streams, and lakes. The benefits of the final rule are almost the same
as those for this option but a lower cost (since lakes and reservoirs,
and for design intake flows below 5% in freshwater rivers and streams
are the least likely to provide significant benefits).
5. Site-Specific Options as Best Technology Available To Minimize
Adverse Environmental Impact
In the proposed rule EPA also considered several site-specific
approaches to establishing best technology available. These include the
site-specific sample rule discussed at 67 FR 17159, an alternative
based on EPA's 1977 Draft Guidance (67 FR 17161), and alternatives
suggested by UWAG and PSEG, respectively (see 67 FR 17162).
EPA did not adopt any of these site-specific regulatory options for
several reasons. None of these site-specific approaches would have
established national performance standards for best technology
available to minimize adverse environmental impact. EPA believes that
such national performance standards promote the consistent application
of the best technology available to minimize adverse environmental
impact. In addition, based on contact with States (see Phase I NODA, 66
FR 28865, Phase II proposal 67 FR 17152-3) and anecdotal

[[Page 41608]]

information \49\ EPA believes that each of these site-specific options
would have resulted in higher administrative burdens being imposed on
applicants and permit writers relative to the final rule. As EPA has
discussed in the preamble to the proposal (see 67 FR 17167), these
administrative burdens can be associated with the need to determine in
each case whether adverse impacts are occurring, the nature and level
of any such impacts, and which design and construction technologies
constitute the best technology available to minimize adverse
environmental impacts, including a consideration of costs and benefits.
Further, all of the proposed site-specific options increase the
likelihood that each significant cooling water intake permitting issue
would become a point of contention between the applicant and permit
writer, which EPA's experience indicates slows the permitting process,
makes it more resource intensive, and makes it more costly. Finally,
because the final rule provides facilities with the option of selecting
from five compliance alternatives, including a site-specific compliance
alternative, the final rule provides facilities with flexibility
comparable to that of a site-specific rule. The site-specific
alternative in the final rule provides clear standards for eligibility
(the cost-cost and cost-benefit tests), and clear standards on which to
base the alternative requirements that they achieve an efficacy as
close as practicable to the national performance standards without
exceeding the cost-test or benefits-test thresholds. EPA believes that
structuring a site-specific compliance alternative in this way will
significantly reduce the potential areas of disagreement between permit
writer and applicant that are inherent in the other site-specific
approaches that it rejected, while still providing facilities with
appropriate flexibility. Through the multiple compliance alternatives
specified in this rule, EPA has sought to balance the statutory
requirements of section 316(b) and the need for reasonable limits on
the administrative burden imposed on both applicants and permit writers
against the need for existing facilities to have flexibility in
implementing the requirements.
---------------------------------------------------------------------------

\49\ For example, a site-specific determination for Brayton
Point, Rhode Island, has required resources for greater than two
full time equivalents (FTEs) over three years for permitting and
support staff, as well as approximately $400,000 in contractor costs
to address technical issues and applicant experts. Similarly,
development of a permit for Salem has required resources for greater
than two full time equivalents (FTEs) over three years for
permitting and support staff, as well as approximately $340,000 in
contractor costs to address technical issues and applicant experts.
---------------------------------------------------------------------------

6. Flow Reduction Commensurate With the Level Achieved by Dry Cooling
Systems Based on Waterbody Type
EPA conducted a full analysis for the Phase I rule and concluded
that dry cooling was not an economically practicable option for new
facilities on a national basis. Dry cooling systems use either a
natural or a mechanical air draft to transfer heat from condenser tubes
to air. In conventional closed-cycle recirculating wet cooling towers,
cooling water that has been used to cool the condensers is pumped to
the top of a recirculating cooling tower; as the heated water falls, it
cools through an evaporative process and warm, moist air rises out of
the tower, often creating a vapor plume. Hybrid wet-dry cooling towers
employ both a wet section and dry section and reduce or eliminate the
visible plumes associated with wet cooling towers.
For the Phase I rule, EPA evaluated zero or nearly zero intake flow
regulatory alternatives, based on the use of dry cooling systems. EPA
determined that the annual compliance cost to industry for this option
would be at least $490 million. EPA based the costs on 121 new
facilities having to install dry cooling. For the Phase II proposal,
EPA estimated that total social costs for dry cooling based on
waterbody type were $2.1 billion per year (or roughly double the costs
for wet towers). Thus, this option would be more expensive than dry
cooling for new facilities. The cost for Phase II existing facilities
to install dry cooling would be significantly higher than the cost for
new facilities to do so due to the complexities of retrofitting both
the dry cooling equipment and components of the cooling system. At
proposal, EPA estimated that 550 Phase II existing facilities would be
subject to Phase II regulation. The cost would be significantly higher
because existing facilities have less flexibility, thus incurring
higher compliance costs (capital and operating) than new facilities.
For example, existing facilities might need to upgrade or modify
existing turbines, condensers, and/or cooling water conduit systems,
which typically imposes greater costs than use of the same technology
at a new facility. In addition, retrofitting a dry cooling tower at an
existing facility would require shutdown periods during which the
facility would lose both production and revenues, and decrease the
thermal efficiency of an electric generating facility.
The disparity in costs and operating efficiency of dry cooling
systems compared with wet cooling systems is considerable when viewed
on a nationwide or regional basis. For example, under a uniform
national requirement based on dry cooling, facilities in the southern
regions of the United States would be at an unfair competitive
disadvantage compared to those in cooler northern climates because dry
cooling systems operate more efficiently in colder climates. Even under
a regional subcategorization strategy for facilities in cool climatic
regions of the United States, adoption of a minimum requirement based
on dry cooling would likely impose unfair competitive restrictions for
steam electric power generating facilities because of the elevated
capital and operating costs associated with dry cooling. Adoption of
requirements based on dry cooling for a subcategory of facilities under
a particular capacity would pose similar competitive disadvantages for
those facilities.
As explained in the preamble to the proposal, EPA does not consider
performance standards based on dry cooling a reasonable option for a
national requirement, nor for subcategorization under this rule,
because the technology of dry cooling carries costs that would
potentially cause significant closures for Phase II existing
facilities. Dry cooling technology would also have a significant
detrimental effect on electricity production by reducing the energy
efficiency of steam turbines. Unlike a new facility that can use direct
dry cooling, an existing facility that retrofits for dry cooling would
most likely use indirect dry cooling which is much less efficient than
direct dry cooling. In contrast to direct dry cooling, indirect dry
cooling does not operate as an air-cooled condenser. In other words,
the steam is not condensed within the structure of the dry cooling
tower, but instead indirectly through a heat exchanger. Therefore, the
indirect dry cooling system would need to overcome additional heat
resistance in the shell of the condenser compared to the direct dry
cooling system. Ultimately, the inefficiency (i.e., energy penalty) of
indirect dry cooling systems will exceed those of direct dry cooling
systems in all cases.
Although the dry cooling option is extremely effective at reducing
impingement and entrainment, it is not economically practicable for
existing facilities and would cause additional adverse environmental
impacts and serious energy impacts. Although dry cooling technology
uses extremely low-

[[Page 41609]]

level or no cooling water intake, thereby reducing impingement and
entrainment of organisms to extremely low levels, section 316(b) does
not require that adverse environmental impact be completely eliminated,
but that it be minimized using the best technology available. (DOE
energy penalty study; DCN 4-2512). EPA does not believe that dry
cooling technology is ``available'' to most Phase II existing facilities.
Although EPA has rejected dry and wet cooling tower technologies as
a national minimum requirement, EPA does not intend to restrict the use
of these technologies or to dispute that they may be the appropriate
cooling technology for some facilities. For example, facilities that
are repowering and replacing the entire infrastructure of the facility
may find that dry cooling is an acceptable technology in some cases.
This technology may be especially appropriate in situations where
access to cooling water is limited. Wet cooling tower technology may be
suitable where adverse effects of cooling water intakes are severe and
where screening systems are impractical, or where thermal discharge
impacts pose serious environmental problems. Under Clean Water Act
section 510, a State may choose to impose more stringent standards than
required by Federal regulations. States may continue to use this
authority to require facilities to use dry or wet cooling systems.

F. What Is the Role of Restoration and Trading Under Today's Final Rule?

1. What Is the Role of Restoration?
EPA is providing facilities with the option to use restoration for
compliance alternatives Sec. 125.94(a)(2), (3), and (5) where the
performance of the restoration measures (the production and increase of
fish and shellfish in the facility's waterbody or watershed, including
maintenance of community structure and function), is substantially
similar to that which would have been achieved if the facility reduced
impingement mortality and entrainment through the use of design and
construction technologies and/or operational measures, to meet the
applicable performance standards. (For a complete discussion of the
legal analysis supporting restoration, see section VIII of this
preamble.) The role of restoration under this rule is to provide
additional flexibility to facilities in complying with the rule by
eliminating or significantly offsetting the adverse environmental
impact caused by the operation of a cooling water intake structure.
Restoration measures that increase fish and shellfish in an impacted
waterbody or watershed and result in performance substantially similar
to that which would otherwise be achieved through reductions in
impingement mortality and entrainment further the goal of minimizing
adverse environmental impact while offering additional flexibility to
both permitting authorities and facilities. Restoration measures may
include such activities as removal of barriers to fish migration,
reclamation of degraded aquatic organism habitat, or stocking of
aquatic organisms. These are still technologies, within the meaning of
that term as used in section 316(b) and as such are an appropriate
means for meeting technology based performance standards. They are not
analogous to water quality based effluent limitations on pollutant
discharges because they are not designed to meet water quality
standards or dependent on the condition of the receiving waterbody.
Rather, they provide an additional means to meet the same performance
standards that guide the selection of design and construction
technologies and operational measures.
Restoration measures have been used at existing facilities as one
of many tools to implement section 316(b) on a case-by-case, best
professional judgment basis to compensate for the death and injury of
fish and other aquatic organisms caused by the cooling water intake
structure. Under today's rule, a Phase II existing facility may utilize
restoration either in lieu of or as a supplement to design and
construction technologies and/or operational measures. For example, a
facility may demonstrate to the Director that velocity controls are the
most feasible technology choice for the facility but that, when used on
their own, the velocity controls are insufficient to meet the
applicable performance standards at Sec. 125.94(b). The facility may
then, in conjunction with the use of velocity controls, implement
restoration measures to increase the fish and shellfish productivity of
the waterbody in order to meet the performance standards at Sec.
125.94(b). Another facility might demonstrate to the Director that
restoration measures alone achieve the greatest compliance with the
performance standards. A facility may alternatively request a site-
specific determination of best technology available under Sec.
125.94(a)(5) and use restoration measures to meet the alternate
requirements.
Facilities that propose to use restoration measures must
demonstrate to the Director that they evaluated the use of design and
construction technologies and operational measures and determined that
the use of restoration measures is appropriate because meeting the
applicable performance standards or requirements through the use of
other technologies is less feasible, less cost-effective, or less
environmentally desirable than meeting the standards in whole or in
part through the use of restoration measures. Facilities must also
demonstrate that the restoration measures they plan to implement,
alone, or in combination with design and construction technologies and/
or operational measures, will produce ecological benefits (production
of fish and shellfish) at a level that is substantially similar to the
level that would be achieved through compliance with the applicable
impingement mortality and/or entrainment performance standards under
Sec. 125.94(b), or alternative site-specific requirements under Sec.
125.94(a)(5). In other words, restoration measures must replace the
fish and shellfish lost to impingement mortality and entrainment,
either as a substitute or as a supplement to reducing impingement
mortality and entrainment through design and control technologies and/
or operational measures. While the species makeup of the replacement
fish and shellfish may not be exactly the same as that of the
impingement mortality and entrainment losses, the Director must make a
determination that the net effect is to produce a level of fish and
shellfish in the waterbody that is ``substantially similar'' to that
which would result from meeting the performance standards through
design and construction technologies and/or operational measures alone.
The final rule requires that a facility use an adaptive management
method for implementing restoration measures because the performance of
restoration projects must be regularly monitored and potentially
adjusted to ensure the projects achieve their objectives (see 67 FR
17146-17148 and 68 FR 13542).
The final rule also requires that restoration projects which
replace the lost fish and shellfish with a different species mix (``out
of kind'' restoration) be based on a watershed approach to restoration
planning. The boundaries of a ``watershed'' should be guided by the
cataloging unit of the ``Hydrologic Unit Map of the United States''
(USGS, 1980), although it may be appropriate to use another watershed
or waterbody classification system developed at the state or local
level if such a system compares favorably in level of detail. For
example, in coastal systems that support migratory fish, a coastal

[[Page 41610]]

waterbody that transects a number of watersheds may be the most
appropriate unit for planning restoration.
2. What Is the Role of Trading in Today's Rule?
In Sec. 125.90(c), today's final rule provides that if a State
demonstrates to the Administrator that it has adopted alternative
regulatory requirements in its NPDES program that will result in
environmental performance within a watershed that is comparable to the
reductions of impingement mortality and entrainment that would
otherwise be achieved under Sec. 125.94, the Administrator must
approve such alternative requirements. A trading program could be a
part of these alternative regulatory requirements.
At proposal, EPA sought comment on the potential role of trading in
the context of the section 316(b) Phase II rulemaking and possible
approaches for developing a trading program. Trading under other EPA
programs has been shown to provide opportunities for regulatory
compliance at reduced costs. The EPA Office of Water's Water Quality
Trading Policy, published in January 2003 [DCN 6-5002], fully supports
trading nutrients and sediment and adopts a case-by case approach to
evaluating proposals to trade other pollutants.
Trading in the context of section 316(b) raises many complex
issues, for example, how to establish appropriate units of trade and
how to measure these units effectively given the dynamic nature of the
populations of aquatic organisms subject to impingement mortality and
entrainment. Should a State choose to propose a trading program under
Sec. 125.90(c), EPA will evaluate the State's proposal on a case-by-
case basis to ensure the program complies with the regulatory
requirement--that it will result in environmental performance within a
watershed that is comparable to the reductions of impingement mortality
and entrainment that would otherwise be achieved under the requirements
established at Sec. 125.94. Some commenters suggested that EPA adopt a
trading program that would allow trading between aquatic organisms and
pollutant discharges. EPA is concerned that such a program would
introduce comparability and implementation challenges that would be
difficult to overcome and therefore, EPA does not expect that such a
program would work within the framework of today's final rule. In
addition, EPA does not believe that it is possible at this time to
quantify with adequate certainty the potential effects on ecosystem
function, community structure, biodiversity, and genetic diversity of
such trades, especially when threatened and/or endangered species are
present. Based on the current state of the science in aquatic community
ecology and ecological risk assessment, States wishing to develop
trading programs within the context of 316(b) would be best off
focusing on programs based on metrics of comparability between fish and
shellfish gains and losses among trading facilities, rather than the
much more complex metrics that would be necessary for comparability
among fish and shellfish losses on the one hand, and pollutant
reductions on the other.

VIII. Summary of Major Comments and Responses to the Proposed Rule and
Notice of Data Availability (NODA)

A. Scope and Applicability

1. Phase II Existing Facility Definition
Numerous commenters supported limiting the scope of the Phase II
rule to existing facilities that generate and transmit electric power,
or generate and sell such power to another entity for transmission, but
suggested that EPA has not sufficiently limited the rule to only these
facilities. Commenters noted that the proposed definition of ``Phase II
existing facility'' does not adequately exempt existing manufacturing
facilities that may occasionally transfer power off-site during peak
load events. Some commenters suggested that EPA clarify the Phase II
rule to specify that it does not apply to facilities whose primary
business is not power generation. Some suggested limiting applicability
to specified SIC codes (e.g., provided that the rule only applies to
facilities in SIC 4911). Examples of facilities identified by
commenters that they believe should be excluded from Phase II include
manufacturers that produce electricity by co-generation, power
generating units that predominantly support a manufacturer, e.g., iron
and steel, but also export some power, and facilities that generate
power for internal use.
Commenters requested that EPA further clarify when repowering is
subject to existing facility requirements. For example, some commenters
viewed as inconsistent the fact that the addition of a generating unit
at an existing single unit site could increase intake flows by 100% and
meet the existing facility definition, while a replacement facility
that increases intake flows by a much lesser amount (e.g., 25%) would
not meet the existing facility definition. These commenters suggested
that EPA consider a facility as an existing facility unless changes to
the facility result in new environmental impacts.
In Sec. 125.91(a)(3) of today's rule, an existing facility is
subject to this rule if its primary activity is either to generate and
transmit electric power, or to generate electric power that it sells to
another entity for transmission. This provision was included in the
rule in response to comments such as those described previously in this
section. EPA believes that this criterion--the primary activity being
the generation of electric power--sufficiently clarifies and limits the
scope of this rule to existing facilities whose primary business is
power generation. As discussed in Section II of this preamble, the
final rule does not apply to existing manufacturing facilities,
including manufacturing facilities that generate power for their own
use and transmit any surplus power, or sell it for transmission,
provided the primary activity of the facility is not electric power
generation. For example, in the case of a facility that operates its
own power generating units and such units predominantly support that
facility's manufacturing operation, its primary activity remains
manufacturing, even if the facility exports some power. Whether a
facility's primary activity is to generate electric power will need to
be determined on a case-by-case basis. Section II also makes clear that
a manufacturing facility is not covered by this final rule just because
it is co-located with another Phase II facility.
EPA considered specifying SIC or NAIC codes to clarify the scope of
the rule beyond that proposed in Sec. 125.91(a)(3), but did not do so
because it believes the changes in the final rule are sufficient to
address many issues raised in comments and because of concerns that SIC
and NAIC codes may change over time, which could unintentionally alter
the scope of the rule.
With regard to repowering, section II of today's notice discusses
the scope of the final rule and specifically discusses the repowering
issue. Section II also addresses other Phase I versus Phase II
classification issues.
2. Thresholds
Some commenters supported use of the 50 MGD design intake flow
threshold and the 25 percent cooling water use criteria in Sec.
125.91(a)(2) and (4), respectively. Some suggested that facilities
agreeing to limit their actual intake to less than 50 MGD should be
excluded from the rule's requirements or be allowed to request an
exemption. Other commenters maintained that permitted or actual flows
should be used rather than design flows. Some commenters asked that EPA
clarify that,

[[Page 41611]]

when applicable, the lesser design value of an intake facility and
conveyance structure versus the design volume of intake pumps should be
used to determine the 50 MGD threshold for applicability.
Alternatively, others asserted that EPA should provide guidance that a
facility's design intake flow is not necessarily the flow associated
with that of the intake pumps.
Several commenters stated that emergency cooling water and
emergency service water intakes should be exempt from the 50 MGD design
intake flow threshold. These commenters recommended that EPA
distinguish between primary cooling water intakes and emergency service
water intakes, for example, at nuclear facilities. They reasoned that
emergency service water systems, which can have a large design capacity
(i.e., design capacity greater than 50 MGD), generally use an intake
that normally operates a nominal amount of time to ensure that the
system is in working order. Such back-up systems are required for
safety, but under normal conditions do not increase the operational
capacity of the facility. Thus, these commenters maintain that rarely
used emergency service water should not count towards 50 MGD.
With regard to the criterion that a Phase II existing facility must
use at least 25 percent of the water it withdraws exclusively for
cooling, some commenters indicated that proposed Sec. 125.91(d), which
describes how to measure whether 25 percent of water withdrawn is used
for cooling, was ambiguous. Commenters asserted that EPA should not
require monthly determinations of applicability of the Phase II rule.
One commenter suggested that EPA should assess the 25 percent cooling
water use on an annual basis calculated once during permit renewal,
since such an approach would provide a high degree of certainty.
As discussed in the proposed rule (67 FR 17129-17130), EPA chose
the design intake flow 50 MGD threshold to focus on the largest
existing power generating facilities, which the Agency believes are
those with the greatest potential to cause or contribute to adverse
environmental impact. EPA estimates that the 50 MGD threshold would
subject approximately 543 of 902 (60 percent) of existing power
generating facilities to this rule and would address 90 percent of the
total flow withdrawn by existing steam electric power generating
facilities. The 25 percent threshold ensures that nearly all cooling
water and the most significant facilities using cooling water intake
structures are addressed by these requirements. EPA notes that Phase II
existing facilities, which are limited to facilities whose primary
activity is power generation, typically use far more than 25 percent of
the water they withdraw for cooling. Yet, as in the new facility rule,
cooling water that is used in a manufacturing process either before or
after it is used for cooling would not count towards calculating the
percentage of a facility's intake flow that is used for cooling purposes.
EPA has retained in the final rule the 50 MGD threshold based on
design intake flow, rather than actual flow, for several reasons.
Design intake flow is a fixed value based on the design of the
facility's operating system and the capacity of the circulating and
other water intake pumps employed at the facility. This approach
provides clarity--the design intake flow does not change, except in
those limited circumstances when a facility undergoes major
modifications or expansion, whereas actual flows can vary significantly
over sometimes short periods of time. EPA believes that an uncertain
regulatory status is undesirable because it impedes both compliance by
the permittee and regulatory oversight, as well as achievement of the
overall environmental objectives. Further, using actual flow may result
in the NPDES permit being more intrusive to facility operation than
necessary since facility flow would be a permit condition and
adjustments to flow would have to be permissible under such conditions
and applicable NPDES procedures. It also would require additional
monitoring to confirm a facility's status, which imposes additional
costs and information collection burdens, and it would require
additional compliance monitoring and inspection methods and evaluation
criteria, focusing on operational aspects of a facility.
With regard to intake versus pump capacity, EPA notes that under
Sec. 125.93 of the final rule, design intake flow means the value
assigned (during the cooling water intake structure design) to the
total volume of water withdrawn from a source waterbody over a specific
time period. Because numerous aspects of a cooling water intake or
system can limit a facility's intake flow, and because flow is a
critical factor that affects the impacts posed by each facility's
cooling water intake structures, EPA has determined that it is more
appropriate for the final rule to focus on a facility's total designed
volume of water withdrawn over a period of time, rather than to
condition applicability of the rule on more specific parameters, such
as intake capacity or pump design, which individually do not fully
determine total design intake flow.
The final rule does not explicitly exclude emergency cooling water
and emergency service water intakes from consideration in determining
which facilities are in-scope. Although EPA does not have detailed data
on emergency cooling water and emergency intakes, based on other
available data EPA does not believe that including consideration of
emergency intakes within this rule significantly alters the scope of
the rule. EPA's survey of all existing electric utilities and non-
utilities indicated that 84 percent of surveyed facilities have an
average flow that equals or exceeds 50 MGD. These facilities would by
necessity have a design intake flow that also equals or exceeds 50 MGD.
Moreover, EPA assumes that this average flow data represent normal
operating conditions and does not include emergency cooling water use.
Consequently, EPA believes that relatively few facilities are
potentially affected by this issue.
Finally, Sec. 125.91(a)(4), which describes how a facility must
determine whether it meets the 25 percent cooling water use criterion
has been changed in the final rule and provides that the percent of
cooling water used be measured on an average annual basis. EPA believes
this approach is more appropriate than making this determination on an
average monthly basis, primarily because the annual average is an
easier measurement to make. Furthermore, because all Phase II existing
facilities generate power, most of the water will be used for cooling,
rendering monthly evaluation of this value unnecessary. The final rule
does not specify how often the facility must measure flow for this
annual average. The facility is encouraged to consult the Permit
Director to determine what level of data collection is needed.

B. Environmental Impact Associated With Cooling Water Intake Structures

Many comments addressed adverse environmental impact, questioning
the definition and quantification of adverse environmental impacts.
Several suggested defining adverse environmental impact exclusively at
the population, community, or ecosystem levels, and believe that
numbers of impinged and entrained organisms should not be a measure of
adverse environmental impact. Some commenters argued that, if a
facility can prove it does not cause adverse environmental impact at
the population level, then it should be exempt from section 316(b)
regulations. Commenters

[[Page 41612]]

cited numerous studies to illustrate whether cooling water intake
structures cause adverse environmental impacts and claimed that where
abundance or biomass falls, it was usually the result of some other
stressor (overfishing, pollution, etc). These commenters asserted that
populations are able to thrive despite high rates of impingement and
entrainment because of density-dependence and compensation.
Numerous other commenters disagreed with limiting the definition of
adverse environmental impact to the population, community or ecosystem
levels, and contended that any measure of impingement and entrainment
constitutes adverse environmental impact. They asserted that power
plants contribute to fish kills directly by impingement and
entrainment, and indirectly by habitat loss. These commenters
maintained that the results of population or ecosystem studies are
highly subjective, and have no place in determining BTA, as once such
impact levels are reached, recovery is often impossible. Regardless of
the severity of adverse environmental impact, these commenters argued
that section 316(b) requires minimization of adverse environmental
impact. They maintained that cooling water intake structures contribute
to fishery collapse and vast reductions in fish biomass and abundance
that are measurable at the species level. These commenters suggested
that actual national impacts due to cooling water intake structures are
vastly underestimated due to poor data collection methodologies
utilized when the majority of the studies were performed and because
studies performed on impinged and entrained organisms overlooked the
vast majority of affected species.
In today's final rule, EPA has elected not to define adverse
environmental impact. EPA believes that it is reasonable to interpret
adverse environmental impact as the loss of aquatic organisms due to
impingement and entrainment. For a further discussion of this issue,
see Section IV above.
With regard to the relationship between intake flow and adverse
environmental impact, some commenters asserted that the relationship of
impingement and entrainment to flow is such that catch rates increase
non-linearly (exponentially) in relation to the volume of water
withdrawn, with entrainment rates being more strongly correlated to
flow than impingement. Environmental commenters advocated for flow
reduction technologies, such as retrofitting closed-cycle cooling
technologies, as the most direct means of reducing fish kills from
power plant intakes; they assert that reducing intake by up to 98 to 99
percent would result in a similarly high reduction of impinged and
entrained organisms. Other commenters insisted that there is no
statistically significant relationship between catch rate and flow, and
the mathematical models that evaluate this relationship are inaccurate.
EPA believes the record contains ample evidence to support the
proposition that entrainment is related to flow (see DCN 2-013L-R15 and
2-013J) while impingement is related to a combination of flow, intake
velocity and fish swim speed (see DCN 2-029). Larger withdrawals of
water may result in commensurately greater levels of entrainment.
Entrainment impacts of cooling water intake structures are closely
linked to the amount of water passing through the intake structure
because the eggs and larvae of some aquatic species are free-floating
and may be drawn with the flow of cooling water into an intake
structure. Swim speeds of affected species as well as intake velocity
must be taken into account to predict rates of impingement in relation
to flow in order to account for the ability of juvenile and adult
lifestages of species to avoid impingement. Due to this relationship,
EPA agrees that reducing intake by installing flow reduction
technologies will result in a similarly high reduction of impinged and
entrained organisms, but EPA believes that other technologies that do
not necessarily reduce flow but that do reduce the number of aquatic
organisms impinged and entrained will also minimize adverse
environmental impact associated with cooling water intake structures.
As such, today's rule provides for flexibility in meeting the
performance standards.

C. Performance Standards

The performance standards promulgated today are expressed as
reductions of impingement and entrainment measured against a
calculation baseline. The purpose of a calculation baseline is to
properly credit facilities that have installed control technologies
prior to the promulgation of the rule. EPA received numerous comments
on the performance standards and the calculation baseline.
1. Appropriate Standards
Many commenters discussed the appropriateness of the performance
standards. While many commenters acknowledged that the performance
range may be attained at some facilities (using certain technologies
and in appropriate conditions), several commenters stated that the
technical justification for the performance standards was insufficient
and may be biased towards higher performing examples of each
technology. Many commenters submitted that some technologies will
perform at some sites, but that no technology will meet the standards
at all sites. Another commenter supported the concept of the
performance standards, as long as sufficient flexibility was retained
through the use of restoration measures and cost tests. Some commenters
suggested allowing permit writers the flexibility to create site-
specific performance standards.
EPA has selected performance standards to facilitate a more
streamlined permitting process, and to provide consistent national
standards. EPA has chosen to express the targets by reference to a
percentage reduction in impingement and entrainment because, as
discussed above, these losses can easily be traced to cooling water
intake structures. Therefore, this is a convenient indicator of the
efficacy of controls in reducing environmental impact. As discussed in
more detail below, it is also a useful basis against which to consider
the efficacy of restoration technologies, which focus on the
replacement of fish and shellfish as an alternative means of minimizing
adverse environmental impact of intake structures.
Additional documentation has been collected and reviewed by EPA to
further support the percent reductions contained in the performance
standards. EPA has added this information to the Technology Efficacy
database (DCN 6-5000), which EPA has expanded to allow users to query
and compare basic data on technology performance and applicability. EPA
recognizes that some may disagree with basing the performance standards
on the wide range of data available in the database. While many
documents do show a level of success in reducing impingement mortality
or entrainment, other studies have shown the deployed technology to be
unsuccessful or at best inconclusive. EPA does not view the varying
degrees of success with regards to a specific technology as indicative
that the performance standards cannot be met, but rather as evidence
that some technologies work in some applications but not in others.
It is for this reason that performance standards, rather than
prescriptive technologies, were chosen. By opting for performance
standards instead of requiring the deployment of specified
technologies, EPA maintains a desired

[[Page 41613]]

flexibility in the implementation of the rule, thus allowing a facility
to select measures that are appropriate to the site conditions and
facility configuration. EPA believes that there are technologies
available (including restoration measures) that can be used to meet the
performance standards at the majority of facilities subject to the
final Phase II rule. EPA believes that it will likely be the
exceptional case where no technology or suite of technologies will be
able to achieve the performance standards. This is not to say, however,
that the technologies are always economically practicable to implement;
there may be situations where the costs are not justified and it is for
those situations that EPA has provided for site-specific determinations
of best available technology for minimizing adverse environmental impact.
2. Application of the Performance Standards
Commenters generally noted that the application of the performance
standards would be very difficult, for a number of site-specific
reasons. Several commenters noted that the performance standards are
not sufficiently defined to make a full evaluation of their
applicability. For example, EPA has not defined the performance
standards as being measured using all species or selected species, or
by counting individuals versus measuring biomass. Some commenters noted
that each of the methods discussed by EPA could have merit at a given
facility, and that flexibility would be needed to evaluate compliance
at a variety of intake configurations. Another commenter further noted
that it is inappropriate for EPA to state that the performance
standards are achievable when the standards are undefined. One
commenter suggested that EPA has not shown that the performance
standards can be met at a reasonable cost. Other commenters stated that
reductions may be achievable for only some species of life stages and
that this approach may not account for natural fluctuations in
population. These commenters claim that implementing a uniform,
nationwide performance standard would be exceedingly complex and
subject to site-specific factors that could significantly affect the
performance of the control technology. Several commenters noted that,
for these reasons, EPA should strongly consider a site-specific
approach to implement 316(b), including a risk assessment-based
approach as suggested by one commenter.
A number of commenters stated that the performance standards would
be best implemented as a set of goals or as a best management practice.
These commenters contended that in view of the wide variety of
environmental conditions at facilities, including natural fluctuations
in populations, compliance with a national performance standard will be
difficult. They claimed that by using the standards as a goal instead
of a condition in the permit, a facility can have greater certainty as
to its compliance status. Similarly, several commenters suggested that
the permit contain conditions requiring proper technology selection,
installation, maintenance, and adjustments instead of requiring
compliance with the performance standards.
Commenters were divided over the concept of a range for the
performance standards. Some commenters supported the range, arguing
that a facility can achieve some reduction within the range and still
be compliant, and others were opposed, claiming that a range of
performance promotes uncertainty in determining compliance. Some
commenters also noted that, by giving a facility a range of
performance, EPA is encouraging performance in the lower end of the
range and therefore not meeting the definition of ``best technology
available.''
Several commenters noted that consideration of entrainment
mortality is important to correctly determine compliance. One commenter
also noted that natural events will affect compliance, such as moribund
fish being swept into an intake or heavy debris loads following a storm.
As in the Phase I rule, EPA is setting performance standards for
minimizing adverse environmental impact based on a conceptually simple
and certain metric-reduction of impingement mortality and entrainment.
EPA recognizes however, that there are challenges associated with
measuring such reduction due to fluctuations in waterbody conditions
(species abundance, composition, etc.) over time. While it is
relatively straightforward to measure impingement mortality and
entrainment reductions relative to past levels, it is more difficult to
determine reductions relative to what would have occurred in the
absence of control technologies if waterbody conditions change after
the technologies are installed. Data provided with the proposed rule
(DCN 4-0003) indicate that there is substantial variability over time
in the numbers and species mix of impinged and entrained organisms at
any given facility. While changes in operational practices and sampling
methods account for some of this variability, the data indicate that
there may be substantial natural variability in waterbody conditions as
well. This natural variability and the changes to species composition
over time may affect the ability of these technologies to perform
consistently at a certain level. This is one reason why EPA has
provided a compliance determination alternative under which facilities
comply with the construction, operational, maintenance, monitoring, and
adaptive management requirements of a Technology Installation and
Operation Plan (or Restoration Plan) designed to meet the performance
standards, rather than having to demonstrate quantitatively that they
are consistently meeting them, which may be difficult in the face of
natural variability. Under this approach, if monitoring data suggest
that performance standards are not being met despite full compliance
with the terms of the Technology Installation and Operations Plan or
the Restoration Plan, the Plan will need to be adjusted to improve
performance.
EPA has provided examples of facilities in different areas of the
country sited on different waterbody types that are currently meeting
or exceeding the performance standards promulgated today. The ability
of these facilities to attain similar performance standards suggests
that while site-specific factors can influence the performance of a
given technology, it is the exceptional situation where no design or
construction technology is capable of meeting the performance
standards. EPA opted for performance ranges instead of specific
compliance thresholds to allow both the permittee and the permitting
authority a certain degree of flexibility in meeting the obligations
under the final Phase II rule. EPA does not believe that performance
ranges promote uncertainty. Instead, EPA has selected performance
ranges out of the recognition that precise results may not be able to
be replicated in different waterbody types in different areas of the
country. EPA disagrees with the comment that it has not shown that the
performance standards can be met at a reasonable cost. The cost and
economic impact analysis for the final rule supports EPA's
determination that the final rule, including the performance standards,
are economically practicable at a national level. In addition, the
final rule includes a site-specific compliance alternative to address
any potential situation where meeting the performance standards, when
evaluated on a facility-specific basis, would result in costs that are
significantly greater than the costs

[[Page 41614]]

considered by EPA, for a like facility in establishing the standards,
or that are significantly greater than the benefits of compliance with
the applicable performance standards at the facility. Thus, the final
rule ensures that the costs of the rule are economically practicable to
the extent required by section 316(b).
In developing the final rule, EPA identified and examined a broad
range of cooling water intake structure technologies and determined, at
a national level, that these technologies support the final performance
standards. EPA notes that, although the performance standards address
all life stages of fish and shellfish, the Director has significant
discretion as to how the performance standards are applied in the
permit. For example, the Director may determine that all species must
be considered or that only representative species are to be considered.
With regard to natural fluctuations in fish and shellfish populations,
and the Technology Installation and Operation Plan compliance scheme
discussed above addresses the concern that natural fluctuations could
impact the level of impingement mortality and entrainment at a given
facility over time. Further, the Director is given considerable
discretion to determine, based on the facility's Comprehensive
Demonstration Study, the appropriate averaging period and precise
metric for determining impingement mortality and entrainment
reductions. Generally, averaging over longer time periods (i.e., a full
five year permit term) can substantially reduce the impact of natural
variability on the determination of whether the performance standards
are being met.
3. Requirements by Waterbody Type
As stated in section C. 2, different performance standards would
apply for facilities located upon different waterbody types. Comments
were received both in support of and against basing performance
standards in part on waterbody type. Some commenters did not support
the withdrawal threshold of 5 percent of the mean annual flow for
facilities on freshwater rivers, as the organisms at an intake may not
be subject to entrainment or may not be evenly distributed. Some State
commenters supported the withdrawal threshold for freshwater rivers,
and another suggested correlating the intake flow requirements with the
total flow of the waterbody to better protect smaller flow rivers. One
State commenter generally opposed all of the proposed thresholds on
freshwater rivers as being arbitrary and stated that the regulations
would be more effective by considering the impacts to the population
within the waterbody. For lakes and reservoirs, one commenter opposed
the requirement to not disturb the thermal stratification of the
waterbody, stating that the requirement has not been defined in
sufficient detail, that EPA has presented no evidence that the
disruption is always detrimental, or presented any discussion of
technologies that might mitigate any thermal disturbances. Some
commenters did not support additional controls on the Great Lakes,
stating that the Lakes are not unique and do not require greater
protection. Another State commenter suggested that additional
requirements be implemented for any impaired waterbody.
EPA considers location to be an important factor in addressing
adverse environmental impact and one expressly included in the language
of section 316(b). When cooling water is withdrawn from sensitive
biological areas, there is a heightened potential for adverse
environmental impact, since these areas typically have higher
concentrations of impingeable and entrainable aquatic organisms.
Therefore, the final rule includes performance standards that vary, in
part, by waterbody type. For example, estuaries and tidal rivers have a
higher potential for adverse impact because they contain essential
habitat and nursery areas for a majority of commercial and recreational
species of fish and shellfish. Therefore, EPA believes that these areas
warrant a higher level of control that includes both impingement and
entrainment controls.
EPA also included performance standards for other waterbody types.
Facilities withdrawing greater than 5% of the mean annual flow from
freshwater rivers and streams will have additional requirements. As
described in the Phase I proposed rule (65 FR 49060) and the Phase II
NODA (66 FR 28853), the withdrawal threshold is based on the concept
that absent any other controls, withdrawal of a unit volume of water
from a waterbody will result in the entrainment of an equivalent unit
of aquatic life (such as eggs and larval organisms) suspended in that
volume of the water column. Thus, facilities withdrawing greater than
5% of the mean annual flow from freshwater rivers and streams may
entrain equal proportions of aquatic organisms. Freshwater rivers and
streams are somewhat less susceptible to entrainment than certain other
categories of waterbodies and, therefore, the final rule limits the
requirement for entrainment control in fresh waters to those facilities
that withdraw the largest proportion of water from freshwater rivers or
streams. EPA has promulgated special requirements for facilities
withdrawing from lakes and reservoirs. Facilities tend to withdraw from
the deeper portions of lakes and reservoirs, as these areas hold the
coolest water. The rule specifies that the intake flows must not
disturb the natural stratification (thermoclines) in the waterbody, as
this may disrupt the composition of dissolved oxygen and adversely
affect aquatic species. While such disruption is often detrimental,
this additional performance standard does not apply where the
disruption does not adversely affect the management of fisheries.
Intake location, the volume of water withdrawn, and other design
technologies can be used to address this requirement. Facilities
located on the Great Lakes are also subject to additional requirements
because these waterbodies have areas of high productivity and sensitive
habitat and in this respect have an ecological significance akin to
estuaries.
4. Approved Design and Construction Technology Option
In response to comments on the burden to facilities and permit
writers, EPA is including in the final rule an approved design and
construction technology option (previously referred to as a
``streamlined technology option'' or ``pre-approved technology
option'') for facilities in certain locations. Under this option, a
facility installing a specified technology would be subject to reduced
application requirements, including a reduced Comprehensive
Demonstration Study. In addition, the final rule sets forth criteria
that State Directors may use to identify and approve additional
technologies.
Nearly all commenters supported the concept of an approved design
and construction technology option as a positive step in facilitating
implementation of section 316(b). Several commenters added that this
option should not preclude the use of cost tests, restoration measures
or the use of other approaches. One commenter opposed the approved
design and construction technology option, arguing that the selection
of only one or two technologies oversimplifies the complexity of
waterbodies, and that the approach would not be sufficiently protective.
Some commenters agreed that the wedgewire screen should be an
effective technology in certain situations and noted that EPA should
specify screen slot openings in the approved design

[[Page 41615]]

and construction technology option. One of the commenters stated that
research on the wedgewire screen suggests that the technology should
easily meet the impingement requirements, but that further research may
be necessary to confirm the effectiveness for entrainment reductions
with varying slot openings.
Some commenters offered suggestions for additional changes to the
option, such as developing scientifically sound, peer-reviewed criteria
for evaluating pre-approved technologies, identifying the technologies
in technical guidance documents as opposed to the regulation, and
continuing to allow restoration measures. Some commenters also
suggested specifying that any monitoring performed would be
informational in nature and not affect the facility's compliance
status, or that facilities only be required to ``substantially meet''
the stated goals. Other commenters suggested expanding the scope of the
approved design and construction technology option to include
prescribed operational or restoration measures or preapproved
technologies for intakes located on man-made cooling reservoirs.
A facility that chooses to comply under the pre-approved technology
option should not, in addition, need to employ restoration measures.
The intent of the pre-approved technology compliance alternative is to
provide a means to reduce the application and information collection
requirements for facilities that are able to meet performance standards
through a technology that is proven to meet performance standards for
impingement mortality and entrainment in most cases. A facility that
chooses to comply by meeting the conditions specified at Sec.
125.99(a), therefore, should be able to achieve the performance
standards for both impingement mortality and entrainment. Facilities
that propose an alternative technology for consideration as a pre-
approved technology under Sec. 125.99(b) are encouraged by EPA to
propose technologies to the Director for approval that are capable of
meeting performance standards for both impingement mortality and
entrainment with a high degree of confidence. However, a situation
could arise where a pre-approved technology only meets performance
standards for impingement mortality or entrainment. In such cases,
facilities that choose to comply using an approved design and
construction technology that only met a subset of applicable
performance standards could either employ other (1) design and
construction technologies, operational measures and/or restoration
measures or (2) request a site-specific requirements for the remaining
performance standards based on either the cost-cost or cost-benefit test.
Some commenters stated that EPA should specify the wedgewire screen
slot opening size. EPA disagrees that it should specify a uniform
screen slot opening size for all facilities that choose the approved
design and construction technology alternative. The rule states in
Sec. 125.99(a)(1)(iv) that the screen slot size must be appropriate
for the size of eggs, larvae, and juveniles of all fish and shellfish
to be protected from entrainment at the site. Because the species to be
protected differ among locations, the slot sizes will need to be
tailored to the sizes of the various assemblages of species at each
site. EPA therefore has determined that the Director should determine
the appropriate design criteria, such as wedgewire screen slot opening
size, on a case-by-case basis. Since no impingement mortality and
entrainment Characterization Study is required under this streamlined
option, EPA expects that this determination would be based on available
information regarding species and life-stage composition of organisms
within the receiving waterbodies. Facilities may wish to assemble
available data and propose a screen slot opening size for the
Director's consideration.
Some commenters stated that EPA should develop peer-reviewed
criteria for evaluating pre-approved technologies other than the
wedgewire screen technology described in Sec. 125.99(a). EPA disagrees
that it needs to develop specific criteria for evaluating pre-approved
technologies. EPA believes that the Director is best equipped to
determine the most appropriate technologies for approval in their
jurisdictions, since these Directors are most familiar with the site-
conditions and intake configurations of the facilities within their
jurisdictions, and have physical access to the facilities. Under Sec.
125.99, EPA has set forth a broad framework outlining the types of
information that the permitting authority would need to evaluate
specific technologies, including design criteria of the proposed
technology, site characteristics and conditions necessary to ensure
that the technology will meet the performance standards, and data to
demonstrate that the facilities in the Director's jurisdiction with the
proposed technology and site conditions will be able to meet the
performance standards in Sec. 125.94(b). EPA believes that the
Directors will be able to evaluate the data and make determinations as
to whether the proposed technologies are suitable for use as approved
design and construction technologies in their jurisdictions. However,
EPA is requiring that the Director take public comment on such
determinations prior to finalizing them.
In answer to comments that EPA should not require facilities
choosing the approved design and construction compliance alternative to
demonstrate through monitoring that they meet the applicable
performance standards, EPA disagrees. EPA believes that verification
monitoring is very important because, while the pre-approved
technologies are designed to meet the performance standards in most
cases, the actual efficacy of any technology will be affected by site-
specific circumstances and conditions, as well as proper operation and
maintenance of the technology. For this reason, EPA believes that it is
necessary and appropriate for these facilities to prepare a Technology
Installation and Operation Plan that describes how they will operate
and maintain the technology and assess success in meeting the
performance standards, as well as adaptive management steps they will
take if the technology does not perform as expected. They must also
propose a Verification Monitoring Plan to describe the monitoring they
will perform to support their performance assessment. EPA notes that
facilities that select the approved technology alternative have
significantly reduced application and information collection
requirements relative to facilities that comply under other alternatives.
One commenter stated that the approved design and construction
technology alternative will not be sufficiently protective given the
complexity of waterbodies. While EPA does not agree with this comment,
EPA recognizes that the efficacy of a given technology will be affected
by site-specific conditions, such as biological and chemical factors in
the waterbody. Because the efficacy of the technology will be affected
by such site-specific conditions, EPA has required all facilities that
choose to comply using the approved design and construction technology
compliance alternative to submit a Technology Installation and
Operation Plan and a Verification Monitoring Plan, and to determine if
they are meeting the applicable performance standards through
monitoring, and adjust their operations accordingly if they are not.
EPA believes, based upon extensive research, that the majority of
facilities with the appropriate site conditions, and that have
installed and properly operated

[[Page 41616]]

and maintained submerged cylindrical wedgewire screen technology,
should be capable of meeting the performance standards set forth in
Sec. 125.94(b). For facilities that fail to meet performance standards
through the approved design and technology alternative, the Director
may amend the facility's permit to require the use of additional design
and construction technologies, operational measures, and/or restoration
measures, in order to meet the performance standards, or if
appropriate, issue a site-specific determination of BTA.
5. Capacity Utilization Threshold
In the proposed rule, EPA introduced reduced requirements for
facilities that are typically not operating year-round and would
therefore bear a proportionately higher cost to comply with the rule.
EPA proposed that facilities that operate less than 15% of the time
(also known as peaking facilities) would only be subject to impingement
reductions, regardless of the waterbody type upon which the facility is
located.
Generally, commenters supported the concept of reduced requirements
for peaking facilities. However, commenters stated that EPA must
further refine the definition of peaking facilities and in many cases
suggested that EPA adopt the United States Department of Energy's
definition of capacity utilization. Aspects of EPA's definition on
which commenters requested clarification included how to measure the
capacity rate (per intake, per facility, per generating unit, etc.),
the time frame for determining historic utilization rates, and the
definition of ``available'' with respect to how to calculate the
capacity utilization rate. One commenter further suggested that EPA
allow an expanded definition (i.e., a higher capacity utilization rate)
for facilities that typically operate in periods of low abundance of
entrainable organisms. One commenter further requested that the reduced
requirements for peaking facilities be extended to account for future
operations at the plant as well. Another commenter expressed concern
over the definition of the threshold, as the operational time for the
facility could still coincide with periods of high abundances of
organisms and therefore still result in significant entrainment. One
commenter opposed the threshold, stating it could encourage facilities
to reduce electricity production in order to have less stringent
requirements and therefore impact energy production, prices, and energy
supply nationwide.
State commenters generally supported the concept, but were divided
as to the threshold utilization rate; some States preferred a lower
threshold and one mentioned that it would prefer a higher threshold.
One State did not support the reduced requirements for peaking
facilities, noting that the time frame in which the facility operates
may be more important than the volume withdrawn. Another State
suggested that restoration or mitigation also be required of peaking
facilities.
EPA has identified peaking facilities in the final Phase II rule as
those facilities that operate at an overall capacity of less than 15
percent. EPA believes that facilities operating below 15% should be
subject to less stringent compliance requirements relative to a typical
base load facility. The threshold of 15% is based on these facilities'
reduced operating levels, low potential for entrainment impacts, and
consideration of economic practicability (see, 67 FR 17141). To address
commenter concerns, EPA has modified the capacity utilization
definition to say that the capacity utilization rate applies only to
that portion of the facility that generates electricity for
transmission or sale using a thermal cycle employing the steam water
system as the thermodynamic medium. The Agency has amended the
definition of the capacity utilization rate threshold to remove the
term ``available'' from the definition, as requested by comments.
Further, the Agency has allowed for calculation of the capacity
utilization rate on an intake basis, when the intake is exclusively
dedicated to a subset of the plant's generating units, and for
determination of the capacity utilization rate based on a binding
commitment of future operation below the threshold.
Peaking facilities are typically older, less efficient generating
units. Because the cost of operation is higher, peaking facilities are
generally employed when generating demand is greatest and economic
conditions justify their use. Such usage is typically a fraction of the
unit's overall generating capacity and represents significantly less
cooling water used when compared to the design intake capacity. This
would appear to obviate the need for entrainment controls for the facility.
Most peaking facilities are employed during the highest electrical
demand period, typically mid-winter or mid-summer. It is generally
accepted that while these seasons can sometimes be associated with a
higher abundance of aquatic organisms or spawning events, mid-winter
and mid-summer are not typically considered to be critical periods for
aquatic communities. Given these operating conditions, generally
entrainment controls would appear to be an unnecessary cost for these
facilities because the losses, while they occur, would have minimal
adverse environmental impact.

D. Site-Specific Approach

Past implementation of section 316(b) often followed the draft
guidance document published in 1977, which promoted a largely site-
specific approach. In this rulemaking, EPA is establishing national
performance standards for best technology available for minimizing
adverse environmental impacts in connection with cooling water intake
structures. Many comments were received regarding a site-specific
approach to implementation.
1. Approach
Many commenters favored a site-specific approach in place of
national performance standards. Many of the commenters cited a need for
flexibility to comply with the regulations, and stated that only a
site-specific approach can represent the best framework for addressing
site-specific environmental impacts in a cost-effective manner.
Commenters also favored an approach that resembles current practices
for implementation of 316(b), in which site-specific determinations are
made without reference to national performance standards.
Some commenters did not support the concept of a site-specific
rule. One commenter stated that it does not fulfill a national standard
and allows a more lenient application for some facilities. Another
commenter added that a site-specific approach favors industry, as the
resources of the regulators and interested public groups to respond to
information-intensive site-specific determinations are limited. Some
States also expressed concern over a site-specific approach, as it
could be less stringent than the present approach, as well as more
burdensome. Some other States expressed support for site-specific
approaches.
In the final rule, EPA has established national performance
requirements for the reduction of impingement mortality and entrainment
that reflect best technology available to minimize adverse
environmental impact for Phase II existing facilities, and has
authorized five different compliance alternatives to achieve those
standards, including a site-specific alternative. Thus, the Agency has
provided both clear national standards of environmental protection and
sufficient flexibility to allow for the selection of cost-efficient
approaches to compliance and permit administration. In addition, under
certain compliance alternatives, Phase II existing facilities

[[Page 41617]]

can use restoration measures, either in lieu of, or in combination with
technologies and/or operational measures, when design and construction
and/or operational measures alone are less feasible, less cost-
effective or less environmentally desirable. This provides additional
flexibility to permittees and permitting agencies. Finally, as
discussed in Section VII of this preamble, EPA does not agree that all
aspects of certain site-specific approaches effectively fulfill the
requirements of section 316(b).
2. Existing Programs and Determinations
Several commenters stated that there is already a successful 30-
year history of implementing section 316(b). Some commenters noted that
many States currently implement 316(b) using a site-specific approach
and that these programs should be allowed to continue, including any
restoration or enhancement programs the States have established. Others
stated that existing BTA determinations (conducted using a site-
specific approach) should remain valid.
EPA acknowledges that some States' existing programs and
determinations have been successful in reducing adverse environmental
impacts to waters of the United States associated with cooling water
intake structures. EPA disagrees, however, that all existing BTA
determinations should remain valid. Some historical BTA decisions may
be based on physical, chemical or biological conditions that are no
longer relevant at the site, or reflect BTA technology that is outdated
and would not meet the performance standards set forth in today's final
rule. However, the final rule provides for EPA approval of alternative
State program requirements where such State NPDES requirements will
result in environmental performance within a watershed that is
comparable to the reductions of impingement mortality and entrainment
that would otherwise be achieved under Sec. 125.94. (see Sec.
125.90(c)). Thus, this rule provides a reasonable degree of flexibility
for States to implement existing effective programs. In Sec.
125.94(e), States are also allowed to establish more stringent BTA
requirements if necessary to comply with State, tribal, or other
federal law.

E. Implementation

1. Calculation Baseline
Numerous commenters indicated that they were unclear as to how to
calculate the baseline conditions for impingement mortality and
entrainment. Some commenters suggested that the calculation baseline
should reflect unrestricted operation at full design capacity year-
round to avoid continually changing the baseline, since maintenance and
operational schedules change over time. Another commenter added that
the baseline definition must specify that data be based upon maximum
operation of a given facility, to avoid allowing a facility to withdraw
more water than it has been permitted for (based on an averaged flow).
Other commenters claimed that the use of a calculation baseline was
problematic due to the difficulties of extrapolation between localities
and waterbody types. One commenter asserted that the calculation
baseline should reflect current local environmental conditions, not
historical or hypothetical future conditions and should specify the
level of operation that would be maintained in the absence of
operational controls implemented for reducing impingement and entrainment.
Many commenters supported an ``As Built'' alternative approach
where a facility would calculate entrainment reduction based on
historical measurements before installation of new technology or
sampling immediately in front of the new technology and enumerating the
organisms of a size that will pass through a standard \3/8\-inch
screen. Several commenters agreed that the use of historical data would
aid in estimating the calculation baseline while others cautioned
against the use of historical data that may not be relevant to the
current conditions. One commenter disagreed with EPA's statement that
the baseline could be estimated by evaluating existing data from a
nearby facility; the commenter asserted that site-specific factors
determine whether an organism will interact with a cooling water intake
structure and/or survive the interaction. Overall, most commenters
recommended that EPA allow the Director broad discretion and
flexibility in evaluating the calculation baseline due to varying site
conditions.
The calculation baseline provides a standard intake configuration
by which facilities can determine relative reductions in impingement
and entrainment. EPA acknowledges the numerous comments on the proposed
definition and has refined the definition to provide more clarity in
implementing this concept. For example, the definition in the proposed
rule incorporated a shoreline intake structure. In the final rule, the
definition has been clarified to specify a \3/8\-inch mesh traveling
screen at a shoreline intake structure. Based on available data that
indicate this is a common intake structure configuration at Phase II
existing facilities, EPA designated a \3/8\-inch screen as the standard
mesh size against which reductions will be calculated. Similarly, the
assumption of no impingement or entrainment controls in the definition
in the proposed rule has been clarified to describe an intake where the
baseline operations do not take into include any procedures or
technologies to reduce impingement or entrainment. EPA recognizes that
some facilities may have control technologies in place that already
reduce impingement or entrainment; the final calculation baseline would
allow credit for such reductions. Additionally, EPA further clarified
the definition to include the potential data sources that may be used
in defining the calculation baseline, such as historical data, data
collected at nearby locations, or data collected at the facility. EPA
is authorizing the use of existing biological data in determining the
calculation baseline to minimize the impacts to facilities, provided
that the data are representative of current facility and/or waterbody
conditions (as applicable) and were collected using appropriate quality
control procedures.
EPA has further clarified the definition to provide that the
calculation baseline may be based on an intake structure located at a
depth other than a surface intake if the facility can demonstrate that
the standard definition (i.e., a shoreline surface intake) would
correspond to a higher baseline level of impingement mortality and/or
entrainment.
EPA chose not to incorporate operating capacity into the
calculation baseline, as the definition is not dependent upon intake
flow volumes. EPA has chosen to adopt the ``as built'' approach: as
stated in Sec. 125.93, a facility may choose to use the current level
of impingement mortality and entrainment as the calculation baseline.
EPA recognizes that this definition cannot address the variety of
intake configurations and other conditions at all facilities and
therefore cannot define the calculation baseline in all settings.
However, EPA believes that the calculation baseline in the final rule
is clear and straightforward to implement, and allows for proactive
facilities (i.e., those with control technologies, operational
procedures, or restoration measures already in place) to take credit
for existing measures.
2. How Will Attainment of the Standards Be Measured?
At the time of the NODA, EPA was evaluating several approaches for

[[Page 41618]]

measuring success in meeting performance standards. EPA therefore
requested comments on whether performance should be measured based on
an assessment of the impacts to all fish and shellfish species (``all-
species approach'') or to fish and shellfish from only a subset of
species determined to be representative of all the species that have
the potential to be impinged or entrained (``representative species
approach''). These comments are addressed under section 2. a below.
Several terms to describe the representative species approach have been
used historically. To avoid confusion among the terms ``representative
indicator species,'' ``representative important species,'' and
``critical aquatic organisms,'' EPA is adopting the term
``representative species'' for the purpose of simplicity in this
section. EPA also requested comment as to whether enumeration of
organisms or biomass should be used as the metric for measuring success
in meeting the performance standards. These comments are addressed in
section 2. b below. With regard to counting absolute numbers of
organisms, EPA also requested comment on the option of counting
undifferentiated organisms (i.e., counting without specifying taxonomic
identification).
After attempting to select optimal approaches for both the scope
and metric to use in determining attainment of the performance
standards, EPA has determined site-specific factors such as biological
assemblage at the site, intake location, and waterbody type must be
factored into decisions regarding how to evaluate attainment. EPA has
therefore decided that, in its Verification Monitoring Plan
(125.95(b)(7)), the facility must propose, among other things, the
parameters to be monitored for determining attainment. The Director
will be best suited to review and approve proposed parameters for each
facility on a case-by-case basis.
a. Scope of Evaluation: All-Species Consideration vs. Representative
Species
Several commenters supported the use of a representative species
evaluation, as opposed to the all-species evaluation, as the most
practical approach in many cases. Another commenter stated that even
with the representative species approach, factors other than simply
numeric reduction in impingement mortality and entrainment must be
considered when determining attainment. On the other hand, one
commenter stated that an ``all species'' approach could make compliance
demonstrations simpler and somewhat less expensive so long as the
taxonomic identity of collected organisms is not required. The
commenter noted that this would not be appropriate, however, in cases
where taxonomic identification is needed, such as where eggs and larval
stages are converted to age-1 equivalents.
As part of the representative species inquiry, EPA also requested
comment on whether 10 to 15 species might be an appropriate number of
representative species to protect all species and ecosystem functions
at a facility. One commenter responded, stating that 15 was too large a
number. This commenter suggested that a demonstration should focus on
the four or five species and add to the list only if there was another
species of special concern.
In response to the commenter who suggested that EPA should evaluate
factors other than reduction in numbers of organisms impinged or
entrained, EPA has selected several means by which to determine
compliance with section 316(b) requirements. For facilities that choose
to demonstrate compliance with the performance standards, the metric
that will be used to evaluate compliance with the performance standards
is the facility's reduction of impingement mortality and entrainment
through the installation of design and control technologies and/or
operational measures. For these facilities, compliance may then be
measured against a facility's calculation baseline, which the facility
estimates and submits with its permit application package. The
calculation baseline is defined at Sec. 125.93. For facilities that
choose to use compliance with the terms of a Technology Installation
and Operation Plan or Restoration Plan to determine compliance, the
degree of success in meeting performance standards is still an
important criteria for determining if adaptive management is needed,
but it would not be the basis for determining compliance. For
facilities that choose to use restoration measures, attainment of
performance standards will be based upon whether the production of fish
and shellfish from the restoration measures is substantially similar to
the level of fish and shellfish the facility would achieve by meeting
the applicable impingement and/or entrainment requirements. If a
facility has been approved for a site-specific determination of best
technology available, the Director will establish alternate
requirements accordingly. EPA expects that a variety of factors will be
considered in determining the appropriate compliance option for a
facility, such as waterbody type, intake location, percentage
withdrawal of mean annual flow of rivers or streams, capacity to upset
thermal stratification in lakes, a facility's calculation baseline, and
the appropriateness of existing or proposed protective technologies or
measures.
EPA agrees that a single approach may not be optimal in all cases.
The Agency has therefore not prescribed the methods (including a
metric) for assessing success in meeting performance standards in
today's final rule. Rather, the Director must determine whether a
clearly defined all-species approach or representative species approach
is appropriate on a case-by case basis, based upon the information and
proposed methods presented by the facility. The Director may choose to
require evaluation of all species or of certain representative species.
In response to comments regarding EPA's suggested number of
representative species, the facility will propose the number of species
to monitor, as well as decisions regarding species and life stages to
monitor, for review and approval by the Director as part of
Verification Monitoring Plan (125.95(b)(7)), Technology Installation
and Operation Plan (125.95(b)(4)(ii)), and, if applicable, the
Restoration Plan required at 125.95(b)(5). As such, in cases where the
representative species approach is applied, the Director may approve
the number of representative species proposed by the facility, based
upon the specifics of the waterbody from which the facility is
withdrawing, the percentage volume of water withdrawn relative to the
freshwater river or stream (as applicable), and other factors.
b. Metric: Absolute Counts vs. Biomass
EPA requested comment as to whether species impinged or entrained
may be measured by counting the total number of individual fish and
shellfish, or by weighing the total wet or dry biomass of the
organisms. In response to the use of absolute counts of organisms or
biomass (weight) for determining compliance, commenters offered a
variety of views. Regarding the use of biomass as a metric, one
commenter expressed that measuring either biomass or total
undifferentiated numbers of species would be appropriate for cases
where restoration was the chosen option, since restoration will never
result in one-for-one species compensation. Several commenters pointed
out a disadvantage of counting numbers of organisms: early life stages
will dominate the numbers and thereby dominate the compliance

[[Page 41619]]

determination, even though most of them would have suffered large
natural mortality losses even without entrainment. To correct for this,
a few commenters suggested identifying the organisms and converting
them to an equivalent unit to ensure that each life stage is
appropriately weighed. Specifically, one commenter suggested converting
to equivalent juveniles, when measuring organisms by biomass, to
correct for the fact that the count will be dominated by later larval
stages even though the number of these organisms per unit weight will
be small compared to eggs and larvae. This commenter continued that
this approach would be useful for forage species, since biomass is an
appropriate measure of the organisms that serve as a food source for
commercial and recreational species.
EPA received many comments regarding the need for flexibility in
determining the appropriate metric to use to determine attainment of
performance standards. Several commenters asserted that the rule should
allow flexibility in the approach and the choice of metric should
factor in whether one is assessing impingement mortality, entrainment
or both; species and life stages affected, and compliance option.
EPA has decided to give the Director the authority to review and
approve methods of determining compliance proposed by the facility as
part of the Verification Monitoring Plan. (125.95(b)(7)), Technology
Installation and Operation Plan (125.95(b)(4)(ii)), and, if applicable,
the Restoration Plan required at 125.95(b)(5). Thus, the facility will
propose, and the Director will review and approve, species and life
stages of concern. The Director may choose to require evaluation of all
species or of certain indicator species; or the Director may elect to
verify attainment of performance standards using biomass as a metric.
EPA believes that as each situation will be somewhat unique, it should
be left to the facility to propose and the Director approve the
appropriate unit, biomass or actual counts.
c. Other Means of Determining Attainment of Performance Standards
Several commenters also suggested that EPA should allow for the use
of existing data for measuring attainment in lieu of requiring existing
facilities to collect and develop new data. Commenters also suggested
that if a facility currently implements the best technology available
to minimize adverse environmental impact, it should be found in
compliance even if the newly promulgated performance standards are not
being met. Other commenters expressed that a facility should be
considered in compliance even during occurrences of unavoidable
episodic impingement and entrainment events. These commenters stated
that in such unusual circumstances, the facility should be provided
with an exemption from any regulatory actions.
EPA agrees with commenters that under certain circumstances,
facilities' historical data may be sufficient to verify that they are
meeting performance standards, as long as the historical data is
reflective of current operation of the facility and of current
biological conditions at the site. For example, under compliance
alternative 2, a facility may use historical data to demonstrate that
existing design and construction technologies, operational or
restoration measures, meet the performance standards. EPA also believes
that some historical data may be appropriate for determining the
calculation baseline and for characterizing the nature of impingement
and entrainment at the site, and therefore has given the Director the
discretion to determine whether historical data are applicable to
current conditions (see 125.95(b)(1)(ii), 125.95(b)(2)(i), and
125.95(b)(3)(iii)). In addition, a facility that proves, using existing
data, that it has reduced its intake capacity commensurate with closed-
cycle recirculating systems would be considered to be in compliance,
and therefore would not be required to meet the performance standards
for either impingement mortality or entrainment.
After the first permit term, facilities may submit a request for
reduced information collection activities to their Director. Facilities
that are able to demonstrate that conditions at their facility and in
the waterbody from which their facility withdraws surface water are
substantially unchanged since their previous permit application will
qualify for reduced requirements (Sec. 125.95(a)(3)). In all these
cases, historical data are used and required to measure success in
meeting performance standards. However, facilities required to submit a
Verification Monitoring Plan must still submit verification monitoring
data for at least two years following implementation of technologies
and/or operational measures.
Other commenters argued that a facility that is implementing permit
conditions reflecting a historical determination of the best technology
available should be considered in compliance with today's final rule
even if the facility is not meeting performance standards. EPA
disagrees that a historical determination of the best technology
available is appropriate for complying with the requirements set forth
by today's rule. Many historical determinations of the best technology
available are less protective of aquatic organisms and ecosystems than
the standards set by today's rule, and would undermine the national
performance standards that EPA has determined reflect the current best
technology available for minimizing adverse environmental impact.
Furthermore, biological, chemical and physical conditions at the
facilities may have changed since the earlier determinations were made,
and the best technology available determinations may no longer apply.
Many of the historical best technology available determinations are
twenty years old or older and may not correspond with current waterbody
or operating conditions.
The question whether a facility should be considered in compliance
even during occurrences of unavoidable episodic impingement and
entrainment events is left to the Director. At the Director's
discretion, facilities that are generally in compliance, but that
experience an unusual peak of impingement mortality and/or entrainment,
may be considered to still be in compliance on the basis of past good
performance. Moreover, the inclusion of a compliance determination
alternative based on a Technology Installation and Operations Plan in
the final rule also addresses these episodic issues.
d. Monitoring
One commenter stated that monitoring frequencies should be
established to address the inherent variability in the rates in
impingement and entrainment over the seasons of the year. Monthly or
biweekly monitoring is probably appropriate in many cases. The same
commenter stated that standard statistical procedures could be followed
to establish sample sizes needed to establish appropriate levels of
precision in the estimates (e.g., 95% confidence intervals within 15-
25% of the mean). In contrast, another commenter pointed out that
weekly sampling would be necessary to determine compliance, as had been
necessary for the Salem facility. Another commenter suggested that the
most cost-effective way of conducting studies would be over the periods
of peak abundance.
Some commenters stated that facilities should be allowed to cease
monitoring following achievement of the performance standards. Some

[[Page 41620]]

suggested that facilities meeting performance standards through a
closed-cycle cooling system should be exempt from monitoring. Another
commenter disagreed with the two-year monitoring requirement
altogether.
EPA has determined that a uniform averaging period would not be
appropriate; rather, the Director will be best suited to make all such
determinations by evaluating these and other factors for each facility
on a case-by-case basis. The Director will be able to make
determinations regarding averaging periods based upon site-specific
factors, such as biological assemblage at the site, annual and diel
fluctuations in concentration and populations present, and the selected
compliance alternative. EPA disagrees that a facility should cease
monitoring once performance standards are achieved, as site-specific
conditions at any facility are bound to change with time, affecting a
facility's ability to achieve performance standards. EPA agrees that
facilities meeting performance standards through flow reductions
commensurate with closed-cycle cooling should be exempt from monitoring
(see Sec. 125.94(a)(1)(i)). Finally, EPA believes that the two-year
monitoring requirement is appropriate so that any site-specific
variability in impingement and entrainment rates can be detected.
e. Timing
Some States favored flexibility in implementation including
delaying the effective date for permits to be renewed soon after the
rule is finalized. Some commenters suggested that the requirements of
the rule must be timed so that facilities are not forced into a period
of noncompliance because of the time needed to determine, design, and
install new intake technology.
One commenter expressed that implementation schedules are too
strict. Along the same vein, another commenter suggested that EPA
should build flexibility into the implementation schedule so that
facilities are not forced into periods of noncompliance.
Commenters generally wanted to see flexibility in the averaging
periods (time increments for determining success in meeting the percent
reduction or production specified by the performance standards and
restoration requirements in Sec. 125.94,) and a way to tailor the
sampling schedules to the needs of the site. These commenters indicated
that the monitoring should be frequent enough to provide useful
information, but not so intensive as to make the program unnecessarily
costly or time-consuming. Furthermore, several recommended that a
compliance schedule be written into the permits, to allow facilities to
install and test new equipment. Several commenters agreed that
different facilities might require different amounts of time, as
dictated by where they are in the cycle and what their circumstances are.
EPA has provided for time to comply with permitting requirements. A
facility whose permit expires more than four years after the date of
publication of this final rule must submit the required information 180
days before the expiration of their permit. A facility whose permit
expires within four years of the date of publication of this final rule
may request that the Permit Director establish a schedule for
submission of the permit application. Such submission should be as
expeditiously as practicable, but no later than three and one-half
years from the date of publication of this final rule. It is expected
that the time that facilities need to comply with permitting
requirements will be variable, ranging from one year for those not
needing to do an impingement mortality and entrainment study to over
three years for those needing to collect more than one years worth of
impingement and entrainment data.
EPA has also provided that facilities may opt to comply with the
Technology Installation and Operations Plan compliance scheme that
allows facilities who properly implement the Technology Installation
and Operations Plan (or Restoration Plan, as applicable) to be
considered in compliance with the requirements of Sec. 125.94. As
indicated above, the final rule provides the Director the flexibility
to establish an appropriate averaging period to meet the particular
situation present in the waterbody within which the facility is located.
3. Entrainment Survival
EPA invited comment on whether to allow Phase II existing
facilities to incorporate estimates of entrainment survival when
determining compliance with the applicable performance standards.
Commenters responded with numerous comments regarding survival with
respect to the performance standards as well as comments regarding
EPA's assumption of zero percent entrainment survival (100 percent
mortality) in the benefits assessment for today's rule.
Some commenters opposing the zero percent survival assumption
argued that in the event a facility can demonstrate entrainment
survival, it should be awarded credits towards meeting performance
standards. EPA disagrees. Today's final rule sets performance standards
for reducing entrainment rather than reducing entrainment mortality.
EPA chose this approach because EPA does not have sufficient data to
establish performance standards based on entrainment survival for the
technologies used as the basis for today's rule. If EPA had
incorporated entrainment survival into any of its conclusions regarding
the appropriate performance standards, then the actual performance
standard would most likely have been higher.
Many commenters argued that in many cases organisms survive
entrainment and the zero percent survival assumption was too
conservative. Some commenters suggested that EPA was biased in its
approach to entrainment survival. For example, one commenter stated
that EPA was biased as a result of relying heavily on old entrainment
survival literature.
Based on its review of all entrainment survival studies available
to the Agency, EPA believes that its assumption of zero percent
survival in the benefits assessment is justified. The primary issue
with regard to the studies EPA reviewed is whether the results can
support a defensible estimate of survival substantially different from
the value zero percent survival assumed by EPA. The review of the
studies has shown that while organisms are alive in some of the
discharge samples, the proportion of the organisms that are alive in
the samples is highly variable and unpredictable on a national basis.
In addition, some studies contain various sources of potential bias
that may cause the estimated survival rates to be higher than the
actual survival rates. For these reasons, EPA believes the current
state of knowledge does not support reliable predictions of entrainment
survival that would provide a defensible estimate for entrainment
survival above zero at a national level. However, today's final rule
does allow facilities to use the results of a well-constructed, sites-
specific entrainment survival study, approved by the Director, in their
benefits assessments when seeking site-specific entrainment
requirements. The permitting authority must review and accept the study
before the results may be incorporated into the benefits assessments.
In cases where there is uncertainty in the survival rates, permitting
authorities may want to specify that benefits be presented as a range
that reflects this uncertainty.

[[Page 41621]]

4. Comprehensive Demonstration Study (CDS)
a. Requirements and Burden
The majority of commenters expressed two concerns regarding the
CDS: (1) it was too burdensome and costly, and the volume of
information required was too overwhelming, and (2) several components
required clarification. These commenters generally suggested that the
costs of such a study were underestimated, and many indicated that the
cost estimates for completing the CDS contained misleading or incorrect
information. Commenters indicated that the information required for
completing the CDS was similar to the data that would be needed for
implementing a purely site-specific approach and was therefore overly
burdensome. Commenters suggested that EPA require a more simplified
demonstration study or waive the requirement for facilities that select
one of the approved technologies. Some commenters suggested, in
general, that costs could be greatly reduced by streamlining this
process, for example, by exempting facilities from certain components
based on (1) facilities that have proven that they are not harming the
aquatic community, and (2) facilities for which there exists relevant
historical data.
Several States anticipated that the majority of their facilities
were likely to choose the site-specific compliance alternative, and
indicated that a rule that requires cost/benefit analyses for many
decisions would be difficult to administer and require significant
resources to implement. They claimed that the site-specific performance
standards compliance option would impose a substantial review burden
and would require specialized expertise. Some States questioned whether
existing permitting staff resources over the first 5 years will be
sufficient to review material and develop permit requirements.
Many commenters suggested that EPA could lower costs by
streamlining the CDS, exempting facilities that are not causing adverse
environmental impact or have historical data, and waiving the
monitoring components for facilities that have installed approved
technologies.
EPA believes that many efficiencies have been added to the rule
since the proposal and the NODA to address concerns that the CDS is too
burdensome and costly. First, EPA has provided five compliance
alternatives to choose from, one of which allows a facility to install
an approved design and construction technology with minimal CDS
requirements. In addition, facilities with design intake flow
commensurate with closed-cycle recirculating systems are exempt
entirely from the CDS; facilities may only have to submit partial CDS
information if they have reduced their design intake velocity to less
than or equal to 0.5 feet per second and are only required to meet
requirements as they relate to reductions in entrainment. In addition,
requiring an early submission of the Proposal for Information
Collection allows the Director to potentially minimize the amount of
information required by the facility. Also, by allowing the use of
historical data, EPA has minimized costs for many facilities. In the
cases where new studies are required, EPA has given the permittee and
the Director discretion to set conditions for the studies which will
not be overly burdensome. Facilities may also reduce costs incurred
through the information collection process in subsequent permit terms
by submitting, one year prior to expiration of the existing permit, a
request for reduced permit application information based on conditions
of their cooling water intake structure and waterbody remaining
substantially unchanged since the previous permit issuance.
One commenter expressed concern that historical data should not be
allowed in the development of the CDS, as it may not accurately reflect
current conditions. EPA believes that some historical data may be
appropriate for determining the calculation baseline and for
characterizing the nature of impingement and entrainment at the site,
and therefore has given the Director the discretion to determine
whether historical data are applicable to current conditions. EPA
expects to provide guidance to Directors to help them make
determinations about historical data submitted by facilities.
Historical data will not be used to determine attainment of performance
standards; this will be verified through a monitoring program approved
by the Director.
b. Timing of Submitting Information
Commenters submitted a variety of opinions about timing. Generally,
most favored limiting the submittal of CDS components to a frequency
equal to or greater than once every five years (one permitting cycle)
to reduce burden. Another commenter argued that there is no reason to
mandate timing, and that approval of the Director should not be
necessary. Other commenters suggested that a time frame is necessary,
and that the information should be submitted with the renewal
application for a NPDES permit. Numerous commenters asserted that
consultation activities should occur prior to development of the
Comprehensive Demonstration Study; that schedules and requirements
should be specified in the permit for various data collection,
analysis, and application submission activities; implementation
schedules are too strict; and monitoring requirements need
clarification. Yet another commenter suggested to ``start the clock''
with the issuance of the renewed permit. Commenters also indicated that
anywhere from one year to several years might be necessary to verify
success in meeting the performance standards. Several commenters
suggested that given the nature of cooling water intake impacts and the
proposed requirements, section 316(b) permit and BTA determinations
should not be made every five years. Instead, they suggested that one-
time determinations should suffice, or that facilities should be
allowed to rely on previous section 316(b) demonstrations if conditions
remain essentially unchanged. There was also some general confusion as
to when the rule would actually become effective.
In response to the comment that EPA should not request submittal of
CDS components more frequently than every five years or more, EPA has
included a provision whereby a facility may be granted reduced CDS
submittal requirements if it can prove that conditions at the facility
and in the waterbody have not substantially changed. Facilities will be
required to review whether conditions, such as biological, chemical or
physical conditions, have substantially changed at each permit renewal
cycle. If conditions have changed, facilities will be required to
submit all of the relevant CDS components (those that would be affected
by the changed conditions when they submit the application for permit
renewal.
One commenter stated that the CDS should be a one-time submittal.
EPA disagrees that all components of the CDS should only be researched
and submitted a single time for the lifetime of the facility,
regardless of potential changes in the plant and/or waterbody, because
the natural and anthropogenic changes that occur in waterbodies over
time may affect a facility's ability to meet performance standards
using the current design and construction technologies, operational
measures, and/or restoration measures in place.
In response to comments that timing was not clear in previous
versions of the rule, EPA agrees, and has clarified timing issues in
today's final rule. A

[[Page 41622]]

facility whose permit expires more than four years after the date of
publication of this final rule must submit the required information 180
days before the expiration of their permit. A facility whose permit
expires within four years of the date of publication of this final rule
may request that the Permit Director establish a schedule for
submission of the permit application, but that such submission should
be as expeditiously as practicable, but no later than three and one-
half years from the date of publication of this final rule. It is
expected that the time that facilities need to comply with permitting
requirements will be variable, ranging from one year for those not
needing to do an impingement mortality and entrainment study to over
three years for those needing to collect more than one years worth of
impingement and entrainment data.
Some commenters felt that decisions about the timing of the CDS
submittal should be left to the Director. EPA agrees and has provided
only that the proposal for information collection should be submitted
prior to the start of information collection activities, but that the
facility may initiate information collection prior to receiving comment
from the Permit Director. All other components of the Comprehensive
Demonstration Study must be submitted 180 days prior to permit
expiration except as noted above for the first, permit term following
promulgation of the rule.
5. State Programs
Many States requested that existing State section 316(b) programs
be allowed to be used to meet the requirements of Phase II. One
commenter asserted that the Phase II rule should not overturn past
State section 316(b) decisions at existing facilities that were made on
a site-specific basis and that examined the impacts of the cooling
water intake structure in relation to the specific biological
community. Several commenters stated that EPA did not sufficiently
recognize the work already done by the States in implementing section
316(b). Several commenters do not believe that a State should have to
demonstrate that its program is ``functionally equivalent'' to today's
rule (i.e., that its alternative regulatory requirements achieve
environmental performance within a watershed that is comparable to the
reductions of impingement mortality and entrainment that would
otherwise be achieved under Sec. 125.94).
In response to comments about existing State section 316(b)
programs, EPA believes that Sec. 125.90(c) in today's rule, by
allowing alternative State programs, acknowledges the work already done
by States. In response to the comment that a State should not have to
prove that its program achieves environmental performance comparable to
those that would be achieved under Sec. 125.94, EPA disagrees. While
EPA is giving significant flexibility to permitting agencies at the
State level to determine how and what each facility must protect and
monitor, it believes it is important to set uniform national
performance standards.

F. Restoration

In the proposed rule EPA requested comments on the use of
restoration measures by facilities within scope of the rulemaking (67
FR 17146). EPA received diverse comments. Many commenters supported a
role for restoration measures. Several commenters stated that allowing
restoration provides additional flexibility to those who must comply
with the section 316(b) requirements, and may provide a more cost-
effective means of minimizing adverse environmental impact than
operational measures or design and construction technologies. Other
commenters stated that restoration is a well-accepted concept that
should have a voluntary role in section 316(b) determinations and
constitutes an appropriate means for reducing the potential for causing
adverse environmental impact. Several commenters felt that restoration
could provide significant benefits in addition to compensating for
impingement and entrainment losses. A number of commenters requested
flexibility in the implementation of restoration projects. Some
commenters stated that restoration should not be limited to
supplementing technology or operational measures, but should instead be
allowed as a complete substitute for such measures. However, other
commenters stated that restoration measures should only be used once
every effort has been made to use technology to avoid impacts.
Commenters further stated that restoration should not be mandatory
and that EPA lacks authority under section 316(b) to require it, but
also asserted that it should have an important role in section 316(b)
permitting decisions. Commenters also stated that restoration should
not be considered the best technology available for minimizing adverse
environmental impact because it is not a technology that addresses the
location, design, construction, or capacity of a cooling water intake
structure. However, one commenter argued that past restoration measures
should be considered during a regulator's determination of whether or
not adverse environmental impact is occurring from a cooling water
intake structure.
Other commenters felt restoration should have a limited role or no
role in the context of section 316(b). One commenter wrote that
restoration measures, in the context of section 316(b), are generally
unworkable and that the only measurable restoration method would be
offsetting, in which an applicant stops use of an older intake facility
that does more harm than the proposed one. One commenter stated that
restoration methods must reproduce the ecological value of lost
organisms and that they have not seen restoration projects adequately
successful in this manner in their region of the country. Many
commenters pointed out uncertainties associated with compensating for
those organisms impacted by a cooling water intake structure through
restoration.
Some commenters suggested that, if restoration is allowed, there
should be consultation with other State and Federal resource agencies
to avoid inconsistent approaches and to provide useful information on
the affected waterbody.
Several commenters remarked on EPA's proposal to include
requirements for uncertainty analysis, adaptive management plans, and
peer review in the final rule. Some commenters were in favor of the
requirements and felt that they would enhance restoration measure
certainty and performance. Some commenters were concerned that the
requirements would be overly burdensome or would overly restrict the
restoration measure options available to permit applicants.
EPA has retained restoration in the final rule and believes that
the restoration requirements strike an appropriate balance between the
need for flexibility and the need to ensure that restoration measures
achieve ecological results that are comparable to other technologies on
which the performance standards are based. Facilities that propose to
use restoration measures, in whole or in part, must demonstrate to the
Director that they have evaluated the use of design and construction
technologies and/or operational measures and found them to be less
feasible, less cost-effective, or less environmentally desirable than
meeting the applicable performance standards in whole or in part
through the use of restoration measures. The requirement to look at
design and construction technologies and/or

[[Page 41623]]

operational measures in order to ensure that facilities give due
consideration to the technologies on which the performance standards
are based.
Facilities must also demonstrate that the use of restoration
measures achieves performance levels that are substantially similar to
those that would be achieved under the applicable performance
standards. To address concerns regarding the uncertainty of restoration
measures, EPA has included, among other things, requirements for
uncertainty analysis, adaptive management plans, monitoring, and peer
review, if requested by the Director. Finally, EPA does not believe the
requirements for restoration measures are overly burdensome or
prescriptive as there is a need to ensure that these types of measures
achieve the anticipated environmental benefit. Moreover, under the
rule, facilities are provided at least three and one-half years to
submit their restoration plan and complete the required studies.

G. Costs

1. Facility-Level Costs
Generally, commenters were split regarding the national costs of
the rule. Industry commenters stated that the cost analysis presented
in the proposal underestimated the compliance costs in several facets
of the analysis, including capital costs of the technology, the site-
specific contingencies associated with retrofitting, and facility down
time. Several commenters stated that EPA underestimated the costs for
the monitoring requirements for both the characterization study in the
permit application and for verification monitoring. Other commenters
generally stated the opposite, arguing that EPA overestimated the
compliance costs, especially for installing cooling towers. Some
commenters stated that costs should not be a consideration in section
316(b) determinations.
The Agency significantly revised the approach to developing costs
for the NODA. Those revisions incorporated some of the comments on the
costing methodology for technologies that reduce impingement and
entrainment. EPA's approach to estimating the costs of the requirements
of the final rule reflect the NODA comments on the revised methodology,
and additional analyses. EPA, however, did not revise its estimates for
cooling towers subsequent to the NODA because it decided not to further
pursue this regulatory option for the reasons outlined more
specifically in Section VII. EPA believes that our costing of cooling
tower technology is appropriate as it is based on vendor and
engineering firm experience in developing costs for Phase II
facilities.
2. Market-Level Impacts
Numerous industry commenters stated that EPA significantly
underestimated the impacts to generators, consumers, reliability, and
energy supply. EPA disagrees with these commenters. EPA performed an
analysis of facility- and market-level impacts (including impacts to
generators, consumers, reliability, and energy supply) using the
Integrated Planning Model (IPM[reg]), which has been widely used in air
quality regulations and in other public policy arenas affecting the
electric power generation industry.
One commenter stated that the IPM analysis does not account for the
economic impacts of other regulatory programs. EPA disagrees with this
assertion. The IPM base case accounts for costs associated with current
federal and state air quality requirements, including future
implementation of SO₂ and NO_X requirements of
Title IV of the Clean Air Act and the NO_X SIP call as
implemented through a cap and trade program. Because of its relative
newness, it does not account for costs associated with the Phase I
facility regulations.
One commenter stated that EPA justified the rule by using a cost-
to-revenue comparison and that this comparison neither measures
profitability nor represents the most efficient economic solution for
each facility. As discussed in Section VII. above, the economic
practicability of the Phase II regulation is based on the electricity
market model analyses using the IPM, not the cost-to-revenue ratio. The
cost-to-revenue ratio is only one of several additional measures EPA
used to assess the magnitude of compliance costs.
Some commenters stated that EPA did not properly take account of
differences between utilities, which own and operate rate-based
facilities, and nonutilities, which own and operate competitive
generating facilities. EPA disagrees with this comment. EPA believes
that in a deregulated market, the distinction between utilities and
nonutilities is no longer relevant. While such a distinction may have
been important in the past, when only a few unregulated nonutilities
competed with regulated utilities, this is no longer the case. The
share of Phase II facilities that are owned by unregulated entities has
increased from 2 percent in 1997 to 31 percent in 2001. By the time the
final rule will take effect, even more Phase II facilities that
currently operate under a rate-based system will be operating in a
competitive market. Furthermore, EPA does not believe that nonutilities
will be differentially impacted compared to utilities, even in the case
that deregulation might not have taken effect in all markets by the
time this rule is implemented. Competitive pressures, even in regulated
environments, will reduce the ability of utilities to pass on costs to
their consumers.
Some commenters stated that small or publicly owned facilities may
be significantly affected. EPA disagrees with this statement. EPA's
SBREFA analysis showed that this rule will not lead to a significant
economic impact on a substantial number of small entities (See Section
XIII.C below). While municipally owned facilities bear a relatively
larger compliance cost per MW of generating capacity than do facilities
owned by other types of entities, EPA's analyses show that these costs
are not expected to lead to significant economic impacts for these
facilities.
Some commenters stated that even a requirement to convert all
facilities to closed-cycle cooling would not significantly affect
energy supply and that the costs to facilities and consumers is small
and in some cases, overstated by EPA's analysis. EPA disagrees with
this statement. EPA considered several options that would require some
or all facilities to install closed-cycle recirculating systems and
rejected them on the basis of economic practicability and technological
feasibility. See Section VII.B for more detail on why EPA rejected
closed-cycle recirculating systems.

H. Benefits

In its analysis for section 316(b) Phase II Proposal, EPA relied on
nine case studies to estimate the potential economic benefits of
reduced impingement and entrainment. EPA extrapolated facility-specific
estimates to other facilities located on the same waterbody type and
summed the results for all waterbody types to obtain national
estimates. During the comment period on the proposed rule EPA received
numerous comments on the valuation approaches applied to evaluate the
proposed rule, including commercial and recreational fishing benefits,
non-use benefits, benefits to threatened and endangered species (T&E),
as well as on the methods used to extrapolate case study results to the
national level. EPA tried to address concerns raised by commenters on
the proposal in the revised methodology presented in the NODA and the
final rule analysis.

[[Page 41624]]

1. Benefits Analysis Design
A number of commenters expressed concern about EPA's reliance on a
few case studies and the extrapolation method used for estimating
benefits at the national level for the proposed rule analysis. The
commenters noted that even within the same waterbody type, there are
important ecological and socioeconomic differences among different
regions of the country. To address this concern, EPA revised the design
of its analysis to examine cooling water intake structure impacts at
the regional-scale. The estimated benefits were then aggregated across
all regions to yield the national benefits estimate. These analytical
design changes were presented in the NODA. No major comments were
received on EPA's regional benefit approach as described in the NODA.
2. Commercial Fishing Benefits
During the comment period on the proposed rule EPA received a
number of comments on the methods used to estimate producer surplus and
consumer surplus in the commercial fishing sector. Commenters felt that
the methods overestimated benefits. The new methods used by EPA assume
that producer surplus is 0% to 40% of gross revenues in the commercial
fishing sector. EPA also now assumes that the Phase II rule will not
create increases in commercial harvest large enough to impact prices.
Thus, no consumer surplus impact is estimated. Commenters on the NODA
noted these changes and agreed with them.
3. Recreational Fishing Benefits
A number of comments were received on the recreational fishing
benefits estimates EPA included in the proposal, which primarily relied
on a benefits transfer approach. Benefit transfer involves adapting
research conducted for another purpose in the available literature to
address the policy questions in hand. For more detail on the valuation
methods used in the final rule analysis, see Chapter A9 of the Regional
Analysis document (DCN 6-0003). For three of the nine case studies,
this analysis was supplemented by original revealed preference studies.
Revealed preference methods use observed behavior to infer users' value
for environmental goods and services. Examples of revealed preference
methods include travel cost, hedonic pricing, and random utility models
(RUM). For more detail on the revealed preference methods used in the
final rule analysis, see Chapters A9 and A11 of the Regional Analysis
document (DCN 6-0003). Although most commenters agreed that properly
executed benefits transfer is an appropriate method for valuing
nonmarket goods, they pointed out that original revealed preference
studies that provide site-specific recreational fishing benefit
estimates provide a superior alternative to benefits transfer. In
response to these comments, EPA developed original or used available
region-specific recreational angler behavior models, which provide
site-specific estimates of willingness-to-pay for improvements in
recreational fishing opportunities, to estimate recreational fishing
benefits from reduced impingement and entrainment for seven of the
eight study regions. Chapter A11 of the Regional Analysis document
provides detailed discussion of the methodology used in EPA's RUM
analysis (DCN 6-0003). Due to data limitations, EPA used a benefit
transfer approach to value recreation fishing benefits from reduced
impingement and entrainment in the Inland region.
4. Non-Use Benefits
Numerous comments were received on EPA's proposed non-use benefit
estimates. Most commenters agreed that non-use values are difficult to
estimate and that EPA's estimates of non-use benefits using the 50%
rule was inappropriate because it relies on outdated studies.
Commenters, however, disagreed as to whether EPA had vastly overstated
or underestimated non-use benefits in the proposed Phase II rule analysis.
Some commenters stated that EPA's approach to estimating non-use
benefits of the proposed rule significantly overestimates total
benefits and that ecological benefits of the section 316(b) regulation
are negligible. Other commenters asserted that EPA's benefits estimates
significantly undervalued the total ecological benefits (including use
and non-use) of preventing fish kills. These commenters indicated that
it would be impossible to claim that the value of the unharvested
commercial and recreational and forage species lost to impingement and
entrainment was equal to zero. Reasons some commenters gave for the
underestimation of total benefits included the following: total losses
were underestimated by using outdated monitoring data for periods when
population levels (and therefore impingement and entrainment) were much
lower than the present; cumulative impacts were not sufficiently
considered; recreational and commercial values were underestimated;
commercial invertebrate species were ignored; ecological value of
forage species was not considered; non-use benefits were
underestimated; and secondary economic impacts were not included.
Overall these commenters argued that a net benefit underestimation
could be corrected by (1) assuming that non-use values were two times
the estimated value of recreation, commercial and forage values; and
(2) assuming that unharvested fish had a value greater than zero.
In response to public comments regarding the analysis of non-use
values in the proposed rule, EPA considered the results of several
different approaches to quantifying non-use values. The Agency points
out that none of the available methods for estimating either use or
non-use values of ecological resources is perfectly accurate; all have
shortcomings.
EPA has determined that none of the methods it considered for
assessing non-use benefits provided results that were appropriate to
include in this final rule, and has thus decided to rely on a
qualitative discussion of non-use benefits. The uncertainties and
methodological issues raised in the approaches considered could not be
resolved in time for inclusion in the rule. EPA continues to evaluate
various approaches for evaluating non-use benefits of CWA rules.
5. Habitat Replacement Cost (HRC)
Some commenters argued that the HRC methods are not legitimate
valuation methods because they concern costs, not benefits. However,
other commenters argued that although HRC analysis is not a benefit's
analysis in the strict economic sense it can provide a practical
approach to capturing the full range of ecosystem services and, thus,
is appropriate for evaluating the benefits of this rule. These
commenters further pointed out that ``restoration cost is used as a
measure of damages under CERCLA for Superfund sites, under the National
Marine Sanctuaries Act, and under the oil spill provisions of the Clean
Water Act. Use of restoration costs was explicitly upheld in the
landmark Ohio vs. Interior court decision of 1989.''
EPA has removed the disputed results of the HRC analyses from its
benefits estimates for the final rule. For the NODA, EPA revised the
HRC analysis presented in the proposed rule (see 67 FR 17191). Instead
of the costs of habitat replacement, EPA used estimated willingness-to-
pay values for the resource improvements that would be achieved by the
habitat replacement/restoration equivalents.

[[Continued on page 41625]]

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

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