National Pollutant Discharge Elimination System--Proposed Regulations To Establish Requirements for Cooling Water Intake Structures at Phase III Facilities

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

[Federal Register: November 24, 2004 (Volume 69, Number 226)]
[Proposed Rules]
[Page 68443-68492]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24no04-25]
[[Page 68444]]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 122, 123, 124, and 125
[OW-2004-0002, FRL-7834-7]
RIN 2040-AD70

National Pollutant Discharge Elimination System--Proposed
Regulations To Establish Requirements for Cooling Water Intake
Structures at Phase III Facilities

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

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SUMMARY: Today's proposed rule would establish national categorical
requirements under section 316(b) of the Clean Water Act for certain
existing facilities that employ a cooling water intake structure and
are designed to withdraw water above a certain design intake flow from
certain waters of the United States for cooling purposes. Today's
notice proposes three possible options for defining which existing
facilities would be subject to uniform national requirements, based on
design intake flow threshold and source waterbody type: The facility
has a total design intake flow of 50 million gallons per day (MGD) or
more, and withdraws from any waterbody; the facility has a total design
intake flow of 200 MGD or more, and withdraws from any waterbody; or
the facility has a total design intake flow of 100 MGD or more and
withdraws water specifically from an ocean, estuary, tidal river, or
one of the Great Lakes. Because the lowest co-proposed flow threshold
option is 50 MGD, the proposed requirements would only apply to
manufacturing facilities--as power producers with a flow greater than
50 MGD are regulated under the Phase II rule. This proposed rule would
constitute Phase III of EPA's section 316(b) regulation development and
would establish national requirements, and procedures for implementing
those requirements, applicable to the location, design, construction,
and capacity of cooling water intake structures at Phase III
facilities. Today's proposed rule would also establish categorical
section 316(b) requirements for new offshore oil and gas extraction
facilities, which were specifically excluded from the scope of the
Phase I new facility rule so that EPA could gather additional data on
these facilities. The proposed rule would apply to both existing
manufacturers and new offshore oil and gas extraction facilities that
withdraw at least 25 percent of the water exclusively for cooling
purposes.
The proposed national requirements, which would 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. For covered existing facilities, today's proposed
rule would establish performance standards for reducing impingement
mortality by 80 to 95 percent, or impingement mortality by 80 to 95
percent and entrainment by 60 to 90 percent. Today's proposal would
allow existing facilities to select from five compliance alternatives
consistent with those provided in the final Phase II rule for existing
large flow electric power generators. Once finalized and implemented,
the rule would 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.
Today's proposed rule does not propose to alter the regulatory
requirements for facilities subject to the Phase I or Phase II
regulations, and EPA is not soliciting comment on those regulations.
EPA is only seeking comment on the proposed regulations for Phase III
existing facilities and new offshore oil and gas facilities, as
reflected in the proposed regulatory text for subparts K and N.
Depending on the options selected in the final section 316(b)
regulation for Phase III facilities, EPA may decide to integrate the
regulatory text for subparts K and N proposed today into the existing
subparts I and J, for purposes of streamlining the number of pages for
publication.

DATES: Comments must be received on or before March 24, 2005.

ADDRESSES: Submit your comments, identified by Docket ID No. OW-2004-
0002, by one of the following methods:
I. Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
II. Agency Web site: http://www.epa.gov/edocket. EDOCKET, EPA's
electronic public docket and comment system, is EPA's preferred method
for receiving comments. Follow the on-line instructions for submitting
comments.
III. E-mail: OW-Docket@epa.gov.
IV. Mail: Water Docket, Environmental Protection Agency, Mailcode:
4101T, 1200 Pennsylvania Ave., NW., Washington, DC 20460, Attention
Docket ID No. OW-2004-0002. Please include a total of 3 copies. In
addition, please mail a copy of your comments on the information
collection provisions to the Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for
EPA, 725 17th St. NW., Washington, DC 20503.
V. Hand Delivery: Water Docket, EPA Docket Center, EPA West, Room
B102, 1301 Constitution Ave., NW., Washington, DC, Attention Docket ID
No. OW-2004-0002. Such deliveries are only accepted during the Docket's
normal hours of operation, and special arrangements should be made for
deliveries of boxed information.
Instructions: Direct your comments to Docket ID No. OW-2004-0002.
EPA's policy is that all comments received will be included in the
public docket without change and may be made available online at
http://www.epa.gov/edocket, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the regulations.gov websites are ``anonymous
access'' systems, which means EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send an e-mail comment directly to EPA without going through
EDOCKET or regulations.gov, your e-mail address will be automatically
captured and included as part of the comment that is placed in the
public docket and made available on the Internet. If you submit an
electronic comment, EPA recommends that you include your name and other
contact information in the body of your comment and with any disk or
CD-ROM you submit. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should avoid the use of
special characters, any form of encryption, and be free of any defects
or viruses. For additional information about EPA's public docket visit
EDOCKET on-line or see the Federal Register of May 31, 2002 (67 FR
38102). For additional instructions on submitting comments, go to
section B of the SUPPLEMENTARY INFORMATION section of this document.
Docket: All documents in the docket are listed in the EDOCKET index
at http://www.epa.gov/edocket. Although listed in the index, some
information is not publicly available, i.e., CBI or other

[[Page 68445]]

information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically in
EDOCKET or in hard copy at the Water Docket, EPA/DC, EPA West, Room
B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The telephone number for the Public Reading
Room is (202) 566-1744, and the telephone number for the Water Docket
is (202) 566-2426.

FOR FURTHER INFORMATION CONTACT: For additional technical information
contact Martha Segall at (202) 566-1041 or Paul Shriner at (202) 566-
1076. For economic information, contact Erik Helm at (202) 566-1066.
For biological information contact Ashley Allen at (202) 566-1012. The
address for the above contacts is: Office of Science and Technology,
Engineering Analysis Division (Mailcode 4303T), Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
fax number: (202) 566-1053; e-mail address: rule.316b@epa.gov.

SUPPLEMENTARY INFORMATION:

General Information

A. What Entities Are Regulated by This Action?

This proposed rule would apply to ``Phase III existing
facilities''--i.e., certain existing manufacturing and industrial
facilities that are: (1) Point sources; (2) use or propose to use one
or more cooling water intake structures; (3) are designed to withdraw
water above a certain threshold from certain waters of the U.S. (the
flow threshold would differ depending on the regulatory option selected
in the final rule); and (4) use at least 25 percent of water withdrawn
exclusively for cooling purposes. Depending on the regulatory option
selected, the facility would be subject to these national requirements
if it had a design intake flow of: (1) 50 MGD or more from any
waterbody; (2) 200 MGD or more from any waterbody; or (3) 100 MGD or
more from an ocean, estuary, tidal river, or one of the Great Lakes.
This proposed rule would define ``existing facility'' as any
manufacturing or industrial facility that commenced construction on or
before January 17, 2002 (or [60 days from publication of the final
rule]
for an offshore oil and gas extraction facility), 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 proposed rule would also apply to new offshore and coastal oil
and gas extraction facilities, which were specifically excluded from
the Phase I new facility rule. An offshore and coastal oil and gas
extraction facility is new if construction commenced after 60 days from
publication of the final rule. Exhibit 1 provides examples of
industrial facility types potentially regulated by this proposed rule.

Exhibit 1.--Examples of Industrial Facility Types Potentially Regulated by This Proposed Rule
----------------------------------------------------------------------------------------------------------------
Examples of potentially regulated Standard industrial North American
Category entities classification codes industry codes (NAIC)
----------------------------------------------------------------------------------------------------------------
Federal, State and local Operators of steam electric 4911 and 493.......... 221111, 221112,
government. generating point source 221113, 221119,
dischargers that employ cooling 221121, 221122
water intake structures.
Industry..................... Operators of industrial point See below............. See below
source dischargers that employ
cooling water intake structures..
Agricultural production.......... 0133.................. 111991, 11193
Metal mining..................... 1011.................. 21221
Oil and gas extraction........... 1311, 1321............ 211111, 211112
Mining and quarrying of 1474.................. 212391
nonmetallic minerals.
Food and kindred products........ 2046, 2061, 2062, 311221, 311311,
2063, 2075, 2085. 311312, 311313,
311222, 311225, 31214
Tobacco products................. 2141.................. 312229, 31221
Textile mill products............ 2211.................. 31321
Lumber and wood products, except 2415, 2421, 2436, 2493 321912,321113, 321918,
furniture. 321999, 321212,
321219
Paper and allied products........ 2611, 2621, 2631, 2676 3221, 322121, 32213,
322121, 322122,
32213, 322291
Chemical and allied products..... 28 (except 2895, 2893, 325 (except 325182,
2851, and 2879). 32591, 32551, 32532)
Petroleum refining and related 2911, 2999............ 32411, 324199
industries.
Rubber and miscellaneous plastics 3011, 3069............ 326211, 31332, 326192,
products. 326299
Stone, clay, glass, and concrete 3241.................. 32731
products.
Primary metal industries......... 3312, 3313, 3315, 324199, 331111,
3316, 3317, 3334, 331112, 331492,
3339, 3353, 3363, 331222, 332618,
3365, 3366. 331221, 22121,
331312, 331419,
331315, 331521,
331524, 331525
Fabricated metal products, except 3421, 3499............ 332211, 337215,
machinery and transportation 332117, 332439,
equipment. 33251, 332919,
339914, 332999
Industrial and commercial 3523, 3531............ 333111, 332323,
machinery and computer equipment. 332212, 333922,
22651, 333923, 33312
Transportation equipment......... 3724, 3743, 3764...... 336412, 333911, 33651,
336416

[[Page 68446]]

Measuring, analyzing, and 3861.................. 333315, 325992
controlling instruments;
photographic, medical, and
optical goods; watches and
clocks.
Electric, gas, and sanitary 4911, 4931, 4939, 4961 221111, 221112,
services. 221113, 221119,
221121, 221122,
22121, 22133
Educational services............. 8221.................. 61131
Engineering, accounting, 8731.................. 54171
research, management and related
services.
----------------------------------------------------------------------------------------------------------------

This exhibit is not intended to be exhaustive, but rather provides
a guide for readers regarding entities that may be regulated by this
action if they satisfy the final flow threshold and waterbody type
criteria. 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. 125.101 and Sec.
125.131 of this proposal. If you have questions regarding the
applicability of this action to a particular entity, consult the
persons listed for technical information in the FOR FURTHER INFORMATION
CONTACT section.

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

1. Submitting Confidential Business Information (CBI). Do not
submit information that you consider to be CBI electronically through
EPA's electronic public docket or by e-mail. Send information claimed
as CBI by mail only to the following address, Office of Science and
Technology, Mailcode 4303T, U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460, Attention: Ahmar Siddiqui
/Docket ID No. OW-2004-0002. You may claim information that you submit
to EPA as CBI by marking any part or all of that information as CBI (if
you submit CBI on disk or CD ROM, mark the outside of the disk or CD
ROM as CBI and then identify electronically within the disk or CD ROM
the specific information that is CBI). Information so marked will not
be disclosed except in accordance with procedures set forth in 40 CFR
Part 2. In addition to one complete version of the comment that
includes any information claimed as CBI, a copy of the comment that
does not contain the information claimed as CBI must be submitted for
inclusion in the public docket and EPA's electronic public docket. If
you submit the copy that does not contain CBI on disk or CD ROM, mark
the outside of the disk or CD ROM clearly that it does not contain CBI.
Information not marked as CBI will be included in the public docket and
EPA's electronic public docket without prior notice. If you have any
questions about CBI or the procedures for claiming CBI, please consult
the person identified in the FOR FURTHER INFORMATION CONTACT section.
2. Tips for Preparing Your Comments. When submitting comments,
remember to:
I. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
II. Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
III. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
IV. Describe any assumptions and provide any technical information
and/or data that you used.
IV. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
V. Provide specific examples to illustrate your concerns, and
suggest alternatives.
VI. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
VII. Make sure to submit your comments by the comment period
deadline identified.

C. Supporting Documentation

The proposed regulation is supported by three major documents:
1. Economic Analysis for the Proposed Section 316(b) Rule for Phase
III Facilities (EPA-821-R-04-016), hereafter referred to as the
Economic Analysis (EA). This document presents the analysis of
compliance costs, closures, energy supply effects, and benefits
associated with the final rule.
2. Regional Benefits Assessment for the Proposed Section 316(b)
Rule for Phase III Facilities (EPA-821-R-04-017), 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 Proposed Section 316(b)
Rule for Phase III Facilities (EPA-821-R-04-015), 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

General Information
A. What Entities Are Regulated By This Action?
B. What Should I Consider as I Prepare My Comments for EPA?
C. Supporting Documentation
D. Table of Contents
I. Legal Authority, Purpose, and Background of Today's Regulation
A. Legal Authority
B. Purpose of Today's Proposed Regulation
C. Background
II. Scope and Applicability of the Proposed Rule
A. What is a ``New'' Offshore Oil and Gas Extraction Facility
for Purposes of the Section 316(b) Proposed Phase III Rule?
B. What is an ``Existing Facility'' for Purposes of the Section
316(b) Proposed Phase III Rule?
C. What is ``Cooling Water'' and What is a ``Cooling Water
Intake Structure?''
D. Would My Facility Be Covered if It Withdraws from Waters of
the United States?
E. Would My Facility Be Covered if It is a Point Source Discharger?
F. What are the Cooling Water Use and Design Intake Flow
Thresholds in this Proposed Rule?
G. When Would a Phase III Existing Facility and New Offshore Oil
and Gas Extraction Facility Be Required to Comply With Any New
316(b) Requirements?
H. What Special Definitions Apply to This Proposal?

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III. Summary of Data Collection Activities
A. Survey Questionnaires
B. Existing Data Sources
C. Data Provided to EPA by Industrial, Trade, Consulting,
Scientific or Environmental Organizations or by the General Public
IV. Overview of Facility Characteristics (Cooling Water Systems &
Intake Structures) for Industries Potentially Subject to Proposed Rule
A. Overview of Potentially Regulated Phase III Universe
B. Existing Manufacturers and Industrial Facilities Potentially
Subject to Proposed National Requirements
C. New Offshore Oil and Gas Facilities Subject to Proposed
National Requirements
V. Environmental Impacts Associated With Cooling Water Intake Structures
VI. Basis for the Proposed Requirements
A. What is the Best Technology Available for Minimizing Adverse
Environmental Impact at Phase III Existing Facilities?
B. Economic Practicability
C. What is the Proposed Role of Restoration and Trading?
VII. Implementation
A. When Would the Proposed Rule Become Effective?
B. What General Information Would I Be Required to Submit to the
Director When I Apply for My Reissued NPDES Permit?
C. Phase III Existing Facility Implementation
D. New Offshore Oil and Gas Extraction Facilities
E. What Are the Respective Federal, State, and Tribal Roles?
F. Are Permits for Phase III Facilities Subject to Requirements
Under Other Federal Statutes?
VIII. Economic Impact Analysis
A. Existing Phase III Facilities: Manufacturers and Electric
Power Producers
B. New Offshore Oil and Gas Extraction Facilities
C. Summary of Total Social Costs and Impacts
IX. Benefits Analysis
A. Introduction
B. Study Design and Methods
C. Impingement and Entrainment
D. National Benefits
X. Comparison of Benefits and Costs
A. Benefit-Cost Analysis
B. Break-even Analysis
XI. Statutory and Executive Order Reviews
A. E.O. 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. E.O. 13175: Consultation and Coordination With Indian Tribal
Governments
G. E.O. 13045: Protection of Children From Environmental Health
Risks and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. E.O. 12898: Federal Actions to Address Environmental Justice
in Minority Populations and Low-Income Populations
K. E.O. 13158: Marine Protected Areas
L. Plain Language Directive

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

A. Legal Authority

Today's proposed rule is issued under the authority of sections
101, 301, 304, 306, 308, 316, 401, 402, 501, and 510 of the Clean Water
Act, 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342, 1361,
and 1370. Publication of this proposed rule fulfills an obligation 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).

B. Purpose of Today's Proposed Regulation

Section 316(b) of the Clean Water Act provides that any standard
established pursuant to section 301 or 306 of the Clean Water Act 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 for minimizing adverse environmental
impact. Today's proposed rule would establish requirements reflecting
the best technology available for minimizing adverse environmental
impact, applicable to the location, design, construction, and capacity
of cooling water intake structures at Phase III facilities (Phase I and
Phase II are described in section I. C of today's preamble). Today's
notice proposes the following three possible options for defining which
existing facilities would be subject to categorical national
requirements based on the design intake flow of cooling water intake
structures at a facility and waterbody type: (1) The facility has a
total design intake flow of 50 million gallons per day (MGD) or more
and withdraws from any waterbody; (2) the facility has a total design
intake flow of 200 MGD or more and withdraws from any waterbody; or (3)
the facility has a total design intake flow of 100 MGD or more and
withdraws water specifically from an ocean, estuary, tidal river, or
one of the Great Lakes. Today's notice also proposes a design intake
flow threshold of greater than 2 MGD for new offshore oil and gas
extraction facilities consistent with the design intake flow threshold
for new facilities in the Phase I rule. Under each of these co-proposed
regulatory options, a Phase III facility must use at least 25 percent
of the water withdrawn exclusively for cooling purposes and meet other
specified criteria in order to be within the scope of the rule (see
Section II--Scope and Applicability of Proposed Rule).

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 Clean Water Act 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; and, (3) requirements for limitations in
NPDES permits based on effluent limitations guidelines and standards
and water quality standards.
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 Clean Water Act 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 Clean Water Act 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 currently 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

[[Page 68448]]

limitations may be based on 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 Clean Water Act
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 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 Clean Water Act 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
economics, as appropriate to each level of control, and other factors
identified in sections 304 and 306 of the Clean Water Act (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 Clean Water Act for
more than 50 industries. See 40 CFR 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 Clean Water Act section
316(b) is not defined in the statute, but its meaning can be understood
in light of similar phrases used elsewhere in the Clean Water Act. See
Riverkeeper v. EPA, slip op. at 11 (2nd Cir. Feb. 3, 2004) (noting that
the cross-reference in Clean Water Act section 316(b) to Clean Water
Act section 306 ``is an invitation to look at section 306 for guidance
in determining what factors Congress intended the EPA to consider in
determining `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
``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 limitations on the
discharge of pollutants from point sources are based 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 Clean
Water Act section 316(b)--are not defined in the statute. However,
section 304 of the Clean Water Act 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
Clean Water Act 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 Clean Water Act 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 available
technology'' 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

[[Page 68449]]

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, considering costs, but
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
section 316(b) limits. 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 III rulemaking, EPA therefore interprets Clean Water
Act 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, today's
proposed rule establishes national requirements for facilities to
install technology, as appropriate, that is technically available,
economically practicable, cost-effective, and justified by the benefits
to the source waterbody.
At this time, EPA is co-proposing all three options discussed above
because it sees advantages to each. EPA is also considering an
alternative under which EPA would not promulgate, at this time,
categorical requirements under section 316(b) for cooling water intake
structures unregulated by Phase I and Phase II. Rather, EPA would
continue to rely on the best professional judgment of the permitting
authority to determine the best technology available to minimize
adverse environmental impact, in order to allow these requirements to
be better tailored to local conditions.
2. Consent Decree
Publication of this proposal fulfills one of EPA's obligations to
comply with a consent decree, as amended. The Second Amended Consent
Decree, which is relevant to today's proposed 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
(AGS). That case was 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 divided the rulemaking into three phases.
EPA took final action on a rule governing cooling water intake
structures used by new facilities (Phase I) on November 9, 2001 (66 FR
65255, December 18, 2001). EPA took final action on a rule governing
cooling water intake structures used by large existing power producers
(Phase II) on February 16, 2004 (69 FR 41576, July 9, 2004). The
consent decree further requires that EPA propose regulations applicable
to, at a minimum, existing facilities using cooling water intake
structures with intake flows above a minimum threshold to be determined
by EPA, in the following categories: power producers not covered by the
Phase II regulations, pulp and paper manufacturing, petroleum and coal
products manufacturing, chemical and allied products manufacturing, and
primary metal manufacturing (Phase III). EPA is required to propose
regulations for Phase III facilities by November 1, 2004, and take
final action by June 1, 2006.
3. What Other EPA Rulemakings and Guidance Address Cooling Water Intake
Structures?
In April 1976, EPA published a final rule under section 316(b) that
addressed cooling water intake structures. 41 FR 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 Clean Water Act section 316(b). It also added a new
part 402, which included three sections: (1) Section 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) Pub. 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

[[Page 68450]]

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 125, Subpart I) establishes requirements applicable to the
location, design, construction, and capacity of cooling water intake
structures at new facilities that withdraw greater than 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 greater than 2 MGD, the design through-screen intake
velocity is restricted to 0.5 feet per second 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 entrainment at all locations.) Under Track II, the applicant
has the opportunity to demonstrate to the Director that the
technologies he employs will reduce the level of adverse environmental
impact to a comparable level to what would be achieved by meeting the
Track I requirements for restricting intake flow and velocity. As part
of this demonstration, EPA initially had allowed the applicant to
employ control measures other than reducing impingement mortality and
entrainment, including restoration measures that would result in
increases in fish and shellfish, comparable to the reduction in
impingement mortality and entrainment it would achieve were it to
implement the Track I intake flow and velocity requirements. However,
in February 2004, the 2nd Circuit Court of Appeals issued a decision in
response to several petitions challenging the final Phase I rule. The
Court found that EPA exceeded its authority by allowing new facilities
to comply with section 316(b) through restoration methods, and remanded
that aspect of the rule to EPA. Riverkeeper, Inc. v. EPA, 358 F.3d 174,
191 (2nd Cir., 2004).
Directors may establish less stringent alternative requirements for
a facility if compliance with the Phase I standards would result in
compliance costs wholly out of proportion to those EPA considered in
establishing the requirements at issue or would result in significant
adverse impacts on local air quality, water resources, or local energy
markets.
With the new facility rule, EPA promulgated national minimum
requirements for the location, design, capacity, and construction of
cooling water intake structures at new facilities. 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.
EPA specifically excluded new offshore oil and gas extraction
facilities from the Phase I new facility rule, but committed to
consider establishing requirements for such facilities in the Phase III
rulemaking. 66 FR 65338 (December 18, 2001).
5. Phase II Existing Facility Rule
On February 16, 2004, EPA took final action on regulations
governing cooling water intake structures at certain existing power
producing facilities. 69 FR 41576 (July 9, 2004). The final Phase II
rule applies to existing facilities that are point sources; that, as
their primary activity, both generate and transmit electric power or
generate electric power for sale or transmission; that use or propose
to use a cooling water intake structure with a total design intake flow
of 50 MGD or more to withdraw water from waters of the United States;
and that use at least 25 percent of the withdrawn water exclusively for
cooling purposes.
Under the Phase II rule, EPA established performance standards for
the reduction of impingement mortality and, when appropriate,
entrainment (see 40 CFR 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. The
type of performance standard applicable to a particular facility (i.e.,
reductions in impingement mortality only or impingement mortality 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. In most cases,
EPA believes that these performance standards can be met using design
and construction technologies or operational measures. 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
certain specified requirements. (See 40 CFR 125.94(c)).
The Phase II rule identifies five alternatives to achieve
compliance with the requirements for best technology available for
minimizing adverse environmental impacts associated with cooling water
intake structures. A facility must demonstrate to the Director one of
the following: (1) That it has already reduced its flow commensurate
with a closed-cycle recirculating system

[[Page 68451]]

(to meet performance standards for impingement and entrainment), or
that it has already reduced its design intake velocity to 0.5 feet per
second or less (to meet the impingement performance standard only); (2)
that its current cooling water intake structure configuration meets the
applicable performance standards; (3) 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 applicable performance standards; (4) that it meets the
applicability criteria and has installed and is properly operating and
maintaining a rule-specified and/or State-specified approved design and
construction technology (i.e., submerged cylindrical wedgewire screen)
in accordance with 40 CFR 125.99(a) or an alternative technology that
meets the appropriate performance standards and is approved by the
Director in accordance with 40 CFR 125.99(b); or (5) that its 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 than the benefits of meeting the applicable
performance standards at the facility. A discussion of the legal
authority and basis for the use of the cost test is found in section VI
of this preamble.
During the first permit term and subsequent permit terms, a
facility that chooses compliance alternatives two (2) through five (5),
as described above, may request that compliance with the requirements
of the rule be determined based on the implementation of a Technology
Installation and Operation Plan (TIOP), indicating how the facility
will install and ensure the efficacy, to the extent practicable, of
design and construction technologies and/or operational measures, and/
or a Restoration Plan. Adaptive management practices must be employed
to ensure compliance during subsequent permit terms. The TIOP must be
developed and submitted to the Director in accordance with 40 CFR
125.95(b)(4)(ii). The Restoration Plan must be developed in accordance
with 40 CFR 125.95(b)(5).
6. Public Participation
EPA worked extensively with stakeholders from the industry, public
interest groups, State agencies, and other Federal agencies in the
development of this proposed rule. EPA included industry groups,
environmental groups, and other government entities in the development,
testing, refinement, and completion of the section 316(b) survey, which
was used as a primary source of data for the Phase III proposed rule.
As discussed in section III of today's preamble, the survey,
``Information Collection Request, Detailed Industry Questionnaires:
Phase II Cooling Water Intake Structures & Watershed Case Study Short
Questionnaire,'' was initiated in 1997, and was used to collect data
during 1998. EPA conducted two public meetings on section 316(b)
issues. In June of 1998, EPA conducted a public meeting focused on a
draft regulatory framework for assessing potential adverse
environmental impact from impingement mortality and entrainment. 63 FR
27958 (May 21, 1998). A second public meeting was held in September of
1998, and focused on technology, cost, and mitigation issues. 63 FR
40683 (July 30, 1998). In addition, in September of 1998, and April of
1999, EPA participated in technical workshops sponsored by the Electric
Power Research Institute on issues relating to the definition and
assessment of adverse environmental impact. EPA also participated in
other industry conferences, and has met 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. Participants included
representatives of the electric power industry, as well as the
petroleum refining, pulp and paper, and iron and steel industries. EPA
also met with environmental groups, States, and interstate groups.
After publication of the proposed Phase I rule, EPA continued to meet
with stakeholders. Summaries of these meetings are in the docket. EPA
also received many comments on the Phase I proposed rule (65 FR 49059,
August 10, 2000) and Notice of Data Availability (NODA). (66 FR 28853,
May 25, 2001). These comments informed the development of the Phase II
rule and this Phase III proposed rule.
In January 2001, EPA attended technical workshops organized by the
Electric Power Research Institute and the Utilities Water Act Group.
These workshops focused on 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 mortality and entrainment. Over
120 people attended the meeting.
On August 21, 2001, EPA 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
Clean Water Act.
During development of the Phase I and Phase II rules, EPA
coordinated with the Nuclear Regulatory Commission (NRC) to ensure that
there would not be a conflict with NRC safety requirements. NRC
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 recommended that EPA consider adding language
which states that in cases of conflict between an EPA requirement and
an NRC safety requirement, the NRC safety requirement takes precedence.
EPA added language to address this concern in the Phase II final rule
and this proposed rule.
EPA sponsored a Symposium on Cooling Water Intake Technologies to
Protect Aquatic Organisms, on May 6-7, 2003. 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.
During the development of this proposed regulation, EPA met several
times with trade associations whose members would be subject to the
Phase III requirements. EPA also conducted Phase III-specific data
collection activities, including a study of entrainment at
manufacturing facilities, contacting Phase III facilities to request

[[Page 68452]]

biological studies and conducted an industry survey of offshore oil and
gas extraction facilities and seafood processing vessels.
Finally, EPA convened a Small Business Advocacy Review (SBAR) panel
(in accordance with the Regulatory Flexibility Act section 609(b) as
amended by the Small Business Regulatory and Enforcement Fairness Act)
to provide information to small entities and receive feedback during
the Phase III rulemaking process. EPA hosted a pre-panel outreach
meeting for small entities potentially subject to Phase III on January
22, 2004. The SBAR panel held an outreach meeting with small entity
representatives (SERs) on March 16, 2004. Based on the information
gathered from the participating small entities during these outreach
meetings and subsequent correspondence, the SBAR panel produced a final
report to the EPA Administrator on April 27, 2004. Results of the final
report were considered in the development of this proposed Phase III rule.
These coordination efforts and all of the meetings described in
this section, as well as the comments submitted on the Phase I and II
section 316(b) rules and EPA's response to these comments, are
documented or summarized in the dockets for these three rules. The
Administrative Record for today's proposal includes all materials from
the Phase I, Phase II, and Phase III section 316(b) rule dockets.

II. Scope and Applicability of the Proposed Rule

Based on the co-proposed flow thresholds based options in today's
proposed rule, the proposed national categorical requirements would
apply to two groups of facilities: (1) Existing manufacturing
facilities (including but not limited to chemical, metal, pulp and
paper, and petroleum refining facilities), and (2) new offshore oil and
gas extraction facilities. In today's proposed rule, the term ``new
offshore oil and gas extraction facility'' is defined to include
facilities in both the offshore and the coastal subcategories of EPA's
Oil and Gas Extraction Point Source Category for which effluent
limitations are established at 40 CFR part 435. Although the term
``offshore'' denotes only one of these two subcategories for purposes
of the effluent guidelines, EPA decided that it was more efficient to
use the term ``offshore'' to denote facilities in either subcategory
for purposes of today's rule because the proposed requirements are the
same for both offshore and coastal facilities and the term ``offshore''
is commonly understood to include any facilities not located on land.
EPA requests comment on whether this definition is likely to cause
confusion over the scope of covered facilities. In order to be covered
by today's proposed rule, these facilities would need to use cooling
water intake structures to withdraw water from waters of the U.S. and
meet all other applicability criteria, described below.
Existing facilities that meet all of the following criteria would
be subject to today's proposed rule, if promulgated as proposed (see
Sec. 125.101).
? The facility is a point source that has or is required to
have an NPDES permit under section 402 of the Clean Water Act;
? The facility is an existing facility not subject to the
Phase II regulation;
? The facility uses at least 25 percent of water withdrawn
exclusively for cooling purposes, measured on an average annual basis;
and
? The facility uses, or proposes to use, cooling water
intake structures, including a cooling water intake structure operated
by an independent supplier (other than a public water system), with a
total design intake flow equal to or greater than a certain threshold
to withdraw cooling water from waters of the United States.
Today's proposed rule co-proposes three options based on design
intake flow and source waterbody type for defining which existing
facilities are Phase III existing facilities subject to categorical
national requirements:
? The facility has a total design intake flow of 50 MGD or
more, and withdraws from any waterbody type (``50 MGD All Waterbodies'');
? The facility has a total design intake flow of 200 MGD or
more, and withdraws from any waterbody type (``200 MGD All Waterbodies'');
? The facility has a total design intake flow of 100 MGD or
more and withdraws water from an ocean, estuary, tidal river, or one of
the Great Lakes (``100 MGD Certain Waterbodies'').
A facility meeting the above criteria, including any flow threshold
EPA adopts after considering comments on the three co-proposed options,
would be referred to as a ``Phase III existing facility.'' If an
existing facility does not meet the relevant Phase II or Phase III
cooling water use and intake flow thresholds by itself, and is co-
located with an existing facility that is not subject to the Phase II
regulation (e.g., a power producing facility below the Phase II flow
threshold, or a manufacturing facility), both facilities would still be
subject to Phase III requirements if the cooling water used
collectively by the co-located facilities meets the applicable
thresholds (and the facilities meet the other requisite Phase III
criteria). Co-located facilities adjoin each other and are under common
ownership, operation, or management. If a facility is a point source
that uses a cooling water intake structure and has, or is required to
have, an NPDES permit, but does not meet the proposed applicable design
intake flow/source waterbody threshold or the 25 percent cooling water
use threshold, it would continue to be subject to permit conditions
implementing CWA section 316(b) set by the permit director on a case-
by-case, best professional judgment basis.
Today's notice also proposes requirements for new offshore oil and
gas extraction facilities, which were specifically excluded from the
Phase I new facility rule. (40 CFR 125 Subpart I). Section II.B of the
preamble discusses what constitutes a ``new'' offshore oil and gas
extraction facility for purposes of the section 316(b) proposed Phase
III rule. Requirements for new offshore oil and gas extraction
facilities are proposed in 40 CFR Subpart N. EPA is seeking comment on
the requirements contained in this subpart. EPA is not seeking comment
on the Phase I rule that EPA promulgated in 2001.
Finally, under today's proposed rule a seafood processing vessel or
an offshore liquefied natural gas import terminal would not be subject
to national categorical requirements. Such a facility could be subject
to permit conditions implementing CWA section 316(b) set by the permit
director on a case-by-case, best professional judgment basis where the
facility is a point source that uses a cooling water intake structure
and has, or is required to have, an NPDES permit.

A. What Is a ``New'' Offshore Oil and Gas Extraction Facility for
Purposes of the Section 316(b) Proposed Phase III Rule?

For purposes of this proposed rule, new offshore oil and gas
extraction facilities are those facilities that are subject to the Oil
and Gas Extraction Point Source Category Effluent Guidelines (i.e., 40
CFR 435.10 Offshore Subcategory or 40 CFR 435.40 Coastal Subcategory);
that commence construction more than 60 days after publication of the
final rule; and that meet all other aspects of the ``new facility''
definition in Sec. 125.83 (other than the date for commencing
construction). In other words, in order to be covered by today's
proposed rule, a new offshore oil and gas extraction facility would
have to be a new source or new discharger per 40 CFR 122.2 and 122.29,
a greenfield or stand-alone

[[Page 68453]]

facility, and use 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.

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

In today's proposed rule, the definition of ``existing facility''
is the same as in the Phase II rule except for additional language
addressing new offshore oil and gas extraction facilities: any facility
that commenced construction on or before January 17, 2002 (or 60 days
after publication of the final rule for an offshore oil and gas
extraction facility), as described in 40 CFR 122.29(b)(4).\1\ January
17, 2002 is the effective date of the Phase I new facility rule and,
therefore, the date for distinguishing new facilities from existing
ones. However, offshore oil and gas extraction facilities were not
subject to the Phase I new facility rule, but rather, would be subject
to requirements under this proposed Phase III rule. Therefore, the
effective date of the final Phase III rule would be the date for
distinguishing new offshore oil and gas extraction facilities from
existing ones. An ``existing facility'' under this proposed rule would
include modifications and additions to existing facilities, that do not
meet the definition of a new facility under the Phase I rule (40 CFR
125.83). That definition states:
---------------------------------------------------------------------------

\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
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.''

The definition in today's proposed regulation is intended to be
consistent with EPA's definition of new facility in the Phase I rule
(Sec. 125.83) and to ensure that sources excluded from the definition
of new facility in the Phase I rule are captured by the definition of
existing facility.
The determination of whether a facility is ``new'' or ``existing''
is focused on the point source discharger--not on the cooling water
intake structure. In other words, 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. Rather, the determination as
to whether a facility is new or existing focuses on the point source
itself, i.e., whether it is a greenfield facility or a stand-alone facility.
Under this proposed rule, an existing manufacturing facility that
replaces or modifies an existing generating or manufacturing unit would
remain subject to regulation as a Phase III existing facility, unless
(1) the existing facility were completely demolished and another
facility constructed in its place (a ``greenfield'' facility), or a
separate facility with substantially independent processes were
constructed on the property (a ``stand-alone'' facility) and (2) the
new facility used either a new intake structure or the existing
structure with an increased design capacity. To illustrate, an existing
facility that undertook the following facility modifications or
additions would continue to be characterized as an existing facility--
not a new facility--under today's proposed rule:
? An existing manufacturing 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 manufacturing 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 manufacturing facility completely rebuilds its
process but uses the existing cooling water intake structure with no
increase in design capacity.
Phase III existing facilities subject to today's proposed rule
would also include point sources that are new users of cooling water
intake structures, but do not meet the definition of new facility under
Sec. 125.83. For example, an existing facility may have historically
withdrawn its cooling water from a municipal or other source, but then
begins to withdraw cooling water from a water of the United States.
This facility would be considered an existing facility because it is
not a ``greenfield'' or ``stand alone'' facility within the meaning of
the new facility rule. Similarly, a facility that previously relied on
unit processes that do not require cooling water, and then adds or
modifies a unit process for purposes of the same industrial operation
such that cooling water is subsequently required, would also be
regulated as an existing facility, not a new facility, under 316(b).

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

Today's proposed rule would adopt for Phase III facilities the same
definition of a ``cooling water intake structure'' that applies to new
facilities under the final Phase I rule and existing facilities under
the final Phase II rule. A cooling water intake structure would be
defined as the total physical structure and any associated constructed
waterways used to withdraw cooling

[[Page 68454]]

water from waters of the Unites States. Under this definition, 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 proposed rule also would adopt the definition of
``cooling water'' used in the Phase I and Phase II rules: 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 and would not be
considered cooling water for purposes of determining whether the
facility was using 25 percent or more of the water withdrawn for
cooling purposes. This clarification is necessary because cooling water
intake structures typically bring water into a facility for numerous
purposes, including use in industrial processes; use as circulating
water, service water, or evaporative cooling tower makeup water;
dilution of effluent heat content; equipment cooling; and air
conditioning. This is particularly true for manufacturers addressed
under this proposed rule, who often seek to reduce water use and
increase efficiency through water reuse. EPA does not wish to create a
disincentive to such improved efficiency and recognizes that to do so
could result in other forms of environmental impacts. Consequently, and
consistent with the Phase I and Phase II rules, only the water used
exclusively for cooling purposes would be counted when determining
whether the 25 percent threshold in Sec. 125.101(a)(4) or Sec.
125.131(a)(2) is met.
This proposed 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) Pub. L. 92-500 (U.S. EPA, 1977).
The proposed rule definition would clarify 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 proposed 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 structure could
not work as designed.

D. Would My Facility Be Covered if It Withdraws From Waters of the
United States?

The requirements proposed today would apply to cooling water intake
structures that have the design capacity to withdraw amounts of water
equal to or greater than the specified proposed intake flow thresholds
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 mortality 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., Sec. 125.102. However, EPA
does not intend that this proposed rule would 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 of whether a particular
cooling pond is a water of the United States is to be made by the
permit writer on a case-by-case basis, informed by the discussions in
Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps
of Engineers, 531 U.S. 159 (2001), and subsequent case law. Therefore,
facilities that withdraw cooling water from cooling ponds that are
waters of the United States and that would meet today's other proposed
criteria for coverage (including the requirement that the facility has
or will be required to obtain an NPDES permit) would be subject to
today's proposed 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
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. Proposed Sec. 125.101(d) also
provides, similar to the Phase I and Phase II rules, 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 proposed rule.

E. Would My Facility Be Covered if It Is a Point Source Discharger?

Today's proposed rule would apply 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 United States. This is the
same requirement EPA included in the Phase I and Phase II final rules
(see, 40 CFR 125.81(a)(1), and 40 CFR 125.91(a)(1), respectively).
Requirements for complying with section 316(b) will continue to be
applied through NPDES permits.
Based on the Agency's review of potential Phase III facilities that
employ cooling water intake structures, the Agency anticipates that
most Phase III facilities that would be subject to this proposed rule
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 would be specified in the facility's
NPDES permit. In the event that a Phase III facility's only NPDES
permit is a general permit (e.g., for oil and gas production) or a
general permit for storm water discharges, the Agency anticipates that
the Director may want to 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

[[Page 68455]]

and operate the intake structure that supplies their facility with
cooling water. For example, manufacturing 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. Proposed Sec. 125.101(c) of
today's proposed rule would address 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 withdraws water
from waters of the United States but is not itself subject to
regulations under 316(b). This provision is intended to prevent
facilities from circumventing the requirements of today's proposed rule
by creating arrangements to receive cooling water from an entity that
is not itself subject to national categorical requirements (e.g., a
facility that is not a point source).
For facilities that have or are required to have NPDES permits that
do not directly control the intake structures that supply their
facilities with cooling water, proposed Sec. 125.101(d) also provides,
similar to the Phase I and II rules, 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 proposed rule.
As stated in the preamble to the final Phase I rule (66 FR 65256,
December 18, 2001), the Agency would encourage 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, under this proposed rule, the
Director would 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.

F. What Are the Cooling Water Use and Design Intake Flow Thresholds in
This Proposed Rule?

This proposed rule would apply to existing facilities that meet the
following thresholds: (1) Use at least twenty-five (25) percent of the
water withdrawn exclusively for cooling purposes (measured on an
average annual basis), and (2) have a total design intake flow equal to
or greater than one of the three proposed thresholds , but are not
subject to the Phase II rule. As previously discussed, EPA is proposing
three possible flow threshold-based options in today's proposed rule
(i.e., 50 MGD, 200 MGD, and 100 MGD \3\). The facility would also have
to meet the other applicability criteria defined in Sec. 125.101.
---------------------------------------------------------------------------

\3\ Note: the 100 MGD flow threshold also specifies withdrawal
from certain source waterbody types. The other proposed flow
thresholds are not linked to source waterbody types.
---------------------------------------------------------------------------

The 25 percent exclusive cooling use threshold is the same as
employed in the Phase I and II regulations. As in the Phase I and Phase
II rules, water used for both cooling and non-cooling purposes would
not count towards the 25 percent threshold. Thus, the proposed rule
would 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 would not be considered cooling
water for purposes of determining whether the 25 percent threshold is
met. Water withdrawn for non-cooling purposes would include water
withdrawn for warming by liquified natural gas facilities, water used
to power hydro-electric plants, and water withdrawn for public water
systems by desalinization facilities.
Today's notice proposes three different options for defining which
existing facilities are Phase III existing facilities subject to
categorical national requirements. These options include existing
facilities having a total design intake flow of: 50 MGD or more; 200
MGD or more; or 100 MGD or more if the facility withdraws water from an
ocean, tidal river, estuary, or Great Lake. EPA is co-proposing these
options because EPA believes that all three reflect potentially viable
alternatives for balancing the many factors EPA considers in
establishing best technology available for minimizing adverse
environmental impact. These factors include the percentage of cooling
water flow subject to national requirements, costs, benefits, cost-
effectiveness, permitting burden and the need for flexibility in
implementation, projected closures, and potential impacts on small
businesses. Each of these factors are permissible for consideration
under the CWA and each of these co-proposed options will fulfill CWA
requirements. For example, considerations of costs, benefits,
economically practicability and cost-effectiveness are appropriate
factors under CWA sections 301 and 304 (e.g., see discussion of Agency
authority in section I). In addition, EPA is required to consider small
business impacts under the Regulatory Flexibility Act as amended by the
Small Business Regulatory Enforcement Fairness Act. Accordingly, the
discussion below focuses on the relative advantages and disadvantages
of these co-proposed options and the proposed regulatory language
reflects all three options.
i. Total Design Intake Flow of 50 MGD or More
Under this co-proposed option, facilities with a design intake flow
of 50 MGD or greater, and that meet the other criteria in Sec.
125.101, would be subject to the performance standards and compliance
alternatives proposed in today's rule discussed below. Under this
option, section 316(b) permit conditions for existing facilities with a
design intake flow of less than 50 MGD would continue to be established
on a case-by-case, best professional judgment basis.
EPA is co-proposing the 50 MGD threshold based on several factors.
With a 50 MGD flow threshold, the proposed rule would regulate 75
percent of the design intake capacity, and 23 percent of the facilities
(155 facilities) potentially covered by the Phase III rule,\4\ thus
subjecting the majority of design intake flows potentially included
within the scope of the Phase III existing facility rule to national
performance requirements. Use of a 50 MGD threshold would focus
national section 316(b) requirements on those Phase III existing
facilities with moderate to large design intake flows. These facilities
pose a greater potential for causing significant adverse environmental
impacts than those withdrawing less than 50 MGD. Assuming full
implementation of the Phase II rule and today's proposed rule, at the
co-proposed 50 MGD threshold, section 316(b) program requirements would
regulate more than 97 percent of the total cooling water withdrawals
associated with existing facilities. In addition, EPA estimates that
use of a 50 MGD threshold would avoid facility closures under this
proposed rule, and would reduce the cost of the proposed rule to
permittees compared with the costs of a lower threshold.
---------------------------------------------------------------------------

\4\ Facilities ``potentially covered by the Phase III rule''
include all existing manufacturing and power producing facilities
greater than 2 MGD that were not covered by the Phase II rule. There
are an estimated 683 manufacturing and electric generating
facilities (survey weighted) potentially covered by the Phase III
rule, with a total design intake flow of 40,441 MGD.

---------------------------------------------------------------------------

[[Page 68456]]

EPA estimates this option would cost $47.3 to $50.1 million \5\ or
$348,000 to $368,000 on average annually per facility. Quantified
benefits are $1.5 million to $1.9 million (annualized use value).
Because this option covers the most facilities, it may also have the
greatest ecological protection benefits, which EPA was not able to
quantify. EPA estimates that this option would provide the highest
quantified and monetized benefits of the co-proposed options but would
also have the highest annualized costs, resulting in the lowest
quantified benefits-to-cost ratio and the lowest (greatest negative)
quantified net benefits among these options. See section X of this
preamble for further discussion of benefits and costs.
---------------------------------------------------------------------------

\5\ Unless otherwise noted, cost and benefit ranges reflect the
use of alternative discount rates (3% and 7%) in annualized 2003 dollars.
---------------------------------------------------------------------------

Finally, the co-proposed 50 MGD threshold would exclude small
businesses from national rule requirements. This is consistent with the
recommendations of the Small Business Advocacy Review Panel final
report that EPA analyze a range of potential thresholds, particularly
those between 20 MGD and 50 MGD, as a means of reducing potential
economic impacts on small businesses while still achieving desired
environmental benefits under the rule. See section XI.C for additional
information. EPA estimates that setting an applicability threshold at
50 MGD would exclude all existing small entities potentially subject to
the Phase III rule.
ii. Total Design Intake Flow of 200 MGD or More
Under this co-proposed option, facilities with a design intake flow
of 200 MGD or greater and that meet the other criteria in Sec.
125.101, would be subject to the performance standards and compliance
alternatives proposed in today's notice and discussed above. Under this
option, section 316(b) permit conditions for existing facilities not
covered under the Phase II rule, with a design intake flow of less than
200 MGD, would continue to be established on a case-by-case, best
professional judgment basis.
EPA is co-proposing the 200 MGD threshold based on several factors.
With a 200 MGD flow threshold, the proposed rule would regulate 45
percent of the design intake capacity and approximately 5% of the
facilities potentially covered by the Phase III rule. Assuming full
implementation of the Phase II rule and today's proposed rule, at the
co-proposed 200 MGD threshold, section 316(b) program requirements
would regulate more than 94 percent of the total cooling water
withdrawals associated with existing facilities withdrawing greater
than 2 MGD.
EPA estimates this option would cost $22.8 to $24.1 million or
$912,000 to $964,000 on average annually per facility. Quantified
benefits are $0.98 to $1.26 million (annualized use value). The option
would have a higher benefit-to-cost ratio yielding 66 percent of the
quantified benefits at 48% of the costs and greater (lower negative)
quantified net benefits compared to the 50 MGD option.
EPA estimates that use of a 200 MGD threshold would avoid facility
closures under this proposed rule and would exclude all existing small
entities.
iii. Facility Has a Total Design Intake Flow of 100 MGD or More and
Withdraws Water From an Ocean, Tidal River, Estuary, or Great Lake
Under this co-proposed option, facilities located on estuaries,
oceans, tidal rivers or streams, or one of the Great Lakes, with a
design intake flow of 100 MGD or greater, and that meet the other
criteria in Sec. 125.101, would be subject to the performance
standards and compliance alternatives proposed in today's rule and
discussed below. Under this regulatory option, section 316(b) permit
conditions for all existing facilities not covered under the Phase II
rule, and located on freshwater rivers and streams or lakes and
reservoirs, or with a design intake flow of less than 100 MGD would
continue to be established on a case-by-case, best professional
judgment basis.
Under this co-proposed option, 4 percent of the facilities
potentially subject to regulation under Phase III would be subject to
national requirements, and 18 percent of total design intake capacity
associated with potential Phase III facilities would be addressed by
such national requirements. Assuming full implementation of the Phase
II rule and today's proposed rule, at the co-proposed 100 MGD
threshold, section 316(b) program requirements would regulate more than
91 percent of the total cooling water withdrawals associated with
existing facilities.
EPA estimates this option would cost $17.6 to $18.2 million or
$926,000 to $958,000 on average annually per facility. Quantified
benefits are $1.1 to 1.4 million (annualized use value). EPA estimates
that this option would provide the second highest quantified benefits
of the co-proposed options, and would have the lowest annualized costs
when compared with the other two options, resulting in the highest
quantified benefits-to-costs ratio and highest (least negative)
quantified net benefits among the three options. This option would
provide about 75 percent of the quantified benefits of the 50 MGD flow
threshold option at about 36 percent of the cost by focusing the rule
requirements on the most sensitive waterbodies.
EPA estimates that use of a 100 MGD threshold would avoid facility
closures under this proposed rule and would exclude all existing small
entities.
EPA requests comment on all aspects of each of these co-proposed
options, including whether lower (e.g., 20 MGD) or higher (e.g., 250
MGD) thresholds should be considered, as well as whether different
conditions (e.g., related to waterbody type) should be combined with
these or other thresholds. EPA also solicits comment on the resource
implications for State permitting agencies associated with each of
these options.

G. When Would a Phase III Existing Facility and New Offshore Oil and
Gas Extraction Facility Be Required To Comply With Any New 316(b)
Requirements?

If EPA were to promulgate today's proposed rule, the final rule
would become effective sixty (60) days after the date of publication in
the Federal Register. After the effective date of any such final
regulation, existing manufacturers and new offshore oil and gas
extraction Phase III facilities, including existing facilities not
currently subject to cooling water intake requirements under 40 CFR
125, would need to comply when an NPDES permit containing requirements
consistent with the final rule is issued to the facility (see Sec.
125.100 and Sec. 125.132). Under current NPDES program regulations,
this will occur when a new NPDES permit is issued or when an existing
NPDES permit is issued, reissued, or modified or revoked and reissued.
As in Phase II, the proposed rule for Phase III existing facilities
includes special provisions to allow sufficient time to complete a
Comprehensive Demonstration Study during the first permit renewal
following promulgation of the Phase III rule (see Sec.
125.104(a)(2)(ii)).
A discussion of the timing of implementation of this proposed rule,
if promulgated, is provided in section VII.

H. What Special Definitions Apply to This Proposal?

EPA is proposing specialized definitions to clarify which
facilities are subject to national categorical requirements. For the
new oil and gas extraction facility requirements in

[[Page 68457]]

Subpart N, EPA is proposing five new definitions to clarify those
facilities subject to the requirements. These definitions are set forth
in the proposed regulations at Sec. 125.133 and include ``new offshore
oil and gas extraction facilities,'' ``offshore liquified natural gas
import terminals,'' ``seafood processing vessels,'' ``sea chest'' and
``fixed facility''). The remainder of the proposed definitions are the
same as those found in the final Phase I regulations; however, not all
of the definitions from Phase I regulations have been used as they are
not all applicable to these proposed Subpart N regulations.
EPA is also proposing definitions for Phase III existing facilities
in Subpart K at Sec. 125.102. All of these definitions are borrowed
from both Phase I and Phase II and remain unchanged, except for the
cutoff date in the definition of ``existing facility'' for new versus
existing offshore oil and gas extraction facilities. Similar to the
definitions for subpart N described above, not all of the definitions
from Phase II regulations have been used as they are not all applicable
to these proposed Subpart K regulations.
EPA solicits comment on these regulatory definitions.

III. Summary of Data Collection Activities

For the Phase III proposed rule, EPA focused its data collection
activities on section 316(b) survey data supplemented by available
existing data sources including the data developed for the Phase I and
Phase II rules.

A. Survey Questionnaires

As discussed in the preamble to the Phase II final rule (69 FR
41576), EPA's industry survey effort consisted of a two-phase process.
EPA administered a screener questionnaire focused on nonutility and
manufacturing facilities as the first phase of this data collection
process. The screener questionnaire provides information on cooling
water intake capacity, sources of the water, intake structure types,
and technologies used to minimize adverse environmental impacts. It
also provides data on facility and parent firm employee numbers and
revenues. This information was used to design a sampling plan for the
subsequent detailed questionnaire. Following the screener survey, the
Agency administered either a short technical or a detailed
questionnaire to utility, nonutility, and manufacturing facilities, as
described below. The two-phase survey was designed to collect
representative data from a sample group of those categories of
facilities potentially subject to section 316(b) regulation for use in
rule development.
In 1997, EPA estimated that over 400,000 facilities could
potentially be subject to a cooling water intake regulation. Given the
large number of facilities potentially subject to regulation, EPA
decided to focus its data collection efforts on six industrial
categories that, as a whole, were estimated to account for over 99
percent of all cooling water withdrawals. These six sectors were:
Utility Steam Electric, Nonutility Steam Electric, Chemicals & Allied
Products, Primary Metals Industries, Petroleum & Coal Products, and
Paper & Allied Products. At the time of the survey, there were about
48,500 facilities in these six categories. EPA believes that this
approach provided a sound basis for assessing best technologies
available for minimizing adverse environmental impacts.
The screener survey focused on nonutility and manufacturing
facilities. EPA developed the sample frame (list of facilities) for the
screener questionnaire using public data sources as described in the
Information Collection Request (DCN 3-3084-R2 in Docket W-00-03).
Facilities chosen for the screener questionnaire represented a
statistical sample of the entire universe of nonutility and
manufacturing facilities potentially subject to cooling water intake
regulations. EPA did not conduct a census of all facilities (i.e. send
a survey to all facilities) for the screener questionnaire because of
the burden associated with surveying a large number of facilities.
Rather, EPA refined the industry data using industry-specific sources
to develop sample frames and mailing lists. EPA believes the sample
frame was sufficient to characterize the operations of each industrial
category. EPA sent the screener questionnaire to 2600 facilities
identified in the sample frame as follows: (1) All identified steam
electric nonutility power producers, both industrial self-generators
and nonindustrial generators (1050 facilities, of which 853 responded);
and (2) a sample of manufacturers from the four non-steam electric
industrial categories: paper and allied products, chemical and allied
products, petroleum and coal products, and primary metals (1550
facilities, of which 1217 responded). EPA adjusted the sample frame for
the screener questionnaire to account for several categories of non-
respondents, including facilities with incorrect address information,
facilities no longer in operation, and duplicate mailings. Through
follow-up phone calls and mailings, EPA increased the response rate for
the screener questionnaire to 95 percent. The screener questionnaire
was not sent to utilities, all of which were believed to be identified
accurately using the publicly-available data described above.
A sample of manufacturing and nonutility facilities identified as
in-scope (subject to regulation) by the screener questionnaire and all
utilities then were sent either a short technical or a detailed
questionnaire. A total of 878 utility facilities, 343 nonutility
facilities and 191 manufacturing facilities received one of the two
questionnaires (short technical or detailed) during the second phase of
the survey. For utilities, nonutilities, and other manufacturing
facilities, EPA selected a random sample of these eligible facilities
to receive a detailed questionnaire. The sample included 282 utility
facilities and 181 nonutility facilities. All 191 manufacturing
facilities received a detailed questionnaire. For nonutilities and
utilities, those facilities not selected to receive a detailed
questionnaire were sent a Short Technical Questionnaire. EPA's approach
in selecting a sample involved the identification of population strata,
the calculation of sample sizes based on desired levels of precision,
and the random selection of sites given the sample size calculations
within each stratum. More detail is provided in the report entitled
``Statistical Summary for Cooling Water Intakes Structures Surveys''
(See DCN 3-3077 in Docket W-00-03).
Five questionnaires were distributed to different industrial
groups. They were: (1) Detailed Industry Questionnaire: Phase II
Cooling Water Intake Structures--Traditional Steam Electric Utilities;
(2) Short Technical Industry Questionnaire: Phase II Cooling Water
Intake Structures--Traditional Steam Electric Utilities (sent to both
utilities and nonutilities); (3) Detailed Industry Questionnaire: Phase
II Cooling Water Intake Structures--Steam Electric Nonutility Power
Producers; (4) Detailed Industry Questionnaire: Phase III Cooling Water
Intake Structures--Manufacturers; and, (5) Watershed Case Study Short
Questionnaire. The questionnaires provided EPA with technical and
financial data necessary for developing this proposed regulation.
Specific details about the questions may be found in EPA's Information
Collection Request (DCN 3-3084-R2 in Docket W-00-03) and in the
questionnaires (see DCN 3-0030 and 3-0031 in Docket W-00-03 and Docket
for today's proposal); these documents are also available on EPA's Web
site

[[Page 68458]]

(http://www.epa.gov/waterscience/316b/question/).
EPA also conducted outreach to industry groups, environmental
groups, and other government entities in the development, testing, and
refinement of a second round of surveys, the section 316(b) Phase III
Industry Technical and Economic Questionnaires, which have been used as
an additional source of data for the Phase III rule. The Phase III
surveys, published in September 2003, were sent to offshore oil and gas
extraction facilities and seafood processing vessels. Specific details
about the questions may be found in EPA's Information Collection
Request (DCN 7-0007) and in the questionnaires (see DCN 7-0008) in the
Docket for today's proposal); these documents are also available on
EPA's Web site (http://www.epa.gov/waterscience/316b/question/). In
addition, EPA utilized a survey conducted by the International
Association of Drilling Contractors (IADC) in 2003 to access technical
data on cooling water use by offshore oil and gas extraction
facilities, including fixed platforms and mobile units.

B. Existing Data Sources

EPA collected data from multiple sources, both public and
proprietary, in order to compile an accurate profile of the potentially
regulated community. EPA reviewed information collected by other
Federal agencies, as well as data compiled by private companies. In
those instances where databases are considered confidential, or where
raw data was unavailable for review, EPA did not consider the
information. Summaries of the reviewed data sources are listed below.
1. Electric Generators
EPA collected a substantial amount of data on the electric power
generating industry in the course of the Phase I, II, and III
rulemakings. For example, EPA used data from the Federal Energy
Regulatory Commission (FERC) (Forms 1 and 1-F), the Energy Information
Administration (EIA) (Forms EIA-412, -767, -860, -861, -867), the Rural
Utility Service (RUS) (Form 12), as well as information from the U.S.
Nuclear Regulatory Commission (NRC), the Utility Data Institute (UDI),
and the Edison Electric Institute (EEI). For detailed information about
these data sources, refer to the proposed rule for Phase II (67 FR 17131).
While electric power generators do not meet the proposed flow
thresholds and are therefore not subject to Phase III national
requirements (refer to section VI for further details), EPA did use the
aforementioned data on electric power generators in reaching this
decision. Data was used to assess, for example, the cooling water
intake flows and the amount of electricity generated, and as part of
the determination of economic impacts of the various compliance
alternatives that EPA considered in developing the proposed rule.
2. Manufacturers
In order to identify potential entrainment impacts at facilities
with a design intake flow below 50 MGD, EPA conducted a field study of
six manufacturers in the Spring of 2002. This study was conducted in
the mid-Atlantic region, with particular focus on the Delaware River
and its tributaries. Sampling sites were selected for three freshwater
and three tidal river facilities. EPA conducted two 4-day sampling
events at each facility and conducted measurements of the following
variables: site location and sampling point, facility intake flow rate,
sampling pump volume, sampling time and duration and sample chain of
custody. Additional physicochemical variables were measured, including
the following: temperature, dissolved oxygen (DO), pH, and
conductivity. Taxonomic identification was conducted for all organisms
collected and results are provided in the Data Report for Small
Facility Ichthyoplankton Entrainment Sampling for the Development of
the 316(b) Phase III Rule for Cooling Water Intake Structures (EPA,
2003) (DCN 7-0009).
In mid-June 2003, in order to supplement the biological data used
for estimating baseline impingement mortality and entrainment rates,
EPA compiled a list of facilities who had responded in their industry
questionnaire that they had conducted a biological study. Some of these
facilities were then requested to provide EPA with copies of these
studies. The first data collection effort focused on facilities that
are located on an inland waterbody and have a high average daily intake
flow. Preference was given to facilities located on Lake Michigan and
the Columbia River, as these waterbodies (and more broadly, these
regions of the country) were identified as having inadequate data for
future analysis of Phase III impingement mortality and entrainment
rates. The second data collection effort focused on facilities located
in particular U.S. Fish and Wildlife Service fish regions to be used by
EPA in calculation of benefits for the rule. The last data collection
effort focused specifically on Phase III facilities. In total, 90
facilities were contacted and these contacts resulted in collection of
63 biological studies (33 of which were from Phase III facilities) for
use in estimation of baseline impingement mortality and entrainment rates.
3. Offshore Oil and Gas Extraction Facilities and Seafood Processing
Vessels
EPA conducted extensive research on the use of cooling water by
offshore oil and gas extraction facilities and seafood processing
vessels to determine whether these industry sectors would be subject to
regulation under the Phase III rule. Information sources included
industry surveys (one administered by EPA in conjunction with the
International Association of Drilling Contractors (IADC) and another
solely by EPA); industry databases and other publicly available
information, and meetings with government and industry representatives.
The survey efforts are described in section III.A above.
In April and May of 2003, EPA conducted site visits and field
interviews at offshore oil and gas extraction facilities and seafood
processing vessels to evaluate technologies in use for reducing
impingement mortality and/or entrainment at these facilities. EPA
employed the services of a specialized naval engineer to conduct these
site visits and field interviews. Site visits were conducted at
platforms and vessels. In addition, field interviews were conducted
with industry personnel. The data collected from these visits and
interviews included geographic data, intake design and impingement and
entrainment technologies in place, impingement and entrainment problems
encountered as well as any methods utilized in resolving such problems
(See DCN 7-0010).
Sources used by EPA to characterize the offshore seafood processing
industry included the following:
? U.S. Food and Drug Administration (FDA), Center for Food
Safety and Applied Nutrition, January 2003, which included a list of
U.S. FDA-European Union (EU) Exporters, Processing Vessels.
? Alaska Department of Fish and Game 2002 Intent to Operate Listing.
? Water Discharge Permits (PCS) database searches by SIC
codes 2091, 2092 and 2077.
? Department of Transportation Maritime Administration
(MARAD) Web site: http://www.marad.dot.gov/publications/index.html and
http://www.marad.dot.gov/Marad_Statistics/index.html.
? U.S. Coast Guard Merchant Vessels of the United States database.

[[Page 68459]]

? U.S. Coast Guard PSIX/MSIS databases.
? National Transportation Safety Board database.
? U.S. Army Corps of Engineers, Navigation Data Center,
Waterborne Commerce Statistics Center.
? The Alaska Department of Fish and Game Division of
Commercial Fisheries Web site: http://www.cf.adfg.state.ak.us
? The At-Sea Processors Association Web site: http://www.atsea.org/.

? EPA Region 10 Database of seafood processors permitted in Alaska.
? Technical Development Document (TDD) for the Uniform
National Discharge Standards (UNDS) program (found at
http://unds.bah.com/TDD.pdf) (Appendix A: Seawater Cooling
Overboard Discharge Report).
? National Marine Fisheries Service Web site, Restricted
Access Management Program, http://www.fakr.noaa.gov/ram/default.htm.
? National Marine Fisheries Services Web site, link to
American Fisheries Act (AFA) permits: http://www.fakr.noaa.gov/ram/afa.htm#list.

? Several vessel operators, naval architects, engineers and regulators.

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

Since 1993, EPA has been developing cooling water regulations as
part of a collaborative effort with industry and environmental
stakeholders, other Federal agencies, the academic and scientific
communities, and the general public. As a result, EPA has reviewed and
considered the many documents, demonstration studies, scientific
analyses, and historical perspectives offered in support of each phase
of the regulatory process. For example, during the early stages of data
gathering, EPA created an internal library of reference documents
addressing cooling water intake structure issues. This library
currently holds over 2,800 documents, many of which were referenced in
the rulemaking process and are contained in the record (see the
following paragraph for further information on the record). The library
contains a thorough collection of a wide variety of documents,
including over 80 section 316(b) demonstration documents, over 300
impingement and entrainment studies, over 100 population modeling
studies, over 500 fish biology and stock assessment documents, over 350
biological studies commissioned by power generators, over 80 NPDES
decisions and NPDES or SPDES-related documents, over 120 intake
technology reports, over 10 databases on the electric power industry,
and documents from interagency committees such as the Ohio River Valley
Water Sanitation Commission (ORSANCO).
In addition, the record for the Phase I new facility rule contains
nearly 1,000 documents (research articles, databases, legal references,
memorandums, meeting notes, and other documents), consisting of
approximately 47,000 pages of supporting material available for public
review. And the record for the Phase II existing facility rule contains
over 2600 additional documents, comprising approximately 125,000 pages
of supporting material.
Finally, EPA has worked extensively with stakeholders from
industry, public interest groups, State agencies, and other Federal
agencies in the development of this proposed rule. These public
participation activities have focused on various section 316(b) issues,
including general issues, as well as issues relevant to development of
the Phase II rule and issues relevant to this proposed Phase III rule.
See section I.C.6 of this preamble for a discussion of key public
participation activities.

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

Today's proposed rule would apply national categorical requirements
to two groups of facilities that use cooling water intake structures to
withdraw water from waters of the U.S.: existing manufacturing and
industrial facilities and new offshore oil and gas extraction facilities.

A. Overview of Potentially Regulated Phase III Universe

EPA's data collection efforts largely focused on five industrial
sectors: small flow electric power generators (both utilities and
nonutilities withdrawing less than 50 MGD); chemicals and allied
products (SIC Major Group 28); primary metals industries (SIC Major
Group 33); paper and allied products (SIC Major Group 26); and
petroleum and coal products (SIC Major Group 29). The latter four
sectors use a significant portion of the cooling water withdrawn among
all manufacturing industries. EPA also identified other industry
sectors that use cooling water including: transportation equipment (SIC
Major Group 37); lumber and wood products (SIC Major Group 24); rubber
and plastics products (SIC Major Group 30); food and kindred products
(SIC Major Group 20); tobacco products (SIC Major Group 21); and
machinery (SIC Major Group 35) (see DCN 7-0011). A more comprehensive
list of industries that use cooling water and their NAICS and SIC Codes
can be found in section A of the Supplementary Information. Although
EPA's survey data collection efforts were not designed to collect data
from industries other than the five listed above, data were collected
from the following industries: food processing; aircraft engines and
engine parts; cutlery; sawmills and planing mills; finishers of broad
woven fabrics of cotton; potash, soda and borate minerals; iron ores;
and sugarcane and sugar beets. These data from other industries, while
not a statistically derived sample, confirm that the five primary
industry sectors discussed above account for the vast majority of Phase
III cooling water use. The data also suggest that the intake structure
design and construction at these industries were substantially similar
to the industries for which EPA did collect data.
Of the estimated 683 manufacturing and electric generator
facilities (survey weighted estimate, as described in the Technical
Development Document EPA-821-R-04-015, DCN 7-0004) within the Phase III
universe,\6\ approximately 225 (33 percent) belong to the pulp and
paper sector, 185 (27 percent) belong to the chemical sector, 88 (13
percent) belong to the metals sector, and 39 (6 percent) belong to the
petroleum sector. EPA also surveyed 29 facilities in other industry
sectors (discussed above, all of which are potentially subject to the
Phase III rule) in the detailed questionnaire, and those data are also
being considered in today's proposed rule. In addition, an estimated
117 (17 percent) electric generating facilities are included within the
Phase III universe.
---------------------------------------------------------------------------

\6\ The entire Phase III universe includes facilities with a
design intake flow greater than 2 MGD which use at least 25 percent
of the water withdrawn exclusively for cooling, and are not covered
by Phase II. Offshore oil and gas extraction facilities are not
included in this estimate.
---------------------------------------------------------------------------

The information below is generally based on data collected from the
Short Technical Industry Questionnaire, the Detailed Industry
Questionnaire, and the Phase III Industry Technical and Economic
Questionnaires. Additional detail discussing the entire Phase III
universe as well as facilities subject to the uniform national
standards and facilities subject to permitting based on best
professional judgment can be found in the Technical Development Document.
As explained in section V of this preamble, there are five main
categories of surface water used as sources of cooling water. The
source of surface water withdrawn for cooling is an

[[Page 68460]]

important factor in determining potential environmental impacts. An
estimated 11 (2 percent) facilities withdraw cooling water from an
ocean; an estimated 39 (6 percent) facilities withdraw cooling water
from an estuary or tidal river; an estimated 496 (73 percent)
facilities withdraw cooling water from a freshwater stream or river; an
estimated 60 (9 percent) facilities withdraw cooling water from a lake
or reservoir; and an estimated 77 (11 percent) facilities withdraw
cooling water from one of the Great Lakes. EPA estimates a total design
intake flow of 40,441 MGD and total actual intake flow of 21,624 MGD
for the Phase III universe.
Of the facilities within the Phase III universe, 303 (44 percent)
employ once-through cooling systems, 198 (29 percent) use closed-cycle
recirculating cooling systems, 121 (18 percent) use ``combination''
systems, and 61 (9 percent) use an ``other'' type of system. An
estimated 286 (42 percent) facilities have installed a cooling tower.
Note that not all facilities that have installed a cooling tower are
classified as using closed-cycle recirculating cooling systems, as some
facilities with multiple cooling water systems may be ``combination''
systems that employ both closed-cycle and once-through cooling.
Facilities may also list ``helper'' cooling towers, which are generally
used to mitigate discharge temperatures and do not affect intake flows.
Since facilities may have more than one cooling water system, these
estimates are based on the predominant cooling water system at each
facility.
Facilities within this universe also may have more than one cooling
water intake structure configuration. Therefore, in providing the
information on intake structures, a facility may be counted multiple
times (as many times as it has distinct cooling water intake structure
configurations). Thus, of the facilities within the Phase III universe,
683 facilities represent an estimated 747 total cooling water intake
structure configurations. Of these, an estimated 359 (48 percent) have
a shoreline intake, 216 (29 percent) have a submerged offshore intake,
123 (16 percent) withdraw cooling water through a canal or channel, 49
(7 percent) have an intake situated in a bay or cove, and 47 (6
percent) are estimated to have some other type of intake or provided no
information.

B. Existing Manufacturers and Industrial Facilities Potentially Subject
to Proposed National Requirements

This section presents the number of facilities that would be
potentially subject to uniform national performance standards under
each of the three co-proposed options. See section VI of this preamble
and Chapter 4 of the Technical Development Document for details on the
other options considered but not presented as part of today's proposal.
Exhibit IV-1 provides the number of existing facilities by design
intake flow and waterbody type. Throughout the rest of this section,
tabulations of less than five facilities are combined to prevent
disclosure of an individual facility's information.

Exhibit IV-1.--Total Number of Phase III Manufacturing Facilities Potentially Subject to the Regulations by
Design Intake Flow and Waterbody Type
----------------------------------------------------------------------------------------------------------------
Waterbody
--------------------------------------------------------
Oceans,
Facility design intake flow Freshwater rivers estuaries, tidal
and streams, rivers and All waterbodies
lakes, and streams, and
reservoirs Great Lakes
----------------------------------------------------------------------------------------------------------------
2 MGD or greater \1\................................... 556 127 683
20 MGD or greater \1\.................................. 302 92 394
50 MGD or greater \2\.................................. 103 52 155
100 MGD or greater \2\................................. 47 26 73
200 MGD or greater \2\................................. 16 15 31
----------------------------------------------------------------------------------------------------------------
\1\ Includes those electric generating facilities defined as part of the Phase III universe.
\2\ Only includes manufacturing facilities.

1. National Requirements for Facilities With a Design Intake Flow of 50
MGD and Above
EPA's 50 MGD option would require an estimated 155 facilities to
meet the uniform national standards that implement section 316(b)
(facilities with a design intake flow of 50 MGD and above and meeting
applicability criteria at Sec. 125.101). These facilities are
comprised of an estimated 56 (36 percent) within the chemical sector,
42 (27 percent) within the pulp and paper sector, 30 (19 percent)
within the metals sector, 17 (11 percent) within the petroleum sector,
and an estimated total of 10 facilities (7 percent) within the
``other'' category; no seafood processing vessels would meet the
applicability criteria at Sec. 125.101.
An estimated 6 (4 percent) facilities withdraw cooling water from
an ocean; an estimated 15 (10 percent) facilities withdraw cooling
water from an estuary or tidal river; an estimated 93 (60 percent)
facilities withdraw cooling water from a freshwater stream or river; an
estimated 10 (6 percent) facilities withdraw cooling water from a lake
or reservoir; and an estimated 31 (20 percent) facilities withdraw from
one of the Great Lakes.
EPA has estimated that these 155 facilities possess a total design
intake flow of 30,136 MGD and an actual intake flow of 16,582 MGD.
Further, of the cooling water system types in use at these 155
facilities, 68 (44 percent) of these systems are once-through cooling
systems, 6 (4 percent) are closed-cycle recirculating cooling systems,
56 (36 percent) are ``combination'' systems, and 25 (16 percent) use an
``other'' type of system. An estimated 52 (33 percent) facilities have
installed a cooling tower. As noted above, not all facilities that have
installed a cooling tower are classified as closed-cycle recirculating
cooling system.
These 155 facilities possess an estimated 211 total cooling water
intake structure configurations. Of these, an estimated 46 (23 percent)
facilities withdraw cooling water through a canal or channel, 17 (11
percent) have an intake situated in a bay or cove, 89 (59 percent) have
a shoreline intake, 31 (20 percent) have a submerged offshore intake,
and 28 (5 percent) are estimated to have some other type of intake or
provide no information.

[[Page 68461]]

2. National Requirements for Facilities With a Design Intake Flow of
200 MGD and Above
EPA's 200 MGD option would require an estimated 31 facilities to
meet the uniform national standards that implement section 316(b)
(facilities with a design intake flow of 200 MGD and above and meeting
applicability criteria at Sec. 125.101). These facilities are
comprised of an estimated 15 (48 percent) within the metals sector, 7
(23 percent) within the chemical sector, and 9 (29 percent) within the
petroleum sector, the pulp and paper sector, or the ``other''
industries category.
An estimated 5 (16 percent) facilities withdraw cooling water from
an estuary or tidal river; an estimated 16 (50 percent) facilities
withdraw cooling water from a freshwater stream or river, lake, or
reservoir; and an estimated 10 (32 percent) facilities withdraw from
one of the Great Lakes. EPA estimates that there are no manufacturing
facilities with a design intake flow of 200 MGD or greater that
withdraw from an ocean.
EPA has estimated that these 31 facilities possess a total design
intake flow of 18,340 MGD and an actual intake flow of 11,472 MGD.
Further, of the cooling water system types in use at these 31
facilities, 17 (55 percent) of these systems are once-through cooling
systems, and 14 (45 percent) are ``combination'' or ``other'' systems.
An estimated 10 (32 percent) facilities have installed a cooling tower
or closed-cycle recirculating system.
These 31 facilities possess an estimated 70 total cooling water
intake structure configurations. Of these, an estimated 16 (23 percent)
facilities withdraw cooling water through a canal or channel, 24 (34
percent) have a shoreline intake, and 30 (43 percent) have a submerged
offshore intake.
3. National Requirements for Coastal and Great Lakes Facilities With a
Design Intake Flow of 100 MGD and Above
EPA's third proposed option would establish national requirements
for facilities with 100 MGD or more design intake flows when the intake
is on coastal waters (including oceans, tidal rivers and streams, and
estuaries) or one of the Great Lakes. This option would require an
estimated 26 facilities to meet the uniform national standards. These
facilities are comprised of an estimated 12 (46 percent) within the
metals sector, 7 (27 percent) within the chemical sector, and the
remaining 7 (27 percent) within the pulp and paper sector, the
petroleum sector, or the ``other'' industries. EPA estimated that these
26 facilities possess a total design intake flow of 7,661 MGD and
actual intake flow of 4,753 MGD.
Further, of the predominant system types in use at these 26
facilities, 13 (50 percent) of these systems are once-through cooling
systems. The other estimated 13 facilities use a combination cooling
system and have installed a cooling tower. These 26 facilities possess
an estimated 47 total cooling water intake structure configurations. Of
these, an estimated 11 (23.4 percent) facilities withdraw cooling water
through a canal or channel, 21 (44.7 percent) have a shoreline intake,
and 15 (31.9 percent) have a submerged offshore intake.

C. New Offshore Oil and Gas Extraction Facilities Subject to Proposed
National Requirements

Today's proposed rule would also apply national requirements to new
offshore (offshore includes coastal) oil and gas extraction facilities.
EPA is presently considering new facilities within the offshore oil and
gas extraction industry as classified under SIC Major Group 13. EPA
projects that there will be an estimated 124 new offshore oil and gas
extraction facilities over the next 20 years. Most of these facilities
will withdraw less than 50 MGD estimated design intake flow and will
include both mobile offshore drilling units (MODUs) and deepwater
platforms in the Gulf of Mexico and Alaska. Only three new MODUs are
projected to have a design intake flow of greater than 50 MGD within
the period of analysis. EPA's projection of new oil and gas extraction
facilities is based on historical refurbishment of old rigs including
MMS data on new platform installations over the last 10 years. See Part
C of the EA for more information. Note most new offshore and coastal
oil and gas extraction facilities to which today's proposed rule would
apply would not be operating in estuaries, except for those operating
in Cook Inlet.

V. Environmental Impacts Associated With Cooling Water Intake Structures

Through the Phase III rulemaking, EPA intends to minimize the
adverse environmental impacts of cooling water intake structures by
reducing 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 rule for new
facilities and in the Phase II rule for certain existing facilities,
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; 67 FR 17136-40;
and 69 FR 41587-88).
For the same reasons set forth in the preamble to the rules for
Phase I and Phase II facilities (66 FR 65256, 65291-65297 and 69 FR
41586-90), EPA has determined that there are multiple types of
undesirable and unacceptable environmental impacts that may be
associated with Phase III facilities, depending on conditions at the
individual site. These types of impacts include entrainment and
impingement which can contribute to reductions of threatened and
endangered species; and ecologically 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 and
recreational fisheries; and stresses to overall communities and
ecosystems as evidenced by reductions in diversity or other changes in
system structure and function. Based on the analyses in and for the
same reasons set forth in the preambles to the Phase I rule (66 FR
65256, 65291-65297) and Phase II rule (69 FR 41598-41601), EPA has
selected reductions in impingement mortality and entrainment as a
quick, certain, and consistent metric for comparing facility
performance to applicable requirements for Phase III facilities.
Further, EPA considered the non-water quality environmental impacts for
this rule (e.g., impacts on energy use and associated increases in
emissions) 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.
Impingement takes place when organisms are trapped against cooling
water 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.

[[Page 68462]]

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.
EPA estimates that existing Phase III facilities withdraw, on
average, approximately 23,000 million gallons a day from waters of the
United States.7 8 The withdrawal of such large quantities of
water has the potential to affect large quantities of aquatic organisms
including phytoplankton (tiny, freefloating photosynthetic organisms
suspended in the water column), zooplankton (small aquatic animals,
including fish eggs and larvae, that may 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. Other organisms, including reptiles, birds, and mammals
are also sometimes drawn into cooling water intake structures.
---------------------------------------------------------------------------

\7\ 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, DC. OMB Control No. 2040-0213.
\8\ EPA 2003. Industry Technical Questionnaire: Phase III
Cooling Water Intake Structures. Offshore and Coastal Oil and Gas
Extraction Facilities. U.S. Environmental Protection Agency, Office
of Science and Technology, Washington DC. OMB Control No. 2030-0213.
---------------------------------------------------------------------------

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 fishery landings. EPA estimates
that cooling water intake structures potentially within the scope of
today's rule and with a cooling water intake designed to take in
greater than 2 MGD of water kill more than 120 million age 1 equivalent
fish annually through impingement and entrainment. 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. Although the
number of age 1 equivalent fish killed by impingement and entrainment
is large, precise quantification of the nature and extent of impacts to
populations and ecosystems is difficult due in part to the complexity
of population dynamics and the physical, chemical, and biological
processes of ecosystems. While it is generally accepted as a simple and
transparent method for modeling losses, the proportional methodology
that EPA uses to estimate impingement mortality and entrainment
nationwide involves uncertainties that may result in under or over
estimating actual impingement mortality and entrainment rates.\9\
---------------------------------------------------------------------------

\9\ For more information, please see Chapter A2 of Part A of the
Regional Analysis Document.
---------------------------------------------------------------------------

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 percent.\10\ This is because forage species,
which comprise a majority of entrainment losses at many facilities, are
often a primary food source for predator species.
---------------------------------------------------------------------------

\10\ Summers, J.K. 1989. Simulating the indirect effects of
power plant entrainment losses on an estuarine ecosystem. Ecological
Modeling, 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).\11\ 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 mortality 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.\12\ 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.\13\ 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 NOAA Fisheries 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.\14\ 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.
---------------------------------------------------------------------------

\11\ For more information, please see Chapter A9 of Part A of
the Regional Analysis Document.
\12\ 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.
\13\ 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.
\14\ Florida Power and Light Company. 2002. Florida Power &
Light Company St. Lucie Plant Annual Environmental Operating Report 2002.
---------------------------------------------------------------------------

EPA is addressing the universe of existing facilities through two
separate rulemakings. The Phase II final rule addressed power
generation facilities with cooling water intake structures designed to
take in water flows greater than or equal to 50 million gallons a day
(MGD). For today's proposed rulemaking, EPA evaluated impacts from the
remaining power generation facilities (those with cooling water intake
structures designed to withdraw greater than 2 MGD and less than 50
MGD) and from manufacturing facilities withdrawing greater than 2 MGD.
EPA divided the universe of existing facilities in this way in part
because EPA initially had limited data on Phase III facilities with
design capacities less than 50 MGD. Dividing the universe of existing
facilities provided EPA with an

[[Page 68463]]

opportunity to gather more information on Phase III facilities.
Though the magnitude of impacts EPA has quantified from the
universe of Phase III facilities is substantially smaller than the
magnitude of impacts EPA has quantified from the universe of Phase II
facilities, the information EPA has gathered on individual Phase III
facilities indicates that the types of impacts that large individual
facilities have on aquatic organisms can be similar to individual Phase
II facilities' impacts.\15\ Like Phase II facilities, Phase III
facilities withdraw water from all waterbody types: lake, reservoir,
Great Lake, freshwater river and stream, tidal river, estuary, and
ocean environments. A smaller percentage of the overall cooling water
flow withdrawn by Phase III facilities comes from tidal river, estuary
and ocean environments, however, which are some of the most sensitive
waterbodies. Phase III facilities also reside in many of the same
geographic areas of the country and on many of the same waterbodies as
Phase II facilities.
---------------------------------------------------------------------------

\15\ 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, DC. OMB Control No. 2040-0213.
---------------------------------------------------------------------------

Information available to the Agency also indicates that the range
of configurations of Phase III cooling water intake structures is
similar to that of Phase II intakes (see section VI), and that their
size ranges broadly overlap (in terms of both design capacity and
actual intake flow). The majority of facilities evaluated as part of
the Phase III rulemaking, have cooling water intake structures designed
to take in less than 50 MGD. However, the majority of total cooling
water intake volume at Phase III facilities is associated with
facilities designed to withdraw 50 MGD or more. The ten largest Phase
III facilities have intakes designed to take in more than 500 MGD. Two
of these facilities have cooling water intakes designed to take in more
than 1,000 MGD. In Phase II, there were 257 facilities with cooling
water intakes designed to take in more than 500 MGD and 112 cooling
water intakes designed to take in more than 1,000 MGD.
The universe of Phase III facilities also differs from that of
Phase II facilities in that it includes oil and gas extraction
facilities operating in offshore marine environments. EPA knows of no
studies that examine actual impingement mortality and entrainment by
offshore oil and gas extraction facilities. However, offshore marine
environments provide habitat for a number of species of fish,
shellfish, and other aquatic organisms. Many species have life stages
that are small and planktonic or of minimal swimming ability and are
therefore vulnerable to entrainment by cooling water intake structures.
Larger life stages are potentially vulnerable to impingement. Both
types of organisms are found in the offshore marine environment and
thus may be susceptible to impingement mortality and entrainment by
offshore oil and gas extraction facilities. The densities of organisms
in the vicinity of these facilities relative to densities in estuaries
and other nearshore areas is not well characterized.
Offshore oil and gas extraction facilities have also been shown to
attract and concentrate aquatic organisms in the immediate vicinity of
the underwater portions of their structure. A variety of species of
pelagic fish have been found to gather within relatively short time
frames around the underwater portion of offshore oil and gas extraction
facilities. If a facility remains in one place for a sufficient length
of time, other species of aquatic organisms take up residence directly
upon the underwater structure and form reef-like communities that
support additional species of fish and shellfish. The increased number
of organisms near the underwater portion of facilities where cooling
water intake structures are located increases the potential for
impingement mortality and entrainment of those organisms. The extent to
which the increased numbers of aquatic organisms represents an overall
increase in organism populations, rather than a simple concentration of
organisms from surrounding areas, is not known. (For additional
information, see DCN 7-0013.)
The Minerals Management Service (MMS) did attempt to estimate
potential population level impacts from impingement mortality and
entrainment associated with the future operation of the Liberty Island
project located in the Beaufort Sea in Alaska. The final Environmental
Impact Statement for the project states that the proposed seawater
intake structure will likely harm or kill some young-of-the-year arctic
cisco during the summer migration period and some eggs and fry of other
species living in the immediate vicinity of the intake. MMS estimated
that less than 1% of all arctic cisco in the Liberty Island area were
likely to be harmed or killed by the intake structure and that there
would not be a measurable effect on the young-of-the-year cisco in the
migration corridor. However, MMS also did not expect measurable effects
on populations of other fish species, including salmon, because of the
widespread and low density distribution of those species' eggs and fry.
Essential fish habitat for salmon will be adversely affected according
to MMS because it is expected that prey species of zooplankton and fish
in their early life stages (juveniles, eggs, and larvae) could be
killed in the intake (see Section A of the Regional Study report).
EPA's analyses indicate that, on a national basis, Phase II
existing facilities have a total actual cooling water intake flow
(214,000 million gallons a day) greater than that of Phase III existing
facilities (23,000 million gallons a day). As discussed in the preamble
to the Phase II final rule (69 FR 41612), information in the record
contains evidence to support the proposition that, in a given aquatic
environment, entrainment is related to flow (see DCN 2-013L-R15 and 2-
013) 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
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. Impingement rates are also influenced by swim speeds of
affected species and intake velocity. As described in section IX, the
Agency estimates that 120 million age 1 equivalent fish are impinged
and entrained annually by the universe of Phase III facilities. This
number is lower than the 3.4 billion age 1 equivalent fish the Agency
estimated to be impinged and entrained annually by Phase II facilities
(69 FR 41656). The lower total flow partially explains why the impacts
EPA quantified for Phase III facilities are lower than those EPA
quantified for Phase II facilities. In addition, based on the studies
EPA was able to collect from Phase II and Phase III facilities, even on
a flow-weighted basis the number of organisms impinged and entrained by
Phase III facilities is approximately one third of the number of
organisms impinged and entrained by Phase II facilities.
The following discussion refers to studies from Phase II facilities
which have been extensively studied in order to illustrate
environmental impacts associated with cooling water intake structures.
Because of the basic similarities in nature among Phase II and Phase
III facilities, the Agency believes these case studies are useful for
understanding the types of environmental impacts that may result from
cooling water intake structures at Phase III facilities. EPA notes that
Phase II facilities as a group withdraw more

[[Page 68464]]

cooling water than the Phase III facilities as a group and requests
comment on the relevance of these Phase II facility studies for the
Phase III rulemaking. EPA also requests any case studies or other
available data on environmental impacts from Phase III facilities.
Examples of Environmental Impacts Caused by Phase II Cooling Water
Intake Structures
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.\16\ The combined design intake flow capacity of these
five facilities is greater than 6,500 million gallons per day. 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.''\17\
---------------------------------------------------------------------------

\16\ 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.
\17\ New York State Department of Environmental Conservation
(NYSDEC). 2000. Internal memorandum provided to the U.S. EPA on
NYDECs position on SPDES permit renewals for Roseton, Bowline Point
1 & 2, and Indian Point 2 & 3 generating stations.
---------------------------------------------------------------------------

The Final Environmental Impact Statement (FEIS) prepared for these
three of these five 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.\18\ 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.\19\ In addition, related studies have found a small long-term
decline in both species richness and diversity within the resident fish
community.\20\
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\18\ 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.
\19\ Ibid.
\20\ 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.
---------------------------------------------------------------------------

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 Ni[ntilde]o-
Southern Oscillation), and strict management of individual species
stocks such as striped bass.\21\ 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.\22\ The existence of these interacting variables
makes it difficult to determine the impact 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.
---------------------------------------------------------------------------

\21\ Ibid.
\22\ 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.
---------------------------------------------------------------------------

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 (1,000 MGD) and the
average annual losses of aquatic organisms due to impingement and
entrainment are estimated in the billions, including, among other
species, 251 million winter flounder, 375 million windowpane flounder,
3.5 billion tautog and 11.8 billion bay anchovy.\23\ A dramatic change
in the fish populations in Mount Hope Bay is apparent after 1984 with
finfish abundance 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.24 25 The relative
contributions of cooling water withdrawal and increased thermal
discharge to the observed population decline is not known, and some of
decline may be due to factors other than cooling water. However, the
downward trend of several species of finfish abundance in Mount Hope
Bay is significantly greater than declines for the same species in
adjacent Narragansett Bay that is not influenced by the operation of
Brayton Point Station.\26\ Despite fishing restrictions, fish stocks
have not recovered.
---------------------------------------------------------------------------

\23\ Brayton Point Station, Somerset, MA. Final National
Pollutant Discharge Elimination System (NPDES) Permit: Fact Sheet.
October 2003.
\24\ Ibid.
\25\ Gibson, M. 1995 (revised 1996). Comparison of trends in the
finfish assemblages of Mt. Hope Bay and Narragansett Bay in relation
to operations fo the New England Power Brayton Point station. Rhode
Island Division of Fish and Wildlife, Marine Fisheries Office.
\26\ 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) (3,300 MGD
design intake capacity), 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.\27\ The amount lost per year included approximately 350,000
juveniles of white croaker, a popular

[[Page 68465]]

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.
---------------------------------------------------------------------------

\27\ 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
Facilities sited on waterbodies previously impaired by
anthropogenic activities such as channelization can demonstrate the
potential for reduced entrainment and impingement losses associated
with cooling water intake structures. 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.\28\ 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 mortality and
entrainment by cooling water intake structures.
---------------------------------------------------------------------------

\28\ 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 mortality and
entrainment at existing facilities, many of them are based on limited
data that were collected more than 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 or for a
subset of the affected species; limited taxonomic detail (i.e., egg and
larval losses not identified to the species level); a general lack of
statistical information such as inclusion of variance measures for
impingement and entrainment estimates; and the lack of standard methods
and metrics for quantifying impingement mortality and entrainment,
which limits the potential for comparing impacts among species, years,
sites, and technologies and 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 or incomplete, making quantification of impacts difficult.
Recent advances in environmental assessment techniques provide new and,
in some cases, better tools for monitoring impingement and entrainment
and quantifying the current magnitude of the impacts.29 30
It is difficult to predict the effects of these study limitations on
the impacts estimates, specifically whether they have led to an
overestimate or underestimate of impacts. The studies do show, however,
that the nature and magnitude of impacts are highly case specific.
---------------------------------------------------------------------------

\29\ Schmitt, R.J. and C.W. Osenberg. 1996. Detecting Ecological
Impacts. Academic Press, San Diego, CA.
\30\ 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
structures withdrawals; and (3) repeated, 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. Based on EPA's
estimation of national impacts from Phase II and Phase III facilities,
Phase II facilities would contribute a greater level of stress to a
national measurement of cumulative stress than would the universe of
Phase III facilities. However, the potential cumulative effects on a
species or ecosystem of multiple intakes located within a specific
waterbody or along a coastal segment are difficult to quantify and are
not typically assessed. Thus, EPA is concerned that this type of
cumulative impact is largely unknown and has not adequately been
accounted for in evaluating impacts.
A total of 408,000 million gallons of water per day were withdrawn
from waters of the United States in 2000 for cooling, irrigation,
manufacturing processes, drinking, livestock watering and other
purposes,\31\ of which cooling water intake from Phase III facilities
constitutes 23,000 million gallons of water per day, or approximately
6% of total water withdrawal. Additional stresses on 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 health and long-term viability of aquatic
resources. EPA analyses suggest that over 99 percent of all existing
facilities with cooling water withdrawals 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.
---------------------------------------------------------------------------

\31\ Hutson, S.S., N.L. Barber, J.F. Kenny, K.S. Linsey, D.S.
Lumia, and M.A. Maupin. 2004. Estimated Use of Water in the United
States in 2000. U.S. Geological Survey Circular 1268.
---------------------------------------------------------------------------

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

[[Page 68466]]

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 uncertainty about the extent to which
cooling water intake structures alone reduce a population's
compensatory reserve, this stressor, in combination with the multitude
of other stressors acting upon a species, can potentially adversely
affect population sustainability.\32\ Moreover, EPA notes that the
opposite effect or ``depensation'' (decreases in recruitment as stock
size declines) \33\ 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.34 35 36
---------------------------------------------------------------------------

\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 New Foundland and Labrador. Canadian Journal of Fisheries
and Aquatic Sciences 51:2126-2146.
\33\ 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.
\34\ 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.
\35\ Hutchings, J.A. and R.A. Myers. 1994. What can be learned
from the collapse of a renewable resource? Atlantic cod, Gadus
morhus, of New Foundland and Labrador. Canadian Journal of Fisheries
and Aquatic Sciences 51:2126-2146.
\36\ Liermann, M. and R. Hilborn. 1997. Depensation in fish
stocks: A hierarchic Bayesian metaanalysis. Can. J. Fish. Aquatic.
Sci. 54:1976-1985.
---------------------------------------------------------------------------

In conclusion, EPA believes that there are multiple types of
undesirable and unacceptable environmental impacts that may be
associated with Phase III facilities, depending on conditions at the
individual site. EPA solicits comment and additional data
characterizing the type and extent of these impacts.

VI. Basis for the Proposed Requirements

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

Under today's proposed rule, existing Phase III facilities would be
subject to the same national performance standards as Phase II existing
facilities, and would be authorized to meet these requirements through
the same five compliance alternatives provided in the Phase II rule.
EPA is proposing to codify Phase III requirements in 40 CFR 125,
subpart K. See section II for a discussion of the three co-proposed
thresholds that in part determine which facilities would constitute a
Phase III existing facility. Requirements for facilities that have, or
are required to have, an NPDES permit and withdraw cooling water from
waters of the United States, but do not meet the applicable flow
threshold of today's proposed rule, or use less than 25 percent of the
water withdrawn exclusively for cooling purposes, would continue to be
established by permit writers on a case-by-case, best professional
judgment basis. Today's proposed rule also would establish requirements
for new offshore oil and gas extraction facilities. See section VI.A.5
for a discussion of proposed requirements for new offshore oil and gas
extraction facilities. As with EPA's Phase I and II rules, States and
authorized Tribes retain the authority to impose additional
requirements as authorized by their laws and regulations.
EPA is proposing national performance standards for the reduction
of impingement mortality and, when appropriate, entrainment. EPA
developed these proposed performance standards in part based on a
variety of technologies, but the proposed rule would not mandate the
use of any specific technology. Rather, the proposed 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) based on the effectiveness of
commercially available, economically practicable technologies operating
in a range of aquatic environments. These proposed performance
standards reflect the best technology available for minimizing adverse
environmental impact determined on a national categorical basis. The
type of performance standard applicable to a particular facility (i.e.,
reductions in impingement mortality only or reductions in both
impingement mortality and entrainment) would vary by the source
waterbody type (i.e., freshwater river/stream, estuary/tidal river,
ocean, Great Lake, or lake/reservoir) and the proportion of the
waterbody withdrawn.
Under this proposal, a Phase III existing facility could select
among the same compliance alternatives available under the Phase II
rule: (1) Demonstrate that it has reduced or will reduce its cooling
water intake flow commensurate with a closed-cycle recirculating
system, or that it has reduced, or will reduce, the maximum through-
screen design intake velocity to 0.5 feet per second or less (the
through-screen design intake velocity criteria meets the performance
standards to reduce impingement mortality only; the facility may still
be subject to performance standards for entrainment); (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.
EPA is proposing this regulatory scheme based on its assessment
that Phase III existing facilities (existing facilities not covered
under the Phase II rule with a design intake flow that meets or exceeds
one of the co-proposed thresholds) and Phase II facilities (existing
power producers with a design intake flow of 50 MGD or greater) can
employ similar technologies to minimize adverse environmental impacts,
specifically impingement mortality and entrainment. EPA found no
significant differences in either the types of cooling water intake
structures or types of fish protection technologies used by proposed
Phase III existing facilities and Phase II facilities. Moreover, EPA
found that these technologies are economically practicable at the Phase
III existing facilities proposed for coverage under the three proposed
options.
Existing facilities that do not meet one of the co-proposed design
intake flow thresholds (but meet the other applicability criteria)
would continue to be subject to requirements established by permit
writers on a case-by-case, best

[[Page 68467]]

professional judgment basis, rather than to national categorical
standards.
EPA notes that under its current regulations at 125.90(b), any
existing facility that is a point source, that uses or proposes to use
cooling water intake structures to withdraw cooling water from waters
of the United States, and that is not subject to Subpart J or any other
section 316(b)-related subpart in Part 125 must meet the requirements
of CWA section 316(b) as determined by the Director on a case-by-case,
best professional judgment (BPJ) basis. In today's Notice, EPA is
proposing national categorical requirements for some of the facilities
that, under Sec. 125.90(b), would otherwise be subject to section
316(b) requirements established on a BPJ basis. Those facilities
outside the scope of today's proposed rule would continue to be
regulated on a case by case, BPJ basis, under Part 125 pursuant to
Sec. 125.90(b). After considering public comment on today's proposed
regulation and any additional information developed as part of this
rulemaking, EPA may decide to continue to rely on Sec. 125.90(b) for
all existing facilities not subject to Subpart J or any other section
316(b)-related subpart in Part 125 in lieu of today's proposed national
categorical requirements.
1. Basis for Proposed Performance Standards
Under today's proposal, Phase III existing facilities would be
subject to the same performance standards promulgated in the final
Phase II cooling water intake structure rule (Sec. 125.103(b)). The
basis for these performance standards is discussed in detail in the
preamble to the final Phase II rule (69 FR 41576, July 9, 2004).
Under two of the three options proposed today, Phase III existing
facilities are subject either to performance standards to reduce
impingement mortality only, or performance standards to reduce both
impingement mortality and entrainment. EPA believes that impingement
mortality and entrainment are appropriate metrics for performance
because these are primary and distinct types of harmful impacts
associated with the use of cooling water intake structures.
All Phase III existing facilities demonstrating compliance under
alternatives two, three, and four described above (proposed Sec.
125.103(a)(2), (3), and (4)) would be subject to performance standards
for impingement mortality. The impingement mortality performance
standard would require a Phase III existing facility that complies
under Sec. 125.103(a)(2), (3), and (4)) to reduce impingement
mortality for all life stages of fish and shellfish by 80 to 95 percent
from the calculation baseline. The impingement mortality and
entrainment performance standards under Sec. 125.103(b) would also be
used for determining eligibility and site-specific requirements for
facilities choosing to comply under compliance alternative five (see
proposed Sec. 125.103(b)).
Both impingement mortality and entrainment performance standards
would apply to Phase III existing facilities that withdraw cooling
water from a tidal river, estuary, ocean, or one of the Great Lakes.
Under the proposed options that would establish a design intake flow
threshold at 50 MGD or higher or 200 MGD or higher, both standards
would also apply to facilities that use cooling water from a freshwater
river or stream and have a design intake flow greater than five percent
of the mean annual flow. EPA is proposing to apply both standards
because these facilities have the potential to cause more significant
entrainment impacts. The entrainment standard, where applicable, would
require a Phase III existing facility to reduce entrainment of all life
stages of fish and shellfish by 60 to 90 percent from the calculation
baseline. Performance standards for entrainment would not apply to
Phase III existing facilities with design intake flows of five percent
or less of the mean annual flow of a freshwater river or stream, and
those that withdraw cooling water from a reservoir or lake (other than
one of the Great Lakes). EPA believes such facilities have a lower
propensity for causing significant entrainment impacts due to lower
proportional intake flow or general waterbody characteristics.
Although facilities that withdraw from lakes (other than the Great
Lakes) and reservoirs would not be subject to entrainment performance
standards, they would be subject to other specific performance
standards under the 50 MGD or higher proposed option, or 200 MGD or
higher proposed option. 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 (see proposed Sec. 125.103(b)(3)).
The performance standards applicable to Phase III existing
facilities are not based on a single technology but, rather, are based
on consideration of a range of technologies that EPA has determined to
be commercially available for the Phase III industries affected as a
whole and to have acceptable non-water quality environmental impacts.
Because the proposed requirements implementing section 316(b) would be
applied in a variety of settings and to Phase III existing facilities
of different types and sizes, no single technology is most effective at
all such facilities. A range of available technologies has therefore
been used as the basis for the performance standards.
EPA developed the performance standards for impingement mortality
reduction based on an analysis of the efficacy of the following
technologies: (1) 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
with no impingement mortality controls. Data available to EPA indicate
that these technologies can be used to achieve the reductions in
impingement mortality and/or entrainment specified in the performance
standards. EPA estimates that 35 percent of potential Phase III
existing facilities (i.e. with an intake greater than 2 MGD) currently
use passive intake technology (e.g., wedgewire screens, etc.), 12
percent use fine mesh screens, 6 percent use fish diversion
technologies, and 5 percent use fish handling technologies. 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 without entrainment controls. EPA notes that screening to
prevent organism entrainment may cause impingement of those organisms
instead.
The performance standards proposed at Sec. 125.103(b) 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 Phase II rule, EPA grouped
waterbodies into five categories: (1) Freshwater rivers or streams, (2)
lakes or reservoirs,

[[Page 68468]]

(3) Great Lakes, (4) tidal rivers and estuaries, and (5) oceans. This
proposal would apply these same categories to Phase III existing
facilities. 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 would vary by waterbody type.
The performance standards for Phase III existing facilities with
cooling water intake structures located in a tidal river or estuary are
a reduction of impingement mortality by 80 to 95 percent and
entrainment by 60 to 90 percent for fish and shellfish. Data available
to EPA indicate that estuaries and tidal rivers are among the more
susceptible waterbodies to adverse impacts from impingement mortality
and entrainment. The reproductive strategies of tidal river and
estuarine species, together with other physical and biological
characteristics of those waters, make them more susceptible to impacts
from cooling water intake structures (66 FR 28857-28859; 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).
Absent entrainment control technologies, entrainment at a
particular site is generally proportional to intake flow at that site.
EPA believes it is reasonable to vary performance standards by the
potential for adverse environmental impact associated with flow levels
and a waterbody type. Under two of the three proposed options, EPA
would limit 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 a greater potential to
impinge and entrain larger numbers of fish and shellfish. 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 lower propensity for
causing significant entrainment impacts due to the lower proportion of
intake flow in combination with the characteristics of the waterbody.
This proposed rule would also establish a specific performance
standard for lakes (other than a Great Lake) or reservoirs, in order to
protect the thermal stratification of the waterbody. 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.
The Great Lakes are subject to more stringent standards than other
lakes or reservoirs, and must meet performance standards for reduction
in both impingement mortality and entrainment. As described in the
Phase I proposed rule (65 FR 49086) and Notice of Data Availability
(NODA) (66 FR 28858), and the Phase II final rule (69 FR 41576), EPA
believes that the Great Lakes have areas of high productivity and
sensitive critical habitats that would require a greater level of
protection.
The performance standards for Phase III existing facilities with
cooling water intake structures located in an ocean are a reduction of
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 (where coastal
cooling water intake structures withdraw water from) 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 over utilized and seeks to minimize the
impact that cooling water intake structures may have on these species
or forage species on which these fishery stocks may depend. See 69 FR
41600.
As in the Phase I and Phase II rules, EPA would apply 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 mortality and entrainment, EPA is proposing this approach
because impingement mortality and entrainment are primary, harmful
environmental effects that can be reduced through the use of specific
technologies. In addition, those impacts that exist at the population,
community, and ecosystem levels will also be reduced by reducing
impingement mortality and entrainment. Using impingement mortality and
entrainment as metrics provide certainty about performance standards
and streamlines and thus speeds the issuance of permits.
The performance standards are expressed 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 operating in a range of aquatic environments subject to
today's proposed rule. See 69 FR 41600. 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 facilities' applications 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 on which the standards
were based. First, a significant amount of the data available to EPA
(e.g., section 316(b) permitting studies) were developed during early
section 316(b) permitting and do not reflect recent developments or
experience using these technologies. Second, many conventional barrier
and return system technologies have not been optimized as would be
encouraged by this rule. Finally, 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, and other operational measures and innovative flow reduction
alternatives that can achieve greater reductions.
The calculation baseline used to determine compliance with
performance standards is defined in proposed Sec. 125.102 as an
estimate of

[[Page 68469]]

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. Alternatively, the facility
could choose to use the current level of impingement mortality and
entrainment as the calculation baseline. The calculation baseline could
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 could
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 is proposing 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. In many cases, existing technologies at the site
show some reductions in impingement mortality 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 that exceed the baseline (e.g., screens
finer than \3/8\ inch mesh, or with fish handling capacity), employment
of more efficient return systems, and even location choices should be
credited for any corresponding reduction in impingement mortality and
entrainment. See section VII of this preamble for a discussion of how
the calculation baseline is used to compare facility performance with
the proposed rule's performance standards.
In the Phase II final regulations (see 69 FR 41578), EPA considered
the rate of use of the electric power generation facility in setting
performance requirements. Under the Phase II rule, power producing
facilities with a capacity utilization rate of less than 15 percent are
only required to meet the impingement mortality reduction requirements,
based on EPA's determination that entrainment impacts below this
threshold would be minimal. Today's proposed rule does not contain an
analogous provision for manufacturing facilities, as EPA has been
unable to identify a similar threshold of operations below which
impacts would be considered minimal. EPA requests comment on the
availability of such a threshold that would result in lesser
requirements for facilities that do not operate full time, thus
minimizing burdens to these facilities while still protecting the
source waterbody.
2. Basis for Five Proposed Compliance Alternatives
Today's proposed rule would authorize a Phase III existing facility
with a total design intake flow that exceeds the specified threshold to
choose one of five alternatives for establishing the best technology
available for minimizing adverse environmental impact at the facility.
These compliance alternatives (proposed Sec. 125.103(a)) would be
consistent with those promulgated in the final Phase II rule (40 CFR
125.94(a)). Each proposed alternative is described below.
This proposed approach provides a high degree of flexibility for
Phase III 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 proposed approach also reflects EPA's judgment that,
given the wide range of various factors that affect the environmental
impact posed by Phase III existing facilities, different technologies
or different combinations of technologies can be used and optimized to
achieve the performance standards. EPA requests comment on all aspects
of this proposed approach.
a. Meeting Performance Standards Through Reducing Intake Flow
Commensurate With a Closed Cycle Recirculating System or Reduced Design
Intake Velocity
EPA is proposing that a Phase III existing facility could meet
applicable performance standards through complying with Sec.
125.103(a)(1)(i) or (ii). Under proposed Sec. 125.103(a)(1)(i), any
Phase III existing facility that reduces its flow to a level
commensurate with a closed-cycle, recirculating cooling system would be
deemed to satisfy the applicable impingement mortality and entrainment
performance standards for all waterbodies under Sec. 125.103(b). Such
facilities may still be subject to requirements under Sec. 125.103(e).
Facilities that select this compliance alternative either through the
use of existing closed-cycle recirculating system technology at the
plant, or by retrofitting their facility, would not be required to
further demonstrate that they meet the applicable performance
standards.
Available data described in Chapter 3 of the Phase II Existing
Facility Technical Development Document (DCN 7-0004) 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.\37\ 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
achieve the performance standards, and therefore, facilities that
reduce their flow commensurate with closed-cycle, recirculating cooling
systems would be deemed to have met the performance standards for both
impingement mortality and entrainment. Under this proposal, Sec.
125.103(a)(1)(i) would thus constitute a compliance alternative for

[[Page 68470]]

Phase III existing facilities based on the use of a closed-cycle,
recirculating cooling system. While EPA based the requirements of the
Phase I new facility rule on the efficacy of closed-cycle recirculating
systems (66 FR 65273--65274), EPA has determined that this technology
is not economically practicable for some Phase III existing facilities.
EPA is nonetheless aware that approximately 6 percent of Phase III
manufacturers with a design intake flow of 50 MGD or greater, and 3
percent of Phase III manufacturers with a design intake flow of 200 MGD
or greater, have installed this highly effective technology and should
meet this streamlined alternative.
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\37\ Reducing the cooling water intake structure's capacity is
one of the most effective means of reducing entrainment (and
impingement mortality). 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.
---------------------------------------------------------------------------

Similarly, under proposed Sec. 125.103(a)(1)(ii), any Phase III
existing facility that reduces its design intake velocity to 0.5 feet
per second or less would be deemed to have met the performance
standards for impingement mortality and would not be required to
demonstrate further that it meets the performance standards for
impingement mortality. However, if the facility is subject to
performance standards for entrainment, it would need to otherwise
demonstrate compliance with entrainment performance standards.
As EPA discussed in the Phase II 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 those notices, EPA
compiled data from three swim speed studies (University of Washington
study, Turnpenny, and EPRI) (DCN 2-28A-C) and these data indicated that
a 0.5 feet per second 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); 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 support this approach (DCN 2-29).
b. Meeting Performance Standards Through the Use of Design and
Construction Technologies, Operational Measures, and/or Restoration
Measures
Under the second and third proposed Phase III compliance
alternatives, a facility could 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. 125.103(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 (see proposed Sec.
125.103(a)(2) and (3)).
Available data indicate that barrier and/or fish handling
technologies are available on a national basis for use by Phase III
existing facilities.\38\ These technologies exist and are in use at
various Phase III existing facilities and, thus, EPA considers them
collectively technologically available. Many Phase III existing
facilities that do not already have closed-cycle cooling systems have
these or other technologies in place that reduce impingement mortality
or entrainment to levels that would meet the proposed rule requirements
(e.g., EPA estimates this is the case for 23 percent of manufacturers
with a design intake flow of 50 MGD or greater, see the TDD for more
details). The fact that these technologies are collectively utilized
means that, in general, one or more technologies within the suite would
be available to each Phase III existing facility to meet the applicable
performance standards. (If this is not the case for a specific
facility, it can utilize compliance alternative five below.)
---------------------------------------------------------------------------

\38\ As previously noted, as an example of technologies in use
EPA estimates that 35 percent of Phase III existing facilities
currently use passive intake technology (e.g., wedgewire screens,
etc.), 12 percent use fine mesh screens, 6 percent use fish
diversion technologies, and 5 percent use fish handling
technologies.
---------------------------------------------------------------------------

EPA believes 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).
In addition, EPA's survey data shows that the types of intakes,
technologies currently employed, or technologies that may be
retrofitted at proposed Phase III existing facilities are no different
than those at Phase II facilities. For example, EPA identified one
Phase III facility that retrofitted ten 36-inch wedgewire T-screens.
Another retrofit example is an electric generator that is below the
Phase II threshold that replaced its perforated plate with wedgewire T-
screens. Examples of Phase II facilities that installed these
technologies after they initially started operating may be found at 69
FR 641602.
c. Meeting Performance Standards Through Use of a Pre-Approved Design
and Construction Technology
Under the fourth compliance alternative in today's proposed
regulation, a Phase III existing facility would be able to demonstrate
that it meets specified conditions and has installed and properly
operates and maintains a pre-approved technology (see proposed Sec.
125.103(a)(4)). EPA has identified one pre-approved technology:
Submerged cylindrical wedgewire screen technology to treat the total
cooling water intake flow. This pre-approved technology was identified
in the Phase II rule, and is proposed as a compliance option for Phase
III existing facilities (see proposed Sec. 125.108). There are five
conditions that would need to be met in order to use this technology to
comply with the proposed 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 feet per second 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 cooling water flow is directed through the technology (small flows
totaling less than two MGD for auxiliary plant cooling uses are
excluded). Under this proposal, Directors would be explicitly
authorized under Sec. 125.108 to pre-approve other technologies for
use at facilities with other specified characteristics within their
respective jurisdiction after providing the public with notice and an
opportunity to comment on the request for approval of the technology.
The Director's authority to pre-approve other technologies would not be
limited to technologies for use by facilities located on freshwater
rivers and streams.
EPA has proposed this compliance alternative in response to Phase
II proposed rule comments and Phase III small entity comments (provided
pursuant to consultations mandated by the Small Business Regulatory
Enforcement Fairness Act) that suggested that EPA provide an
additional, more streamlined compliance option that would allow a
facility to implement certain specified technologies that are deemed
highly protective in exchange for reducing the implementation burden,
including reducing the scope of the

[[Page 68471]]

Comprehensive Demonstration Study. (See, 68 FR 13522, 13539; March 19,
2003 and DCN 7-0006). EPA evaluated the effectiveness of specific
technologies using the impingement mortality and entrainment reduction
performance standards as assessment criteria. The approved cylindrical
wedgewire screen technology 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
proposed Sec. 125.108(a)(1). 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 Phase II Technical Development Document (DCN 6-
0004)). Because cylindrical wedgewire screens are believed to be
effective when deployed under the specified conditions and properly
maintained, facilities that select this compliance option are provided
substantially streamlined requirements for completing the Comprehensive
Demonstration Study. However, facilities that select this option would
still be required to prepare a Technology Installation and Operation
Plan and a Verification Monitoring Plan to monitor the effectiveness of
the technology at their sites in meeting the performance standards.
Referenced below are examples of Phase III facilities that
installed this technology after they initially started operating.
Sherburne County Generating Plant. A Phase III electric generator,
Sherburne County is located on the upper Mississippi River in
Minnesota. The facility began operations in 1976 and operates one
cooling water intake structure. The facility also uses a closed-cycle,
recirculating cooling system. In 1986, Sherburne County replaced its
existing intake technology (a perforated plate) with cylindrical
wedgewire screens.
Tosco Refinery. Oil refineries are one of the industry sectors
examined in the Phase III rule. Located in Rodeo, California, the Tosco
Refinery replaced its traveling screens with cylindrical wedgewire
screens in 2000.
To date, EPA has not identified new data or information that could
be used to establish other technologies as pre-approved on a nationwide
basis. Several stakeholders suggested EPA continue to evaluate whether
other technologies could qualify as pre-approved technologies. EPA
solicits comment and new data, including appropriate site conditions,
on other candidate technologies for pre-approval.
d. Site-Specific Determination of Best Technology Available To Minimize
Adverse Environmental Impact
Under this proposed compliance alternative, a Phase III existing
facility also could comply with the proposed rule by seeking a site-
specific determination of the best technology available to minimize
adverse environmental impact by demonstrating to the Director 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 proposed Sec.
125.103(a)(5)(i) and (ii)). If a facility satisfies one of the two
proposed cost tests in Sec. 125.103(a)(5), then the Director would
have to 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.
As discussed in the Phase II rule, in developing the proposed
standards in Sec. 125.103(b) and the proposed compliance alternatives
in Sec. 125.103(a)(2)-(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). These proposed site-specific compliance
options would give Phase III existing 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 required if the facility selected one of the
compliance alternatives in Sec. 125.103(a)(2), (3) or (4).
i. Basis of the Cost-Cost Test
For a number of related reasons discussed below, EPA chose to use a
comparison of a facility's actual costs to the costs EPA estimated that
a like 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 to minimize adverse
environmental impact. EPA's record for this proposed rule shows that
for Phase III existing facilities withdrawing greater than the three
co-proposed thresholds, the requirements in today's proposed rule would
be technically available and generally economically practicable.
However, EPA recognizes that it may not have anticipated all site-
specific costs that a facility would incur, or that the costs for
retrofitting may significantly exceed those EPA considered. For
example, 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, were not available. Moreover, the
information EPA used to develop its costs was in some cases limited by
the fact that, while EPA sent surveys to all known electric generators
and a sample of manufacturing facilities covered under today's proposed
rule, only 42 percent of the total potential Phase II and Phase III
universes were sent detailed questionnaires. The remaining 58 percent
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 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 all facilities that would be subject to
today's proposed rule. Despite EPA's best effort, site-specific costs
are difficult to estimate in a national rule. For all of these reasons,
EPA believes that the cost-cost site-specific compliance alternative is
necessary to ensure that the proposed rule would be economically
practicable for all Phase III existing facilities. In order to ensure
that this alternative provides only the

[[Page 68472]]

minimum relaxation of performance standards that is needed to make the
proposed rule economically practicable, proposed Sec. 125.103(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.
EPA is proposing at Sec. 125.103(a)(5) to limit the comparison of
like facilities to Phase III existing facilities within the scope of
the rule. EPA believes this provision is necessary and appropriate
because different cost assumptions were used in estimating costs for
the Phase II and Phase III existing facilities. (These differences are
discussed in detail in the relevant Technical Development Documents
(DCN 6-0004 and DCN 7-0002.)

Legal Authority for the Cost-Cost Test

CWA section 316(b) authorizes a site-specific determination of best
technology available. Although, CWA section 316(b) authorizes EPA to
promulgate national categorical requirements, the variety of factors to
be considered in determining these requirements--such as location and
design--indicate that site-specific conditions can be highly relevant
to the determination of best technology available to minimize adverse
environmental impact. In addition to specifying best technology
available in relation to a national categorical performance standard,
today's proposed rule also authorizes a site-specific determination of
best technology available when conditions at the site lead to a more
costly array of controls than EPA had expected would be necessary to
achieve the applicable performance standards.
This site-specific compliance option is similar to the
``fundamentally different factors'' provision in CWA section 301(n),
which authorizes alternative requirements for sources subject to
national technology-based standards for effluent discharges, if the
facility can establish that it is fundamentally different with respect
to factors considered by EPA in promulgating the national standard. The
fundamentally different factors provision was added to the CWA in 1987,
but prior to the amendment, both the Second Circuit and the Supreme
Court upheld EPA's rules containing provisions for alternative
requirements as reasonable interpretations of the statute. NRDC v. EPA,
537 F.2d 642, 647 (2d Cir. 1976) (``the establishment of the variance
clause is a valid exercise of the EPA's rulemaking authority pursuant
to section 501(a) which authorizes the Administrator to promulgate
regulations which are necessary and proper to implement the Act''); EPA
v. National Crushed Stone Ass'n, 449 U.S. 64 (1980) (approving EPA's
alternative requirements provision in a standard adopted pursuant to
CWA section 301(b)(1), even though the statute did not expressly permit
a variance.) EPA's alternative site-specific compliance option in this
proposed rule is similarly a reasonable interpretation of section
316(b) and a valid exercise of its rulemaking authority under CWA
section 501.
Based on this interpretation, EPA and State permitting authorities
have been implementing CWA section 316(b) on a case-by-case basis for
over 25 years. Such a case-by-case determination of best technology
available has been recognized by courts as being consistent with the
statute. See Hudson Riverkeeper Fund v. Orange and Rockland Util, 835
F. Supp. 160, 165 (S.D.N.Y. 1993) (``This leaves to the permit writer
an opportunity to impose conditions on a case by case basis, consistent
with the statute'').
EPA reasonably interprets CWA section 316(b) to authorize it to
consider costs of compliance in determining best technology
``available.'' (See section I.) Therefore, where EPA fails to consider
a facility's unusual or disproportionate costs in setting the national
requirements for best technology available, it reasonably authorizes
permit authorities to set site-specific alternative limits to account
for these costs. See Riverkeeper v. EPA, slip op. at 25 (2nd Cir. Feb.
3, 2004) (upholding site-specific alternative limits under the Phase I
rule for new facilities where a particular facility faces
disproportionate compliance costs).
ii. Basis of the Cost-Benefit Test
Under today's proposal, EPA would allow a facility to use a
comparison of its costs to the benefits of meeting the performance
standards at its site (a ``cost-benefit test'') as another basis for
obtaining a site-specific determination of best technology available 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 technology available for the purpose
of minimizing adverse environmental impact. Accordingly, in proposing
the technologies on which EPA based the compliance alternatives and
performance standards as 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 mortality and entrainment
that EPA estimated would occur nationally if all Phase III existing
facilities withdrawing greater than any of the co-proposed thresholds
selected one of the compliance options in Sec. 125.103(a)(2) through
(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 impact, EPA also recognizes
that, at times, determining what is necessary to minimize adverse
environmental impact can necessitate a site-specific inquiry. EPA's
balance of the national costs and national benefits may not be similar
to the comparison of costs and benefits at 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 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. 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. For example, 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 environmental

[[Page 68473]]

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 impact
(i.e., the benefits) in cases where the costs of installing the
technology are significantly greater than the reduction in
environmental impacts would seem to 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. Proposed
Sec. 125.103(a)(5)(ii) 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.

Legal Authority for the Cost-Benefit Test

EPA believes that the Clean Water Act authorizes a site-specific
determination of the best technology available to minimize adverse
environmental impact where the costs of compliance with the rule's
performance standards are significantly greater than its benefits. This
authority stems from the statutory language of CWA section 316(b).
Section 316(b) requires that cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact. 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. In contrast, under section 301, the goal of BAT is
explicitly articulated by reference to a different purpose, to make
reasonable further progress toward the national goal of eliminating the
discharge of all pollutants (section 301(b)(2)(A)). Similarly, under
section 304, the goal of BPT and BCT is explicitly articulated by
reference to the degree of effluent reduction attainable. (Section
304(b)(1)(A) and section 304(b)(4)(A))
EPA has previously considered the costs of technologies in relation
to the benefits of minimizing adverse environmental impact in
establishing section 316(b) limits, which historically have been done
on a case-by-case basis. See, e.g., 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). Under CWA section 316(b), EPA
may consider the benefits that the technology-based standard would
produce in a particular waterbody, to ensure that it will ``minimize
adverse environmental impact.'' EPA believes that the technology-based
standards established in this proposed rule will, as a national matter,
``minimize adverse environmental impact.'' However, the degree of
minimization contemplated by the national performance standards may not
be justified by site-specific conditions. In other words, depending on
the circumstances of the receiving water, it may be that application of
less stringent controls than those that would otherwise be required by
the performance standards will achieve the statutory requirement to
``minimize'' adverse environmental impact, when considered in light of
economic practicability. An extreme example is a highly degraded ship
channel with few fish and shellfish, but such situations can only be
identified and addressed through a site-specific assessment.
For these reasons, EPA reasonably interprets the phrase ``minimize
adverse environmental impact'' in section 316(b) to authorize a site-
specific consideration of the benefits of the technology-based standard
on the receiving water. EPA continues to believe that any impingement
or entrainment would be an adverse environmental impact, but has
determined that section 316(b) does not require minimization of adverse
environmental impact beyond that which can be achieved at a cost that
is economically practicable. EPA believes that the relationship between
costs and benefits is one component of economic practicability for
purposes of section 316(b) and the legislative history indicates that
economic practicability may be considered in determining what is best
technology available for purposes of section 316(b). 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.'' \39\ EPA believes
that allowing a relaxation of the performance standards when costs
significantly exceed benefits, but only to the extent justified by the
significantly greater costs, is a reasonable way of ensuring that
adverse environmental impact be minimized at an economically
practicable cost. This does not mean that there is a need to make a
finding of ``adverse environmental impact'' before performance
standards based CWA section 316(b) requirements would apply. Rather,
EPA is authorizing an exception to national performance standards based
requirements on a site-specific basis in limited circumstances: when
the costs of complying with the national performance standards are
significantly greater than the benefits of compliance at a particular
site.
---------------------------------------------------------------------------

\39\ 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).
---------------------------------------------------------------------------

3. Why Is EPA Proposing National Requirements for New Offshore and
Coastal Oil and Gas Extraction Facilities?
After EPA proposed the Phase I rule for new facilities (65 FR
49060, August 10, 2000), the Agency received adverse comment from
operators of mobile offshore and coastal drilling units concerning the
limited information about their cooling water intakes, associated
impingement mortality and entrainment, costs of technologies, or
achievability of the controls proposed by EPA. On May 25, 2001, EPA
published a Notice of Data Availability (NODA) for Phase I that, in
part, sought additional data and information about mobile offshore and
coastal drilling units (see 66 FR 28857). In the Phase I final rule,
EPA committed to ``propose and take final action on regulations for new
offshore oil and gas extraction facilities, as defined at 40 CFR 435.10
and 40 CFR 435.40, in the Phase III section 316(b) rule.'' See 66 FR
65256. Today's proposed regulation would establish national
requirements for new offshore oil and gas extraction facilities that
use a cooling water intake structure to withdraw water from waters of
the U.S.
Requirements for new offshore oil and gas extraction facilities are
proposed in a new subpart N. New onshore oil and gas extraction
facilities are already potentially covered under section 316(b) Phase I
requirements; new offshore oil and gas extraction facilities that would
be subject to subpart N include new coastal and offshore oil and gas
extraction facilities. The proposed requirements for these facilities
are similar to some, but not all, of the requirements contained in the
Phase I rule applicable to other new facilities. For example, the Phase
I requirement to reduce intake flow commensurate with a closed-cycle,
recirculating cooling system would not apply to these facilities. EPA
is seeking comment only on the new facility requirements contained in
proposed Subpart N, which would be applicable to new offshore oil and
gas extraction facilities.
Under today's proposed rule, new offshore oil and gas extraction
facilities

[[Page 68474]]

that withdraw greater than 2 MGD and that employ sea chests as cooling
water intake structures, and are fixed facilities would have to comply
with the requirements in Sec. 125.134(b)(1)(ii). These requirements
address intake flow velocity, specific impact concerns (e.g.,
threatened or endangered species, critical habitat, migratory or sport
or commercial species), required information submission, monitoring,
and recordkeeping. Under this proposal, new offshore oil and gas
extraction facilities that withdraw greater than 2 MGD that do not
employ sea chests as cooling water intake structures, and are fixed
facilities would have to comply with the requirements in Sec.
125.134(b)(1)(i). The one additional requirement for these facilities
is Sec. 125.134(b)(5), which requires the selection and implementation
of design and construction technologies or operational measures to
minimize entrainment of entrainable life stages of fish or shellfish.
Fixed facilities can also choose to comply through Track II, which
allows a site-specific demonstration that alternative requirements
would produce comparable levels of impingement mortality and
entrainment reduction. New offshore oil and gas facilities that are not
fixed facilities would have to comply with the regulations at Sec.
125.134(b)(1)(iii). Track II is not available to non-fixed (mobile)
facilities because non-fixed facilities, which are expected to operate
at multiple locations, would not be able to perform a site-specific
demonstration. For this same reason, EPA has dropped some of the other
site-dependent requirements for non-fixed facilities (e.g., baseline
biological assessment). EPA requests comment on the practicability of
Track II demonstrations and other site-dependent requirements for non-
fixed facilities.
EPA has limited information on environmental impacts associated
with the use of cooling water intake structures at new offshore oil and
gas extraction facilities but believes the potential for such impacts
is sufficient to warrant including requirements for new offshore oil
and gas extraction facilities in this proposed rule (see section V for
more detailed discussion). In addition, although such technologies are
not generally in use at existing offshore oil and gas extraction
facilities, EPA believes that technologies are available for use by new
facilities in this subcategory to meet the proposed requirements as
described below. EPA requests comment, including data, on environmental
impacts from, and availability of technologies for, cooling water
intake structures at new offshore oil and gas extraction facilities.
Some offshore oil and gas extraction facilities employ an
underwater compartment within the facility or vessel hull or pontoon
through which sea water is drawn in or discharged, often called a ``sea
chest.'' A passive screen (strainer) is often set along the flush line
of the sea chest. Pumps draw seawater from open pipes in the sea chest
cavity for a variety of purposes (e.g., cooling water, fire water, and
ballast water). These intakes are normally the only source of cooling
water for the facility; therefore, it is crucial to the operation of
these facilities that the intake structures be kept clean and clear of
fish, jellyfish, plastic bags, and other debris. To accomplish this
these intake structures can, and have been, designed for low intake
velocity (i.e., less than 0.5 feet per second) and/or include fish
protection equipment; see the Technical Development Document for
details.
As outlined in Alaska's oil and gas leasing requirements, oil and
gas extraction facilities in Alaskan State waters are currently subject
to an impingement control velocity limit of 0.1 feet per second (i.e.,
more stringent than EPA's design requirement of 0.5 feet per second in
the Phase I new facility rule to minimize impingement mortality of
aquatic organism). These State regulations suggest that impingement
controls that would meet the velocity requirements of this proposed
rule are available for new offshore oil and gas extraction facilities
in Alaskan or similar waters.
However, facilities using sea chests may have limited opportunities
to meet the entrainment control requirements applicable to facilities
subject to the Phase I rule. A 2003 literature survey by Mineral
Management Services (DCN 7-0012) identified no evidence of entrainment
controls successfully fitted to offshore oil and gas extraction vessels
with sea chests such as drill ships, jack-ups, MODUs, and barges. EPA's
data suggests that the only physical technology controls for
entrainment at facilities with sea chests would entail installation of
equipment projecting beyond the hull of the vessel. Such controls may
not be feasible due to facility design requirements, even for new
facilities that could avoid the challenges of retrofitting control
technologies.
EPA does have limited information showing the entrainment reduction
benefits of planar wedgewire screens. EPA is considering, and requests
comment on, whether entrainment technologies, such as planar wedgewire
screens, are available for use by facilities using sea chests and
whether based on such technologies it would be appropriate to apply
Sec. 125.134(b)(5) (requiring design and construction technologies or
operational measures to minimize entrainment of entrainable life stages
of fish or shellfish) to such facilities.
EPA also considered whether all new offshore vessels could be
constructed without employing sea chests. A technology must prove to be
practicable to be a viable alternative to current technology. In this
case, EPA treats a viable alternative to sea chests as any practical
alternative configuration/technology successfully implemented at
existing facilities, including those in other manufacturing industries,
with similar seawater intake structures. EPA data suggests the only
demonstrated design for drill ships and semi-submersible MODUs is to
use sea chests because they allow the vessel to maintain appropriate
fluid dynamics, overall optimal vessel shape, and a safe seaworthy
profile. Therefore, EPA does not believe entrainment controls are
feasible at such facilities.
For new offshore oil and gas extraction facilities with intake
structures other than sea chests, EPA believes the proposed entrainment
controls are feasible. For example, a caisson intake (as referred to
here) is simply a steel pipe attached to a fixed structure that extends
from an operating area down some distance into the water. It is used to
provide a protective shroud around another process pipe or pump that is
lowered into the caisson from the operating area. The most likely
technologies to reduce impingement mortality and entrainment of marine
life in this type of structure would be passive intake screens or
velocity caps. Air sparges and copper nickel alloys can be used to
control biofouling. Other technologies such as acoustic barriers,
electro barriers or intake relocation may also be used.
In summary, EPA is proposing to apply requirements that are
consistent with some--but not all--of the Phase I provisions to new
offshore oil and gas extraction facilities, because of differences in
technological availability between such facilities and those covered in
the Phase I rule. Because available information indicates that it is
not feasible for all new offshore oil and gas extraction facilities to
employ closed-cycle recirculating cooling systems, new offshore oil and
gas extraction facilities would not be subject to Phase I requirements
based on closed-cycle recirculating cooling systems.

[[Page 68475]]

Specifically, new offshore oil and gas extraction facilities would not
have to meet requirements equivalent to Sec. 125.84(b)(1) (requiring
that a facility reduce intake flow to a level commensurate with a
closed-cycle recirculating cooling system) and Sec. 125.84(d)(1)
(Track II requirements using closed-cycle recirculating cooling systems
as a baseline).
EPA is proposing to exclude new seafood processing vessels from the
proposed national requirements. Data available to the Agency indicate
that given the relatively low cooling water flows used by these
vessels, the propensity for reduced intake of fish or debris due to the
vessel's speed in relation to the intake's orientation and intake
velocity, and their highly mobile character, these vessels are not
likely to cause significant adverse environmental impacts. Further,
data available to the Agency has not clearly identified available
technologies that would reduce entrainment for such vessels. In
addition, EPA is proposing to exclude new offshore liquified natural
gas import terminals from the proposed national requirements. Such
facilities withdraw water primarily for warming (not cooling) purposes,
to heat liquified natural gas to temperatures at which it becomes a gas
and can enter the natural gas distribution pipelines. Thus, it appears
that these facilities would not meet the 25 percent exclusive cooling
water use threshold, and would therefore be beyond the scope of section
316(b). Seafood processing vessels and new offshore liquified natural
gas import terminals would continue to be subject to any requirements
for their cooling water intake structures established by permit
Directors on a case-by-case basis using best professional judgment.
EPA requests comment on all aspects of this proposed approach.

B. 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.'' \40\ This interpretation 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 proposed rule and
the co-proposed options discussed above, using an integrated energy
market model (the IPM) and an analysis of market costs and residential
rates for the energy sector, and a discounted cash flow analysis model
for the facility, firm, and market levels for manufacturers. For a
complete discussion of these analyses, please refer to section VIII of
this preamble or the Economic Analysis in support of this proposed rule
(DCN 7-0002).
---------------------------------------------------------------------------

\40\ 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 proposed rule reflect
the best technology available at an economically practicable cost. EPA
examined the effects of the proposed 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 proposed rule would be economically practicable.
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. EPA requests comment on the relationship of costs to
environmental benefits of this proposed rule.

C. What Is the Proposed Role of Restoration and Trading?

1. What Is the Proposed Role of Restoration?
Under today's proposed rule, consistent with the Phase II
regulation, EPA would provide Phase III existing facilities with the
option to use restoration under compliance alternatives Sec.
125.103(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), would be substantially similar to that which
would have been achieved if the facility reduced its impingement
mortality and entrainment through the use of design and construction
technologies and/or operational measures, to meet the applicable
performance standards. The role of restoration under this proposed 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 would 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.
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 proposed rule, a Phase III existing facility
could utilize restoration measures either in lieu of or as a supplement
to design and construction technologies and/or operational measures.
For example, a facility could 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. 125.103(b). The
facility could 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. 125.103(b). Another facility could demonstrate to
the Director that restoration measures alone achieve the greatest
compliance with the performance standards. A facility could
alternatively request a site-specific determination of best technology
available under Sec. 125.103(a)(5) and use restoration measures to
meet the alternate requirements. Facilities that are currently
utilizing restoration measures to comply with their existing section
316(b) requirements may use these measures to comply with the
performance standards at Sec. 125.103(b) or site-specific requirements
at Sec. 125.103(a)(5). However, restoration measures that are required
under other statutory provisions or regulations (e.g., CWA section 404)
could not be used to comply with today's proposed rule.
Facilities that propose to use restoration measures would need to
demonstrate to the Director that they evaluated the use of design and

[[Page 68476]]

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 also would
need to demonstrate that the restoration measures they plan to
implement, alone, or in combination with design and construction
technologies and/or operational measures, would 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. 125.103(b), or alternative site-
specific requirements under Sec. 125.103(a)(5). In other words,
restoration measures would have to replace the fish and shellfish lost
to impingement mortality and entrainment to the extent the loss would
have been reduced by otherwise applicable requirements, 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 would not have to be exactly the same as that of the
impingement mortality and entrainment losses, the Director would have
to 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 proposed rule would require 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 proposed rule also would require 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 waterbody that transects a number of watersheds may be the most
appropriate unit for planning restoration.

Legal Authority for Restoration

While the Phase I rule also authorized use of restoration measures,
today's proposed rule includes additional regulatory controls on the
use of restoration measures to ensure that they are used appropriately
by existing facilities to comply with the applicable performance
requirements or site specific alternative requirements. For example, as
described above, restoration measures are authorized only after a
facility demonstrates to the permitting authority that it has evaluated
other design and construction technologies and operational measures and
determined that they are less feasible, less cost effective, or less
environmentally desirable than meeting the performance standards or
alternative site-specific requirements in whole or in part through the
use of restoration measures. The facility must also demonstrate that
the proposed restoration measures will produce ecological benefits
(i.e., the production of fish and shellfish for the facility's
waterbody or watershed, including maintenance of community structure
and function) at a level that is substantially similar to the level a
facility would achieve through compliance with the applicable
performance standards or alternative site-specific requirements.
Further, the permitting authority must review and approve the
restoration plan to determine whether the proposed restoration measures
will meet the applicable performance standards or site specific
alternative requirements. Consequently, the restoration provisions of
today's proposed rule are designed to minimize adverse environmental
impact to a degree that is comparable to the other technologies on
which the rule is based.
The use of restoration to meet the requirements of section 316(b)
is consistent with the goals of the Clean Water Act; measures that
restore fish and shellfish to compensate for those that are impinged
and entrained further the objective of the Clean Water Act ``'to
restore, maintain, and protect the biological integrity of the nation's
waters.'' 33 U.S.C. 1251(a) (emphasis added). It is also consistent
with EPA's and States' past practices in implementing section 316(b) in
individual permit decisions. For at least twenty years, EPA and States
have authorized existing facilities to comply with section 316(b)
requirements, at least in part, through the use of restoration
measures. For example, the Chalk Point Generating Station, located on
the Patuxent River in Prince George's County, Maryland constructed a
fish rearing facility in partial compliance of its section 316(b)
obligations (DCN 1-5023-PR).
Although the United States Court of Appeals for the Second Circuit
recently remanded the portion of EPA's Phase I new facility rule that
authorized restoration measures to meet that rule's requirements, EPA
believes that portion of the decision should not apply to this Phase
III proposed rulemaking. Indeed, the Second Circuit explicitly stated
that ``[i]n no way [does it]
mean to predetermine the factors and
standard applicable to Phase II and III of the rulemaking.''
Riverkeeper v. EPA, slip op. at 12, note 13 (2nd Cir. Feb. 3, 2004).
This is probably because there are important differences between new
and existing facilities that warrant interpreting section 316(b) more
broadly to give existing facilities additional flexibility to comply
with section 316(b). As noted above, restoration measures have been
used to comply with section 316(b) limits at existing facilities for
several years because of the more limited availability of other
technologies for existing facilities. Costs to retrofit an existing
facility to install a ``hard'' technology can be much higher than costs
to install one at the time a facility is constructed, and those costs
can vary considerably from site to site. Thus, the range of
technologies that are ``available'' to existing facilities to meet the
performance standards is narrower than the range of technologies
available to new facilities.
In recognition of the vast differences between existing and new
facilities, Congress established separate sections in the Clean Water
Act for establishing discharge limitations on existing and new
facilities. Effluent limitations guidelines for existing facilities are
established under sections 301 and 304, whereas new source performance
standards are established under section 306. Those sections set out two
distinct sets of factors for developing effluent limitations guidelines
for existing facilities and new source performance standards for new
facilities. Notably, there are only two factors explicitly stated in
section 306 for the Administrator to consider in establishing new
source performance standards--cost and non-water quality

[[Page 68477]]

impacts, whereas for existing facilities Congress calls upon EPA to
consider a much broader range of factors in section 304(b)(2)(b): 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. This list reflects
the wide range of facility characteristics and circumstances that can
influence the feasibility and availability of a particular technology
across a particular industry. Existing facilities generally face more
and different problems than new facilities because of the technological
challenges and high costs associated with retrofitting as compared to
building a new facility. Indeed, by including the phrase ``and such
other factors as [EPA]
deems appropriate,'' Congress made certain that
EPA would have sufficient flexibility in establishing limitations for
existing facilities to consider all relevant factors. For several other
reasons, EPA believes the Second Circuit decision is not binding on
this Phase III proposed rule. First, section 316(b) requires the design
of a cooling water intake structure to reflect the best technology
available to ``minimize adverse environmental impact.'' The phrase
``minimize adverse environmental impact'' is not defined in section
316(b). For the Phase III proposed rule, EPA interprets this phrase to
allow facilities to minimize adverse environmental impact by reducing
impingement mortality and entrainment, or to minimize adverse
environmental impact by compensating for those impacts after the fact.
Section 316(b) does not explicitly state when the adverse environmental
impact of cooling water structures must be minimized--that is whether
they must be prevented from occurring in the first place or compensated
for after the fact or where the minimization most occurs--at the point
of intake or at some other location in the same watershed. Therefore,
under Chevron, EPA is authorized to define ``minimize'' to authorize
restoration at existing facilities to minimize the effects of adverse
environmental impact.
In another context under the Clean Water Act, EPA has interpreted
authority to ``minimize adverse effects'' as including authority to
require environmental restoration. Section 404 of the CWA authorizes
the Army Corps of Engineers to issue permits for discharges of dredged
or fill material into waters of the United States. EPA was granted
authority to establish regulations containing environmental guidelines
to be met by the Corps in issuing section 404 permits. See CWA section
404(b)(1). Current regulations, in place since 1980, prohibit a
discharge unless, among other requirements, all practicable steps are
taken to avoid, minimize and mitigate for the environmental effects of
a discharge. See 40 CFR 230.10. Of particular relevance here, the
regulations require that steps be taken to ``minimize potential adverse
effects of the discharge on the aquatic ecosystem'' (40 CFR 230.10(d)).
EPA has specifically defined minimization steps to include
environmental restoration. See 40 CFR 230.75(d) (``Habitat development
and restoration techniques can be used to minimize adverse impacts and
to compensate for destroyed habitat'').
Moreover, at the time of the Phase I litigation, EPA had not
interpreted the term ``reflect'' in section 316(b), and therefore, the
Second Circuit did not consider its meaning in determining whether
restoration could be used as a design technology to meet the Phase I
rule requirements. Section 316(b) requires that ``the location, design,
construction, and capacity of cooling water intake structures reflect
the best technology available for minimizing adverse environmental
impact.'' The term ``reflect'' is significant in two respects. First,
it indicates that the design, location, construction and capacity of
the cooling water intake structure itself must be based on the best
technology available for such structures. This authorizes EPA to
identify technologies that can be incorporated into the physical
structure of the intake equipment. It also indicates that the choice of
what actually is the best physical configuration of a particular
cooling water intake structure can take into account, i.e., reflect,
other technologies--and their effects--that are not incorporated into
the structure itself. For example, barrier nets are not incorporated
into the physical design of the cooling water intake structure, but
their use--and effectiveness--influences the physical design of the
cooling water intake structure. Another relevant example is the
technology known as ``closed-cycle'' cooling. Although this technology
is physically independent of the cooling water intake structure, it
directly influences decisions regarding the design capacity of the
cooling water intake structure: as more cooling water is recycled, less
needs to be withdrawn.
Both barrier nets and closed-cycle cooling are considered
``design'' technologies.'' Similarly, properly designed restoration
measures can be best technologies available that can influence the
design of the physical cooling water intake structure. To put it
another way, for purposes of minimizing adverse environmental impact,
requirements for cooling water intake structures reflect a variety of
best technologies available, which EPA construes to include restoration
measures. A dry cooling system is another example of a technology that
although physically independent of the cooling water intake structure
is nonetheless considered an acceptable method to minimize adverse
environmental impacts. In fact, since a dry cooling system uses air as
a cooling medium, it uses little or no water, dispensing altogether
with the need for a cooling water intake structure.
EPA has discretion to characterize restoration measures as
technologies for purposes of section 316(b). Section 316(b) does not
define either the phrase ``cooling water intake structure'' or the term
``technology'' and, therefore, leaves their interpretation to EPA. EPA
has defined the phrase cooling water intake structure in today's rule
to mean the total physical structure and any associated waterways used
to withdraw cooling water from waters of the United States. This
definition embraces elements both internal and external to the intake
equipment. EPA did not define the term technology in today's proposed
rule, but looked for guidance to section 304(b), which the Second
Circuit has recognized can help illuminate section 316(b). Section
301(b)(2) best available technology limitations are based on factors
set forth in section 304(b). Section 304(b), while not using the term
technology, discusses the ``application of the best control measures
and practices achievable including treatment techniques, process and
procedure innovations, operating methods, and other alternatives.''
This is a broad, nonexclusive list. Indeed, BAT effluent limitations
guidelines under this authority have been based on a vast array of
treatment techniques, operation practices (including chemical
substitution), and management practices. See 40 CFR part 420 (effluent
guidelines for concentrated animal feeding operations); 40 CFR part
430, subparts B & E (effluent guideline for pulp and paper industry).
See also 62 FR 18504 (April 15, 1998).
Employing this broad concept of technology, in today's proposed
rule EPA has determined that the design of cooling water intake
structures may reflect technologies relating to the restoration of fish
and shellfish in the

[[Page 68478]]

waters from which cooling water is withdrawn. Restoration is not
included in the definition of ``design and construction technology'' in
today's proposed rule so as to distinguish restoration from ``hard''
technologies for purposes of the proposed rule. Under the regulatory
scheme of the proposed rule, restoration is treated differently than
other technologies in several respects, all of which are to help ensure
that restoration projects achieve substantially similar performance as
design and construction technologies and/or operational measures. When
these restoration technologies are used they must produce ecological
benefits (the production of fish and shellfish for a facility's
waterbody or watershed, including maintenance of community structure
and function) at a level that is substantially similar to the level the
facility would achieve by using other design and construction
technologies and/or operational measures to achieve the applicable
performance standards or alternative site-specific performance
requirements in Sec. 125.103. In other words, the operation of the
cooling water intake structure together with these restoration
technologies will achieve the overall performance objective of the
statute: To minimize the adverse environmental impact of withdrawing
cooling water. For facilities using this authority, their hardware
decisions for the cooling water intake structure thus take into
account--or reflect--the effects of restoration technology, as well as
other technologies external to the intake structure itself.
EPA acknowledges that in 1982, when Congress was considering
substantial amendments to the Clean Water Act, EPA testified in support
of a proposed amendment to CWA section 316(b) that would have expressly
authorized the use of restoration measures as a compliance option.
According to the Second Circuit, this suggested that EPA may have
interpreted section 316(b) at that time as not authorizing restoration
measures to minimize the adverse environmental impact of cooling water
intake structures. In EPA's view, the Second Circuit gave undue weight
to that testimony, particularly because it was provided before the
Supreme Court's decision in Chevron U.S.A. v. Natural Resources Defense
Council, 467 U.S. 837 (1984), which gave administrative agencies
latitude to fill in the gaps created by ambiguities in statutes the
agencies have been charged by Congress to implement. For at least
twenty years, EPA and States have authorized existing facilities to
comply with section 316(b) requirements, at least in part, through the
use of restoration measures. Additionally, since 1982 EPA has gathered
substantially more data to inform its judgment regarding cooling water
intake structures, the environmental impact resulting from them, and
various technologies available to reduce impingement mortality and
entrainment. Finally, EPA notes that, in contrast to water quality
based effluent limitations that are included in NPDES permits to meet
water quality standards, the required performance of restoration
measures under this proposed rule is not tied to conditions in the
waterbody. Rather it is tied directly to the performance standards,
just as is the performance of the other technologies that facilities
may use to meet the standards. While the design and operation of
restoration measures will necessarily be linked to conditions in the
waterbody (as is also the case for ``hard'' technologies) the
performance standards that restoration measures must meet are not.
2. What Is the Role of Trading in Today's Proposed Rule?
Under today's proposed rule, 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.
125.103, the Administrator must approve such alternative requirements
(see Sec. 125.100(c)). A trading program could be a part of these
alternative regulatory requirements.
Trading under other EPA programs has been shown to provide
opportunities for regulatory compliance at reduced costs. EPA's Office
of Water's Water Quality Trading Policy, published in January 2003 (see
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. 125.100(c), EPA would 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. 125.103. For more
information on approaches to trading under section 316(b) and
considerations, see the Phase II proposed rule at 67 FR 17170-17173;
April 9, 2002.
As in Phase II, questions have been raised by stakeholders in the
context of EPA's section 316(b) rulemakings as to whether these
proposed requirements would allow for trading of aquatic organisms for
pollutant discharges. EPA is concerned that such a program may
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 proposed 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 in the context of section 316(b) would be better 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 hand (69 FR 41609). EPA requests comment on the
potential role of trading in the context of today's proposed rulemaking
and possible approaches for developing a trading program.

VII. Implementation

As in Phase I and II, proposed section 316(b) requirements for
Phase III existing facilities and new offshore oil and gas extraction
facilities would be implemented through the NPDES permit program.
Today's proposal would establish implementation requirements consistent
with the Phase II final rule for Phase III existing facilities. This
proposed rule would also establish implementation requirements for new
offshore oil and gas extraction facilities that are generally
consistent with Phase I requirements. Today's proposal would establish
application requirements for Phase III existing facilities under 40 CFR
122.21 and proposed Sec. 125.104, monitoring requirements under

[[Page 68479]]

proposed Sec. 125.105, and record keeping and reporting requirements
under proposed Sec. 125.106. For new offshore oil and gas extraction
facilities, today's proposal would establish application requirements
consistent with 40 CFR 122.21 and proposed Sec. 125.136, monitoring
requirements under proposed Sec. 125.137, and record keeping and
reporting requirements consistent with proposed Sec. 125.138. The
proposed regulations also require the Director to review application
materials submitted by each regulated facility and include monitoring
and record keeping requirements in the permit (Sec. 125.107, Sec.
125.139).

A. When Would the Proposed Rule Become Effective?

If promulgated as proposed, this proposed rule would become
effective 60 days after the final rule is published in the Federal
Register. Phase III existing facilities subject to today's proposed
rule would need to comply with the Subpart K requirements when an NPDES
permit containing requirements consistent with Subpart K is issued to
the facility. Under existing NPDES program regulations, this would
occur when an existing NPDES permit is reissued or, when an existing
permit is modified or revoked and reissued. For facilities whose
permits are expiring, EPA recognizes that facilities will need a
reasonable time period to conduct baseline studies and develop and
implement an appropriate suite of control technologies and this is
provided for in Sec. 125.104(a)(2)(ii). Under today's proposed rule,
new offshore oil and gas extraction facilities would need to comply
with the Subpart N requirements when an NPDES permit containing
requirements consistent with Subpart N is issued to the facility (Sec.
125.132).

B. What General Information Would I Be Required To Submit to the
Director When I Apply for My Reissued NPDES Permit?

The NPDES regulations that establish the application process at
Sec. 122.21 generally require that facilities currently holding a
permit submit information and data 180 days prior to the end of the
permit term, which is five years. Under today's proposed rule, Phase
III existing facilities and new offshore oil and gas extraction
facilities would be required to submit the information that is required
under Sec. 122.21 of today's proposed rule with their application for
permit issuance or reissuance.
Today's proposed rule would modify regulations at Sec. 122.21 to
require existing Phase III facilities and new offshore oil and gas
extraction facilities to prepare and submit some of the same
information required for new Phase I and existing Phase II facilities.
The proposed application requirements would require owners or operators
of all Phase III existing facilities to submit two general categories
of information when they apply for a reissued NPDES permit. The general
categories of information would include (1) physical data to
characterize the source waterbody in the vicinity where the cooling
water intake structure(s) is/are located, and (2) data to characterize
the design and operation of the cooling water intake structures. As in
Phase II, Phase III existing facilities would not be required to submit
the Source Water Baseline Biological Characterization Data required
under Sec. 122.21(r)(4). However, new offshore oil and gas extraction
facilities may be required to submit the Source Water Baseline
Biological Characterization Data depending on whether they are fixed or
non-fixed facilities. Non-fixed facilities would be exempt from the
requirement. Specific data requirements for the Source Water Baseline
Biological Characterization Data are described later in this section.
Studies to be submitted by both Phase III existing facilities and new
offshore oil and gas extraction facilities are described below.
1. Source Water Physical Data (Sec. 122.21(r)(2))
Under the requirements at Sec. 122.21, Phase III existing
facilities and new offshore oil and gas extraction facilities subject
to this proposed rule are required to provide the source water physical
data specified at Sec. 122.21(r)(2) in their application for a
reissued permit. These data are needed to characterize the facility and
evaluate the type of waterbody and species potentially affected by the
cooling water intake structure. The Director would use this information
to evaluate the appropriateness of the design and construction
technologies proposed by the applicant.
The applicant for an existing facility or a new fixed offshore oil
and gas extraction facility would be required to submit the following
specific data: (1) A narrative description and scale drawings showing
the physical configuration of all source waterbodies used by the
facility, including areal dimensions, depths, salinity and temperature
regimes, and other documentation; (2) an identification and
characterization of the source waterbody's hydrological and
geomorphological features, as well as the methods used to conduct any
physical studies to determine the intake's zone of influence and the
results of such studies; and (3) locational maps. For new non-fixed
(mobile) offshore oil and gas extraction facilities this provision
requires only some of the location information and not the source water
physical data required for Phase III existing facilities and new fixed
offshore oil and gas extraction facilities.
EPA recognizes that mobile facilities may not always know where
they will be operating during the permit term, and the requirement in
(r)(2)(iv) is not meant to restrict them only to locations identified
in the permit application. However, EPA expects that permit applicants
will provide, based on available information, their best estimate as to
where they will be operating during the permit term, at whatever level
of detail they can. EPA requests comment on this requirement.
2. Cooling Water Intake Structure Data (Sec. 122.21(r)(3))
Phase III existing facilities and new offshore oil and gas
extraction facilities would be required to submit the cooling water
intake structure data specified at Sec. 122.21(r)(3) to characterize
the cooling water intake structure and evaluate the potential for
impingement and entrainment of aquatic organisms. Note that Sec.
122.21(r)(3)(ii)--latitude and longitude of each intake structure--
would not be applicable to non-fixed (mobile) offshore oil and gas
extraction facilities. Information on the design of the intake
structure and its location in the water column would allow the permit
writer to evaluate which species or life stages would potentially be
subject to impingement mortality and entrainment. A diagram of the
facility's water balance would be used to identify the proportion of
intake water used for cooling, make-up, and process water. The water
balance diagram also provides a picture of the total flow in and out of
the facility, allowing the permit writer to evaluate compliance with
the performance standards or requirements.
The applicant would be required to submit the following specific
data: (1) A narrative description of the configuration of each of its
cooling water intake structures and where they are located in the
waterbody and in the water column; (2) latitude and longitude in
degrees, minutes, and seconds for each of its cooling water intake
structures (not applicable to new non-fixed (mobile) offshore oil and
gas extraction facilities); (3) a narrative description of the
operation of each of the cooling water intake structures, including
design intake flows, daily

[[Page 68480]]

hours of operation, number of days of the year in operation, and
seasonal operation schedules, if applicable; (4) a flow distribution
and water balance diagram that includes all sources of water to the
facility, recirculating flows, and discharges; and (5) engineering
drawings of the cooling water intake structure.
3. Cooling Water System Description (Sec. 122.21(r)(5)) (Phase III
Existing Facilities Only)
Phase III existing facilities would be required to submit the
cooling water system data specified at Sec. 122.21(r)(5) to
characterize the operation of cooling water systems and their
relationship to the cooling water intake structure(s) at the facility.
They would also be required to submit a narrative description of the
proportion of design intake flow that is used in the system, the number
of days of the year that the cooling water system is in operation, and
any seasonal changes in the operation of the system, if applicable. The
facility would also submit design and engineering calculations prepared
by a qualified expert, such as a professional engineer, and supporting
data to support the narrative description. This information would be
expected to be used by the applicant and the Director in determining
the appropriate standards that can be applied to the Phase III
facility.

C. Phase III Existing Facility Implementation

In this proposed rule, a Phase III existing facility as defined by
any of the three co-proposed options would choose one of the following
five compliance alternatives for establishing best technology available
for minimizing adverse environmental impact at the site (see Sec.
125.103(a)(1-5)):
(1) Demonstrate that it has reduced its flow commensurate with a
closed-cycle recirculating system and therefore already meets the
performance standards to reduce impingement mortality and entrainment.
Or, a facility may demonstrate that it has already reduced its design
intake velocity to 0.5 feet per second and therefore meets the
performance standards to reduce impingement mortality only;
(2) Demonstrate that existing design and construction technologies,
operational measures, and/or restoration measures already meet the
performance requirements specified under Sec. 125.103(b) and the
restoration requirements in (c), as applicable;
(3) Demonstrate that it has selected and installed 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 performance standards specified under Sec.
125.103(b) and the restoration requirements specified in Sec.
125.103(c), as applicable;
(4) Demonstrate that it has installed and properly operates and
maintains an approved design and construction technology in accordance
with Sec. 125.108(a); or propose a technology for approval in
accordance with Sec. 125.108(b); or,
(5) Demonstrate that a site-specific determination of best
technology available for minimizing adverse environmental impact is
appropriate for its site in accordance with Sec. 125.103(a)(5).
The application, monitoring, record keeping, and reporting
requirements for each of these compliance alternatives are detailed in
the following sections.
1. As an Existing Phase III Facility, What Additional Information Would
I Submit to the Director When I Apply for My Reissued NPDES Permit?
In addition to Sec. 122.21 described above, the facility would be
required to submit the information required under Sec. 125.104, as
appropriate. This information includes the Comprehensive Demonstration
Study and its seven components as discussed in this section. The seven
components include the following: Proposal for Information Collection;
Source Waterbody Flow Information; Impingement Mortality and/or
Entrainment Characterization Study; Technology Compliance and
Assessment Information; Restoration Plan; Information to Support Site-
specific Determination of Best Technology Available for Minimizing
Adverse Environmental Impact; and Verification Monitoring Plan.
Under today's proposed rule, if a Phase III existing facility's
permit expires before 4 years after the publication date of the final
rule, the facility may request that the Director establish a schedule
for the facility to submit the information required as expeditiously as
practicable, but not later than 3 years and 180 days after publication
of the final rule. Between the time the facility's existing permit
expires and the time an NPDES permit containing requirements consistent
with Subpart K is issued to the facility, the best technology available
to minimize adverse environmental impact would continue to be based on
the Director's best professional judgment.
The Proposal for Information Collection component of Sec. 125.104
should be submitted to the Director for review and comment prior to the
start of information collection activities. For a typical facility that
plans to install a new technology, it is estimated that a facility
would need to submit this Proposal for Information Collection about
fifteen (15) months prior to the submission of the remainder of the
required information, which in turn would need to be submitted about
twenty-one (21) months prior to the expiration of its current permit.
This approximate timing is based on the sequential Comprehensive
Demonstration Study requirements and the estimated level of effort
required to complete the studies and allow time for the Director's
review and approval. The timing provided in this section is for
illustrative purposes only and represents a schedule that the average
facility may need to follow to meet the deadlines established in
today's proposed rule. Some facilities may require more, or less time
to perform the studies and prepare the application requirements. All
facilities, except those that choose to comply with the proposed rule
by reducing intake capacity to a level commensurate with a closed-cycle
recirculating system in accordance with Sec. 125.103(a)(1)(i), or by
adopting an approved technology in accordance with Sec. 125.103(a)(4)
would submit a Proposal for Information Collection for review and
comment by the Director (Sec. 125.104(a)(1)). Facilities that comply
with impingement mortality requirements by reducing intake velocity to
0.5 feet per second or less in accordance with Sec. 125.103(a)(1)(ii)
will only need to submit a Comprehensive Demonstration Study, including
a Proposal for Information Collection, for entrainment reduction
requirements, if applicable. The Proposal for Information Collection
requirements are detailed later in this section. Figure 1 presents an
example of a possible time frame a facility may follow in preparing and
submitting application components.
Following submission of the Proposal for Information Collection,
the Director will review and provide comments on the proposal. During
this time, the facility may proceed with planning, assessment, and data
collection activities in fulfillment of Comprehensive Demonstration
Study requirements. The Director is encouraged to provide comments
expeditiously (i.e., within 60 days) so the permit applicant can make

[[Page 68481]]

responsive modifications to its information gathering activities.
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It is assumed that most facilities would need approximately one
year to complete the studies outlined in the Proposal for Information
Collection. These would be completed at least 180 days prior to the end
of the current permit term, by which time the remainder of required
application information would be submitted. If the facility believed it
would require more than one year to complete studies described in the
Proposal for Information Collection, the facility would be encouraged
to consult with the Director.
After the first permit containing requirements consistent with
Subpart K is issued, facilities may submit a request to their Director
soliciting a reduced information collection effort for subsequent
permit applications in accordance with Sec. 125.104(a)(3), which
allows facilities to demonstrate that the conditions at their facility
and within the waterbody in which their intake is located remain
substantially unchanged since their previous permit application. The
request for reduced cooling water intake structure and waterbody
application information would contain a list of and justification for
each information item in Sec. 122.21(r) and Sec. 125.104(b) that has
not changed since the previous permit application. The applicant would
submit this request at least one year prior to the expiration of the
current permit term and the Director is required to act on the request
within 60 days.
The Director would review the information provided in the
application including the information submitted in compliance with
Sec. 122.21 and Sec. 125.104 and would confirm whether the facility
should be regulated as an existing facility under these proposed
regulations or as a new facility under regulations that were published
on December 19, 2001 (66 FR 65256), and establish the appropriate
requirements to be applied to the cooling water intake structure(s).
Following review and approval of the permit application, the Director
would develop a draft permit for public notice and comment. The comment
period would allow the facility and other interested parties to review
the draft permit conditions and provide comments to the Director. The
Director would consider all public comments received on the draft
permit and would develop a final permit based upon the application
studies submitted and other information submitted during the comment
period, as appropriate. The Director would incorporate the relevant
requirements for the facility's cooling water intake structure(s) into
the final permit.
The information required under Sec. 125.104 would be identical
under each of the three co-proposed regulatory options, with one
exception. Under the regulatory option which defines facilities with
design intakes flows 100 MGD or more located on tidal rivers,
estuaries, or oceans or one of the Great Lakes as existing Phase III
facilities, there would not be a requirement to collect the Source
Waterbody Flow information described below, because this information is
only relevant for facilities withdrawing water from freshwater rivers
and streams or lakes and reservoirs. In addition, under this regulatory
option there would not be any facilities required to meet only
impingement mortality performance standards. Therefore, under this
regulatory option all facilities except those that have met the
applicable requirements in accordance with Sec. 125.103(a)(1)(i) or
Sec. 125.103(a)(4) would be required to submit a Study for both the
impingement mortality and entrainment reduction requirements, unless
the facility had met the applicable requirements in Sec.
125.103(a)(1)(ii), in which case it would be required to submit a Study
for entrainment only. The following describes the proposed application
requirements in more detail.
a. Comprehensive Demonstration Study (Sec. 125.104(b))
Proposed application requirements at Sec. 125.104 would require
all existing facilities except those deemed to have met the performance
standard in Sec. 125.103(a)(1) (reduced intake capacity to a level
commensurate with the use of a closed-cycle, recirculating cooling
water system, or for facilities with impingement requirements only,
reduce intake velocity to 0.5 feet per second or less) to perform and
submit to the Director the results of a Comprehensive Demonstration
Study, including data and detailed analyses to demonstrate that the
facility will meet applicable requirements contained in Sec.
125.103(b) or established pursuant to Sec. 125.103(a)(5).
The proposed Comprehensive Demonstration Study has seven
components.
? Proposal for Information Collection;
? Source Waterbody Flow Information;
? Impingement Mortality and/or Entrainment Characterization
Study;
? Technology and Compliance Assessment Information;
? Restoration Plan;
? Information to Support Site-specific Determination of Best
Technology Available for Minimizing Adverse Environmental Impact; and
? Verification Monitoring Plan.
All Phase III existing facilities would not be required to submit
each of these components of the Comprehensive Demonstration Study.
Rather, required submittals for a facility would depend on the
compliance alternative selected. All Phase III existing facilities,
except those deemed to have met the performance standard in accordance
with Sec. 125.103(a)(1) or Sec. 125.103(a)(4), would be required to
submit a Proposal for Information Collection; Source Waterbody Flow
Information whenever the intake is on a freshwater river or stream or a
lake or reservoir; an Impingement Mortality and/or Entrainment
Characterization Study; Technology and Compliance Assessment
Information; and a Verification Monitoring Plan. Facilities complying
in accordance with Sec. 125.103(a)(4) would be required to submit
Technology and Compliance Assessment Information and a Verification
Monitoring Plan. Only those Phase III existing facilities that propose
to use restoration measures in whole or in part to meet the performance
standards in Sec. 125.103(b) or site-specific requirements in Sec.
125.103(a)(5) would be required to submit a Restoration Plan. Only
those facilities that choose to demonstrate that a site-specific
standard is appropriate for their site would be required to submit
Information to Support Site-specific Determination of Best Technology
Available for Minimizing Adverse Environmental Impact.

Proposal for Information Collection (Sec. 125.104(a))

Before conducting any studies, the facility would be required to
submit to the Director for review and approval, a proposal stating what
information would be collected to support the Comprehensive
Demonstration Study (see Sec. 125.104(b)(1)). This proposal would
provide: (1) A description of the proposed and/or implemented
technology(ies) and/or supplemental restoration measures to be
evaluated; (2) a list and description of any historical studies
characterizing impingement mortality and entrainment and/or the
physical and biological conditions in the vicinity of the cooling water
intake structures and their relevance to this proposed study. If the
facility proposes to use existing data, it would demonstrate the extent
to which the data are representative of current conditions and that the
data were collected using appropriate quality assurance/quality control
procedures;

[[Page 68483]]

(3) a summary of any past or ongoing (including voluntary)
consultations with appropriate Federal, State, and Tribal fish and
wildlife agencies that are relevant to this study and a copy of written
comments received as a result of such consultation; and (4) a sampling
plan for any new field studies proposed to be conducted in order to
ensure that the facility has sufficient data to develop a
scientifically valid estimate of impingement mortality and entrainment
at the site. The sampling plan would document all methods and quality
assurance/quality control procedures for sampling and data analysis.
The sampling and data analysis methods proposed would be appropriate
for a quantitative survey and would take into account the methods used
in other studies performed in the source waterbody. The sampling plan
would include a description of the study area (including the area of
influence of the cooling water intake structure), and provide taxonomic
identifications of the sampled or evaluated biological assemblages
(including all life stages of fish and shellfish).
The proposed rule does not specify particular timing requirements
for the information collection proposal, but does require review of the
proposal by the Director. In general, EPA expects that it would be
submitted well in advance of the other permit application materials, so
that if the Director determined that additional information was needed
to support the application, the facility would have time to collect
this information, including additional monitoring as appropriate. In
some cases, however, where the facility intends to rely on existing
data and there has been no change in conditions at the site since the
last permit renewal, a long lead time might not be necessary. This
would most likely be the case for subsequent permit renewals following
the first renewal after the Phase III requirements go into effect.

Source Waterbody Flow Information

Facilities under the co-proposed regulatory option that defines
existing Phase III facilities as those with design intakes flows 100
MGD or more located on tidal rivers, estuaries, or oceans, or one of
the Great Lakes would not have a requirement to submit Source Waterbody
Flow Information. Under either of the other co-proposed options, Phase
III existing facilities with cooling water intake structures that
withdraw cooling water from freshwater rivers or streams, except those
deemed to have met the performance standard in Sec. 125.103(b) (in
accordance with 125.103(a)(1)(i)), would be required to provide the
mean annual flow of the waterbody and any supporting documentation and
engineering calculations that allow a determination of whether they are
withdrawing less than or greater than five (5) percent of the annual
mean flow. This would provide information needed to determine which
requirements would apply to the facility (see Sec. 125.103(b)(1) and
(2)). Facilities seeking compliance in accordance with Sec.
125.103(a)(1)(ii) would need this information to determine whether they
have impingement mortality and entrainment requirements, or impingement
mortality requirements only. The documentation might include either
publicly available flow data from a nearby U.S. Geological Survey
(USGS) gauging station or actual instream flow monitoring data
collected by the facility. The waterbody flow should be compared with
the total design flow of all cooling water intake structures at the
regulated facility.
Under the proposed requirements at Sec. 125.103(b)(3), Phase III
existing facilities with cooling water intake structures that withdraw
cooling water from a lake or reservoir and that propose to increase the
facility's design intake flow would be required to submit a narrative
description of the waterbody's thermal stratification and any
supporting documentation and engineering calculations to show that the
increased flow meets the requirement not to disrupt the natural thermal
stratification or turnover pattern (where present) of the source water
except in cases where the disruption is determined, in consultation
with Federal, State or Tribal fish and wildlife management agencies, to
not adversely affect the management of fisheries. Typically, this
natural thermal stratification would be defined by the thermocline,
which may be affected to a certain extent by the withdrawal of cooler
water and the discharge of heated water into the system. In cases where
the lake or reservoir remains stratified, the Director may also
consider changes in the relative size of the water layers due to the
changes in withdrawals and any subsequent impacts (e.g., change in
dissolved oxygen, change in available habitat).

Impingement Mortality and/or Entrainment Characterization Study

The proposed regulations would require that the facility submit the
results of an Impingement Mortality and/or Entrainment Characterization
Study in accordance with Sec. 125.104(b). This study would include:
(1) Taxonomic identifications of those species of fish and shellfish
and their life stages that are in the vicinity of the cooling water
intake structure and are most susceptible to impingement and
entrainment; (2) a characterization of these species of fish and
shellfish and life stages, including a description of the abundance and
temporal/spatial characteristics in the vicinity of the cooling water
intake structure, based on the collection of a sufficient number of
years of data to characterize annual, seasonal, and diel variations in
impingement mortality and entrainment (e.g., related to climate/weather
differences, spawning, feeding and water column migration); and (3)
documentation of the current impingement mortality and entrainment of
all life stages of fish and shellfish at the facility and an estimate
of impingement mortality and entrainment under the calculation
baseline.
This documentation would include historical data that are
representative of the current operation of the facility and of
biological conditions at the site. Impingement mortality and
entrainment samples to support the calculations required would be
collected during periods of representative operational flows for the
cooling water intake structure and the flows associated with the
samples would be documented. In addition, this study would include an
identification of species that are protected under Federal, State, or
Tribal law (including threatened or endangered species) that might be
susceptible to impingement and entrainment by the cooling water intake
structure(s). The Director might coordinate a review of the list of
threatened, endangered, or other protected species with the U.S. Fish
and Wildlife Service, National Marine Fisheries Service, or other
relevant agencies to ensure that potential impacts to these species
have been addressed.
The calculation baseline is defined at Sec. 125.102 as an estimate
of impingement mortality and entrainment that would occur at the site
assuming: (1) The cooling water intake system has 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,
procedures, and structural configuration are those that the facility
would maintain in the absence of any structural or operational
controls, including flow or velocity reductions, implemented in whole
or in part for the purposes of reducing impingement mortality and
entrainment. The facility

[[Page 68484]]

may also choose to use its current level of impingement mortality and
entrainment as the calculation baseline. EPA has previously referred to
this as the ``as-built approach'' (69 FR 41576).
Reductions in impingement mortality and entrainment from the
calculation baseline as a result of any design and construction
technologies and/or operational measures already implemented at the
facility should be added to the reductions expected to be achieved by
any additional design and construction technologies and operational
measures that will be implemented in order to meet the applicable
performance standards or site-specific requirements. In this case, the
calculation baseline could be estimated by evaluating existing data
from a facility nearby without impingement and/or entrainment control
technology (if relevant) or by evaluating the abundance of organisms in
the source waterbody in the vicinity of the intake structure that may
be susceptible to impingement and/or entrainment. Additionally, if a
portion of the total design intake flow is water withdrawn for a
closed-cycle, recirculating cooling system (but flow is not
sufficiently reduced to satisfy the compliance option in Sec.
125.103(a)(1)(i)), such facilities would be able to use the reduction
in impingement mortality and entrainment that is attributed to the
reduction in flow in meeting the performance requirements in Sec.
125.103.
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 cooling water intake structure; or current impingement
mortality and entrainment data collected at the facility. A facility
could also 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.

Technology and Compliance Assessment Information

The Technology and Compliance Assessment Information required under
Sec. 125.104(b)(4) consists of two parts: (1) The Design and
Construction Technology Plan; and (2) the Technology Installation and
Operation Plan. If a facility plans to utilize the compliance
alternative in Sec. 125.103(a)(4), it need only submit the Technology
Installation and Operation Plan (and the Verification Monitoring Plan
under Sec. 125.104(b).) If the facility plans to utilize the
compliance alternative in Sec. 125.103(a)(2) or (3) using design and
construction technologies and/or operational measures (either existing
or new), it would submit both the Design and Construction Technology
Plan and the Technology Installation and Operation Plan. Note that
facilities seeking a site-specific determination of best technology
available in accordance with Sec. 125.103(a)(5), would submit a Site-
Specific Technology Plan in accordance with Sec. 125.104(b) rather
than a Design and Construction Technology Plan, as well as a Technology
Installation and Operation Plan and the other studies discussed later
in section VII.C.5, Alternative Site-Specific Requirements.
The Design and Construction Technology Plan would explain the
technologies or operational measures selected by a facility to meet the
requirements in Sec. 125.103(a)(2) or (3). The Agency recognizes that
selection of the specific technology or group of technologies for the
site will depend on individual facility and waterbody conditions.
Examples of appropriate technologies may include, but are not limited
to, wedgewire screens, fine mesh screens, fish handling and return
systems, barrier nets, aquatic filter barrier systems, and enlargement
of the cooling water intake structure to reduce velocity. Examples of
operational measures include, but are not limited to, seasonal
shutdowns or reductions in flow, and continuous or more frequent
rotation of traveling screens.
Information required as part of the Design and Construction
Technology Plan would include the following: (1) A narrative
description of the design and operation of all design and construction
technologies and/or operational measures that have been or will be put
into place to meet the performance standards for reduction of
impingement mortality of those species most susceptible to impingement,
and information that demonstrates the efficacy of those technologies
and/or operational measures for those species; (2) a description of the
design and operation of all design and construction technologies or
operational measures that have been or will be put into place, to meet
the performance standards for reduction of entrainment for those
species most susceptible to entrainment, if applicable to the facility,
and information that demonstrates the efficacy of those technologies
and/or operational measures for those species; (3) calculations of the
reduction in impingement mortality and/or entrainment of all life
stages of fish and shellfish that would be achieved by the technologies
and/or operational measures selected based on the Impingement Mortality
and/or Entrainment Characterization Study in Sec. 125.104(b); and (4)
design and engineering calculations, drawings, and estimates to support
the narrative descriptions required in the Design and Construction
Technology Plan prepared by a qualified expert such as a professional
engineer.
In determining compliance with any requirements to reduce
impingement mortality or entrainment, the facility would assess the
total reduction in impingement mortality and entrainment against the
calculation baseline developed under the Impingement Mortality and/or
Entrainment Characterization Study.
Under the Phase II final rule, power producing facilities with a
capacity utilization rate of less than 15 percent are only required to
meet the impingement mortality reduction requirements, based on EPA's
determination that entrainment impacts below this threshold would be
minimal. EPA defined the capacity utilization rate as the ratio between
the average annual net generation of the power by the facility (in MW)
and the total net capability of the facility to generate power (in MW)
multiplied by the number of available hours during a year. Today's
proposed rule does not contain an analogous provision for manufacturing
facilities, as EPA has been unable to identify a similar threshold of
operations below which impacts would be considered minimal. EPA
requests comment on the availability of such a threshold that would
result in lesser requirements for facilities that do not operate full
time, thus minimizing burdens to these facilities while still
protecting the source waterbody.
The Technology Installation and Operation Plan is required for all
facilities that choose the compliance alternatives in Sec.
125.103(a)(2), (3), (4), or (5), and propose to use design and
construction technologies and/or operational measures (either existing
or new) to meet performance standards or site specific requirements.
Such facilities would submit the following information to the Director
for review and approval: (1) A schedule for the installation and
maintenance of any new design and construction technologies; (2) a list
of the operational parameters that will be monitored, including the
location and the

[[Page 68485]]

frequency at which they will be monitored; (3) a list of activities to
be undertaken to ensure to the degree practicable the efficacy of the
installed design and construction technologies and operational
measures, and the schedule for implementing them; (4) a schedule and
methodology for assessing the efficacy of any installed design and
construction technologies and operational measures in achieving
applicable performance standards, including an adaptive management plan
for revising design and construction technologies and/or operational
technologies if the assessment indicates that applicable performance
standards are not being met; and (5) for facilities that select an
approved technology in accordance with Sec. 125.103(a)(4),
documentation that appropriate site conditions (as specified by EPA or
the Director in accordance with Sec. 125.108) exist at the facility.
In developing the schedule for installation and maintenance of any new
design and construction technologies in item 1, the facility should
schedule any downtime to coincide with otherwise necessary downtime
(e.g., for repair, overhaul, or routine maintenance of the) to the
extent practicable. The Director should approve any reasonable
scheduling provision included for this purpose. Those facilities that
propose to use restoration measures in whole or in part would submit
the Restoration Plan required at Sec. 125.104(b)(5).
Today's proposed rule would require the Director to evaluate, using
information submitted in the application, biennial status reports, and
any other available information, the performance of any technologies,
operational measures, and/or restoration measures the facility may have
implemented in previous permit terms. Additional or different design
and construction technologies, operational measures, and/or restoration
measures may be required if the Director determines that the initial
technologies, operational measures, and/or restoration measures
selected and implemented will not meet the requirements of Sec.
125.103, as provided in Sec. 125.107. The proposed rule also requires
that the permit contain a condition requiring the facility to reduce
impingement mortality and entrainment (if applicable) commensurate with
the efficacy of the installed design and construction technologies and/
or operational measures. This is designed to ensure that technologies
are operated and maintained to ensure their efficacy to the degree
practicable, and not merely to meet the low end of the applicable
performance standard range, if better performance is practicable.
The Technology Installation and Operation Plan is one of the most
important pieces of documentation for implementing the requirements of
this proposed rule. It serves to: (1) Guide facilities in the
installation, operation, maintenance, monitoring, and adaptive
management of selected design and construction technologies and/or
operational measures; (2) provide a schedule and methodology for
assessing success in meeting applicable performance standards and site-
specific requirements; and (3) provide a basis for determining
compliance with the requirements of Sec. 125.103(a)(2)-(5). Facilities
and Directors are encouraged to take appropriate care in developing,
reviewing and approving the plan. Note that for facilities employing
restoration measures, the Restoration Plan serves the same required
functions.

Restoration Plan

EPA proposes restoration measures as one of several technologies
that may be employed, alone or in combination with others, to minimize
adverse environmental impact at existing facilities. The consideration
of restoration measures is relevant to the section 316(b) determination
of the requisite design of cooling water intake structures because
restoration measures help minimize the adverse environmental impact
attributable to such structures. Phase III existing facilities may use
restoration measures that produce and/or result in levels of fish and
shellfish in the facility's waterbody or watershed that are
substantially similar to those that would result through compliance
with the applicable performance standards or alternative site-specific
requirements. In order to employ restoration measures, the facility
would demonstrate to the Director that it has evaluated the use of
design and construction technologies and/or operational measures and
determined that the use of restoration measures is appropriate because
meeting the applicable performance standards or site-specific
requirements through the use of design and construction technologies
and/or operational measures alone 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 would
also demonstrate to the Director that the restoration measures, alone
or in combination with any selected design and construction
technologies and/or operational measures, will produce ecological
benefits and maintain fish and shellfish in the waterbody, including
community structure and function, at a substantially similar level to
that which would be achieved by meeting the applicable performance
standards at Sec. 125.103(b) or the site-specific requirements
developed pursuant to Sec. 125.103(a)(5).
To help all parties review the proposed or existing restoration
measures and to help ensure adequate performance of those measures,
Sec. 125.104(b) would require facilities proposing to use restoration
measures to submit the following information in a Restoration Plan with
their applications to the Director for review and approval. In the
submittal, the facility would address species identified, in
consultation with Federal, State, and Tribal fish and wildlife
management agencies with responsibility for fisheries and wildlife
potentially affected by the facility's cooling water intake structures,
as species of concern. The level of complexity of the Restoration Plan
likely will be commensurate with the restoration measures considered or
proposed.
First, the facility would be required to demonstrate that it has
evaluated the use of design and construction technologies and/or
operational measures and explain how it determined that the use of
restoration measures would be more feasible, cost-effective, or
environmentally desirable than meeting the applicable performance
standards or site-specific requirements wholly through the use of
design and construction technologies, and/or operational measures.
Second, the facility would be required to submit a narrative
description of the design and operation of all restoration measures the
facility has in place or has selected and proposes to implement to
produce fish and shellfish. If the ecological benefits from an existing
restoration project are required to compensate for some environmental
impact other than the impact from impingement and entrainment by the
cooling water intake structure (e.g., a wetland created to satisfy
section 404 of the Clean Water Act requirements), those ecological
benefits should not be counted towards meeting the applicable
performance standards or site-specific requirements. The narrative
description should identify the species targeted under any restoration
measures.
Third, the facility would be required to submit a quantification of
the ecological benefits of the existing and/or proposed restoration
measures. The facility would estimate the reduction in fish and
shellfish impingement mortality and entrainment that would

[[Page 68486]]

be necessary to comply with applicable performance standards or site-
specific requirements, using information from the Impingement Mortality
and/or Entrainment Characterization Study and any other available and
appropriate information. The facility would then calculate the
production of fish and shellfish from existing and proposed restoration
measures. The quantification would also include a discussion of the
nature and magnitude of uncertainty associated with the performance of
the restoration measures and a discussion of the time frame within
which ecological benefits are expected to accrue from the restoration
project.
Fourth, the facility would be required to provide design
calculations, drawings, and estimates documenting that the proposed
restoration measures, in combination with design and construction
technologies and/or operational measures, or alone, will meet the
requirements for production of fish and shellfish. Production of fish
and shellfish as a result of relevant restoration measures already
implemented at the facility should be added to the production expected
to be achieved by the additional restoration measures. If the
restoration measures address the same fish and shellfish species
identified in the Impingement Mortality and/or Entrainment
Characterization Study (in-kind restoration), the facility would be
required to demonstrate that the restoration measures will produce a
level of these fish and shellfish substantially similar to that which
would result from meeting applicable performance standards or site-
specific requirements. In this case, the calculations should include a
site-specific evaluation of the suitability of the restoration measures
based on the species that are found at the site. If the restoration
measures address fish and shellfish species different from those
identified in the Impingement Mortality and/or Entrainment
Characterization Study (out-of-kind restoration), the facility would be
required to demonstrate that the restoration measures produce
ecological benefits substantially similar to or greater than those that
would be realized through in-kind restoration. Such a demonstration
should be based on a watershed approach to restoration planning and
consider applicable multi-agency watershed restoration plans, site-
specific peer-reviewed ecological studies, and/or consultation with
appropriate Federal, State, and Tribal natural resource agencies. While
both in-kind and out-of-kind restoration require a quantification of
the levels of fish and shellfish the restoration measures are expected
to produce, out-of-kind restoration could include a qualitative
demonstration that these ecological benefits are substantially similar
to or greater than those that would be realized through in-kind
restoration, because different species are being produced that may not
be directly comparable to those identified in the Impingement Mortality
and/or Entrainment Characterization Study. The Director could require
additional information from the facility in order to assess the results
of the out-of-kind restoration (e.g., biological data on species
present, function of species in the community, etc.).
Fifth, the facility would be required to submit a plan utilizing an
adaptive management method for implementing, maintaining, and
demonstrating the efficacy of the restoration measures it has selected
and for determining the extent to which restoration measures, or the
restoration measures in combination with design and construction
technologies and operational measures, have met the applicable
performance standards or site-specific requirements. Adaptive
management is a process in which a facility chooses an approach for
meeting a project goal, monitors the effectiveness of that approach,
and then, based on monitoring and any other available information,
makes any adjustments necessary to ensure continued progress toward the
project's goal. This cycle is repeated as necessary until the goal is
met.
The adaptive management plan would include: (1) A monitoring plan
that includes a list of the restoration parameters that the facility
will monitor, the frequency at which they will be monitored, and the
success criteria for each parameter; (2) a list of activities the
facility will undertake to ensure the efficacy of the restoration
measures, a description of the linkages between these activities and
the items described in the monitoring plan, and an implementation
schedule for the activities; and (3) a process for revising the
restoration plan as new information, including monitoring data, becomes
available, and if the applicable performance standards or site-specific
requirements are not being met.
Sixth, the facility would be required to submit a summary of any
past or ongoing consultation with Federal, State, and Tribal fish and
wildlife management agencies on its use of restoration measures,
including any written comments received as a result of such
consultations.
Seventh, if requested by the Director, the facility would be
required to conduct a peer review of items to be submitted as part of
the Restoration Plan. Written comments from peer reviewers would be
submitted to the Director and made available to the public as part of
the permit application. Peer reviewers would be selected in
consultation with the Director who may consult with EPA, and with
Federal, State and Tribal fish and wildlife management agencies with
responsibility for fish and wildlife potentially affected by the
facility's cooling water intake structure(s). Peer reviewers would be
required to have appropriate qualifications (e.g., in the fields of
geology, engineering and/or biology) depending upon the materials to be
reviewed.
Finally, the facility would be required to include in the Plan a
description of information to be included in a status report to the
Director every two years. The proposed regulations at Sec. 125.107(b)
would require that this information be reviewed by the Director to
determine whether the proposed restoration measures, in conjunction
with (or in lieu of) design and construction technologies and/or
operational measures, would meet the applicable performance standards
or site-specific requirements, or, if the restoration is out-of-kind,
would produce substantially similar ecological benefits (fish and
shellfish) including maintenance or protection of community structure
and function in the facility's waterbody or watershed.

Compliance Using an Approved Technology

Today's proposed rule would offer facilities the choice of adopting
a protective, pre-approved design and construction technology, which
would allow them to submit a significantly streamlined Comprehensive
Demonstration Study. Section 125.108 lists one approved technology
(wedgewire screens) and provides an opportunity for the Director to
pre-approve other technologies.
If the facility chooses to comply with this compliance alternative,
the facility would submit documentation to the Director that the
facility meets the appropriate site conditions and the facility has
installed and will properly operate and maintain submerged cylindrical
wedgewire screen technology (as described in Sec. 125.108(a)(1)) or
other technologies as approved by the Director under Sec. 125.108(b)).
If the facility is subject to impingement mortality performance
standards only, and plans to install

[[Page 68487]]

wedgewire screens with a maximum through-screen design intake velocity
of 0.5 feet per second or less, the facility should choose the
compliance alternative in Sec. 125.103(a)(1)(i), and does not need to
demonstrate that it meets the other criteria in Sec. 125.104(a)(1) or
prepare a Technology Installation and Operation Plan or Verification
Monitoring Plan.
Facilities subject to entrainment performance standards seeking
compliance under this alternative would submit a Technology
Installation and Operation Plan and a Verification Monitoring Plan that
address entrainment reduction, and document that all of the appropriate
site conditions in Sec. 125.108(a)(1) exist at their facility. To
qualify for compliance using the cylindrical wedgewire screen
technology, the facility would have to meet the following conditions:
(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 maximum through-screen design intake velocity is
0.5 feet per second or less; (4) the slot size is appropriate for the
size of eggs, larvae, and juveniles of all fish and shellfish to be
protected at the site; and (5) the entire main cooling water intake
flow is directed through the technology. Facilities should demonstrate
that they meet these criteria in the Technology Installation and
Operation Plan. Note the submerged cylindrical wedgewire screen
technology is only pre-approved if the cooling water intake structure
is, among other things, located in a freshwater river or stream (see
Sec. 125.108(a)). Therefore, this particular pre-approved technology
would not apply under the co-proposed regulatory option that defines
Phase III existing facilities as those with design intakes flows 100
MGD or more located on tidal rivers, estuaries, or oceans, or one of
the Great Lakes.
In addition, any interested person could submit a request that a
technology be approved for use in accordance with the compliance
alternative in Sec. 125.103(a)(4). If the Director approves, the
technology may be used by all facilities that have similar site
conditions under the Director's jurisdiction. To do this, the
interested person would submit the following as required by Sec.
125.108(b): (1) A detailed description of the technology; (2) a list of
design criteria for the technology and site characteristics and
conditions that each facility would need to have in order to ensure
that the technology can consistently meet the appropriate impingement
mortality and entrainment performance standards in Sec. 125.103(b);
and (3) information and data sufficient to demonstrate that all
facilities under the jurisdiction of the Director can meet the
applicable impingement mortality and entrainment performance standards
in Sec. 125.103(b) if the applicable design criteria and site
characteristics and conditions are present at the facility.
EPA is proposing this compliance alternative in response to
comments received under the Phase II proposed rule suggesting 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). This approach was also endorsed by small entity representatives
and the Final Report of the Small Business Advocacy Review Panel on
EPA's Planned Proposed Rule for Cooling Water Intake Structures at
Section 316(b) Phase III Facilities (DCN 7-0006). EPA is soliciting
comments on other technologies that are equally protective and may be
used to meet the performance requirements.

Information To Support Site-Specific Determination of Best Technology
Available for Minimizing Adverse Environmental Impact

If a facility selects compliance alternative 5 (Sec.
125.103(a)(5)), it would be required to demonstrate that its costs of
compliance under the compliance alternatives 3 or 4 (Sec.
125.103(a)(3) or (4)) would be significantly greater than the costs
considered by the Administrator for a similar facility in establishing
the applicable performance standards, or that its cost of compliance
under alternatives 3 and 4 would be significantly greater than the
benefits of complying with the applicable performance requirements.
Depending on the approach taken, a facility would be required to
complete the Site-Specific Technology Plan, the Comprehensive Cost
Evaluation Study, and possibly the Benefits Valuation Study. These
study requirements are discussed later in section VII.C.5, Alternative
Site-Specific Requirements.

Verification Monitoring Plan

Section 125.104(b) would require all Phase III existing facilities,
except those deemed to have met the performance standard in Sec.
125.103(a)(1), to submit a Verification Monitoring Plan to measure the
efficacy of the implemented design and construction technologies and/or
operational measures. The plan would include a monitoring study lasting
at least two years to verify the full-scale performance of the proposed
or already implemented technologies and of any additional operational
measures. The plan would be required to describe the frequency of
monitoring and the parameters to be monitored and the bases for
determining these. The Director would use the verification monitoring
results to confirm that the facility is meeting the level of
impingement mortality and/or entrainment reduction expected and that
fish and shellfish are being maintained at the level expected (as
required in Sec. 125.105). Verification monitoring would be required
to begin once the technologies and/or operational measures are
implemented and continue for a sufficient period of time (but at least
two years) to demonstrate that the facility is reducing impingement
mortality and/or entrainment to the level of reduction required.
2. How Would the Director Determine the Appropriate Cooling Water
Intake Structure Requirements?
The Director's first step would be to determine whether the
facility is covered by this proposed rule. If the answer to all the
following questions is yes, the facility would be required to comply
with the requirements of this proposed rule.
(1) Is the facility a point source?
(2) Is the facility an existing facility other than a Phase II
existing facility?
(3) Does the facility use at least 25 percent of water withdrawn
exclusively for cooling purposes, measured on an average annual basis?
and
(4) Does the facility use, or propose to use, a cooling water
intake structure (including a cooling water intake structure operated
by an independent supplier) that meets the total design intake flow/
source waterbody threshold as specified under each of the three co-
proposed regulatory options to withdraw cooling water from waters of
the United States?
If a facility is a point source that uses a cooling water intake
structure and has or is required to have an NPDES permit, but does not
meet the applicability requirements in today's proposed rule, it would
continue to be subject to permit conditions implementing section 316(b)
of the Clean Water Act set by the Director on a case-by-case basis,
using best professional judgment.
The Director's second step would be to determine whether the
facility proposes to comply: By demonstrating

[[Page 68488]]

that its existing design and construction technologies, operational
measures, or restoration measures meet the proposed performance
standards; by implementing design and construction technologies,
operational measures, or restoration measures that, in combination with
existing technologies and operational measures, meet the proposed
performance standards; by using an approved technology; or by seeking a
site-specific determination of best technology available to minimize
adverse environmental impact (see Sec. 125.103(a)).
If a facility selects compliance alternative 1 (Sec.
125.103(a)(1)), and it demonstrates that it has reduced its flow
commensurate with a closed-cycle recirculating system and therefore
already meets the performance standards to reduce impingement mortality
and entrainment, the Director would only have to verify that this is
indeed true; no additional requirements are necessary. Under compliance
alternative 1, a facility may demonstrate that it has already reduced
its design intake velocity to 0.5 feet per second and therefore meets
the performance standards to reduce impingement mortality only. Again
the Director would only need to verify the design intake velocity and
no further requirements would be necessary.
Under compliance alternative 2 (Sec. 125.103(a)(2)), in which a
Phase III existing facility chooses to demonstrate that its existing
design and construction technologies, operational measures, or
restoration measures meet the proposed performance standards, the
Director would need to verify that the existing facility meets the
impingement mortality and entrainment reduction requirements.
To verify that existing controls meet the impingement mortality and
entrainment reduction requirements in the proposed rule, the Director
would need to: (1) Verify the facility's baseline calculation; (2)
confirm the location of the facility's cooling water intake
structure(s); (3) verify the withdrawal percentage of mean annual flow
if applicable; (4) review impingement mortality and/or entrainment
rates or estimates; and (5) consider any use of restoration. These same
steps also would be part of determining requirements under other
compliance alternatives as discussed below.
The Director would initially review and verify the calculation
baseline estimate submitted by the facility under Sec. 125.104(b).
This estimate would need to be consistent with the proposed definition
of the term ``calculation baseline'' and be representative of current
biological conditions at the facility. The Director would then review
the information that the facility provides to validate the source
waterbody type in which the cooling water intake structure is located
(freshwater river or stream; lake or reservoir; or estuary, tidal
river, ocean, or Great Lake). The Director would review the supporting
material the applicant provided in the permit application to document
the physical placement of the cooling water intake structure. For
existing facilities with one or more cooling water intake structures
located in a freshwater river or stream, the Director would need to
determine whether the facility withdraws more or less than five percent
of the mean annual flow, which determines whether impingement
mortality, or impingement mortality and entrainment controls would
apply. For facilities with cooling water intake structures located on
lakes or reservoirs, other than a Great Lake, for which the facility
seeks to increase the design flow, the Director would need to determine
whether the increased intake flow would disrupt the natural thermal
stratification or turnover pattern of the source waterbody. In making
this determination, the Director would need to consider anthropogenic
factors that can influence the occurrence and location of a
thermocline, and would need to coordinate with appropriate Federal,
State, or Tribal fish and wildlife agencies to determine if any
disruption adversely impacts the management of the fisheries. Both of
these determinations would be based on the source waterbody flow
information required under Sec. 125.104(b).
For Phase III existing facilities that have in place existing
restoration measures that meet the requirements of Sec. 125.103(b),
the Director would review the evaluation of the current restoration
measures submitted under Sec. 125.104(b). The Director could gather
additional information and solicit input for the review from
appropriate fishery management agencies as necessary. The Director
would need to determine whether the current measures would maintain the
fish and shellfish in the waterbody at comparable levels to those that
would be achieved under Sec. 125.103, as well as review and approve
the proposed Restoration Plan required in Sec. 125.104(b).
Finally, the Director would need to review impingement and/or
entrainment data or estimates to determine whether in-place controls
achieve the performance standards proposed for the different categories
of source waterbodies. This step would involve comparing the
calculation baseline with the impingement and/or entrainment data or
estimates provided as part of the Comprehensive Demonstration Study and
the Impingement Mortality and/or Entrainment Characterization Study
requirements under Sec. 125.104(b).
If the Director determines that the existing technologies,
operational measures, or supplemental restoration measures employed do
not achieve compliance with the applicable performance standards, the
Director would issue a permit requiring additional measures to achieve
such compliance, based on the information submitted in the
Comprehensive Demonstration Study (Sec. 125.107(b)(1)). If such
studies are approved and a permit is issued on that basis, but the
Director later determines, based on the results of subsequent
monitoring, that the technologies, operational measures, and
supplemental restoration measures did not meet the performance
standards, the Director would require the existing facility to
implement additional technologies and operational measures as necessary
to meet the rule requirements. In general, this would occur at the next
renewal of the permit. The Director would also review the facility's
Verification Monitoring Plan and/or Restoration Plan (as appropriate)
for post-operational monitoring to demonstrate that the technologies
and/or restoration measures are performing as predicted.
Under compliance alternative 3 (Sec. 125.103(a)(3)), the same
general steps would be followed as described above to assess compliance
of existing controls with applicable performance standards except that
under this alternative, the Phase III existing facility would be
required to demonstrate that the technologies and measures identified
would meet (rather than currently meet) the applicable performance
standards. This review would also be based on data submitted in the
Comprehensive Demonstration Study required under Sec. 125.104(b).
For facilities seeking compliance under compliance alternative 4
(Sec. 125.103(a)(4)), through the use of an approved technology, the
Director would review the Technology Installation and Operation Plan
and Verification Monitoring Plan.
These same basic steps described under compliance alternatives 2
and 3 would also apply to facilities seeking to comply under compliance
alternative 5 (Sec. 125.103(a)(5)); however, the Director would be
required to make two additional determinations under this option,
including whether the facility meets one of the applicable cost tests

[[Page 68489]]

and what alternative requirements are justified in light of the
significantly greater costs. Phase III existing facilities seeking to
comply under this option would be required to submit a Comprehensive
Cost Evaluation Study under Sec. 125.104(b), which includes data that
document the cost of implementing design and construction technologies,
operational measures, and/or restoration measures to meet the otherwise
applicable performance standards in Sec. 125.103(b). The Director
would need to review these data, including detailed engineering cost
estimates, and compare these with the costs the Agency considered in
establishing these requirements for a like Phase III facility. Where
the Director finds that the facility's cost of implementation is
significantly greater than those considered during rule development, he
or she would approve site-specific requirements and could approve
alternative technologies or operational measures. Such alternative
technologies or operational measures could be those proposed by the
facility in the Site-Specific Technology Plan or Restoration Plan, but
less protective requirements would have to be justified by the
significantly greater costs.
Where a Phase III existing facility seeks site-specific
requirements based on facility costs that are significantly greater
than the environmental benefits of compliance, the facility would also
be required to submit a Benefits Valuation Study (along with the
Comprehensive Cost Evaluation Study). The Director would review the
benefits valuation, including a narrative description of non-quantified
benefits, to determine whether it fully values the benefits of meeting
the applicable performance standards, as required in Sec. 125.104(b),
and whether the facility's cost of implementation is significantly
greater than the environmental benefits of complying with the
requirements of Sec. 125.103(b). If the Director determines that the
compliance costs are significantly greater than the environmental
benefits, the Director would approve site-specific requirements and
could approve alternative technologies or operational measures. Such
alternative technologies or operational measures could be those
proposed by the facility in the Site-Specific Technology Plan and/or
Restoration Plan, but less protective requirements would have to be
justified by the significantly greater costs. EPA is interested in ways
to decrease application review time and is requesting comments on how
to make this process both efficient and effective.
3. What Would I Be Required To Monitor?
Section 125.105 of today's proposed rule provides that Phase III
existing facilities would perform monitoring in accordance with the
Verification Monitoring Plan, the Technology Installation and Operation
Plan, and/or the Restoration Plan, all required by Sec. 125.104(b),
and any additional monitoring specified by the Director to demonstrate
compliance with the applicable requirements of Sec. 125.103(e). In
developing biological monitoring conditions, the Director should
consider the need for the data, and only collect data sufficient to
assess the presence, abundance, life stages (including eggs, larvae,
juveniles, and adults), and mortality of aquatic organisms (fish and
shellfish or other organisms required to be monitored by the Director)
impinged or entrained during operation of the cooling water intake
structure. This type of data may be used to develop permit conditions
to implement the requirements of this rule. The Director should ensure,
where appropriate, that any required monitoring will allow for the
detection of any annual, seasonal, and diel variations in the species
and numbers of individuals that are impinged or entrained.
The Director may modify the monitoring program based on changes in
physical, chemical, or biological conditions in the vicinity of the
cooling water intake structure. The Director may also require
monitoring of operational parameters for facilities that employ a
Technology Installation and Operation Plan or Restoration Plan to
comply with the requirements of Sec. 125.103. The Director would be
required to specify what monitoring or other data is to be included in
a status report every two years.
4. How Would Compliance Be Determined?
This proposed rule would be implemented by the Director placing
conditions consistent with the requirements of this part in NPDES
permits. The application information, including components of the
Comprehensive Demonstration Study, as appropriate, should demonstrate
that the facility is already meeting the performance standards, or that
it will install and properly operate and maintain design and
construction technologies, operational measures, and/or restoration
measures to meet the performance standards, or that a site-specific
determination of best technology available is necessary. To support
this demonstration, the facility should submit the following
information to the Director:
? Data submitted with the NPDES permit application to show
that the facility meets location, design, construction, and capacity
requirements consistent with the compliance alternative selected;
? Data to demonstrate that the facility is meeting the
performance standards or requirements consistent with the compliance
alternative selected; and
? Compliance monitoring data and records as prescribed by
the Director.
Facilities complying using compliance alternatives in Sec. 125.103
(a)(2)-(5) would be required to submit a Technology Installation and
Operation Plan and Verification Monitoring Plan (or Restoration Plan,
which includes comparable information), regardless of how the facility
wants to measure compliance. The specifics of how success in meeting
the performance standards may be measured (i.e, the number of species,
whether critical species or all species) and the method of measurement
(e.g., total biomass, total counts, etc.) would be determined by the
Director based on review of the proposed methodology submitted by the
facility in its Verification Monitoring Plan and/or Restoration Plan,
and any other methods the Director considers appropriate.
The facility may request that compliance be determined based on
whether it has complied with the construction, operational,
maintenance, monitoring, and adaptive management requirements of its
Technology Installation and Operation Plan (for design and construction
technologies and/or operational measures) or Restoration Plan (for
restoration measures). In this case, the facility would still assess
success in meeting applicable performance standards or restoration
requirements but this assessment serves to guide the adaptive
management process rather than as a basis for determining compliance.
After the first permit term following promulgation of this rule,
facilities are only eligible for this compliance determination
alternative if they have been in compliance with the terms of their
Technology Installation and Operation Plan and/or Restoration Plan
during the preceding permit term.
Under this compliance determination alternative, the Technology
Installation and Operation Plan or Restoration Plan would specify
construction, operational, maintenance, monitoring, and adaptive
management requirements that can reasonably be expected to achieve
success in meeting the applicable performance standards, restoration

[[Page 68490]]

requirements and/or site-specific requirements. These construction,
operational, maintenance, monitoring, and adaptive management
requirements would also be approved by the Director, who would be
required to specify what verification monitoring, monitoring data and
other information would be included in the facility's biennial status
report.
The required elements of the Technology Installation and Operation
Plan include: (1) A schedule for installation and maintenance of any
new technologies; (2) operational parameters to be monitored; (3)
activities to ensure the efficacy of technologies and measures; (4) a
schedule and methodology for assessing the efficacy of installed
technologies and measures in meeting the performance standards; (5) an
adaptive management plan; and (6) for facilities using an approved
compliance technology, documentation that they meet the conditions for
its use. The Restoration Plan requires corresponding information as
appropriate for restoration measures.
EPA believes that it is important for facilities to consider and
document each of the components of the Technology Installation and
Operation Plan, regardless of which compliance determination approach
is used. However, the level of detail appropriate for some of the
components may be different for the two different approaches. For
facilities that comply by demonstrating success in meeting performance
standards, particularly in cases where they are already meeting the
standards and no significant changes in technologies or operations are
needed, brief summaries may be sufficient for most components, though
they would still need detailed documentation of their schedule and
methodology for assessing efficacy of installed technologies and
measures for meeting the standards. Conversely, for facilities where
compliance is determined based on whether they have complied with the
construction, operation, maintenance, monitoring, and adaptive
management approaches required in the Technology Installation and
Operation Plan or Restoration Plan, a fairly detailed specification of
these requirements would be appropriate. The Director should ensure
that the level of detail in the Technology Installation and Operation
Plan or Restoration Plan is sufficient to support whichever compliance
determination approach is selected.
Section 125.106 requires existing facilities to keep records and
report monitoring data and other information specified by the Director
in a biennial status report, although Directors may require more
frequent reports. Facilities would also keep records of all data used
to complete the permit application and show compliance with the
requirements of Sec. 125.103, any supplemental information developed
under Sec. 125.104, and any compliance monitoring data submitted under
Sec. 125.105, for a period of at least three (3) years from date of
permit issuance. The Director may require that these records be kept
for a longer period.
5. Alternative Site-Specific Requirements
Under Sec. 125.103(a)(5), an existing facility may demonstrate to
the Director 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 determines to be the best
technology available to minimize adverse environmental impact for the
facility based on the cost-cost test specified in Sec.
125.103(a)(5)(i) or the cost-benefit test specified in Sec.
125.103(a)(5)(ii) of the proposed rule.
Section 125.103(a)(5)(i) provides that an existing facility may
demonstrate that the costs of compliance under the compliance
alternatives in Sec. 125.103(a)(3) and (4) of the rule would be
significantly greater than the costs considered by the Administrator
for a like facility in establishing the applicable performance
standards. In such cases, the Director would make a site-specific
determination of the best technology available for minimizing adverse
environmental impact. The Director would establish site-specific
alternative requirements based on new and/or existing 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 in Sec. 125.103(b) of the rule without resulting in
significantly greater costs than those considered by the Administrator
for a like facility. Section 125.103(a)(5)(ii) provides that an
existing facility may demonstrate that the costs of compliance under
alternatives in Sec. 125.103(a)(3) and (4) of the rule would be
significantly greater than the benefits of complying with the
applicable performance standards at that facility. In such cases, the
Director would make a site-specific determination of best technology
available for minimizing adverse environmental impact. The Director
would establish site-specific alternative requirements based on new
and/or existing design and construction technologies, operational
measures, and/or restoration measures that achieve an efficacy that, in
the judgment of the Director, is as close as practicable to the
applicable performance standards in Sec. 125.103(b) of the rule
without resulting in costs significantly greater than the benefits of
meeting the performance standards.

Facility's Costs Significantly Greater Than Costs Considered by EPA

If the Director determines that data specific to the facility
indicate that the costs of compliance under Sec. 125.103(a)(3) and (4)
would be significantly greater than the costs considered by the
Administrator for a like facility in establishing the applicable
performance standards in Sec. 125.103(b), a facility may request a
site-specific determination of best technology available for minimizing
adverse environmental impacts. A facility requesting this determination
would submit a Comprehensive Cost Evaluation Study and a Site Specific
Technology Plan (Sec. 125.104(b)). The Comprehensive Cost Evaluation
Study would include: engineering cost estimates in sufficient detail to
document the costs of implementing design and construction
technologies, operational measures, and/or restoration measures at the
facility that would be needed to meet the applicable performance
standards of Sec. 125.103(b); a demonstration that the documented
costs significantly exceed the costs considered by EPA for a like
facility in establishing the applicable performance standards; and
engineering cost estimates in sufficient detail to document the costs
of implementing alternative design and construction technologies,
operational measures, and/or restoration measures in the facility's
Site-Specific Technology Plan developed in accordance with Sec.
125.104(b).
To make the demonstration that compliance costs are significantly
greater than those considered by EPA, the facility would first
determine its actual compliance costs. To do this, the facility first
should determine the costs for any new design and construction
technologies, operational measures, and/or restoration measures that
would be needed to meet the applicable performance standards in Sec.
125.103(b), which may include the following cost categories: the
installed capital cost of the technologies or measures; the net
operation and maintenance (O&M) costs for the technologies or measures
(that is,

[[Page 68491]]

the O&M costs for the final suite of technologies and measures once all
new technologies and measures have been installed less the O&M costs of
any existing technologies and measures); the net revenue losses (lost
revenues minus saved variable costs) associated with net construction
downtime (actual construction downtime minus that portion which would
have been needed anyway for repair, overhaul or maintenance); and any
pilot study costs associated with on-site verification and/or
optimization of the technologies or measures. Costs should be
annualized using a 7 percent discount rate, with an amortization period
of 10 years for capital costs and 30 years for pilot study costs and
construction downtime net revenue losses. Annualized costs should be
converted to 2002 dollars ($2002), using the engineering news record
construction cost index (see Engineering News-Record. New York: McGraw
Hill). The annual average index value is 6538 for year 2002). Costs for
permitting and post-construction monitoring should not be included in
this estimate, as these are not included in the EPA-estimated costs
against which they would be compared, as described below. Because
existing facilities already incur monitoring and permitting costs and
will continue to do so regardless of the compliance option selected,
and these are largely independent of the specific performance standards
adopted and technologies selected to meet them, EPA believes it is both
simpler and more appropriate to conduct the cost comparison required in
this provision using direct compliance costs (capital, net O&M, net
construction downtime, and pilot study) only. Adding permitting and
monitoring costs to both sides of the comparison would complicate the
analysis without substantially changing the results.
To facilitate the comparison of the facility-derived costs with
those considered by the Agency in establishing the proposed
requirements, EPA has developed an automated cost estimating tool. This
cost test tool estimates the costs using all of the same assumptions
that EPA considered in developing costs for the proposed rule and would
be made available to both the facility and the permitting authority. In
fact, EPA used this same algorithm to estimate the incremental cost
impact for this proposed rulemaking. This approach differs from the
approach used in the Phase II regulations; however, EPA believes that
this will provide an easier, more exact methodology for estimating
those costs. In particular, EPA believes that this tool is appropriate
because of the type of data on each facility that was available for
this rulemaking. EPA surveyed only a segment of the Phase III universe
and, therefore had data on a limited number of facilities, which
required EPA to extrapolate costs for the universe of facilities
potentially covered by this proposed rule. EPA therefore used a model
facility approach in costing manufacturing facilities, which is the
same methodology that is used in the development of most of EPA's
technology-based effluent guidelines. This does not allow for providing
a table that would give EPA's cost estimates for every Phase III
existing facility as was done for Phase II. EPA requests comments on
the use of this Cost Test Algorithm and has provided a version for
review in DCN 7-0004. For more details on the cost-test algorithm, see
the cost-test tool in section VIII and the Technical Development
Document.
Facilities requesting site-specific performance requirements would
be required to submit a Site-Specific Technology Plan. This plan is
developed based on the results of the Comprehensive Cost Evaluation
Study and would be required to contain the following information:
? A narrative description of the design and operation of all
existing and proposed design and construction technologies, operational
measures, and/or restoration measures selected in accordance with Sec.
125.103(a)(5);
? An engineering estimate of the efficacy of the proposed
and/or implemented design and construction technologies or operational
measures, and/or restoration measures. This estimate would include a
site-specific evaluation of the suitability of the technologies or
operational measures for reducing impingement mortality and/or
entrainment (as applicable) of all life stages of fish and shellfish
based on representative studies (e.g., studies that have been conducted
at cooling water intake structures located in the same waterbody type
with similar biological characteristics) and, if applicable, site-
specific technology prototype or pilot studies. If restoration measures
will be used, a Restoration Plan that includes the elements described
in Sec. 125.104(b) would be provided;
? A demonstration that the proposed and/or implemented
design and construction technologies, operational measures, and/or
restoration measures achieve an efficacy that is as close as
practicable to the applicable performance standards of Sec. 125.103(b)
without resulting in costs significantly greater than either the costs
considered by the Administrator for a facility like yours in
establishing the applicable performance standards, or, if employing the
cost-benefit test described in B below, the benefits of complying with
the applicable performance standards at your facility; and,
? Design and engineering calculations, drawings, and
estimates prepared by a qualified professional to support the elements
of the Plan.

Facility's Costs Significantly Greater Than the Benefits of Complying
With Performance Standards

A facility demonstrating that its costs are significantly greater
than the benefits of complying with performance standards would produce
and submit a Comprehensive Cost Evaluation Study, a Benefits Valuation
Study, and a Site-Specific Technology Plan.
The Comprehensive Cost Evaluation Study is discussed in the
previous section. It would require the same information for a cost-
benefit site-specific determination as for a cost-cost site-specific
determination, except that the demonstration in Sec. 125.104(b) would
show that the facility's actual compliance costs significantly exceed
the benefits of meeting the applicable performance standards at the
facility.
The Benefits Valuation Study would require that a facility use a
comprehensive methodology to fully value the impacts of impingement
mortality and entrainment at its site and the benefits of complying
with the applicable performance standards. In addition to the valuation
estimates, the benefit study would include the following:
? A description of the methodology(ies) used to value
commercial, recreational, and ecological benefits (including any non-
use benefits, if applicable);
? Documentation of the basis for any assumptions and
quantitative estimates. If the facility plans to use an entrainment
survival rate other than zero, they would submit a determination of
entrainment survival at the facility based on a study approved by the
Director;
? An analysis of the effects of significant sources of
uncertainty on the results of the study;
? If requested by the Director, a peer review of the items
submitted in the Benefits Valuation Study. The facility would be
required to choose the peer reviewers in consultation with the Director
who may consult with EPA and Federal, State, and Tribal fish and
wildlife management agencies with responsibility for fish and wildlife
potentially affected by the cooling water intake structure. Peer
reviewers would be required to have appropriate

[[Page 68492]]

qualifications depending upon the materials to be reviewed.
? A narrative description of any non-monetized benefits that
would be realized at the site if they were to meet the applicable
performance standards and a qualitative assessment of their magnitude
and significance.
All benefits, whether expressed qualitatively or quantitatively,
should be addressed in the Benefits Valuation Study and considered by
the Director in determining whether the costs of compliance would
significantly exceed benefits.
The benefits assessment should begin with an impingement mortality
and entrainment study, which quantifies both the baseline mortality as
well as the expected change from rule compliance. The benefits
assessment should include a qualitative and/or quantitative description
of the benefits that would be produced by compliance with the
applicable performance standards at the facility site and, to the
extent feasible, monetized (dollar) estimates of all significant
benefits categories using well established and generally accepted
valuation methodologies. The first benefit category that would be
considered is use benefits, which includes such benefits as those to
commercial and recreational fishermen. Well-established revealed
preference and market proxy methods exist for valuing use benefits, and
these should be used in all cases where the impingement mortality and
entrainment study identifies substantial impacts to harvested or other
relevant species.
The second benefit category that would be considered is non-use
benefits. Non-use benefits may arise from reduced impacts to ecological
resources that the public considers important, such as threatened and
endangered species. Non-use benefits can generally only be monetized
through the use of stated preference methods. When determining whether
to monetize non-use benefits, permittees and permit writers should
consider the magnitude and character of the ecological impacts implied
by the results of the impingement mortality and entrainment study and
any other relevant information.
? In cases where an impingement mortality and entrainment
characterization study identifies substantial harm to a threatened or
endangered species, to the sustainability of populations of important
species of fish, shellfish or wildlife, or to the maintenance of
community structure and function in a facility's waterbody or
watershed, non-use benefits should be monetized.\41\
---------------------------------------------------------------------------

\41\ In cases where harm cannot be clearly explained to the
public, monetization is not feasible because stated preference
methods are not reliable when the environmental improvement being
valued cannot be characterized in a meaningful way for survey
respondents.
---------------------------------------------------------------------------

? In cases where an impingement mortality and entrainment
characterization study does not identify substantial harm to a
threatened or endangered species, to the sustainability of populations
of important species of fish, shellfish or wildlife, or to the
maintenance of community structure and function in a facility's
waterbody or watershed, monetization is not necessary.
Permittees should consult with their permitting authority regarding
their plans for assessing ecological and non-use benefits, including
whether they plan to conduct a stated preference study and if so, the
basic design of the study, including such items as target population,
sampling strategy, approximate sample size, general survey design, and
other relevant information. When conducting quantitative benefits
assessments, permittees should carefully review and follow accepted
best practices for such studies. A discussion of best practices
regarding valuation can be found in EPA's Guidelines for Preparing
Economic Analyses (EPA 2000, EPA 240-R-00-003, September 2000) and OMB
Circular A-4: Regulatory Analysis (September 17, 2003, http://www.whitehouse.gov/
omb/inforeg/circular_a4.pdf). In the benefits
assessment, permittees should present the results, as well as clearly
describe the methods used, the assumptions made, and the associated
uncertainties.
It is recommended that the permittee and Director seek peer review
of the major biological and economic aspects of the final benefits
assessment. The goal of the peer review process is to ensure that
scientific and technical work products receive appropriate levels of
critical scrutiny from independent scientific and technical experts as
part of the overall decision-making process. In designing and
implementing peer reviews, permittees and permit writers could look to
EPA's Science Policy Council Handbook--Peer Review (EPA 100-B-98-00,
January 1998, http://www.epa.gov/osa/spc/index.htm) for guidance.
The Site Specific Technology Plan, as described in the previous
section, would require the same information for a cost-benefit site-
specific determination as for a cost-cost site-specific determination,
except that the demonstration in Sec. 125.104(b) would show that the
proposed and/or implemented technologies and measures achieve an
efficacy that is as close as practicable to the applicable performance
standards without resulting in costs significantly greater than the
benefits of complying with the applicable performance standards at your
facility.

D. New Offshore Oil and Gas Extraction Facilities

Under today's proposed rule, new offshore oil and gas extraction
facilities would be required to submit the application requirements
consistent with Sec. 122.21(r)(2), (3), and (4) and Sec. 125.136 of
Subpart N if they are fixed facilities and choose to comply with the
Track I or II requirements in Sec. 125.134(b) or (c). A fixed facility
is defined as a bottom founded offshore oil and gas extraction facility
permanently attached to the seabed or subsoil of the outer continental
shelf (e.g., platforms, guyed towers, articulated gravity platforms) or
a buoyant facility securely and substantially moored so that it cannot
be moved without a special effort (e.g., tension leg platforms,
permanently moored semi-submersibles) and which is not intended to be
moved during the production life of the well. This definition does not
include mobile offshore drilling units (MODUs) (e.g., drill ships,
temporarily moored semi-submersibles, jack-ups, submersibles, tender-
assisted rigs, and drill barges). The Track I and Track II requirements
are generally consistent with the Phase I requirements for new
facilities (66 FR 65256). Under Track I, this includes source water
baseline biological characterization data, velocity information, source
waterbody flow information, and a design and construction technology
plan. Track II requirements include source waterbody flow information
and Track II comprehensive demonstration study (including source water
biological study, evaluation of potential cooling water intake
structure effects, and verification monitoring plan). These
requirements are detailed later in this section.
As described in Sec. 125.135, fixed facilities would also have the
opportunity to conduct a cost-to-cost test and provide data to
determine if compliance with the Subpart N requirements would result in
compliance costs wholly out of proportion to those EPA considered in
establishing the requirement, or would result in significant adverse
impacts on local water resources other than

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