[Federal Register Volume 64, Number 159 (Wednesday, August 18, 1999)]
[Proposed Rules]
[Pages 45072-45087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17206]



[[Page 45071]]

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Part IV





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 441



Effluent Limitations Guidelines and Pretreatment Standards for the 
Industrial Laundries Point Source Category; Proposed Rule

  Federal Register / Vol. 64, No. 159 / Wednesday, August 18, 1999 / 
Proposed Rules  

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 441

[FRL-6373-5]
RIN 2040-AB97


Effluent Limitations Guidelines and Pretreatment Standards for 
the Industrial Laundries Point Source Category

AGENCY: Environmental Protection Agency (EPA).

ACTION: Withdrawal of proposed rule.

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SUMMARY: On December 17, 1997 (62 FR 66182), EPA published proposed 
pretreatment standards for the control of wastewater pollutants from 
the industrial laundries industry. After careful consideration of all 
of the information in the record for this rulemaking, EPA has decided 
not to promulgate national categorical pretreatment standards for the 
industrial laundries point source category because industrial laundry 
discharges to publicly owned treatment works (POTWs) do not present a 
national problem warranting national regulation. EPA is not issuing 
effluent limitations guidelines and new source performance standards 
for direct dischargers since there are no direct dischargers and no 
means to evaluate performance to determine the appropriate level of 
control for national rulemaking purposes. For this action, EPA 
considered many regulatory technology options as well as the no 
regulation option. EPA has determined that indirect discharges from 
industrial laundries do not warrant national regulation because of the 
small amount of pollutants removed by pretreatment options determined 
to be economically achievable. For existing sources, EPA estimates that 
a rule for this industry would remove less than 650 pounds of pollutant 
per facility per year (which, on a toxic-weighted basis, is only 32 
pound equivalents). For new sources, EPA estimates that a rule for this 
industry would remove less than 1,040 pounds of pollutant per facility 
per year (which, on a toxic-weighted basis, is only 51 pound 
equivalents). These pollutant reductions represent much smaller 
removals than any other categorical pretreatment standards promulgated 
by EPA. EPA's record does not demonstrate that Publicly Owned Treatment 
Works (POTWs) are generally experiencing problems with discharges from 
this industry, and EPA believes that such discharges will rarely, if 
ever, present a problem. To the extent that isolated problem discharges 
occur, existing pretreatment authority is available to control these 
isolated discharges. EPA believes that for this industry, the best way 
to control effluent discharges of certain organic pollutants is to 
remove the pollutants which are contained on the laundry items before 
they are washed. EPA's Office of Solid Waste (OSW) plans to address the 
amount of certain waste solvents being sent to laundries in a future 
rulemaking (the first quarter of the year 2000) with an aim toward 
decreasing the amount of solvent based organics on towels.

DATES: In accordance with 40 CFR Part 23, this final action shall be 
considered issued for the purposes of judicial review at 1 pm Eastern 
time on September 1, 1999. Under section 509(b)(1) of the CWA, judicial 
review of the Administrator's final action regarding effluent 
limitations guidelines and pretreatment standards can only be had by 
filing a petition for review in the United States Court of Appeals 
within 120 days after the decision is considered issued for purposes of 
judicial review.

ADDRESSES: For additional technical information write to Ms. Marta E. 
Jordan, Engineering and Analysis Division (4303), U.S. EPA, 401 M 
Street SW, Washington, DC 20460 or send e-mail to: Jordan. 
M[email protected] or call at (202) 260-0817. For additional economic 
information contact Mr. George Denning at the address above or by 
calling (202) 260-7374.
    The complete administrative record (excluding confidential business 
information) for this action is available for review at EPA's Water 
Docket at EPA Headquarters at Waterside Mall, room EB-57, 401 M Street, 
SW, Washington, DC 20460. For access to docket materials, call (202) 
260-3027 between 9:00 am and 3:30 pm for an appointment. A reasonable 
fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: Ms. Marta E. Jordan, (202) 260-0817.

SUPPLEMENTARY INFORMATION:

Supporting Documentation

    The basis for this final action is detailed in four documents, each 
of which is supported in turn by additional information and analyses in 
the rulemaking record. EPA's technical foundation for this final action 
is presented in the Technical Development Document for the Final Action 
Regarding Pretreatment Standards for the Industrial Laundries Point 
Source Category (hereafter, ``Technical Development Document''; EPA 
Report No. 821-R-99-010. EPA's economic analysis is presented in the 
Economic Assessment for the Final Action Regarding Pretreatment 
Standards for the Industrial Laundries Point Source Category 
(hereafter, ``Economic Assessment''; EPA Report No. EPA-821-R-99-011.) 
and in the Cost-Effectiveness Analysis for the Final Action Regarding 
Pretreatment Standards for the Industrial Laundries Point Source 
Category (hereafter, ``Cost-Effectiveness Analysis''; EPA Report No. 
EPA-821-R-99-009). EPA's environmental benefits analysis is presented 
in the Water Quality Benefits Analysis for the Final Action Regarding 
Pretreatment Standards for the Industrial Laundries Point Source 
Category (hereinafter, ``WQBA''). EPA's responses to comments on the 
proposal and a Notice of Data Availability (NODA) which are part of 
this action are presented in the Comment Response Document for the 
Final Action Regarding Pretreatment Standards for the Industrial 
Laundries Point Source Category (hereinafter, ``Comment Response 
Document'').

Organization of this Document

I. Legal Authority
II. Background
    A. Clean Water Act
    B. Pollution Prevention Act
    C. Profile of the Industry
    D. Proposed Rule
    E. Notice of Data Availability
    1. Towel Only Option
    2. Total Petroleum Hydrocarbons (TPH)
    3. Pollution Prevention Program
    F. Changes Since Proposal
    1. Cost Changes
    2. Pollutant Loading and Reduction Changes
    3. Economic Analysis Changes
III. Decision Not to Regulate Industrial Laundries
    A. Summary of Options Considered
    B. Pretreatment Standards for Existing Sources (PSES)
    1. Selected Option
    2. Rationale for Selected Option
    C. Pretreatment Standards for New Sources (PSNS)
IV. Costs and Economic Impacts for the Regulatory Options
    A. Introduction
    B. Economic Impact Methodology
    1. Introduction
    2. Methodology Overview
    C. Summary of Costs and Economic Impacts
    1. Number of Facilities and Costs of the Regulatory Options
    2. Economic Impacts of the Regulatory Options
    a. Impacts from Regulatory Options for Existing Sources
    b. Impacts from Regulatory Options for New Sources
    3. Small Business Analysis

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    4. Cost-Benefit Comparison
V. Total Toxic and Nonconventional Pounds Reduced By Options 
Considered for the Final Action
VI. Pass Through Analysis
VII. Cost-Effectiveness Analysis
VIII. Environmental Benefits Analysis
    A. Summary
    B. Changes Since the Proposal
    C. Benefits of Action
    1. Reduced Pollutant Discharges
    2. Reduced Human Health Risk
    3. Improved Recreational Fishing Opportunities
    4. Reduced Impacts on POTWs
    a. Modeled POTW Impacts
    b. Discussion with POTW Operators and Pretreatment Coordinators
IX. Non-Water Quality Environmental Impacts
    A. Air Pollution
    B. Solid Waste Generation
    C. Energy Requirements
X. Related Acts of Congress and Executive Orders
Appendix A to the Notice--Lists of Abbreviations, Acronyms, 
Definitions and Other Terms Used in this Notice

I. Legal Authority

    This final action withdraws the proposed pretreatment standards for 
the industrial laundries point source category. EPA takes this action 
pursuant to sections 301, 304, 306, 307, 308, 402, and 501 of the Clean 
Water Act, 33 U.S.C. 1311, 1314, 1316, 1317, 1318, 1342, and 1361.

II. Background

A. Clean Water Act

    The Federal Water Pollution Control Act Amendments of 1972 (Clean 
Water Act) established a comprehensive program to ``restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters,'' (section 101 (a)). To implement the Act, EPA is to 
issue effluent limitations guidelines, pretreatment standards and new 
source performance standards for industrial dischargers. These types of 
effluent guidelines and standards are summarized in the proposed 
regulation at 62 FR 66182 (December 17, 1997).
    Section 304(m) of the Clean Water Act (33 U.S.C. 1314(m)), added by 
the Water Quality Act of 1987, requires EPA to establish schedules for 
(1) reviewing and revising existing effluent limitations guidelines and 
standards (``effluent guidelines''), and (2) promulgating new effluent 
guidelines. On January 2, 1990 EPA published an Effluent Guidelines 
Plan (55 FR 80), in which schedules were established for developing new 
and revised effluent guidelines for several industry categories. One of 
the industries for which the Agency established a schedule was the 
Industrial Laundries Point Source Category.
    Natural Resources Defense Council, Inc. (NRDC) and Public Citizen, 
Inc., challenged the Effluent Guidelines Plan in a suit filed in U.S. 
District Court for the District of Columbia (NRDC et al v. Reilly, Civ. 
No. 89-2980). The plaintiffs charged that EPA's plan did not meet the 
requirements of section 304(m). A Consent Decree in this litigation was 
entered by the Court on January 31, 1992. The terms of the Consent 
Decree are reflected in the Effluent Guidelines Plan most recently 
published on September 4, 1998 (63 FR 47285). This plan states, among 
other things, that EPA proposed effluent limitations guidelines and 
standards for the industrial laundries point source category in 
November 1997 and that EPA would take final action by June 1999. This 
notice serves to inform the public of EPA's final action pursuant to 
the decree.

B. Pollution Prevention Act

    The Pollution Prevention Act of 1990 (PPA) (42 U.S.C. 13101 et 
seq., Pub. L. 101-508, November 5, 1990) declares it to be the national 
policy of the United States that pollution should be prevented or 
reduced whenever feasible; pollution that cannot be prevented should be 
recycled in an environmentally safe manner, whenever feasible; 
pollution that cannot be prevented or recycled should be treated in an 
environmentally safe manner whenever feasible; and disposal or release 
into the environment should be employed only as a last resort (Section 
6602; 42 U.S.C. 13101(b)). In short, preventing pollution before it is 
created is preferable to trying to manage, treat or dispose of it after 
it is created.

C. Profile of the Industry

    An industrial laundry is any facility that launders industrial 
textile items from off-site as a business activity (i.e., launder 
industrial textile items for other business entities for a fee or 
through a cooperative arrangement). Either the industrial laundry or 
the off-site customer may own the industrial laundered textile items. 
This definition includes textile rental companies that perform 
laundering operations. For this action, laundering means washing with 
water, including water washing following dry cleaning. Laundering does 
not include laundering exclusively through dry cleaning. Industrial 
textile items include, but are not limited to, industrial: shop towels, 
printer towels, furniture towels, rags, mops, mats, rugs, tool covers, 
fender covers, dust control items, gloves, buffing pads, absorbents, 
uniforms and filters.
    Industrial laundry facilities are located in all 50 states and all 
10 EPA regions. By state, the largest number of industrial laundries 
are in California. By EPA region, the largest concentration of 
industrial laundries is in Region V. Most of the industrial laundering 
facilities are in large urban areas. Industrial laundries vary in size 
from one-or two-person facilities to large corporations that operate 
many facilities with hundreds of employees nationwide. Annual laundry 
production per facility ranges from approximately 44,000 to over 32 
million pounds, with a total annual industry production of over 9 
billion pounds. At proposal, EPA estimated that the industrial laundry 
industry consisted of approximately 1,747 facilities nationwide.
    In analyzing data submitted as part of the comment period of the 
proposed rule, EPA decided to eliminate clean room items (i.e., items 
used in particle-and static-free environments by computer 
manufacturing, pharmaceutical, biotechnology, aerospace, and other 
customers to control contamination in production areas) from the 
industrial textile items list. EPA compared data of pollutant 
concentrations in clean room items to pollutant concentrations in 
linens and industrial textile items. EPA found the clean room item 
pollutant concentrations lower than the linen concentrations and 
excluded the clean room items from the list. Since EPA excluded clean 
room items from the definition of industrial laundry textile items the 
number of facilities affected by this action decreased by five 
facilities. Thus, EPA's current estimate of industrial laundries 
consists of 1,742 facilities nationwide.

D. Proposed Rule

    On December 17, 1997 (62 FR 66182), EPA published proposed 
pretreatment standards for the control of wastewater pollutants from 
the industrial laundries industry. The proposed rule covered facilities 
that launder industrial textile items from off-site as a business 
activity (i.e., launders industrial textile items for other business 
entities for a fee or through a cooperative arrangement). EPA proposed 
an exclusion for existing facilities processing less than one million 
pounds of incoming laundry and less than 255,000 pounds of shop and/or 
printer towels per calendar year to eliminate unacceptable 
disproportionate adverse economic impacts on the smaller facilities. By 
excluding these facilities, EPA's

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proposed rule would have applied to 1,606 facilities nationwide.
    EPA proposed pretreatment standards based on chemical precipitation 
technology for 11 parameters (3 metals, 7 organics, and one bulk 
parameter known as silica gel treated-hexane extracted material (SGT-
HEM)). SGT-HEM was formerly called total petroleum hydrocarbon (TPH) 
under a previously used analytical method. The analytical method used 
for measuring SGT-HEM, EPA's Method 1664, was approved in a final 
rulemaking in the Federal Register on May 14, 1999 (64 FR 26315); the 
parameter is now called Non-polar material (NPM).
    EPA received comments on the proposed exclusion and on the 
technology basis used in calculating limits. Other comments related to 
the necessity of a national rule, costs of compliance, benefits, cost-
effectiveness, the toxic weighting factor and the POTW percent removal 
or SGT-HEM (TPH). EPA evaluated all of the issues based on the 
additional information gathered by EPA or received during the comment 
period following the proposal. EPA then discussed the results of most 
of these evaluations in a notice of data availability discussed below.

E. Notice of Data Availability

    EPA published a notice of data availability (NODA) on December 23, 
1998 (63 FR 71054). The NODA presented a summary of the data gathered 
or received from commenters since the proposal, an assessment of the 
usefulness of the data in EPA's analyses; a description and evaluation 
of a modified technology option suggested by commenters; and a 
discussion of a voluntary industry program, along with certain other 
specific issues raised by commenters.
1. Towel Only Option
    In response to comments received on the proposal, EPA evaluated an 
option covering only facilities laundering shop and/or printer towels 
(``towel only''). EPA provided information on the towel only option in 
the NODA. This option was a modified version of the ``heavy'' options 
presented in the proposal. This towel only alternative would have 
applied to 1,333 facilities nationwide. Based on comments on the NODA, 
EPA decided that the towel only options were complicated to implement 
and enforce and could result in significantly increased monitoring 
costs for compliance with both the categorical standards for one 
portion of the facility's discharge, as well as with local limits 
applied to the remainder of the facility's discharge. In addition, 
there was limited data identifying performance of the control 
technologies treating the towel only wastewater. Thus, EPA decided not 
to pursue the towel only options.
2. Total Petroleum Hydrocarbons (TPH)
    In the NODA, EPA also discussed issues related to how TPH was used 
for two different analyses--the pass through analysis and the cost-
effectiveness analysis. As part of the analyses conducted for the NODA, 
EPA incorporated data submitted on the POTW removal of the bulk 
parameter SGT-HEM (TPH). The new data showed nondetects for TPH in the 
POTW effluent. Thus, for the pass through analysis conducted for the 
NODA, EPA estimated a POTW removal of greater than 74 percent for SGT-
HEM (TPH) based on the highest influent measurement of SGT-HEM (see 
NODA, 63 FR 71054).
    In the NODA, EPA also discussed the new data collected related to 
constituents of TPH and modifications made to improve both the pass 
through and cost-effectiveness analyses based on this new data. 
Following the proposal, EPA conducted a study to evaluate the bulk 
parameter SGT-HEM (TPH) in order to identify more accurately the 
constituents comprising the SGT-HEM (TPH) measurement. The study was 
conducted by sampling the influents and effluents of the Dissolved Air 
Flotation (DAF) and Chemical Precipitation (CP) treatment units at the 
same facilities EPA sampled prior to and soon after proposal. EPA 
analyzed these samples for SGT-HEM (TPH) and total oil and grease using 
Method 1664 and evaluated the sample extracts using gas chromatography 
and mass spectroscopy (GC/MS) methods. Based on these analyses, EPA was 
able to identify several constituents measured as part of the SGT-HEM 
(TPH) parameter. Most of the constituents identified in the influent 
samples were n-alkanes, as well as naphthalene, bis(2-ethylhexyl) 
phthalate and 2-methylnaphthalene. The identified constituents, 
however, represent only a very small portion of the total SGT-HEM (TPH) 
measurement.
    In the NODA, EPA solicited additional information on influent and 
effluent pollutant concentrations from POTWs operating secondary 
treatment. EPA did not receive any additional data in response to the 
NODA that was useful in revising POTW percent removals for individual 
constituents, including the identified constituents of SGT-HEM (TPH).
    As part of EPA's analysis for the rule, EPA also conducted a cost-
effectiveness analysis. This analysis, in part, compares for various 
technology options the cost of removing toxic and nonconventional 
pollutants that would otherwise pass through the POTW. EPA expresses 
these pollutant removals as ``pound equivalents'' which EPA estimates 
by multiplying pounds of a pollutant removed by an assigned toxic 
weighting factor. The assigned toxic weighting factor for each 
pollutant is based on the pollutant's relative toxicity to copper. At 
proposal, EPA included the bulk parameter TPH in the cost-effectiveness 
calculations. Following the TPH study, EPA used a revised toxic 
weighting factor for TPH based on the toxic weighting factors for the 
individual constituents of SGT-HEM (TPH). Based on the identified 
constituents of SGT-HEM (TPH), EPA revised its average toxic weighting 
factor for the bulk parameter TPH from 0.10 (used at proposal) to 
0.009. EPA used this value, as discussed in the NODA, to identify the 
``total toxic pound equivalents'' of SGT-HEM (TPH) removed by the rule. 
EPA also calculated cost-effectiveness based on removals of the 
individual constituents of SGT-HEM (TPH) rather than on removals of the 
bulk parameter SGT-HEM (TPH). The results of the analyses using both 
the individual constituents only and the bulk parameter TPH can be 
found in the record and supporting documents.
3. Pollution Prevention Program
    In comments on the proposal and NODA, the industrial laundries 
trade associations, Uniform and Textile Service Association and Textile 
Rental Services Association of America, (UTSA and TRSA) submitted a 
description of a voluntary multi-media environmental stewardship and 
pollution prevention program as an alternative approach to a national 
pretreatment standard. The centerpiece of the voluntary program is a 
series of initiatives seeking to achieve an annual reduction of 
pollutants being discharged of 20,000 toxic pound equivalents and an 
annual reduction of up to 25 percent in industry water, energy, and 
washroom chemical usage (on a per pound of textiles laundered basis) by 
the year 2002. The program would be initiated by UTSA and TRSA 
surveying the industry to develop a 1997 ``benchmark'' against which 
progress towards these reduction goals will be measured. EPA supports 
industry efforts to reduce pollution at the source, and believes that 
the environment would benefit from this pollution prevention program 
whether or not categorical pretreatment standards are established.

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F. Changes Since Proposal

1. Cost Changes
    Engineering cost changes have been made based on supplementary data 
and comments. These changes, which are reflected in the economic impact 
analyses, cost-effectiveness analysis, and small business analyses, are 
discussed more fully in the Technical Development Document (TDD), 
Economic Assessment (EA), and Cost-Effectiveness documents. The major 
changes since the proposal resulted from the following:

--EPA removed three model clean room facilities (equivalent to five 
facilities in the industry) from the scope of the rule, based on the 
raw wastewater loadings for their items. This change had minor effects 
on the overall industry costs.
--EPA added a cost for facilities that currently (based on 1993 data) 
operate dissolved air flotation (DAF) and chemical precipitation in 
order to upgrade performance to meet the projected standards. This 
change increased the capital and O & M costs for all options.
--EPA revised the labor costs associated with the operation and 
maintenance of the option treatment equipment. The labor costs are now 
calculated as one full-time equivalent operator per treatment system, 
which generally increased the costs for all options.
--EPA increased the required square footage and the cost per square 
foot of buildings that were included in the option costs to house the 
treatment systems, thus increasing the costs for all options.
--EPA changed the sludge generation rates of the treatment technologies 
based on available treatment system data. This change had a minor 
effect on the option costs (some model facility costs increased, while 
others decreased).
2. Pollutant Loading and Reduction Changes
    Pollutant loading and reduction changes have been made based on 
supplementary data and comments. These changes, which are reflected in 
the pass through and cost-effectiveness analyses, are discussed more 
fully in the Technical Development Document and Cost-Effectiveness 
documents. The major changes since the proposal resulted from the 
following:

--EPA removed three model clean room facilities (equivalent to five 
facilities in the industry) from the scope of the rule, based on the 
raw wastewater loadings for their items. This change had minor effects 
on the overall industry pollutant loadings and removals.
--For the primary assessment, EPA removed the toxic weighting factor 
(TWF) for total petroleum hydrocarbon (TPH) and included the TWFs for 
the identified constituents of TPH in the pollutant loadings and 
removals calculations. EPA also evaluated pollutant loadings and 
removals using the adjusted TWF for TPH as described in the NODA. Under 
either analysis, this greatly decreased the pound-equivalent loadings 
and removals for all options.
--EPA incorporated new sampling data collected since proposal for the 
chemical precipitation technology option, which modified the long term 
averages for those options. This change had minimal effects on the 
loadings calculations for the options.
--For calculating pollutant loadings, EPA used a revised pass through 
analysis. At proposal, EPA performed the pass through analyses on TPH 
(and not the individual pollutants that comprise TPH) using the average 
percent removal of three individual n-alkanes. For this final action, 
as discussed in the NODA, EPA performed the pass through analysis on 
the individual pollutants that comprise TPH (i.e., n-alkanes and 
others).
--Further, for all pollutants EPA looked at Henry's Law Constants to 
see if the individual pollutants were volatile. If the pollutants were 
volatile, EPA determined POTW percent removal based on the POTW removal 
model for the pollutant with the most similar Henry's Law Constant, as 
presented in the development document for the pharmaceutical 
manufacturing industry effluent limitations guidelines and standards 
(63 FR 50388) using a combination of POTW empirical data and the Water 
8 biodegradation model.
--Finally, for the n-alkanes that were not volatile, EPA used the 
average POTW percent removal of two n-alkanes that were used for the 
proposal to represent the SGT-HEM (TPH) POTW percent removal. EPA did 
not use the percent removal from a third n-alkane because the percent 
removal is reported simply as ``greater than 9 percent''; and therefore 
the actual removal based on this data could be anywhere between 9 and 
99 percent. However, the two n-alkanes are volatile, under the Henry's 
Law Constant approach above, and EPA believes their removal by POTWs 
may overstate the POTW removal of all n-alkanes that are not volatile. 
To evaluate POTW removal of non-volatile n-alkanes, EPA conducted two 
analyses. One used the average percent removal of the two n-alkanes, 
the other used the 74 percent removal identified in NODA as the basis 
for POTW removal of TPH, of which the non-volatile n-alkanes are 
constituents. EPA also evaluated pass through of the n-alkanes based on 
another method which used the POTW removal for the individual n-alkanes 
based on the 94 percent average of the same two n-alkanes used in the 
first method, regardless of their volatility. Both changes increased 
the pollutant removals of n-alkanes by POTWs and decreased the 
pollutant removals that would occur under the technology options 
considered.
3. Economic Analysis Changes
    Based on comments, EPA made three changes to the economic impact 
methodology. These are discussed more fully in the EA.

--The main analysis assumes that costs of compliance cannot or will not 
be passed through to customers, but are absorbed by the affected 
facilities, as was done in an appendix to the EA for the proposal. EPA 
is using this assumption in its primary impact analyses because it is 
possible that some facilities or firms might not be able to pass 
through as much of their costs as would other facilities. This could 
happen where there is regional or local competition between industrial 
laundries and between industrial laundries and disposable product 
vendors or other providers of substitutes. Given that EPA believes that 
this is a competitive industry, EPA believed this conservative 
assumption was appropriate. A cost passthrough approach is discussed as 
a sensitivity analysis in an appendix in the EA.
--Minor refinements to the cash flow analysis and firm failure analysis 
addressed several issues. For example, depreciation is no longer 
annualized in the Altman's Z'' analysis. These changes do not affect 
the economic results in any significant way. See the Comment Response 
Document for additional detail on these changes.
--Based on public comment describing industry experience with buyouts, 
EPA now estimates 75 percent of a facility's employees will lose their 
jobs if that facility's parent company is predicted to be a firm 
failure. EPA believes this estimate reflects a reasonable upper-bound 
estimate of

[[Page 45076]]

short-term potential employment losses due to firm failure.

III. Decision Not To Regulate Industrial Laundries

A. Summary of Options Considered

    EPA considered various options prior to taking this final action. 
Among the final options EPA considered were ``no regulation'' and a 
number of regulatory options.
    For the regulatory options, EPA evaluated various options using two 
major technologies as bases for the standards: chemical precipitation 
and dissolved air flotation. EPA also evaluated several exclusions 
within the towel only option discussed in detail in the NODA and 
mentioned above. In evaluating these options, EPA considered the total 
pounds and toxic pound equivalents removed by any economically 
achievable option, the degree to which these pollutants pass through 
the POTW and the extent to which POTWs can adequately treat these 
pollutants. To mitigate disproportionately adverse economic impacts of 
a rule, EPA considered excluding the following facilities from the 
scope of the regulation:
     Option CP-1: facilities that launder less than one million 
pounds of incoming laundry (total) and less than 255,000 pounds of shop 
and/or printer towels per calendar year (i.e., the exclusion in the 
proposed rule);
     Option CP-2: facilities that launder between one and three 
million pounds of incoming laundry (total) and less than 120,000 pounds 
of shop and/or printer towels per calendar year, in addition to those 
facilities that launder less than one million pounds of incoming 
laundry (total) and less than 255,000 pounds of shop and/or printer 
towels per calendar year; or
     Option CP-3: facilities that launder less than five 
million pounds of incoming laundry (total) and less than 255,000 pounds 
of shop and/or printer towels per calendar year.
    EPA also considered and analyzed additional exclusions; 
descriptions and results are discussed in further detail in the 
Economic Assessment.

B. Pretreatment Standards for Existing Sources (PSES)

1. Selected Option
    After considering all of the information collected and analyzed, 
EPA has selected the ``no additional regulation'' option as its final 
action. In other words, EPA has decided not to establish categorical 
pretreatment standards for existing dischargers in this industry.
2. Rationale for Selected Option
    After careful consideration of all of the information in the record 
for this rulemaking, EPA has decided not to promulgate national 
categorical pretreatment standards for the industrial laundries point 
source category because industrial laundry discharges to publicly owned 
treatment works (POTWs) do not present a national problem warranting 
additional national regulation under the Clean Water Act. In making a 
final decision, EPA identified various technologies as candidate PSES 
technologies. EPA determined that some of these technology options are 
not economically achievable due to the number of plant closures and 
firm failures estimated. After determining what options would be 
economically achievable, EPA estimated the total pounds of pollutant 
discharges that would be removed by the rule. One measure of the toxic 
and nonconventional pounds of pollutant discharges that would be 
removed by the rule results from assigning pollutants a ``toxic 
weighting factor'' based on the pollutant's relative toxicity to 
copper. Measured this way, EPA determined that the rule would remove 
only 32 toxic pound equivalents per facility per year, depending on the 
option. This is a relatively small total amount of toxic and 
nonconventional pollutant reductions, as confirmed by comparison with 
other industries for which effluent limitations guidelines have been 
promulgated. The details of this assessment are found in the Technical 
Development Document and EA and are summarized below.
    EPA examined the economic achievability of a wide array of options 
for the rule. This included varying the technology basis for the rule, 
i.e., chemical precipitation (CP), dissolved air flotation (DAF); 
requiring treatment of only shop and/or printer towels; and various 
regulatory exclusions or ``cutoffs'' based on total production and 
amount of shop and/or printer towels laundered. For the reasons noted 
in Section II.E., EPA decided not to pursue the towel only options. In 
evaluating the options based upon DAF, EPA found that these options 
removed fewer toxic pound equivalents than the comparable options based 
upon CP, but at higher cost and comparable impact. For this reason, EPA 
focuses on the CP options only in this preamble, but makes the same 
conclusions for the comparable DAF options.
    EPA determined that looking at impacts on the industry as a whole, 
an economically achievable option (referred to as CP-2) is based on CP 
with production cutoffs that exclude facilities with between one and 
three million total pounds of incoming laundry and less than 120,000 
pounds of shop and/or printer towels and facilities with up to 1 
million total pounds of incoming laundry and less than 255,000 pounds 
of shop and/or printer towels. This option would result in 44 facility 
closures (2.5 percent of the total industry) and no firm failures, with 
resulting direct employment losses of 2,261 jobs. The exclusion is 
justified because the facilities excluded would have suffered a 
disproportionate closure rate of 12 percent and disproportionate 
failure rate of 20 percent under the rule.
    EPA rejected Option CP-1 (i.e., CP with production cutoffs only to 
1 million total pounds of incoming laundry and less than 255,000 pounds 
of shop and/or printer towels) due not only to the number of facility 
closures (61) and employment losses (2,684 jobs) that would result, but 
also due to the number of firm failures (72) and resulting employment 
losses (1,721 jobs) under this option. The 61 facility closures 
represent about 3.5 percent of all facilities and the 72 firm failures 
represent 8 percent of firms. These firm failures are in addition to 
the facility closures. Firm failures would result in additional 
employment loss because in the industrial laundry industry, when a 
facility is bought by a firm already in the industry, it is likely that 
the facility would no longer be a production facility, but instead be 
turned into a depot or transfer station which based on examples of 
recent buyouts, results in an estimated 75 percent loss of employment. 
Thus, under this option, that EPA rejects as not economically 
achievable, the closures and firm failures would have resulted in 
direct employment losses of 4,405 jobs, or 3.4 percent of the 
industry's employment. While EPA does not have a bright line for 
determining what level of impact is economically achievable for the 
industry as a whole, EPA looked for a breakpoint that would mitigate 
adverse economic impacts without greatly affecting the toxic pound 
equivalents being removed under a rule. Here, by moving from the first 
option to the second option, that is, by adding an additional 
production cut-off of one to three million total pounds of incoming 
laundry and less than 120,000 pounds of shop and/or printer towels, EPA 
was able to reduce employment losses by almost half, from 4,405 to 
2,261 while only losing about 8.7 percent toxic pound equivalents that 
would be removed under the first option. Thus, EPA rejected the first 
option (option

[[Page 45077]]

CP-1) that would result in 61 facility closures and 72 additional firm 
failures as not economically achievable.
    If EPA had chosen a greater exclusion (Option CP-3 with production 
cutoffs of up to five million total pounds of incoming laundry and less 
than 255,000 pounds of shop and/or printer towels) there would be two 
closures and no firm failures. Under this option, EPA projected only 
235 job losses, but would have lost a greater percentage of toxic pound 
equivalents. Although EPA identified both option 2 and option 3 as the 
economically achievable options, EPA rejected option 3 as not the 
``best'' technology since EPA believes that for BAT or PSES the term 
``economic achievability'' contemplates acceptance of some adverse 
economic impacts.
    For Option CP-2, which EPA found to be economically achievable for 
the industry as a whole, EPA estimates average removals of only 32 
toxic pound equivalents per facility per year. These reductions are 
much lower than any other categorical pretreatment standards 
promulgated by EPA. For example, for Organic Chemicals, Plastics, and 
Synthetic Fibers (OCPSF), Electroplating, Battery Manufacturing, and 
Porcelain Enameling, toxic pound equivalents removed per facility per 
year range from 6,747 to 14,960. For some of the more recently proposed 
rules the reductions are lower, but not nearly as low as projected for 
industrial laundries. For example, for Transportation Equipment 
Cleaning and Metal Products and Machinery Proposals the toxic pound 
equivalents removed per facility per year would range from 492 to 693.
    POTWs are effective at treating industrial laundry effluent. EPA 
estimates POTW removal efficiency of SGT-HEM (TPH) to be greater than 
74 percent. Because the actual percent removal could not be calculated 
and could be much higher (i.e., 95-99 percent), EPA believes that SGT-
HEM (TPH) does not pass through. Although EPA does not have data 
showing how much greater than 74 percent is the treatment efficiency, 
EPA expects that the treatment is significantly more effective because 
all of the POTW effluent data are below the analytical detection limit. 
For the individual toxic and nonconventional pollutants, EPA determined 
that POTW removal efficiencies ranged from 18 to 99 percent. A rule 
based on the economically achievable option would remove only a total 
of 39,000 toxic pound equivalents nationwide per year; or 32 toxic 
pounds per facility per year on average. With respect to conventional 
pollutants, POTWs are designed to treat and can effectively treat these 
pollutants. Thus, EPA has determined that there is insignificant pass 
through of total pounds or toxic pound equivalents of pollutants 
discharged to POTWs by industrial laundries such that national 
categorical pretreatment standards are not warranted. EPA also examined 
the total pounds and total pound equivalents removed under a rule with 
the first cutoff and determined that the amount of pounds removed is 
also insignificant and does not warrant national regulation. This 
analysis is discussed in the Development Document for the final action.
    EPA has little, if any, record evidence that POTWs are currently 
having pass through or interference problems due to industrial laundry 
effluent. In the event that a particular industrial laundry could 
create a local problem, EPA believes the existing pretreatment program 
is fully adequate to control these discharges at the local level.
    The small total removals achieved by the rule are reflected in the 
cost-effectiveness results. Cost-effectiveness is expressed as the 
ratio of costs to toxic pound equivalent pollutant removals achieved by 
a regulatory option. While EPA is not required to consider cost-
effectiveness in establishing BAT, new source standards or pretreatment 
standards, EPA typically estimates the cost-effectiveness of its 
options particularly to determine which option along a spectrum of 
options is most efficient. For this rule, all of the regulatory options 
considered have high average cost-effectiveness values ($2,360/toxic 
pound equivalent for the economically achievable option) resulting from 
the very small removals that occur under that option.
    EPA further believes that the most effective way to address organic 
wastes from certain solvents in the discharges to POTWs is reduce their 
use or toxicity in the customer facilities in the first place or to 
remove them before washing, either at the customer's facility or at the 
laundry. EPA's Office of Solid Waste (OSW) is planning to conduct 
rulemaking to address certain organic solvents found mainly in shop 
and/or printer towels before they are washed. EPA expects to propose 
this rulemaking in the Federal Register in the first quarter of the 
year 2000.
    EPA believes that the decision not to promulgate national 
categorical pretreatment standards for industrial laundries is the most 
reasonable decision based on the record. While EPA has broad discretion 
to promulgate such standards, EPA retains discretion not to do so where 
the total pounds removed do not warrant national regulation and there 
is not a significant concern with pass through and interference at the 
POTW. Further, although not a decision factor for the final action, EPA 
expects that the industry's commitment to a pollution prevention 
program will be beneficial. The program projects reductions of 20,000 
toxic pound equivalents per year to water, and includes non-water 
quality benefits, as well. For example, EPA estimates that a 10-25 
percent reduction in energy use would save 3.1 trillion to 7.8 trillion 
BTUs, reducing air emissions of carbon dioxide by up to 900 million 
pounds per year, if natural gas is the fuel source. Reduced use of 
other fuels would also result in reduced emissions of sulfur dioxide 
and particulates. (See Section 16 of the record for EPA's assessment of 
the environmental benefits of the pollution prevention goals).
    EPA recognizes this final decision reflects a significant shift 
from the preferred option at proposal. As described in the preceding 
paragraphs, this shift reflects the new information and revised 
analysis that EPA presented in the notice of data availability, 63 FR 
71054, and discussed above. First, POTW removal of SGT-HEM (TPH) is 
greater than thought at proposal. Second, the constituents of TPH that 
have been identified are not as toxic as previously believed. Both of 
these factors have resulted in reduced projections of the toxic pound 
equivalents annually removed by the rule from about 407,000 down to 
less than 39,000 toxic pound equivalents. In addition, the projected 
economic impacts of the proposal option are greater than originally 
estimated. Finally, EPA's record demonstrates that the occurrence of 
individual local problems from laundry discharges are not as prevalent 
as EPA thought at the time of proposal.

C. Pretreatment Standards for New Sources (PSNS)

    The options considered for PSNS are similar to those considered for 
PSES. After considering all of the information in the record, EPA has 
determined not to require pretreatment standards for new sources 
because as is the case for existing sources, discharges from new 
sources do not present a national problem warranting national 
regulation.
    EPA estimates that there will be at most 27 new sources each year. 
(In fact the number is likely to be lower since it is based on the 
number of new entities that started in a three year period, some of 
which likely were existing facilities with new ownership.) Under a rule 
with

[[Page 45078]]

the same small production threshold as would have been chosen for 
existing sources, EPA estimates that new sources would discharge about 
1,040 pounds of pollutants and 51 toxic pound equivalents per facility 
per year, or a total of about 19,740 total pounds of pollutant and 945 
toxic pounds per year. Because the total pounds and pound equivalents 
per facility that would be removed by PSES are comparable to those for 
existing sources, the same reasons for not issuing pretreatment 
standards for existing sources also apply to new sources. This is true 
not only for the option selected as economically achievable, but also 
under a rule that would apply the first cutoff. This analysis is 
discussed in the Development Document for the final action.
    In developing estimates of total pounds of pollutants that would be 
reduced by the rule, EPA determined what option would not present a 
barrier to entry for new sources. Here, EPA considered whether a small 
production exclusion should apply for new sources equivalent to the one 
that would have applied to existing sources. EPA determined that it 
would be appropriate to apply the same production threshold for PSNS 
because for this industry, the costs of the rule are similar regardless 
of whether a facility is a new source or an existing source and thus 
new smaller facilities would likely suffer the same disproportionate 
impacts that existing smaller facilities would suffer under a rule. For 
example, under the costs of a rule, all of the new sources projected to 
close would have been under the threshold for the exclusion. This 
represents a disproportionate impact on those smaller facilities. Also, 
EPA was concerned that it would not provide a level playing field to 
require a new smaller facility to compete with an existing smaller 
facility that would be excluded under the production threshold for the 
rule, and this competitive disadvantage could be a barrier to entry if 
the production threshold for new and existing sources were not the 
same.

IV. Costs and Economic Impacts for the Regulatory Options

A. Introduction

    This section describes the capital investment and annualized costs 
of compliance of the three regulatory options outlined in Section III 
and the potential economic impacts of these compliance costs on current 
and future facilities and firms in the industry. EPA's economic 
assessment is presented in detail in the Economic Assessment for the 
Final Action Regarding Pretreatment Standards for the Industrial 
Laundries Point Source Category (EA). The EA estimates the economic 
effect of compliance costs on facilities, firms, employment, domestic 
and international markets, inflation, distribution, industry 
consolidation, environmental justice and industrial laundries 
customers. The EA covers various regulatory options in addition to the 
three summarized in this notice. EPA also conducted an analysis 
equivalent to a Final Regulatory Flexibility Analysis under the 
Regulatory Flexibility Act (RFA) as amended by the Small Business 
Regulatory Enforcement Act (SBREFA), which estimates effects on small 
entities. EPA also prepared an analysis of pollutant removals and 
average cost-effectiveness of all options.

B. Economic Impact Methodology

1. Introduction
    Section IV.B.2 (and, in more detail, the EA and record) summarizes 
the methodology EPA used to estimate the economic impacts that result 
from compliance costs associated with the regulatory options. The 
analysis in the EA consists of eight major components: (1) An 
assessment of the number of facilities that could have been affected by 
pretreatment standards; (2) an estimate of the annual aggregate cost 
for these facilities to comply with pretreatment standards using 
facility-level capital and operating and maintenance (O&M) costs; (3) 
an evaluation of potential facility closures, using a financial model 
that projects impacts on facilities' cash flow (closure analysis); (4) 
an evaluation of potential firm failures; (5) an evaluation of 
potential secondary impacts such as those on employment, markets, 
inflation, distribution, industry consolidation, environmental justice 
and industrial laundry customers; (6) an assessment of the potential 
for impact on new sources (barrier to entry); (7) an analysis of the 
effects of potential compliance costs on small entities; and (8) a 
cost-benefit analysis.
    All costs in today's notice are reported in 1998 dollars, with the 
exception of average cost-effectiveness results, which, by convention, 
are reported in 1981 dollars. The EA presents costs in 1993 dollars. 
The Engineering News Record Construction Cost Index was used to inflate 
costs to 1998 dollars. The sources of data for the economic analysis 
are the same as reported in the preamble to the proposed rule (62 FR 
66182) with updates to the profile, costs, and removals as reported in 
the Technical Development Document. The primary source of data for the 
economic analysis is the 1994 Industrial Laundries Industry Detailed 
Questionnaire (Section 308 Survey). Other sources include comments to 
the proposal and NODA, government data from the Bureau of the Census, 
industry trade journals, and several preliminary surveys of the 
industry, including the 1989 Preliminary Data Summary for Industrial 
Laundries, the 1993 Industrial Laundries Industry Screener 
Questionnaire, and the 1994 Industrial Laundries Supplemental Screener 
Questionnaire.
2. Methodology Overview
    Central to the EA is the cost annualization model, which uses 
facility-specific cost data and other inputs (discussed in Chapter 11 
of the Technical Development Document) to determine the annualized 
capital and operating and maintenance (O&M) costs of improved 
wastewater treatment. This model uses these costs along with an annual 
compliance monitoring cost with the facility-specific real cost of 
capital (discount rate) over a 16-year analytic time frame to generate 
the annual cost of compliance for each option. EPA chose the 16-year 
time frame for analysis based on the depreciable life for equipment of 
this type, 15 years according to Internal Revenue Service (IRS) rules, 
plus approximately one year for purchasing and installing the 
equipment. As an alternative to installing wastewater treatment, the 
cost model also generates the annualized cost of hauling wastewater 
offsite. The cost model compares the treatment costs to the hauling 
costs (where this alternative is available), and selects the lower of 
the two.
    EPA then converts the annual cost for each facility into a present 
value change in cash flow, which is subtracted from the estimated 
baseline present value of facility cash flow. EPA estimated baseline 
present value of facility cash flow based on the average of three years 
of financial data from each facility in the Section 308 survey under an 
assumed no-growth scenario (i.e., the annual cash flow, calculated as 
the 3-year average, is expected to remain the same over the 16-year 
period of analysis). If the change in present value of cash flow (which 
is derived from the annualized costs of compliance of a regulatory 
option) causes a facility's estimated cash flow to change from positive 
in the baseline to zero or negative, over the 16-year period of 
analysis, EPA considers the facility likely to close (i.e., liquidate) 
as a result

[[Page 45079]]

of that regulatory option. Salvage value, as at proposal, was not used 
in the closure analysis, although EPA did perform sensitivity analyses, 
which are presented in an appendix in the EA. For reasons discussed in 
the EA and the Comment Response Document, salvage value was either 
considered inappropriate or did not substantially change the outcome of 
the analysis.
    Note that facilities that reported negative cash flow over the 3-
year period of the survey are considered baseline closures and are not 
considered affected by the regulatory options for several reasons: (1) 
Many of these facilities are owned by multifacility firms. These 
facilities may be transferring production (laundering services at or 
near cost) from other facilities owned by the same parent company, or 
otherwise not expected to be self-supporting by the parent. EPA 
analyzes the parent firms of these facilities in the firm-level 
analysis. (2) OMB guidance suggests that agencies develop a baseline 
that is ``the best assessment of the way the world would look absent 
the proposed regulation. That assessment may consider a wide range of 
factors, including the likely evolution of the market * * *.'' EPA's 
best assessment is that some facilities currently operating may not 
remain in business to install and operate the pollution control 
equipment. EPA cannot say for certain which facilities these may be, 
but can assert that those facilities that are currently considered not 
financially viable because their cash flow is zero or negative (among 
those not owned by multifacility firms) are the likeliest facilities to 
close without ever installing and operating pollution control 
equipment. It is possible that a facility estimated to be a baseline 
closure may remain open, but the converse is also true--a facility 
projected to remain open until it is subject to a regulatory option may 
actually close independently of the effects of the regulatory options. 
Thus, EPA believes it is consistent with OMB guidance to estimate 
postcompliance closures by counting closures that are projected to 
close solely due to the effect of compliance costs.
    In the firm failure analysis, EPA uses the capital costs, O&M 
costs, and an early-year depreciation figure to compute a change in 
earnings, assets, liabilities, and working capital at the firm level 
(accounting for costs for multiple facilities, where applicable). These 
postcompliance financial figures are used in a computerized model of 
financial health on a firm-by-firm basis. The model uses an equation 
known as Altman's Z'', which was developed based on empirical data to 
characterize the financial health of firms. This equation calculates 
one number, based on the financial data, that can be compared to index 
numbers that define ``good'' financial health, ``indeterminate'' 
financial health, and ``poor'' financial health. All firms whose 
Altman's Z'' number changes such that the firm goes from a ``good'' or 
``indeterminate'' baseline category to a ``poor'' postcompliance 
category are classified as likely to have significant difficulties 
raising the capital needed to comply with a regulatory option, which 
can indicate the likelihood of firm bankruptcy, or loss of financial 
independence.
    EPA estimated direct employment impacts associated with both the 
facility closure and firm failures. In addition, EPA took the extra 
steps to consider and estimate national and regional level employment 
impacts. These extra steps provide EPA with additional information and 
analysis about the potential effects on the national economy. For 
example, closures and failures of industrial laundry facilities or 
firms could lead to economic and financial impacts in other sectors of 
the economy. These economic impacts could potentially affect suppliers 
or customers that are in other sectors of the economy. Moreover, these 
impacts could be positive or negative, e.g., jobs could be created for 
installing pollution control equipment or jobs could be lost with a 
decrease in business from the industrial laundries industry. This 
additional comprehensive analysis of impacts at the national level 
relied upon procedures known as input-output analysis. These analyses 
are discussed fully in the EA.
    Another key analysis EPA performs is an analysis to determine 
impacts on new sources, which is primarily a ``barrier-to-entry 
analysis'' to determine whether the compliance costs would have 
prevented a new source from entering the market. This analysis also 
looks at whether new industrial laundries would have been at a 
competitive disadvantage compared with existing sources. Market effects 
and barriers to entry associated with the small source exclusion also 
are qualitatively investigated.

C. Summary of Costs and Economic Impacts

1. Number of Facilities and Costs of the Regulatory Options
    This section presents the costs for the three regulatory options 
outlined in Section III. The costs for other options are presented in 
the EA. EPA estimates that there are 1,742 industrial laundries 
facilities. Of these, 136 to 953 facilities would have been excluded 
from the regulation, depending on the production cutoff. As described 
in Section III, EPA considered three primary exclusions in addition to 
analyzing the impacts with no cutoff. To summarize, the exclusions are 
(1) All facilities laundering less than 1 million pounds of incoming 
laundry per calendar year and less than 255,000 pounds of shop and/or 
printer towels per calendar year (abbreviated as the 1MM/255K cutoff, 
which was the cutoff originally proposed by EPA, and which would have 
excluded 136 facilities or 8 percent of all facilities), (2) all 
facilities laundering between 1 and 3 million pounds of total laundry 
per year and less than 120,000 pounds of shop towels, in addition to 
those excluded above under the 1MM/255K cutoff (abbreviated as the 3MM/
120K cutoff, which would exclude 518 facilities or 30 percent of all 
facilities), and (3) all facilities laundering less than 5 million 
pounds of total laundry and less than 255,000 pounds of shop towels 
(abbreviated as the 5MM/255K cutoff, which would have excluded 953 
facilities or 55 percent of all facilities). There are 903 firms owning 
the 1,742 facilities. A total of 837 of the 903 firms (93 percent) are 
``small businesses'' according to SBA definitions (revenues less than 
$10.5 million per year). The analysis looks separately at single-
facility firms (those firms where the firm and the facility are a 
single entity) and multifacility firms (firms that own more than one 
facility; generally, these firms are larger than single facility 
firms). There are a total of 830 single-facility firms in the industry 
(92 percent), the vast majority of which meet the SBA definition of 
small.
    The total cost of each regulatory option is based on engineering 
cost estimates. The Technical Development Document describe EPA's 
development of these cost estimates (EPA 821-R-99-010). Briefly, EPA 
developed cost equations for capital and O&M costs (including 
monitoring and recordkeeping) for the wastewater treatment 
technologies. For the CP options, the components of the cost estimates 
include screen, stream splitting, equalization, chemical precipitation, 
pH adjustment, sludge dewatering, building and monitoring.
    Table IV.C.2.1. presents a summary of the total annualized costs 
for the various production cutoffs associated with CP. A parallel set 
of results for DAF is presented in the EA. The costs of the regulatory 
options are estimated to range from $61.3 million for the option with 
the 5MM/255K cutoff to $145.8

[[Page 45080]]

million under the option with no cutoff. The 3MM/120K cutoff is 
estimated to cost $103.2 million per year.

         Table IV.C.2.1.--Costs of Regulatory Options Considered
                                 [$1998]
------------------------------------------------------------------------
                                                                Total
                                                              annualized
                                                               post tax
   Option and cutoff considered  (Production/Shop Towels)        cost
                                                             ($millions,
                                                                1998)
------------------------------------------------------------------------
                               CP Options
------------------------------------------------------------------------
No cutoff..................................................        145.8
1MM/255K...................................................        137.4
3MM/120K...................................................        103.2
5MM/255K...................................................         61.3
------------------------------------------------------------------------

2. Economic Impacts of the Regulatory Options
a. Impacts From Regulatory Options for Existing Sources
    Table IV.D.2.2 summarizes the closure and employment impacts of the 
CP options. Closure and firm failure impacts from the DAF options are 
identical and are reported in an Appendix to the EA. EPA estimates that 
the CP options would have resulted in closures of from 2 facilities 
under the 
5MM/255K cutoff to 106 facilities under no cutoff (0.1 to 6.1 percent 
of all 1,742 facilities). Under the 3MM/120K cutoff, EPA estimates that 
44 facilities would have closed (2.5 percent of all facilities). In 
addition to these closures, EPA predicts firm failures for 72 firms 
under no cutoff and under the 1MM/255K cutoff. EPA estimated no firm 
failures for the 3MM/120K cutoff and the 
5MM/255K cutoff .
    EPA estimates that a total direct job loss of 235 to 3,318 full-
time equivalents (1 FTE=2,080 hours of labor) would have occurred as a 
result of the facility closures projected under the various CP options, 
depending on cutoff. The 3MM/120K cutoff is associated with a loss of 
2,261 FTEs due to closures. These losses would have contributed to 
losses elsewhere in the economy, because a closure can affect other 
parts of the economy as inputs to the closed facility are no longer 
needed and demand for products by laid off workers is reduced. The sum 
of the direct losses from closures and these other indirect and induced 
losses range from 404 to 5,707 FTEs, depending on cutoff. The 3MM/120K 
cutoff is associated with nationwide losses of 3,889 FTEs due to 
closures. The employment losses associated with closures overstate 
actual net losses to the industry and to the economy, because some 
employment gains in the industry and throughout the economy would have 
occurred (although the gains might not have occurred in the same 
geographic location or at the same time as the losses). The gains to 
the industrial laundries industry would have included operators of 
pollution control systems that might be hired by facilities and 
additional workers hired to expand some production at facilities 
located in market areas with facility closures. In the economy as a 
whole, gains due to increased production and installation of pollution 
control devices would have occurred.
    Employment losses from closures might not be the only losses that 
could occur. Employment losses might have occurred as a result of firm 
failures. When 75 percent of the employment at these failing firms are 
added to the employment losses that might have occurred under the 
various cutoffs, EPA estimates that the direct employment losses 
associated with the CP option would have been 235 FTEs (note that no 
failures were estimated under the 
5MM/255K cutoff) to as high as 5,039 FTEs under no cutoff. The 
3MM/120K cutoff is associated with no additional losses of employment 
due to failures. When direct and indirect employment effects are 
estimated, total losses associated with both closures and failures are 
estimated to be as high as 404 to 8,667 FTEs, depending on cutoff. The 
3MM/120K cutoff is associated with total nationwide losses of 3,889 
FTEs due to both closures and failures.

                                    Table IV.D.2.2--Summary of Option Impacts
----------------------------------------------------------------------------------------------------------------
                           Impact                              No cutoff     1MM/255K     3MM/120K     5MM/255K
----------------------------------------------------------------------------------------------------------------
Facility Closures...........................................          106           61           44            2
Direct Employment Losses from Closures......................        3,318        2,684        2,261          235
Economy-Wide Employment Losses Due To Closures..............        5,707        4,617        3,889          404
Firm Failures...............................................           72           72            0            0
Direct Employment Losses from Closures Plus Failures........        5,039        4,405        2,261          235
Economy-Wide Employment Losses from Closures Plus Failures..        8,667        7,576        3,889          404
----------------------------------------------------------------------------------------------------------------

    Losses due to closures are not the only losses to the national 
economy, nor are those losses net losses (after accounting for gains). 
EPA predicts employment impacts to the national-level economy on the 
basis of the output losses calculated for the U.S. economy using the 
input-output analysis described in Section IV.A.2. Based on this 
analysis, which estimates both national employment losses stemming from 
decreased output in the industrial laundries industry and offsetting 
gains stemming from increased output of pollution control equipment, 
the CP options would have resulted in a net loss of employment at the 
national level in all industry sectors of 3,389 to 7,900 FTEs, which is 
less than 0.01 percent of the U.S. labor force in 1998. Net output loss 
would have been $62.6 million to $149.9 million per year at most, which 
is about 0.001 percent of Gross Domestic Product in 1998. Thus EPA 
expects, at the national level, that the CP options would have had 
negligible impact on U.S. employment and output.
    EPA also investigated employment impacts driven by output 
reductions in the industrial laundries industry alone. Within the 
industrial laundries industry, nonclosing facilities could have 
experienced gains in production (and thus gains in output and 
employment) or losses in production, depending on how many facilities 
were expected to close and whether the loss of production to the 
economy represented by closing facilities exceeded or fell short of 
production losses that would have occurred when market equilibrium was 
achieved. Although the CP options are estimated to have produced a 
short-term employment loss to the industrial laundries industry of 235 
to 5,039 FTEs based on closures and failures, this is less than the 
long-term net direct employment losses that would be calculated on the 
basis of output losses assuming no costs could be passed through to 
customers. Assuming no cost passthrough, as many as 2,884 to 6,692 FTEs 
(2.2 percent to 5.2 percent of total employment in the industry) might 
have been lost over the long term (inclusive of closure- and failure-
based losses, but net of gains in employment due to hiring of pollution 
control system operators) in the industrial laundries

[[Page 45081]]

industry under the CP option, depending on cutoff. The 3MM/120k cutoff 
is associated with a loss of 4,897 FTEs. This worst-case estimate shows 
greater losses than those estimated using the production losses 
calculated using EPA's market model (and assuming costs are passed 
through to customers), which projects that, in fact, very small net 
gains might have occurred over time (from 30 to 87 FTEs gained, 
depending on cutoff). Thus, the 3MM/120K cutoff would be expected to 
result in net employment losses ranging from 2,520 to 4,897 FTEs.
    For the community-level analysis, under the conservative approach 
for estimating community employment impacts described above, EPA 
determined that closures and failures would have resulted in a maximum 
change in a community's unemployment rate of less than one percent 
under all cutoffs considered.
    EPA considers the options likely to have had a minimal impact on 
international markets. Under the higher cutoffs such as the 5MM/255K 
cutoff (which would have excluded 55 percent of the 1,742 facilities, 
the options might have had some effect on the ability of larger 
facilities to compete. These larger facilities generally, however, have 
a competitive advantage over the smaller excluded facilities. Most are 
owned by large multifacility firms that benefit from economies of scale 
not available to the smaller, single-facility firms. For the most part, 
the nonexcluded facilities have greater financial resources and could 
have better absorbed the costs of compliance. All analyses have been 
run under the assumption that no costs are passed through to customers, 
thus the analysis shows that the vast majority of these larger 
facilities would have been able to compete on the basis of price. 
Furthermore, as discussed below in the Small Business Analyses section, 
EPA believes that any potential adverse impacts to the facilities not 
excluded under the various options would have been far outweighed by 
the benefits of reducing adverse economic impacts on the most 
vulnerable firms in the industry.
    EPA also estimates that the options considered would have had 
minimal impacts on inflation and insignificant distributional effects. 
The no regulation decision will not change the status quo and this will 
not affect industrial laundry competitors, such as the disposable 
industry. The options also would have had minimal impacts on industrial 
laundries customers. EPA investigated the impact on customers in the 
unlikely event that most costs of the options considered could have 
been passed through to customers. A realistic estimate of the cost 
increase at a typical medium size printer (a key industrial laundry 
customer industry) would be about $200 per year, or about a 0.6 percent 
increase in laundry costs. EPA believes this level of impact is 
representative at most sizes and types of industrial laundry customers. 
Therefore, EPA does not expect price increases, should they have 
occurred, to have had a major impact on customers.
    EPA also investigated the likelihood that customers might 
substitute disposable items for laundered items or begin operating on-
site laundries under the various regulatory options. Both the 
substitution of disposable items for laundered items and the 
installation and operation of on-site laundries are associated with 
potential negative impacts on customers that might deter them from 
choosing these potential substitutes. Disposable items can be more 
expensive to use than laundered items, may not meet quality 
requirements (e.g., disposable printer towels tend to be linty) and 
are, in certain circumstances, regulated under other environmental 
statutes. Lint-free disposable wipers (such as those used in clean 
rooms) are very expensive, and currently are only used in situations 
where even reusable wipers provided by industrial laundries are not 
sufficiently lint-free. Meanwhile because of the high initial costs to 
install equipment on-site and the likelihood that any price increase 
associated with industrial laundry service would have been small, on-
site laundries could have required years before any cost savings might 
be realized. Given the disincentives towards those substitutes 
indicated above, particularly under the higher cutoffs (e.g., the 5MM/
255K cutoff), prices would have been unlikely to rise noticeably. EPA 
does not believe that the options considered would have had a 
substantial effect on substitution of disposable items for laundered 
items or caused an increase in industrial laundering on-site for 
industrial laundries services in any major way as a result of price 
increases. Furthermore, since EPA has assumed for these analyses that 
no costs are passed through to customers, under the cutoffs considered, 
most firms and facilities would have been able to absorb the cost of 
the options if they felt their customers would have switched to 
substitutes had price increased.
    Any cost of compliance that is not passed through to customers, 
however, would have resulted in some reduction in production (assuming 
no other factors in the industrial market changed) as firms attempted 
to maximize profits, but this reduction must be compared to the 
approximate 6 percent per year growth in revenues seen in recent years. 
This growth in revenues appears to be driven by increasing production 
(to meet new demands for industrial laundry services), while increasing 
productivity and declining costs of production (in the baseline), 
combined with revenue growth, have contributed to higher profitability. 
EPA expects that the options would have had a one-time effect on 
revenue and profit growth, but in actuality, with a continuing economic 
boom, the overall effect might have been only a reduction in the 
increase in production. In a downturn, however, EPA recognizes that 
output losses due to a downturn might have been greater than they would 
be without a regulation.
b. Impacts From Regulatory Options for New Sources
    EPA's decision not to promulgate pretreatment standards applies to 
new sources as well. This section presents EPA's assessment of what 
impacts on new sources might have been had EPA decided to promulgate 
pretreatment standards for new sources under the same option and 
exclusion selected for existing sources (CP-IL under the 3MM/120K 
cutoff). EPA assessed impacts on new sources by determining whether the 
regulatory options would have resulted in a barrier to entry into the 
market.
    EPA has found that overall impacts from either the CP-IL or DAF-IL 
options would not have been any more severe on new sources than those 
on existing sources as long as both are subject to the same cutoff, 
since the costs faced by new sources generally will be similar to those 
faced by existing sources. Because most new sources and existing 
sources would have faced similar costs, EPA has determined that the CP-
IL option under the 3MM/120K cutoff for new sources would not have 
posed a barrier to entry on the basis of competitiveness.
    EPA also examined whether there would be a barrier to entry for 
small new sources based on disproportionate impacts measured as 
closures or failures. EPA investigated facilities in the Section 308 
Survey that indicated they were new or relatively new at the time of 
the survey. Using the Section 308 Survey data, EPA expects that new 
sources would generally have exceeded most of the threshold size 
cutoffs that EPA considered for existing sources. Sixty percent of 
facilities identified as new exceed the 5MM/255K cutoff. The number of 
new source facilities coming on line each year is extremely small.

[[Page 45082]]

Over a three year period (1991, 1992, and 1993), according to Section 
308 Survey data, laundry operations began at about only 80 facilities 
(and it is not absolutely clear from the data whether these facilities 
were actually new dischargers or were existing dischargers acquired in 
that year by a different firm). Over the 3-year period, this amounts to 
27 new sources a year at most, or only 1.5 percent of existing 
facilities. Given the small level of growth in the industrial laundries 
industry, EPA believes that new sources are primarily replacing 
production from closing facilities that exit the market.
    Of these facilities identified as new or relatively new facilities, 
EPA determined that the average revenues of this group exceeded $4 
million per year, and the amount of laundry processed averaged over 5 
million pounds per year. Only 24 to 32 facilities out of 80 total newer 
facilities (weighted), or 30 to 40 percent, would meet the size 
threshold for the exclusions EPA investigated for existing sources. On 
a yearly basis (given that these facilities started up over the 3 years 
of the survey) EPA estimates that 8 to 11 facilities of the size, on 
average, that would meet an exclusion similar to those investigated for 
existing sources might be started up each year. Under the 3MM/120K 
cutoff, 30 facilities total, or 10 per year, on average, would meet 
this exclusion. Overall, in the group of 80 facilities, 6 facilities 
(weighted), or 7.5 percent, were identified as postcompliance closures 
(based on a closure by one surveyed nonindependent facility). These 
facilities would have been exempted under all cutoffs considered. Given 
the above results, EPA finds that had new sources been regulated under 
the 3MM/120K cutoff, the rule for new sources would have been 
economically achievable and no barriers to entry would have occurred.
    Furthermore, because both new sources and existing sources would 
have been provided the same exclusion, EPA avoids a situation where a 
level playing field would not be provided for new sources relative to 
existing sources. This could occur when a new smaller facility that was 
not excluded from the rule must compete with an existing smaller 
facility that was excluded under the production threshold for the rule. 
This competitive disadvantage could be a barrier to entry if the 
production threshold for new and existing source were not the same.
3. Small Business Analysis
    There are 903 firms owning the 1,742 facilities. A total of 837 out 
of the 903 firms or 93 percent are ``small business'' according to SBA 
Guidelines (revenues less than $10.5 million per year). The analysis 
looks separately at single-facility firms (those firms where the firm 
and the facility are a single entity) and multifacility firms (firms 
that own more than one facility; generally, these firms are larger than 
single facility firms). There are a total of 830 single-facility firms 
out of 903 total firms in the industry (92 percent), the vast majority 
of which (812) meet the SBA definition of small. Only 25 multifacility 
firms meet this definition. Under the 3MM/120K cutoff, 363 small, 
single-facility firms (45 percent of small, single facility firms) 
would have been excluded.
    Had EPA promulgated a rule, no small firms would have closed or 
failed under the 5MM/255K cutoff, but 126 small, single-facility firms 
would have closed or failed under the 1MM/255K cutoff (54 closures and 
72 failures, or 18.4 percent of all small firms in the postcompliance 
analysis). Under the 3MM/120K cutoff, 39 small, single-facility firms 
would have closed or failed (39 closures and no failures, or 5.7 
percent of the 684 small firms in the postcompliance analyses).
4. Cost-Benefit Comparison
    EPA estimates that the pretax costs of compliance, as can be seen 
in the EA for the proposal, generally make up nearly all of the 
monetizable social costs of pretreatment standards. Additional very 
small costs are associated with costs to permitting authorities and the 
administrative costs of providing unemployment benefits.
    EPA thus approximates the social costs of a rule using the pretax 
compliance costs of the option and cutoff. EPA would have selected had 
the Agency promulgated a rule. The pretax cost of the CP-IL option 
under the 3MM/120K cutoff is $149.1 million per year in 1998 dollars. 
This figure can be compared with the monetized benefits of $0.16 to 
$0.79 million in 1998 dollars. The components of these benefits and 
their value are summarized in detail in Section VIII of this final 
action.

V. Total Toxic and Nonconventional Pounds Reduced by Options 
Considered for the Final Action

    In addition to the foregoing analyses, EPA has estimated toxic and 
nonconventional pollutant reductions for all options and cutoffs 
considered for the final action. These results are expressed in terms 
of the ``pound equivalent'' (PE) removed. PE is a measure that 
addresses differences in the toxicity of pollutants removed. Total PEs 
are derived by taking the number of pounds of a pollutant removed and 
multiplying this number by a toxic weighting factor (TWF). EPA 
calculates TWFs for priority pollutants and some additional 
nonconventional pollutants using ambient water quality criteria and 
toxicity values. The TWFs are then standardized by relating them to a 
particular pollutant at a certain point in time, in this case, copper. 
As of 1985 the water quality criterion for copper was revised, thus the 
TWF for copper also has been revised. PEs are calculated only for 
pollutants for which TWFs have been estimated, thus they do not reflect 
potential toxicity of some nonconventional and, to date, any 
conventional pollutants. EPA does not include pollutant removals to the 
extent that those pollutants are reliably removed at the POTW, but only 
includes the removal of pollutants that would not be removed by the 
POTW.
    As noted earlier, based on new data and as discussed in the NODA, 
EPA estimated toxic weighting factors for the individual components of 
SGT-HEM (TPH), such as certain alkanes and naphthalene, bis(2-
ethylhexyl) phthalate and 2-methylnaphthalene to estimate toxic pound 
equivalent removals for the decision.

 Table IV.E.1.--Pollutant Removals of CP Options and Cutoffs Considered
------------------------------------------------------------------------
                                                             Toxic pound
                Option/ Cutoff                     Pounds    equivalents
                                                  removed      removed
------------------------------------------------------------------------
                                   CP
------------------------------------------------------------------------
No Cutoff.....................................      891,572       43,013
1MM/255K......................................      871,422       42,249
3MM/120K......................................      794,448       38,566
5MM/255K......................................      636,660       31,469
------------------------------------------------------------------------

    As noted above, EPA also estimated the toxic pound equivalent 
removed by the rule using a toxic weighting factor for the bulk 
parameter TPH (SGT-HEM). This analysis was not EPA's primary analysis 
because EPA historically assigns TWFs to the individual constituents 
and because EPA only identified a very small percentage (approximately 
two percent) of the constituents comprising TPH (SGT-HEM). To derive a 
toxic weighting factor for the bulk parameter TPH (SGT-HEM) in this 
case, EPA extrapolated the toxic weighting factor from the identified 
constituents to all of the TPH pounds. While EPA thinks that this 
approach for estimating the toxic pound equivalents for a bulk 
parameter may be reasonable where a large percentage of constituents 
can be identified, EPA was not able to do so here. The uncertainty 
inherent in

[[Page 45083]]

extrapolating the toxicity of so minuscule a fraction of TPH 
constituents to the entire TPH parameter is too great for EPA to use 
for its primary analysis. Nevertheless, EPA would not have made a 
different decision based on this alternative analysis.

VI. Pass Through Analysis

    Categorical pretreatment standards are technology-based standards 
for indirect dischargers in an industrial category. Pretreatment 
Standards for Existing Sources (PSES) and Pretreatment Standards for 
New Sources (PSNS) are analogous to the BAT (Best Available Technology 
Economically Achievable) and best available demonstrated technology 
(BADT for NSPS) for existing and new source direct dischargers, 
respectively. For the development of the national categorical 
pretreatment standards, EPA determines whether pollutants discharged to 
POTWs pass through to waters of the U.S. by comparing the percentage of 
the pollutant removed by well-operated POTWs achieving secondary 
treatment with the percentage of the pollutant removed by the candidate 
BAT or pretreatment technologies. For this industry, there is no 
candidate BAT technology because there are no known direct dischargers 
in the industry so EPA has based the pass through analysis on a 
comparison of the candidate pretreatment technologies to POTW removals. 
EPA believes that the comparison of well-operated POTWs to the 
candidate pretreatment technologies instead of BAT is appropriate, 
since there are no direct dischargers in the industry. In addition, EPA 
looks at the engineering design aspects of the candidate technologies 
and the ability of the POTW to treat pollutants to determine if certain 
pollutants pass through (e.g., soluble organic compounds exhibiting 
some degree of volatility).
    By contrast, General Pretreatment Standards authorize POTWs to set 
local limits for individual indirect dischargers in order to prevent 
pass through or interference, or what is necessary for the POTW to meet 
its NPDES permit limit. Under the General Pretreatment Standards, pass 
through is defined as a discharge that exits the POTW into waters of 
the U.S. in quantities or concentrations, which alone or in conjunction 
with a discharge or discharges from other sources, cause a violation of 
any requirement of the POTW's NPDES permit.
    Results of the pass through analysis show that there is not 
significant pass through, while pretreatment using CP would produce 
some additional removal of some pollutants, the removals associated 
with these pollutants are small in absolute pounds and toxic pound 
equivalents. For the economically achievable option (see sections IV 
and V) the removals for the pollutants would be 794,448 lbs/yr (38,566 
pound equivalents) or 649 pounds (32 pound equivalents) per year per 
facility. A full description of the pass through analysis results is 
shown in the Technical Development Document.
    Results of alternative methods for conducting the pass through 
analysis can be found in the record. The results of conducting the pass 
through analysis using the other methodologies show only minor 
differences in pollutant removals.

VII. Cost-Effectiveness Analysis

    In addition to calculating pound equivalent (PE) removals, the 
Agency also calculated the average cost-effectiveness of the various 
options and cutoffs considered. EPA calculates average cost-
effectiveness on the basis of cost per toxic pound equivalent removed. 
For this rule, EPA did not perform an incremental cost-effectiveness 
analysis, which evaluates cost-effectiveness incrementally between 
options along the same treatment train. Average cost-effectiveness, 
which evaluates an option or cutoff relative to a baseline, or no 
regulation option, was calculated. The average cost-effectiveness ratio 
is calculated as the costs of an option at that cutoff in 1981 dollars 
(the standard year for all cost-effectiveness studies) divided by the 
total removals calculated under that option and cutoff. Costs evaluated 
include the pretax direct compliance costs, such as capital 
expenditures and O&M costs, including compliance monitoring. Table 
IV.E.1 shows the pollutant removals in pound equivalents and average 
cost-effectiveness of each regulatory option under each cutoff 
considered. EPA is showing the average cost-effectiveness results for 
the DAF options as well as the CP options to illustrate that these 
options removed less pound equivalents at greater cost than the 
comparable CP options.

       Table IV.E.1.--Pollutant Removals and Average Cost-Effectiveness of Options and Cutoffs Considered
----------------------------------------------------------------------------------------------------------------
                                                                           Total annual
                                                                 --------------------------------   Average C-E
                          Option/Cutoff                                            Cost  ($mil.     (1981$/lb.
                                                                    PE  removed        1981)           eq.)
----------------------------------------------------------------------------------------------------------------
                                                       CP
----------------------------------------------------------------------------------------------------------------
No Cutoff.......................................................          43,013           121.5           2,824
1MM/255K........................................................          42,249           115.7           2,739
3MM/120K........................................................          38,566            88.3           2,290
5MM/255K........................................................          31,469            52.7           1,674
----------------------------------------------------------------------------------------------------------------
                                                       DAF
----------------------------------------------------------------------------------------------------------------
No Cutoff.......................................................          35,345           132.1           3,885
1MM/255K........................................................          34,640           126.5           3,652
3MM/120K........................................................          31,665            98.4           3,108
5MM/255K........................................................          25,844            60.1           2,327
----------------------------------------------------------------------------------------------------------------

    As the table shows, the difference between the no cutoff scenario 
and the most inclusive cutoff (5MM/255K) is only 11,844 PEs under the 
CP option, representing a 27 percent drop in removals (the results for 
DAF are similar). EPA considers the options and their cutoffs to be 
generally cost-ineffective. EPA would expect this to be the case given 
the ability of POTWs to effectively treat industrial laundry effluent 
and the resulting small total

[[Page 45084]]

number of pound equivalents removed by the rule. Thus, while EPA does 
not base its decision regarding PSES or PSNS on cost-effectiveness, 
this analysis confirms that EPA's decision not to issue national 
categorical pretreatment standards is reasonable.

VIII. Environmental Benefits Analysis

A. Summary

    Since EPA is not promulgating national categorical standards for 
the industrial laundries point source category, EPA estimates that 
there will be no environmental benefits associated with this action. If 
EPA were to promulgate national standards based upon the economically 
achievable CP treatment option presented above, the monetized human 
health benefits would be nominal. Projected cancer cases would be 
reduced by far less than one cancer case per year. (0.06 cancer cases 
from a baseline of 0.17 cancer cases.) EPA's use of a hazard ranking 
score to evaluate non-cancer effects found no non cancer effects would 
occur. In terms of other benefits, EPA estimates based on computer 
modeling, that a rule would remove 16 out of 38 exceedences of Ambient 
Water Quality Criteria (AWQC) for the protection of aquatic life and/or 
human health at 12 reaches nationwide, and biosolid quality at eight 
POTWs would be improved.
    This section presents the estimated benefits due to implementation 
of the economically achievable CP and DAF options. For more details, 
see the Water Quality Benefits Analysis (WQBA). EPA estimates the 
monetized CP benefits, which consist of reduced cancer cases and 
improved biosolid quality to be small, from $0.16 million to $0.79 
million ($1998). These benefits are de minimis, and therefore, 
reinforce EPA's decision made above. Taken in context across all stream 
reaches nationwide, EPA does not believe that the benefits analysis 
indicates that industrial laundry discharges present a nationwide 
problem. Further, EPA expects that the benefits realized from the rule 
could be realized under the existing pretreatment program, where EPA 
will work with any POTW that is not meeting its water quality-based 
permit limit to impose controls as necessary to meet that permit limit. 
EPA also notes that efforts that would prevent pollution at the source, 
such as the voluntary program or the efforts of OSW could achieve these 
same benefits.
    Thus, while EPA does not base its decision regarding PSES or PSNS 
on the benefits described above, EPA does not believe that the benefits 
of national categorical pretreatment standards for this industry would 
justify their costs.

B. Changes Since the Proposal

    In response to numerous comments received pertaining to the 
benefits analysis conducted for the Proposed Rule, for the NODA, EPA 
revised its analysis in two ways: (1) The aquatic life chronic toxicity 
value of TPH (1,145 g/L), used to develop a recommended AWQC 
for TPH and also used to develop a toxic weighting factor for TPH, is 
based on a weighted average of the toxicity of 13 identified 
constituents of TPH (as compared to the 56 g/L based on 
soluble hydrocarbons used for the proposal); (2) the POTW removal 
percentage of TPH was increased to 74% from 65%; and (3) the POTW 
removal percentages of other pollutants were updated.
    The overall impact of the changes related to TPH is a decrease in 
the number of reaches with modeled baseline water quality criterion 
toxicity exceedences in the baseline from 78 at proposal to 12 at 
final. The water quality exceedences predicted for the final action are 
for five Pollutants Of Concern (POCs) (mercury, silver, 
tetrachloroethene, chloroform and bis (2-ethylhexyl) phthalate) rather 
than for TPH. These pollutants from industrial laundries are modeled to 
be present in POTW effluent in concentrations above recommended Water 
Quality Criteria (WQC) for either chronic toxicity to aquatic organisms 
or human health at baseline conditions for three sample reaches that 
represents 12 reaches nationwide.

C. Benefits of Action

1. Reduced Pollutant Discharges
    EPA considered the benefits that could result from reductions in 
industrial laundry pollutant discharges to POTWs, including: improved 
quality of freshwater, estuarine, and marine ecosystems; reduced risks 
to human health through consumption of fish or water taken from 
affected waterways; reduced cost of disposal or use of municipal sewage 
sludge that is affected by industrial laundry pollutant discharges; and 
reduced occurrence of biological inhibition of activated sludge at 
POTWs.
    For the industrial laundry industry, EPA evaluated the effects of 
POTW wastewater discharges of 72 pollutants on receiving stream water 
quality at current levels of treatment and at a number of proposed PSES 
limits. EPA assessed the benefits from the modeled pollutant reductions 
in three broad classes: human health, ecological, and economic 
productivity benefits. However, because of data limitations and the 
understanding of how society values some of these benefit categories, 
EPA was not able to analyze all of these categories with the same level 
of rigor. At the highest level of analysis, EPA was able to quantify 
the expected effects for some benefit categories and attach monetary 
values to them, such as a nominal value for reduction in cancer risk 
from fish consumption and reduced costs of managing and disposing of 
POTW sewage sludge. For other benefit categories, EPA was able to 
quantify expected effects but not able to estimate monetary values for 
them. These benefit categories include reduced exceedences of 
biological inhibition criteria at POTWs and changes in human health and 
aquatic life risk indicators. Finally, non-quantified, non-monetized 
benefit categories include enhanced water-dependent recreation other 
than fishing.
2. Reduced Human Health Risk
    EPA projects that the CP and DAF options would eliminate far less 
than 1 cancer case per year (0.06 cancer cases from a baseline of 0.17 
cancer cases). This translates into $0.15 million to $0.78 million 
($1998) in benefits. Further, based on risk reference doses in 
conjunction with in-stream pollutant concentrations, EPA modeled no 
non-cancer human health effects. Both of these analyses are based on 
exposure of recreational and subsistence anglers and their families to 
fish. With respect to ambient water quality criteria for human health, 
EPA modeled exceedences for three pollutants at 12 reaches nationwide.
    To estimate the reduced risk of non-cancer health effects (e.g., 
systemic effects, reproductive toxicity, and developmental toxicity) 
from fish and water consumption for each option, EPA used risk 
reference doses, in conjunction with in-stream pollutant 
concentrations, to calculate a hazard score. A value of one or greater 
for a hazard score indicates the potential for non-cancer hazards to 
occur. The hazard score, which EPA calculated by summing over all 
pollutants, was less than one for baseline conditions as well as for 
all treatment options.
    At current discharge levels, in-stream concentrations of bis(2-
ethylhexyl)phthalate, chloroform, and tetrachloroethene are projected 
to exceed human health criteria (developed for consumption of water and 
organisms) in 12 receiving streams nationwide for a total of 21 
exceedences. The CP (and DAF) option(s) would eliminate the occurrence 
of bis(2-ethylhexyl)

[[Page 45085]]

phthalate concentrations in excess of the human health-based AWQC in 
eight of the 12 affected streams.
3. Improved Recreational Fishing Opportunities
    Although the rule would eliminate 16 out of 38 AWQC exceedences for 
the protection of human health and/or aquatic life, the rule would not 
eliminate all AWQC at any one reach. Currently EPA has no methodology 
to monetize the elimination of these AWQC unless they are entirely 
eliminated for a waterbody and thus EPA was not able to monetize these 
benefits.
4. Reduced Impacts on POTWs
    EPA expects that reduced effluent discharges from the industrial 
laundries industry would have a minimal impact on POTWs. EPA estimates 
a $0.006 million to 0.01 million ($1998) annual benefit due to improved 
biosolids quality. Discussion with POTW operators support EPA's 
position that industrial laundry discharges usually are not problematic 
to POTWs.
a. Modeled POTW Impacts
    EPA evaluated whether industrial laundry pollutants may interfere 
with POTWS by impairing their treatment effectiveness or causing them 
to violate applicable CWA sewage sludge requirements for their chosen 
sludge disposal method. For the POTW impact analysis, EPA analyzed two 
benefit categories: (1) Reduced costs to public sewage systems for 
managing and disposing of the sewage sludge that result from treatment 
of effluent discharges from industrial laundries; and (2) a reduction 
in risk of biological inhibition of activated sludge.
    EPA has promulgated regulations establishing standards for sewage 
sludge when it is applied to the land, disposed of at dedicated sites 
(surface disposal), and incinerated (40 CFR Part 503). For a discussion 
of these requirements see the final WQBA.
    EPA estimated sewage sludge concentrations of ten metals for sample 
facilities under baseline discharge levels. EPA compared these 
concentrations with the relevant metal concentration limits for the 
following sewage sludge management options: Land Application-High 
(Concentration Limits), Land Application-Low (Ceiling Limits), and 
Surface Disposal. In the cutoff 2 (3 mm/120K) baseline case, EPA 
estimated that concentrations of one pollutant (lead) at 10 POTWs would 
fail the Land Application-High limits while meeting the Land 
Application-Low limits. EPA estimated that no POTWs would fail any of 
the Surface Disposal limits.
    EPA estimated that both the CP and DAF options would permit 10 
POTWs to meet the Land Application-High limits and that an estimated 
6,100 dry metric tons (DMT) of annual disposal of sewage sludge would 
newly qualify for beneficial use under the Land Application-High 
limits. EPA estimated the reduced time required for record-keeping for 
sewage sludge meeting the more stringent Land Application-High 
Criteria, and, on this basis, developed a partial estimate of monetary 
benefits from reduced metals contamination of sewage sludge. For all 
options, the regulation is expected to result in benefits from sewage 
sludge quality improvements of $0.006 to $0.01 million ($1998) 
annually.
    EPA estimated potential inhibition of POTW operations by comparing 
predicted POTW influent concentrations to available inhibition levels 
for 45 pollutants. EPA based the POTW inhibition and sludge values upon 
engineering and health estimates contained in guidance or guidelines 
published by EPA and other sources. At current discharge levels, EPA 
estimates POTW concentrations of lead exceed biological inhibition 
criteria at two POTWs. Under both treatment options, these potential 
inhibition problems would not be eliminated. Note, however, that these 
are modeled potential instances of inhibiting, not actual documented 
cases. Whether inhibition at either of these facilities would actually 
occur depends on a variety of site specific factors.
b. Discussions with POTW Operators and Pretreatment Coordinators
    To better understand the frequency and characteristics of problems 
to POTWs resulting from industrial laundry discharges, EPA obtained 
information from discussions with EPA regional staff and POTW 
operators. Of 37 operators at POTWs that receive discharges from 
industrial laundries, 11 POTW operators described their facilities as 
having encountered some difficulty in the past resulting from 
industrial laundry discharges, while the remaining 26 reported no 
problems from industrial laundry discharges. All the POTWs with 
reported past difficulties have solved their problems by setting local 
discharge limits.

IX. Non-Water Quality Environmental Impacts

    EPA has considered the non-water quality environmental impacts 
associated with the various technology options considered as well as 
the environmental improvement that could be realized through the 
industry voluntary program. Non-water quality environmental impacts are 
impacts (both good and bad) of the technology options on the 
environment that are not directly associated with wastewater. Non-water 
quality environmental impacts include changes in energy consumption, 
air emissions, and solid waste generation of oil and sludge. Based on 
these analyses, EPA finds that the non-water quality environmental 
impacts resulting from the regulatory options are acceptable.

A. Air Pollution

    Industrial laundry facilities generate wastewater that contains 
significant concentrations of organic compounds, some of which are on 
the list of Hazardous Air Pollutants (HAPs) in Title 3 of the Clean Air 
Act Amendments (CAAA) of 1990. Atmospheric exposure of the organic-
containing wastewater may result in volatilization of both volatile 
organic compounds (VOCs) and HAPs from the wastewater. VOCs and HAPs 
are emitted from the wastewater beginning at the point where the 
wastewater first contacts ambient air. Thus, VOCs and HAPs may be of 
concern immediately as the wastewater process is discharged from the 
process unit. Emissions occur from wastewater collection units such as 
process drains, manholes, trenches, and sumps, and from wastewater 
treatment units such as screens, equalization basins, DAF and CP units, 
and any other units where the wastewater is in contact with the air.
    EPA believes that air emissions from industrial laundry wastewater 
would have been similar before and after implementation of a rule based 
on DAF or chemical precipitation technologies because the wastewater 
from all industrial laundries currently has contact with ambient air as 
it flows to the POTW. At facilities that do not currently have 
treatment on site, the wastewater typically flows from the washers to 
an open or partially open catch basin, then to the sewer and on to the 
POTW, where the wastewater is typically treated in open aerated basins 
or lagoons. Air emissions from the wastewater occur as the wastewater 
flows from the facility to the POTW. At a facility with treatment, the 
wastewater would have more contact with air while still at the 
facility, as it is treated in open units such as equalization basins 
and DAF or chemical precipitation units prior to flowing through the 
sewer to the POTW. Air emissions from the treated wastewater occur at 
the treatment units at the facility, as well as while the

[[Page 45086]]

wastewater flows to the POTW. Thus, EPA expects that the location of a 
portion of air emissions from industrial laundry wastewater would shift 
from the POTW collection and treatment system to the facility treatment 
system, but EPA believes that the overall amount of air emissions from 
industrial laundries wastewater would not change. Air emissions 
resulting from increased energy use are discussed in the Technical 
Development Document.
    EPA believes that no adverse air impacts would have been expected 
to occur due to a rule based on CP or DAF. Thus, because EPA would not 
have expected an overall increase in the amount of air emissions as a 
result of an implemented rule and based on EPA's determination of the 
total emissions from one industrial laundry's untreated wastewater, EPA 
finds that the air emissions impacts of all of the regulatory options 
under consideration would not have been unacceptable.

B. Solid Waste Generation

    EPA considered regulatory options based on DAF and chemical 
precipitation technologies followed by dewatering of the sludge 
generated from these technologies. Based on information collected in 
the industrial laundries detailed questionnaires and from data 
submitted in comments, most industrial laundry sludge from CP or DAF 
treatment systems is disposed of in nonhazardous landfills.
    EPA estimates that the incremental increase in sludge generation 
from the CP technology options (not including savings in the volume of 
sludge generated at POTWs that would have resulted from the 
implementation of the technology options) would have been a maximum of 
173,000 tons per year of wet sludge, or 60,600 tons per year of dry 
solids. EPA estimates that the incremental increase in sludge 
generation from the DAF technology option would have been a maximum of 
128,000 tons per year of wet sludge, or 70,600 tons per year of dry 
solids. For more details, see Chapter 10 of the Technical Development 
Document. Approximately 430 million tons (dry basis) of industrial 
nonhazardous waste was sent to landfills in the U.S. in 1986 (Subtitle 
D Study Phase I: Report EPA No. 530SW86-054). Implementation of these 
technology options would have resulted in at most only a 0.014% 
increase in sludge generation for CP and 0.016% for DAF. Data from the 
Waste Treatment Industry Phase II: Landfills effluent guidelines 
project suggest that current landfill capacity can accept this increase 
in solid waste generation. Further, the estimates presented here are 
likely to significantly overstate any net increase in sludge generation 
since they do not factor in decreases in sludge generation at POTWs. In 
general, EPA would expect these decreases to partially offset increases 
at individual pretreatment locations. Therefore, EPA believes the solid 
waste impacts of all of the regulatory options under consideration 
would have been acceptable.

C. Energy Requirements

    EPA estimates that implementation of a rule would have resulted in 
a net increase in energy consumption for the industrial laundries 
industry. The incremental increase is based on electricity used to 
operate wastewater treatment equipment at facilities that are not 
currently operating either DAF or chemical precipitation treatment 
systems.
    EPA estimates that the incremental increase in electricity use for 
the industrial laundries industry as a result of an implemented rule 
would have been a maximum of 69.5 million kilowatt hours per year for 
CP and 82.8 million kilowatt hours per year for DAF. Based on a 1996 
survey of industrial laundries conducted by industry, industrial 
laundries use 31.2 trillion BTUs per year, or 9.1 billion kilowatt 
hours per year. EPA estimates that the incremental energy increase for 
CP and DAF, respectively, would have been 0.76% and 0.91% of 
electricity currently used by the industrial laundries industry to 
operate all washing, drying, and treatment equipment. In addition, 
Approximately 2,805 billion kilowatt hours of electric power were 
generated in the U.S. in 1990.
    The incremental increase in energy use for the industrial laundries 
industry for CP and DAF, respectively, would have corresponded to 
0.0025% and 0.0030% of the total national energy use. For these 
reasons, EPA believes that the energy impacts of all of the regulatory 
options under consideration would have been acceptable.

X. Related Acts of Congress and Executive Orders

    EPA's final action not to establish national categorical 
pretreatment standards does not constitute a rule under section 551 of 
the Administrative Procedure Act. 5 U.S.C. Sec. 551. Hence, 
requirements of other regulatory statutes and Executive Orders that 
generally apply to rulemakings (e.g., the Unfunded Mandate Reform Act) 
do not apply to this final action.

    Dated: June 30, 1999.
Carol M. Browner,
Administrator.

Appendix A to the Notice--Lists of Abbreviations, Acronyms, 
Definitions and Other Terms Used in This Notice

Administrator--The Administrator of the U.S. Environmental 
Protection Agency
Agency--The U.S. Environmental Protection Agency
BAT--Best Available Technology Economically Achievable
BMPs--Best Management Practices--As authorized by sections 304 (e) 
and 402 of the CWA. Gives the Administrator the authority to publish 
regulations to control plant site runoff, spillage or leaks, sludge 
or waste disposal, and drainage from raw material storage.
CBI--Confidential Business Information
C-E--Cost-Effectiveness Analysis
Cooperative--An enterprise or organization owned by and operated for 
the benefit of those using its services. For purposes of this rule, 
a laundry service like facilities owned by and/or operated for the 
benefit of those facilities.
CP--Chemical Precipitation.
CWA--Clean Water Act. The Federal Water Pollution Act, 33 U.S.C. 
1251 et seq.
DAF--Dissolved Air Flotation
Dry Cleaning--The cleaning of fabrics using an organic-based solvent 
rather than water-based detergent solution.
EA--Economic Assessment.
Effluent--Wastewater discharges.
EPA--The U.S. Environmental Protection Agency.
E.O.--Executive Order.
Facility--A facility is all contiguous property owned, operated, 
leased or under the control of the same person, or corporate or 
business entity. The contiguous property may be divided by public or 
private right-of-way.
FTE--Full-time Equivalent.
HEM--N-Hexane Extractable Material.
Indirect Discharger--A facility that discharges or may discharge 
pollutants into a publicly owned treatment works.
IL--Industrial Laundry.
Industrial laundry facility--any facility that launders industrial 
textile items from off-site as a business activity. Either the 
industrial laundry facility or the off-site customer is may own the 
industrial laundered textile items. This includes textile rental 
companies that perform laundering operations.
Industrial textile items--items such as, but are not limited to: 
shop towels, printer towels, furniture towels, rags, mops, mats, 
rugs, tool covers, fender covers, dust-control items, gloves, 
buffing pads, absorbents, uniforms, and filters.
Laundering--washing items with water, including water washing 
following dry cleaning.

[[Page 45087]]

Linens--items such as sheets, pillow cases, blankets, bath towels 
and washcloths, hospital gowns and robes, tablecloths, napkins, 
tableskirts, kitchen textile items, continuous roll towels, 
laboratory coats, family laundry, executive wear, mattress pads, 
incontinence pads, and diapers. This list is intended to be an 
inclusive list.
LTA--Long Term Average. For purposes of the pretreatment standards, 
average pollutant levels achieved over a period of time by a 
facility , subcategory, or technology option.
NTTAA--National Technology Transfer and Advancement Act.
New Source--``New source'' is defined in section 306 of the CWA and 
at 40 CFR 122.12 and 122.29(b).
NODA--Notice of Data Availability
Nonconventional pollutants--Pollutants that are neither conventional 
pollutants nor priority pollutants listed at 40 CFR part 401.
Non-detect value--A concentration-based measurement reported below 
the sample specific detection limit that can reliably be measured by 
the analytical method for the pollutant.
Non-water quality environmental impact--An environmental impact of a 
control or treatment technology, other than to surface waters 
(including energy requirements) or an environment improvement of a 
decision not to regulate.
NPDES--The National Pollutant Discharge Elimination System 
authorized under section 402 of the CWA. NPDES requires permits for 
discharge of pollutants from any point source into waters of the 
United States.
O&G--Oil and Grease
OMB--Office of Management and Budget.
Off-site--``Off-site'' means outside the boundaries of a facility.
On-site--``On-site'' means within the boundaries of a facility.
OSW--USEPA Office of Solid Waste.
POTW/POTWs--Publicly owned treatment works, as defined at 40 CFR 
403.3(o).
Pretreatment standard--a regulation that establishes industrial 
wastewater effluent quality required for discharge to a POTW.
Priority pollutants--The toxic pollutants designated by EPA as 
priority in 40 CFR part 423, Appendix A.
PSES--Pretreatment Standards for Existing Sources on indirect 
discharges, under section 307(b) of the CWA.
PSNS--Pretreatment Standards for New Sources of indirect discharges, 
under section 307(b) and (c) of the CWA.
RFA--Regulatory Flexibility Act.
SBA--Small Business Administration.
SBREFA--Small Business Regulatory Enforcement Fairness Act.
SGT-HEM--Silica Gel Treated N-Hexane Extractable Material.
SIC--Standard Industrial Classification.
Small Business--Businesses with annual revenues less than $10.5 
million. This is the higher of the two Small Business Administration 
definition of small business for SIC codes 7218 and 7213.
TPH--Total Petroleum Hydrocarbons.
TRSA--Textile Rental Services Association of America.
TSS--Total suspended solids.
TWF--Toxic weighting factor.
UMRA--Unfunded Mandates Reform Act (PL 104-4), establishes 
requirements for Federal agencies to assess the effects of their 
regulatory actions on State, local and tribal governments and the 
private sector.
UTSA--Uniform and Textile Service Association.

[FR Doc. 99-17206 Filed 8-17-99; 8:45 am]
BILLING CODE 6560-50-F