[Federal Register Volume 67, Number 68 (Tuesday, April 9, 2002)]
[Proposed Rules]
[Pages 17122-17225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5597]



[[Page 17121]]

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

Part II





Environmental Protection Agency





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



40 CFR Parts 9, et al.



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

  Federal Register / Vol. 67, No. 68 / Tuesday, April 9, 2002 / 
Proposed Rules  

[[Page 17122]]


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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 122, 123, 124, and 125

[FRL-7154-7]
RIN 2040-AD62


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: Today's proposed rule would implement section 316(b) of the 
Clean Water Act (CWA) for certain existing power producing facilities 
that employ a cooling water intake structure and that withdraw 50 
million gallons per day (MGD) or more of water from rivers, streams, 
lakes, reservoirs, estuaries, oceans, or other waters of the U.S. for 
cooling purposes. The proposed rule constitutes Phase II in EPA's 
development of section 316(b) regulations and would establish national 
requirements applicable to the location, design, construction, and 
capacity of cooling water intake structures at these facilities. The 
proposed national requirements, which would be implemented through 
National Pollutant Discharge Elimination System (NPDES) permits, would 
minimize the adverse environmental impact associated with the use of 
these structures.
    Today's proposed rule would establish location, design, 
construction, and capacity requirements that reflect the best 
technology available for minimizing adverse environmental impact from 
the cooling water intake structure based on water body type, and the 
amount of water withdrawn by a facility. The Environmental Protection 
Agency (EPA) proposes to group surface water into five categories--
freshwater rivers and streams, lakes and reservoirs, Great Lakes, 
estuaries and tidal rivers, and oceans--and establish requirements for 
cooling water intake structures located in distinct water body types. 
In general, the more sensitive or biologically productive the 
waterbody, the more stringent the requirements proposed as reflecting 
the best technology available for minimizing adverse environmental 
impact. Proposed requirements also vary according to the percentage of 
the source waterbody withdrawn, and facility utilization rate.
    A facility may choose one of three options for meeting best 
technology available requirements under this proposed rule. These 
options include demonstrating that the facility subject to the proposed 
rule currently meet specified performance standards; selecting and 
implementing design and construction technologies, operational 
measures, or restoration measures that meet specified performance 
standards; or demonstrating that the facility qualifies for a site-
specific determination of best technology available because its costs 
of compliance are either significantly greater than those considered by 
the Agency during the development of this proposed rule, or the 
facility's costs of compliance would be significantly greater than the 
environmental benefits of compliance with the proposed performance 
standards. The proposed rule also provides that facilities may use 
restoration measures in addition to or in lieu of technology measures 
to meet performance standards or in establishing best technology 
available on a site-specific basis.
    EPA expects that this proposed regulation would minimize adverse 
environmental impact, including substantially reducing the harmful 
effects of impingement and entrainment, at existing facilities over the 
next 20 years. As a result, the Agency anticipates that this proposed 
rule would help protect ecosystems in proximity to cooling water intake 
structures. Today's proposal would help preserve aquatic organisms, 
including threatened and endangered species, and the ecosystems they 
inhabit in waters used by cooling water intake structures at existing 
facilities. EPA has considered the potential benefits of the proposed 
rule and in the preamble discusses these benefits in both quantitative 
and non-quantitative terms. Benefits, among other factors, are based on 
a decrease in expected mortality or injury to aquatic organisms that 
would otherwise be subject to entrainment into cooling water systems or 
impingement against screens or other devices at the entrance of cooling 
water intake structures. Benefits may also accrue at population, 
community, or ecosystem levels of ecological structures.

DATES: Comments on this proposed rule and Information Collection 
Request (ICR) must be received or postmarked on or before midnight July 
8, 2002.

ADDRESSES: Public comments regarding this proposed rule should be 
submitted by mail to: Cooling Water Intake Structure (Existing 
Facilities: Phase II) Proposed Rule Comment Clerk--W-00-32, Water 
Docket, Mail Code 4101, EPA, Ariel Rios Building,1200 Pennsylvania 
Avenue, NW., Washington, DC 20460. Comments delivered in person 
(including overnight mail) should be submitted to the Cooling Water 
Intake Structure (Existing Facilities: Phase II) Proposed Rule Comment 
Clerk--W-00-32, Water Docket, Room EB 57, 401 M Street, SW., 
Washington, DC 20460. You also may submit comments electronically to 
[email protected]. Please submit any references cited in your comments. 
Please submit an original and three copies of your written comments and 
enclosures. For additional information on how to submit comments, see 
``SUPPLEMENTARY INFORMATION, How May I Submit Comments?''
    EPA has prepared an Information Collection Request (ICR) under the 
Paperwork Reduction Act for this proposed rule (EPA ICR number 
2060.01). For further information or a copy of the ICR contact Susan 
Auby by phone at (202) 260-4901, e-mail at [email protected] 
or download off the internet at http://www.epa.gov/icr. Send comments 
on the Agency's need for this information, the accuracy of the burden 
estimates, and any suggested methods for minimizing respondent burden 
(including the use of automated collection techniques) to the following 
addresses. Please refer to EPA ICR Number 2060.01 in any 
correspondence.

Ms. Susan Auby, U.S. Environmental Protection Agency, OP Regulatory 
Information Division (2137), 401 M Street, SW., Washington, DC 20460.
        and
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Attention: Desk Officer for EPA 725 17th Street, NW, 
Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: For additional technical information 
contact Deborah G. Nagle at (202) 566-1063. For additional economic 
information contact Lynne Tudor, Ph.D. at (202) 566-1043. For 
additional biological information contact Dana A. Thomas, Ph.D. at 
(202) 566-1046. The e-mail address for the above contacts is 
``[email protected].''

SUPPLEMENTARY INFORMATION: 

What Entities Are Potentially Regulated by This Action?

    This proposed rule would apply to ``Phase II existing facilities,'' 
i.e., existing facilities that both generate and transmit electric 
power or that generate electric power for sale to another entity for 
transmission; use one or more cooling water intake structures to 
withdraw water from waters of the U.S.;

[[Page 17123]]

have or require a National Pollutant Discharge Elimination System 
(NPDES) permit issued under section 402 of the CWA; and meet proposed 
flow thresholds. \1\ Existing electric power generating facilities 
subject to this proposal would include those that use cooling water 
intake structures to withdraw fifty (50) million gallons per day (MGD) 
or more and that use at least twenty-five (25) percent of water 
withdrawn solely for cooling purposes. If a facility that otherwise 
would be subject to the proposed rule does not meet the fifty (50) MGD 
design intake flow or twenty-five (25) percent cooling water threshold, 
the permit authority would implement section 316(b) on a case-by-case 
basis, using best professional judgment. EPA intends to address such 
facilities in a future rulemaking effort. This proposal defines the 
term ``cooling water intake structure'' to mean the total physical 
structure and any associated constructed waterways used to withdraw 
water from waters of the U.S. The cooling water intake structure 
extends from the point at which water is withdrawn from the surface 
water source up to, and including, the intake pumps. The category of 
facilities that would meet the proposed cooling water intake structure 
criteria for existing facilities are electric power generation 
utilities and nonutility power producers.
---------------------------------------------------------------------------

    \1\ Proposed Sec. 125.93 defines ``existing facility'' as any 
facility that commenced construction before January 17, 2002 and 
certain modifications and additions to such facilities.
---------------------------------------------------------------------------

    The following exhibit lists the types of entities that EPA is now 
aware potentially could be subject to this proposed rule. This exhibit 
is not intended to be exhaustive, but rather provides a guide for 
readers regarding entities likely to be regulated by this action. Types 
of entities not listed in the exhibit could also be regulated. To 
determine whether your facility would be regulated by this action, you 
should carefully examine the applicability criteria proposed at 
Sec. 125.91 of the proposed rule. If you have questions regarding the 
applicability of this action to a particular entity, consult one of the 
persons listed for technical information in the preceding FOR FURTHER 
INFORMATION CONTACT section.

----------------------------------------------------------------------------------------------------------------
                                                                                              North American
                                        Examples of regulated       Standard Industrial          Industry
              Category                         entitles            Classification (SIC)    Classification System
                                                                           codes               (NAICS) codes
----------------------------------------------------------------------------------------------------------------
Federal, State, and Local            Operators of steam electric  4911 and 493..........  221112, 221113,
 Government.                          generating point source                              221119, 221121,
                                      dischargers that employ                              221122.
                                      cooling water intake
                                      structures.
Industry...........................  Steam electric generating    4911 and 493..........  221112, 221113,
                                      (this includes utilities                             221119, 221121,
                                      and nonutilities).                                   221122.
----------------------------------------------------------------------------------------------------------------

Supporting Documentation

    The proposed Phase II regulation is supported by three major 
documents:
    1. Economic and Benefits Analysis for the Proposed Section 316(b) 
Phase II Existing Facilities Rule (EPA-821-R-02-001), hereafter 
referred to as the EBA. This document presents the analysis of 
compliance costs, closures, energy supply effects and benefits 
associated with the proposed rule.
    2. Case Study Analysis for the Proposed Section 316(b) Phase II 
Existing Facilities Rule (EPA-821-R-02-002), hereafter referred to as 
the Case Study Document. This document presents the information 
gathered from the watershed and facility level case studies and 
methodology used to determine baseline impingement and entrainment 
losses.
    3. Technical Development Document for the Proposed Section 316(b) 
Phase II Existing Facilities Rule (EPA-821-R-02-003), hereafter 
referred to as the Technical Development Document. This document 
presents detailed information on the methods used to develop unit costs 
and describes the set of technologies that may be used to meet the 
proposed rule's requirements.

How May I Review the Public Record?

    The record (including supporting documentation) for this proposed 
rule is filed under docket number W-00-32 (Phase II Existing Facility 
proposed rule). The record is available for inspection from 9 a.m. to 4 
p.m. on Monday through Friday, excluding legal holidays, at the Water 
Docket, Room EB 57, USEPA Headquarters, 401 M Street, SW, Washington, 
DC 20460. For access to docket materials, please call (202) 260-3027 to 
schedule an appointment during the hours of operation stated above.

How May I Submit Comments?

    To ensure that EPA can read, understand, and therefore properly 
respond to comments, the Agency requests that you cite, where possible, 
the paragraph(s) or sections in the preamble, rule, or supporting 
documents to which each comment refers. You should use a separate 
paragraph for each issue you discuss.
    If you want EPA to acknowledge receipt of your comments, enclose a 
self-addressed, stamped envelope. No faxes will be accepted. Electronic 
comments must be submitted as a WordPerfect 5.1, 6.1, 8, or 9 format, 
or an ASCII file or file avoiding the use of special characters and 
forms of encryption. Electronic comments must be identified by the 
docket number W-00-32. EPA will accept comments and data on disks in 
WordPerfect 5.1, 6.1, 8 or 9 format or in ASCII file format. Electronic 
comments on this notice may be filed on-line at many Federal depository 
libraries.

Organization of This Document

I. Legal Authority, Purpose of Today's Proposal, and Background
    A. Legal Authority
    B. Purpose of Today's Proposal
    C. Background
II. Scope and Applicability of the Proposed Rule
    A. What Is an ``Existing Facility'' for Purposes of the Section 
316(b) Proposed Phase II Rule?
    B. What Is a ``Cooling Water Intake Structure''?
    C. Is My Facility Covered If It Withdraws From Waters of the 
U.S.?
    D. Is My Facility Covered If It Is a Point Source Discharger 
Subject to an NPDES Permit?
    E. Who Is Covered Under the Thresholds Included in This Proposed 
Rule?
    F. When Must a Phase II Existing Facility Comply With the 
Proposed Requirements?
    G. What Special Definitions Apply to This Proposal
III. Summary of Data Collection Activities
    A. Existing Data Sources
    B. Survey Questionnaires
    C. Site Visits
    D. Data Provided to EPA by Industrial, Trade, Consulting, 
Scientific or Environmental Organizations or by the General Public

[[Page 17124]]

IV. Overview of Facility Characteristics (Cooling Water Systems & 
Intakes) for Industries Potentially Subject to Proposed Rule
V. Environmental Impacts Associated With Cooling Water Intake 
Structures
VI. Best Technology Available for Minimizing Adverse Environmental 
Impact at Phase II Existing Facilities
    A. What Is the Best Technology Available for Minimizing Adverse 
Environmental Impact at Phase II Existing Facilities?
    B. Other Technology Based Options Under Consideration
    C. Site-Specific Based Options Under Consideration
    D. Why EPA Is Not Considering Dry Cooling Anywhere?
    E. What is the Role of Restoration and Trading?
VII. Implementation
    A. When Does the Proposed Rule Become Effective?
    B. What Information Must I Submit to the Director When I Apply 
for My Reissued NPDES Permit?
    C. How Would the Director Determine the Appropriate Cooling 
Water Intake Structure Requirements?
    D. What Would I Be Required To Monitor?
    E. How Would Compliance Be Determined?
    F. What Are the Respective Federal, State, and Tribal Roles?
    G. Are Permits for Existing Facilities Subject to Requirements 
Under Other Federal Statutes?
    H. Alternative Site-Specific Requirements
VIII. Economic Analysis
    A. Proposed Rule
    B. Alternative Regulatory Options
IX. Benefit Analysis
    A. Overview of Benefits Discussion
    B. The Physical Impacts of Impingement and Entrainment
    C. Impingement and Entrainment Impacts and Regulatory Benefits 
Are Site-Specific
    D. Data and Methods Used to Estimate Benefits
    E. Summary of Benefits Findings: Case Studies
    F. Estimates of National Benefits
X. Administrative Requirements
    A. E.O. 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Unfunded Mandates Reform Act
    D. Regulatory Flexibility Act as Amended by SBREFA (1996)
    E. E.O. 12898: Federal Actions to Address Environmental Justice 
in Minority Populations and Low-Income Populations
    F. E.O. 13045: Protection of Children From Environmental Health 
Risks and Safety Risks
    G. E.O. 13175: Consultation and Coordination With Indian Tribal 
Governments
    H. E.O. 13158: Marine Protected Areas
    I. E.O. 13211: Energy Effects
    J. National Technology Transfer and Advancement Act
    K. Plain Language Directive

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

A. Legal Authority

    Today's proposed rule is issued under the authority of sections 
101, 301, 304, 306, 308, 316, 401, 402, 501, and 510 of the Clean Water 
Act (CWA), 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342, 
1361, and 1370. This proposal partially fulfills the obligations of the 
U.S. Environmental Protection Agency (EPA) under a consent decree in 
Riverkeeper Inc., et al. v. Whitman, United States District Court, 
Southern District of New York, No. 93 Civ. 0314 (AGS).

B. Purpose of Today's Proposal

    Section 316(b) of the CWA provides that any standard established 
pursuant to section 301 or 306 of the CWA and applicable to a point 
source must require that the location, design, construction, and 
capacity of cooling water intake structures reflect the best technology 
available (BTA) for minimizing adverse environmental impact. Today's 
proposed rule would establish requirements, reflecting the best 
technology available for minimizing adverse environmental impact, 
applicable to the location, design, construction, and capacity of 
cooling water intake structures at Phase II existing power generating 
facilities that withdraw at least fifty (50) MGD of cooling water from 
waters of the U.S. Today's proposal would define a cooling water intake 
structure as the total physical structure, including the pumps, and any 
associated constructed waterways used to withdraw water from waters of 
the U.S. Cooling water absorbs waste heat rejected from processes 
employed or from auxiliary operations on a facility's premises. Single 
cooling water intake structures might have multiple intake bays. In 
1977 EPA issued draft guidance for determining the best technology 
available to minimize adverse environmental impact from cooling water 
intake structures. In the absence of section 316(b) regulations or 
final guidance, the 1977 draft guidance has served as applicable 
guidance for section 316(b) determinations. See Draft Guidance for 
Evaluating the Adverse Impact of Cooling Water Intake Structures on the 
Aquatic Environment: Section 316(b) Pub. L. 92-500 (U.S. EPA, 1977). 
Administrative determinations in several permit proceedings also have 
served as de facto guidance.
    Today, EPA proposes a national framework that would establish 
certain minimum requirements for the location, design, capacity, and 
construction of cooling water intake structures for large cooling water 
intake structures at Phase II existing facilities. In doing so, the 
Agency is proposing to revise the approach adopted in the 1977 draft 
guidance which was based on the judgment that ``[t]he decision as to 
best technology available for intake design location, construction, and 
capacity must be made on a case-by-case basis.'' Other important 
differences from the 1977 draft guidance include today's proposed 
definition of a ``cooling water intake structure.'' Today's proposal 
also would establish a cost-benefit test that is different from the 
``wholly disproportionate'' cost-benefit test that has been in use 
since the 1970s.
    Although EPA's judgment is that the requirements proposed today 
would best implement section 316(b) at Phase II existing facilities, 
the Agency is also inviting comment on a broad array of other 
alternatives, including, for example, more stringent technology-based 
requirements and a framework under which Directors would continue to 
evaluate adverse environmental impact and determine the best technology 
available for minimizing such impact on a wholly site-specific basis. 
Because the Agency is inviting comment on a broad range of alternatives 
for potential promulgation, today's proposal is not intended as 
guidance for determining the best technology available to minimize the 
adverse environmental impact of cooling water intake structures at 
potentially regulated Phase II existing facilities. Until the Agency 
promulgates final regulations based on today's proposal, Directors 
should continue to make section 316(b) determinations with respect to 
existing facilities, which may be more or less stringent than today's 
proposal, on a case-by-case basis applying best professional judgment.
    Today's proposal would not apply to existing manufacturing 
facilities or to power generating facilities that withdraw less than 
fifty (50) MGD of cooling water. These facilities will be addressed in 
a separate rulemaking, referred to as the Phase III rule (see section 
I.C.2., below). In the interim, these facilities are subject to section 
316(b) requirements established by permitting authorities on a case-by-
case basis, using best professional judgment. Upon promulgation of 
final regulations based on today's proposal, the Agency will address 
the extent to which the final regulations and preamble should serve as 
guidance for developing section 316(b) requirements for Phase III 
facilities prior to the promulgation of the Phase III regulations.

[[Page 17125]]

    EPA and State permitting authorities should use existing guidance 
and information to form their best professional judgment in issuing 
permits to existing facilities. EPA's draft Guidance for Evaluating the 
Adverse Impact of Cooling Water Intake Structures on the Aquatic 
Environment: Section 316(b) (May 1, 1977), continues to be applicable 
for existing facilities pending EPA's issuance of final regulations 
under section 316(b). Two background papers that EPA prepared in 1994 
and 1996 to describe cooling water intake technologies being used or 
tested for minimizing adverse environmental impact also contain 
information that could be useful to permit writers. (Preliminary 
Regulatory Development, Section 316(b) of the Clean Water Act, 
Background Paper Number 3: Cooling Water Intake Technologies (1994) and 
Draft Supplement to Background Paper Number 3: Cooling Water Intake 
Technologies.) Fact sheets from recent 316(b) State and Regional 
permits are another source of potentially relevant information. The 
evaluations of the costs and efficacies of technologies presented in 
the Technical Development Document for the Final Regulations Addressing 
Cooling Water Intake Structures for New Facilities, EPA-821-R-01-036, 
November 2001 may also be relevant on some cases, although costs for 
some technologies will differ between new and existing facilities. EPA 
and State decision-makers retain the discretion to adopt approaches on 
a case-by-case basis that differ from applicable guidance where 
appropriate. Any decisions on a particular facility should be based on 
the requirements of section 316(b).

C. Background

1. The Clean Water Act
    The Federal Water Pollution Control Act, also known as the Clean 
Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to ``restore and 
maintain the chemical, physical, and biological integrity of the 
nation's waters.'' 33 U.S.C. 1251(a). The CWA establishes a 
comprehensive regulatory program, key elements of which are (1) a 
prohibition on the discharge of pollutants from point sources to waters 
of the U.S., except as authorized by the statute; (2) authority for EPA 
or authorized States or Tribes to issue National Pollutant Discharge 
Elimination System (NPDES) permits that regulate the discharge of 
pollutants; and (3) requirements for EPA to develop effluent 
limitations guidelines and standards and for States to develop water 
quality standards that are the basis for the limitations required in 
NPDES permits.
    Today's proposed rule would implement section 316(b) of the CWA as 
it applies to ``Phase II existing facilities'' as defined in this 
proposal. Section 316(b) addresses the adverse environmental impact 
caused by the intake of cooling water, not discharges into water. 
Despite this special focus, the requirements of section 316(b) are 
closely linked to several of the core elements of the NPDES permit 
program established under section 402 of the CWA to control discharges 
of pollutants into navigable waters. For example, section 316(b) 
applies to facilities that withdraw water from the waters of the United 
States for cooling through a cooling water intake structure and are 
point sources subject to an NPDES permit. Conditions implementing 
section 316(b) are included in NPDES permits and would continue to be 
included in such permits under this proposed rule.
    Section 301 of the CWA prohibits the discharge of any pollutant by 
any person, except in compliance with specified statutory requirements. 
These requirements include compliance with technology-based effluent 
limitations guidelines and new source performance standards, water 
quality standards, NPDES permit requirements, and certain other 
requirements.
    Section 402 of the CWA provides authority for EPA or an authorized 
State or Tribe to issue an NPDES permit to any person discharging any 
pollutant or combination of pollutants from a point source into waters 
of the U.S. Forty-four States and one U.S. territory are authorized 
under section 402(b) to administer the NPDES permitting program. NPDES 
permits restrict the types and amounts of pollutants, including heat, 
that may be discharged from various industrial, commercial, and other 
sources of wastewater. These permits control the discharge of 
pollutants primarily by requiring dischargers to meet effluent 
limitations and other permit conditions. Effluent limitations may be 
based on promulgated federal effluent limitations guidelines, new 
source performance standards, or the best professional judgment of the 
permit writer. Limitations based on these guidelines, standards, or 
best professional judgment are known as technology-based effluent 
limits. Where technology-based effluent limits are inadequate to ensure 
compliance with water quality standards applicable to the receiving 
water, more stringent effluent limits based on applicable water quality 
standards are required. NPDES permits also routinely include monitoring 
and reporting requirements, standard conditions, and special 
conditions.
    Sections 301, 304, and 306 of the CWA require that EPA develop 
technology-based effluent limitations guidelines and new source 
performance standards that are used as the basis for technology-based 
minimum discharge requirements in wastewater discharge permits. EPA 
issues these effluent limitations guidelines and standards for 
categories of industrial dischargers based on the pollutants of concern 
discharged by the industry, the degree of control that can be attained 
using various levels of pollution control technology, consideration of 
various economic tests appropriate to each level of control, and other 
factors identified in sections 304 and 306 of the CWA (such as non-
water quality environmental impacts including energy impacts). EPA has 
promulgated regulations setting effluent limitations guidelines and 
standards under sections 301, 304, and 306 of the CWA for more than 50 
industries. See 40 CFR parts 405 through 471. Among these, EPA has 
established effluent limitations guidelines that apply to most of the 
industry categories that use cooling water intake structures (e.g., 
steam electric power generation, iron and steel manufacturing, pulp and 
paper manufacturing, petroleum refining, chemical manufacturing).
    Section 306 of the CWA requires that EPA establish discharge 
standards for new sources. For purposes of section 306, new sources 
include any source that commenced construction after the promulgation 
of applicable new source performance standards, or after proposal of 
applicable standards of performance if the standards are promulgated in 
accordance with section 306 within 120 days of proposal. CWA section 
306; 40 CFR 122.2. New source performance standards are similar to the 
technology-based limitations established for Phase II existing sources, 
except that new source performance standards are based on the best 
available demonstrated technology instead of the best available 
technology economically achievable. New facilities have the opportunity 
to install the best and most efficient production processes and 
wastewater treatment technologies. Therefore, Congress directed EPA to 
consider the best demonstrated process changes, in-plant controls, and 
end-of-process control and treatment technologies that reduce pollution 
to the maximum extent feasible. In addition, in establishing new source 
performance standards, EPA is required to take into consideration the 
cost of achieving the effluent reduction

[[Page 17126]]

and any non-water quality environmental impacts and energy 
requirements.
2. Consent Decree
    Today's proposed rule partially fulfills EPA's obligation to comply 
with an Amended Consent Decree. The Amended Consent Decree was filed on 
November 22, 2000, in the United States District Court, Southern 
District of New York, in Riverkeeper Inc., et al. v. Whitman, No. 93 
Civ 0314 (AGS), a case brought against EPA by a coalition of 
individuals and environmental groups. The original Consent Decree, 
filed on October 10, 1995, provided that EPA was to propose regulations 
implementing section 316(b) by July 2, 1999, and take final action with 
respect to those regulations by August 13, 2001. Under subsequent 
interim orders and the Amended Consent Decree, EPA has divided the 
rulemaking into three phases and is working under new deadlines. As 
required by the Amended Consent Decree, on November 9, 2001, EPA took 
final action on a rule governing cooling water intake structures used 
by new facilities (Phase I). 66 FR 65255 (December 18, 2001). The 
Amended Consent Decree also requires that EPA issue this proposal by 
February 28, 2002, and take final action by August 28, 2003 (Phase 
II).\2\ The decree requires further that EPA propose regulations 
governing cooling water intake structures used, at a minimum, by 
smaller-flow power plants and factories in four industrial sectors 
(pulp and paper making, petroleum and coal products manufacturing, 
chemical and allied manufacturing, and primary metal manufacturing) by 
June 15, 2003, and take final action by December 15, 2004 (Phase III).
---------------------------------------------------------------------------

    \2\ Under the Amended Consent Decree, EPA is to propose 
reuglations in Phase II that are ``applicable to, at a minimum: (i) 
Existing utilities (i.e., facilities that both generate and transmit 
electric power) that employ a cooling water intake structure, and 
whose intake flow levels exceed a minimum threshold to be determined 
by EPA during the Phase II rulemaking process; and (ii) existing 
non-utility power producers (i.e., facilities that generate electric 
power but sell it to another entity for transmission) that employa 
cooling water intake structure, and whose intakeflow levels exceed a 
minimum threshold to be determined by EPA during the Phase II 
rulemaking process.''
---------------------------------------------------------------------------

3. What Other EPA Rulemakings and Guidance Have Addressed Cooling Water 
Intake Structures?
    In April 1976 EPA published a rule under section 316(b) that 
addressed cooling water intake structures. 41 FR 17387 (April 26, 
1976), proposed at 38 FR 34410 (December 13, 1973). The rule added a 
new Sec. 401.14 to 40 CFR Chapter I that reiterated the requirements of 
CWA section 316(b). It also added a new part 402, which included three 
sections: (1) Sec. 402.10 (Applicability), (2) Sec. 402.11 (Specialized 
definitions), and (3) Sec. 402.12 (Best technology available for 
cooling water intake structures). Section 402.10 stated that the 
provisions of part 402 applied to ``cooling water intake structures for 
point sources for which effluent limitations are established pursuant 
to section 301 or standards of performance are established pursuant to 
section 306 of the Act.'' Section 402.11 defined the terms ``cooling 
water intake structure,'' ``location,'' ``design,'' ``construction,'' 
``capacity,'' and ``Development Document.'' Section 402.12 included the 
following language:

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

    In 1977, fifty-eight electric utility companies challenged these 
regulations, arguing that EPA had failed to comply with the 
requirements of the Administrative Procedure Act (APA) in promulgating 
the rule. Specifically, the utilities argued that EPA had neither 
published the Development Document in the Federal Register nor properly 
incorporated the document into the rule by reference. The United States 
Court of Appeals for the Fourth Circuit agreed and, without reaching 
the merits of the regulations themselves, remanded the rule. 
Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later 
withdrew part 402. 44 FR 32956 (June 7, 1979). 40 CFR 401.14 remains in 
effect.
    Since the Fourth Circuit remanded EPA's section 316(b) regulations 
in 1977, NPDES permit authorities have made decisions implementing 
section 316(b) on a case-by-case, site-specific basis. EPA published 
draft guidance addressing section 316(b) implementation in 1977. See 
Draft Guidance for Evaluating the Adverse Impact of Cooling Water 
Intake Structures on the Aquatic Environment: Section 316(b) P.L. 92-
500 (U.S. EPA, 1977). This draft guidance describes the studies 
recommended for evaluating the impact of cooling water intake 
structures on the aquatic environment and recommends a basis for 
determining the best technology available for minimizing adverse 
environmental impact. The 1977 section 316(b) draft guidance states, 
``The environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake 
design, location, construction, and capacity must be made on a case-by-
case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4). 
This case-by-case approach also is consistent with the approach 
described in the 1976 Development Document referenced in the remanded 
regulation.
    The 1977 section 316(b) draft guidance suggests a general process 
for developing information needed to support section 316(b) decisions 
and presenting that information to the permitting authority. The 
process involves the development of a site-specific study of the 
environmental effects associated with each facility that uses one or 
more cooling water intake structures, as well as consideration of that 
study by the permitting authority in determining whether the facility 
must make any changes for minimizing adverse environmental impact. 
Where adverse environmental impact is present, the 1977 draft guidance 
suggests a stepwise approach that considers screening systems, size, 
location, capacity, and other factors.
    Although the draft guidance describes the information that should 
be developed, key factors that should be considered, and a process for 
supporting section 316(b) determinations, it does not establish uniform 
technology-based national standards for best technology available for 
minimizing adverse environmental impact. Rather, the guidance leaves 
the decisions on the appropriate location, design, capacity, and 
construction of cooling water intake structures to the permitting 
authority. Under this framework, the Director determines whether 
appropriate studies have been performed and whether a given facility 
has minimized adverse environmental impact.
4. New Facility Rule
    On November 9, 2001, EPA took final action on regulations governing 
cooling water intake structures at new facilities. 66 FR 65255 
(December 18, 2001). The final new facility rule (Phase I) established 
requirements applicable to the location, design, construction, and 
capacity of cooling water intake structures at new facilities that 
withdraw at least two (2) million gallons per day (MGD) and use at 
least twenty-five (25) percent of the water they withdraw solely for 
cooling purposes. EPA adopted a two-track approach. Under Track I, for 
facilities with a design intake flow more than 10 MGD, the capacity of 
the cooling water intake structure is restricted, at a minimum, to a 
level commensurate with that which could be attained by use of a 
closed-cycle recirculating system. For facilities

[[Page 17127]]

with a design intake flow more than 2 MGD, the design through-screen 
intake velocity is restricted to 0.5 ft/s and the total quantity of 
intake is restricted to a proportion of the mean annual flow of a 
freshwater river or stream, or to maintain the natural thermal 
stratification or turnover patterns (where present) of a lake or 
reservoir except in cases where the disruption is determined to be 
beneficial to the management of fisheries for fish and shellfish by any 
fishery management agency(ies), or to a percentage of the tidal 
excursions of a tidal river or estuary. In addition, an applicant with 
intake capacity greater than 10 MGD must select and implement an 
appropriate design and construction technology for minimizing 
impingement mortality and entrainment if certain environmental 
conditions exist. (Applicants with 2-10 MGD flows are not required to 
reduce capacity but must install technologies for reducing entrainment 
at all locations.) Under Track II, the applicant has the opportunity to 
demonstrate that impacts to fish and shellfish, including important 
forage and predator species, within the watershed will be comparable to 
these which it would achieve were it to implement the Track I 
requirements for capacity and design velocity. This demonstration can 
include the use of restoration measures such as habitat enhancement or 
fish restocking programs. Proportional flow requirements also apply 
under Track II.
    With the new facility rule, EPA promulgated a national framework 
that establishes minimum requirements for the design, capacity, and 
construction of cooling water intake structures for new facilities. EPA 
believes that the final new facility rule establishes a reasonable 
framework that creates certainty for permitting of new facilities, 
while providing some flexibility to take site-specific factors into 
account.
5. Public Participation
    EPA has worked extensively with stakeholders from the industry, 
public interest groups, state agencies, and other federal agencies in 
the development of this proposed rule. These public participation 
activities have focused on various section 316(b) issues, including 
general issues, as well as issues relevant to development of the Phase 
I rule and issues relevant to the proposed Phase II rule.
    In addition to outreach to industry groups, environmental groups, 
and other government entities in the development, testing, refinement, 
and completion of the 316(b) survey,\3\ which has been used as a source 
of data for the Phase II proposal, EPA conducted two public meetings on 
316(b) issues. In June 1998, in Arlington, Virginia (63 FR 27958) EPA 
conducted a public meeting focused on a draft regulatory framework for 
assessing potential adverse environmental impacts from impingement and 
entrainment. In September, 1998, in Alexandria, Virginia (63 FR 40683) 
EPA conducted a public meeting focused on technology, cost, and 
mitigation issues. In addition, in September 1998 and April 1999, EPA 
staff participated in technical workshops sponsored by the Electric 
Power Research Institute on issues relating to the definition and 
assessment of adverse environmental impact. EPA staff have participated 
in other industry conferences, met upon request on numerous occasions 
with industry representatives, and met on a number of occasions with 
representatives of environmental groups.
---------------------------------------------------------------------------

    \3\ U.S. EPA, Information Collection Request, Detailed Industry 
Questionnaires: Phase II Cooling Water Intake Structures & Watershed 
Case Study Short Questionnaires, Section 3, 1999.
---------------------------------------------------------------------------

    In the months leading up to publication of the proposed Phase I 
rule, EPA conducted a series of stakeholder meetings to review the 
draft regulatory framework for the proposed rule and invited 
stakeholders to provide their recommendations for the Agency's 
consideration. EPA managers have met with the Utility Water Act Group, 
Edison Electric Institute, representatives from an individual utility, 
and with representatives from the petroleum refining, pulp and paper, 
and iron and steel industries. EPA conducted several meetings with 
environmental groups attended by representatives from 15 organizations. 
EPA also met with the Association of State and Interstate Water 
Pollution Control Administrators (ASIWPCA) and, with the assistance of 
ASIWPCA, conducted a conference call in which representatives from 17 
states or interstate organizations participated. After publication of 
the proposed Phase I rule, EPA continued to meet with stakeholders at 
their request. These meetings are summarized in the record.
    EPA received many comments from industry stakeholders, government 
agencies and private citizens on the Phase I proposed rule 65 FR 49059 
(August 10, 2000). EPA received additional comments on the Notice of 
Data Availability (NODA) 66 FR 28853 (May 25, 2001). These comments 
have informed the development of the Phase II proposal.
    In January, 2001, EPA also attended technical workshops organized 
by the Electric Power Research Institute and the Utilities Water Act 
Group. These workshops focused on the presentation of key issues 
associated with different regulatory approaches considered under the 
Phase I proposed rule and alternatives for addressing 316(b) 
requirements.
    On May 23, 2001, EPA held a day-long forum to discuss specific 
issues associated with the development of regulations under section 
316(b) of the Clean Water Act. 66 FR 20658. At the meeting, 17 experts 
from industry, public interest groups, States, and academia reviewed 
and discussed the Agency's preliminary data on cooling water intake 
structure technologies that are in place at existing facilities and the 
costs associated with the use of available technologies for reducing 
impingement and entrainment. Over 120 people attended the meeting.
    In August 21, 2001, EPA staff participated in a technical symposium 
sponsored by the Electric Power Research Institute in association with 
the American Fisheries Society on issues relating to the definition and 
assessment of adverse environmental impact under section 316(b) of the 
CWA.
    Finally, EPA has coordinated with the staff from the Nuclear 
Regulatory Commission (NRC) in the development of this proposed rule to 
ensure that the proposal does not conflict with NRC safety 
requirements. NRC staff have reviewed the proposed 316(b) rule and did 
not identify any apparent conflict with nuclear plant safety. NRC 
licensees would continue to be obligated to meet NRC requirements for 
design and reliable operation of cooling systems. NRC staff recommended 
that EPA consider adding language which states that in cases of 
conflict between an EPA requirement under this proposed rule and an NRC 
safety requirement, the NRC safety requirement take precedence. EPA has 
added language to address this concern to the proposed rule. These 
coordination efforts and all of the meetings described above are 
documented or summarized in the record.

II. Scope and Applicability of the Proposed Rule

    This proposed rule would apply to existing facilities as defined 
below, that use a cooling water intake structure to withdraw water for 
cooling purposes from waters of the U.S. and that have or are required 
to have a National Pollutant Discharge Elimination System (NPDES) 
permit issued under section 402 of the

[[Page 17128]]

CWA. Specifically, the rule applies to you if you are the owner or 
operator of an existing facility that meets all of the following 
criteria:
     Your facility both generates and transmits electric power 
or generates electric power but sells it to another entity for 
transmission;
     Your facility is a point source and uses or proposes to 
use a cooling water intake structure or structures, or your facility 
obtains cooling water by any sort of contract or arrangement with an 
independent supplier who has a cooling water intake structure;
     Your facility's cooling water intake structure(s) 
withdraw(s) cooling water from waters of the U.S. and at least twenty-
five (25) percent of the water withdrawn is used solely for contact or 
non-contact cooling purposes;
     Your facility has an NPDES permit or is required to obtain 
one; and
     Your facility has a design intake flow of 50 million 
gallons per day (MGD) or greater;
     In the case of a cogeneration facility that shares a 
cooling water intake structure with another facility, only that portion 
of the cooling water flow that is used in the cogeneration process 
shall be considered when determining whether the 50 MGD and 25 percent 
criteria are met.

Facilities subject to the proposed rule are referred to as ``Phase II 
existing facilities.'' Existing facilities with design flows below the 
50 MGD threshold, as well as certain existing manufacturing facilities, 
and offshore and coastal oil and gas extraction facilities, would not 
be subject to this proposed rule, but will be addressed in Phase III. 
If an existing facility that would otherwise be a Phase II existing 
facility has or requires an NPDES permit but does not meet the twenty-
five percent cooling water use threshold, it would not be subject to 
permit conditions based on today's proposed rule; rather, it would be 
subject to permit conditions implementing section 316(b) of the CWA set 
by the permit director on a case-by-case basis, using best professional 
judgment.

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

    EPA is proposing to define the term ``existing facility'' as any 
facility that commenced construction before January 17, 2002 and (1) 
any modification of such a facility; (2) any addition of a unit at such 
a facility for purposes of the same industrial operation; (3) any 
addition of a unit at such a facility for purposes of a different 
industrial operation, if the additional unit uses an existing cooling 
water intake structure and the design capacity of intake structure is 
not increased; or (4) any facility constructed in place of such a 
facility if the newly constructed facility uses an existing cooling 
water intake structure whose design intake flow is not increased to 
accommodate the intake of additional cooling water.
    The term commence construction is defined in 40 CFR 122.29(b)(4) 
and January 17, 2002 is the effective date of the new facility rule. 
EPA has specified that any modification of a facility that commenced 
construction before January 17, 2002 remains an existing facility for 
purposes of this rule to clarify that significant changes to such a 
facility would not, absent other conditions, cause the facility to be a 
``new facility'' subject to the Phase I rule. In addition, the proposed 
definition specifies that any addition of a unit at a facility that 
commenced construction before January 17, 2002 for purposes of the same 
industrial operation as the existing facility would continue to be 
defined as an existing facility. Further, any addition of a unit at a 
facility that commenced construction before January 17, 2002 for 
purposes of a different industrial operation would remain an existing 
facility provided the additional unit uses an existing cooling water 
intake structure and the design capacity of intake structure is not 
increased. Finally, under the proposed definition, any facility 
constructed in place of a facility that commenced construction before 
January 17, 2002, would remain defined as an existing facility if the 
newly constructed facility uses an existing cooling water intake 
structure whose design intake flow is not increased to accommodate the 
intake of additional cooling water.
    Under this proposed rule certain forms of repowering could be 
undertaken by an existing power generating facility that uses a cooling 
water intake structure and it would remain subject to regulation as a 
Phase II existing facility. For example, the following scenarios would 
be existing facilities under the proposed rule:
     An existing power generating facility undergoes a 
modification of its process short of total replacement of the process 
and concurrently increases the design capacity of its existing cooling 
water intake structures;
     An existing power generating facility builds a new process 
for purposes of the same industrial operation and concurrently 
increases the design capacity of its existing cooling water intake 
structures;
     An existing power generating facility completely rebuilds 
its process but uses the existing cooling water intake structure with 
no increase in design capacity.

Thus, in most situations, repowering an existing power generating 
facility would be addressed under this proposed rule.
    The proposed definition of ``existing facility'' is sufficiently 
broad that it covers facilities that will be addressed under the Phase 
III rule (e.g., existing power generating facilities with design flows 
below the 50 MGD threshold, certain existing manufacturing facilities, 
and offshore and coastal oil and gas extraction facilities). These 
facilities are not covered under this proposal because they do not meet 
the requirements of proposed Sec. 125.91.

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

    Today's proposal would adopt for Phase II existing facilities the 
same definition of a ``cooling water intake structure'' that is part of 
the new facility rule, i.e., 40 CFR 125.83, the total physical 
structure and any associated constructed waterways used to withdraw 
cooling water from waters of the U.S. The cooling water intake 
structure extends from the point at which water is withdrawn from the 
surface water source up to, and including, the intake pumps. Today's 
proposal also would adopt the new facility rule's definition of 
``cooling water,'' i.e., water used for contact or noncontact cooling, 
including water used for equipment cooling, evaporative cooling tower 
makeup, and dilution of effluent heat content. The definition specifies 
that the intended use of cooling water is to absorb waste heat from 
production processes or auxiliary operations. The definition also 
specifies that water used for both cooling and non-cooling purposes 
would not be considered cooling water for purposes of determining 
whether 25% or more of the flow is cooling water.
    This definition differs from the definition of ``cooling water 
intake structure'' that is included in the 1977 Draft Guidance. The 
proposed definition clarifies that the cooling water intake structure 
includes the physical structure and technologies that extend up to and 
include the intake pumps. Inclusion of the term ``associated 
constructed waterways'' is intended to clarify that the definition 
includes those canals, channels, connecting waterways, and similar 
structures that may be built or modified to facilitate the withdrawal 
of cooling water. The explicit inclusion of the intake pumps in the 
definition reflects the key role pumps play in determining the capacity 
(i.e., dynamic capacity) of the intake. These pumps,

[[Page 17129]]

which bring in water, are an essential component of the cooling water 
intake structure since without them the intake could not work as 
designed.
    In addition, the definition would apply to structures that bring 
water in for both contact and noncontact cooling purposes. This 
clarification is necessary because cooling water intake structures 
typically bring water into a facility for numerous purposes, including 
industrial processes; use as circulating water, service water, or 
evaporative cooling tower makeup water; dilution of effluent heat 
content; equipment cooling; and air conditioning.
    Finally, at Sec. 125.91(b), consistent with the new facility rule, 
this proposed rule provides that use of a cooling water intake 
structure includes obtaining cooling water by any sort of contract or 
arrangement with an independent supplier (or multiple suppliers) of 
cooling water if the supplier or suppliers withdraw(s) water from 
waters of the United States. This provision is intended to prevent 
circumvention of these requirements by creating arrangements to receive 
cooling water from an entity that is not itself a point source. It also 
provides that use of cooling water does not include obtaining cooling 
water from a public water system or the use of treated effluent that 
otherwise would be discharged to a water of the U.S.

C. Is My Facility Covered If It Withdraws From Waters of the U.S.?

    The requirements proposed today would apply to cooling water intake 
structures that withdraw amounts of water greater than the proposed 
flow threshold from ``waters of the U.S.'' Waters of the U.S. include 
the broad range of surface waters that meet the regulatory definition 
at 40 CFR 122.2, which includes lakes, ponds, reservoirs, nontidal 
rivers or streams, tidal rivers, estuaries, fjords, oceans, bays, and 
coves. These potential sources of cooling water may be adversely 
affected by impingement and entrainment.
    Some facilities discharge heated water to cooling ponds, then 
withdraw water from the ponds for cooling purposes. EPA does not intend 
this proposal to change the regulatory status of cooling ponds. Cooling 
ponds are neither categorically included nor categorically excluded 
from the definition of ``waters of the United States'' at 40 CFR 122.2. 
EPA interprets 40 CFR 122.2 to give permit writers discretion to 
regulate cooling ponds as ``waters of the United States'' where cooling 
ponds meet the definition of ``waters of the United States.'' The 
determination whether a particular cooling pond is or is not ``waters 
of the United States'' is to be made by the permit writer on a case-by-
case basis, informed by the principles enunciated in Solid Waste Agency 
of Northern Cook County v. US Army Corps of Engineers, 531 U.S. 159 
(2001). Therefore, facilities that withdraw cooling water from cooling 
ponds that are ``waters of the U.S.'' and that meet today's other 
proposed criteria for coverage (including the requirement that the 
facility have or be required to obtain an NPDES permit) would be 
subject to today's proposed rule.

D. Is My Facility Covered If It Is a Point Source Discharger Subject to 
an NPDES Permit?

    Today's proposed rule would apply only to facilities that have an 
NPDES permit or are required to obtain one because they discharge or 
might discharge pollutants, including storm water, from a point source 
to waters of the U.S. This is the same requirement EPA included in the 
new facility rule. 40 CFR 125.81(a)(1). Requirements for minimizing the 
adverse environmental impact of cooling water intake structures would 
continue to be applied through NPDES permits.
    Based on the Agency's review of potential Phase II existing 
facilities that employ cooling water intake structures, the Agency 
anticipates that most existing power generating facilities that would 
be subject to this rule will control the intake structure that supplies 
them with cooling water, and discharge some combination of their 
cooling water, wastewater, and storm water to a water of the U.S. 
through a point source regulated by an NPDES permit. In this scenario, 
the requirements for the cooling water intake structure would be 
specified in the facility's NPDES permit. In the event that a Phase II 
existing facility's only NPDES permit is a general permit for storm 
water discharges, the Agency anticipates that the Director would write 
an individual NPDES permit containing requirements for the facility's 
cooling water intake structure. The Agency invites comment on this 
approach for applying cooling water intake structure requirements to 
the facility. Alternatively, requirements applicable to cooling water 
intake structures could be incorporated into general permits. The 
Agency also invites comment on this approach.
    The Agency also recognizes that some facilities that have or are 
required to have an NPDES permit might not directly control the intake 
structure that supplies their facility with cooling water. For example, 
facilities operated by separate entities might be located on the same, 
adjacent, or nearby property; one of these facilities might take in 
cooling water and then transfer it to other facilities prior to 
discharge of the cooling water to a water of the U.S. Proposed 
Sec. 125.91(c) addresses such a situation. It provides that use of a 
cooling water intake structure includes obtaining cooling water by any 
sort of contract or arrangement with an independent supplier (or 
multiple suppliers) of cooling water if the supplier or suppliers 
withdraw(s) water from waters of the United States. This provision is 
intended to prevent circumvention of the proposed requirements by 
creating arrangements to receive cooling water from an entity that is 
not itself a point source discharger. It is the same as in the final 
new facility rule. 40 CFR 125.81(b).
    Proposed Sec. 125.91(c) also provides, as in the new facility rule, 
that facilities that obtain cooling water from a public water system or 
use treated effluent that otherwise would be discharged to a water of 
the U.S. would not be subject to this proposed rule.
    In addition, as EPA stated in the preamble to the final new 
facility rule, the Agency would encourage the Director to closely 
examine scenarios in which a potential Phase II existing facility 
withdraws significant amounts of cooling water but does not have an 
NPDES permit. As appropriate, the Director should apply other legal 
requirements, such as section 404 or 401 of the Clean Water Act, the 
Coastal Zone Management Act, the National Environmental Policy Act, or 
similar State authorities to address adverse environmental impact 
caused by cooling water intake structures at those existing facilities.

E. Who Is Covered Under the Thresholds Included in This Proposed Rule?

    This proposed rule applies to facilities that (1) withdraw cooling 
water from water of the U.S. and use at least twenty-five (25) percent 
of the water withdrawn for cooling purposes and (2) have at least one 
cooling water intake structure with a design intake capacity of 50 MGD 
or more. Proposed Sec. 125.91.
    EPA is proposing to include a provision, like that specified in the 
new facility rule, that facilities that use less than twenty-five (25) 
percent of the water withdrawn for cooling purposes are not subject to 
this rule. This threshold ensures that nearly all cooling water and the 
most significant facilities using cooling water intake structures are 
addressed by these requirements to minimize adverse environmental 
impact (see 66 FR 65338). Phase II existing

[[Page 17130]]

facilities typically use far more than 25 percent of the water they 
withdraw for cooling. As in the new facility rule, water used for both 
cooling and non-cooling purposes would not count towards the 25 percent 
threshold.
    In addition, at Sec. 125.91, EPA is proposing that this rule would 
apply to facilities that have a cooling water intake structure with a 
design intake capacity of 50 million gallons per day (MGD) or greater 
of source water. EPA chose the 50 MGD threshold to focus the proposed 
rule on the largest existing power generating facilities. Existing 
power generating facilities with design flows below this threshold, as 
well as certain existing manufacturing facilities, and offshore and 
coastal oil and gas extraction facilities, would not be subject to this 
proposed rule but will be addressed under the Phase III rule. To 
clarify that manufacturing and commercial facilities are not subject to 
the Phase II rule as a result of their relationship as a host plant to 
a cogeneration facility, only that portion of the cooling water intake 
flow that is used in the cogeneration process would be considered in 
determining whether the 50 MGD and 25 percent criteria are met. EPA 
estimates that the 50 MGD threshold would subject approximately 539 of 
942 (57 percent) of existing power generating facilities to the 
proposal and would address 99.04 percent of the total flow withdrawn by 
existing steam electric power generating facilities.\4\ EPA believes 
the regulation of existing facilities with flows of 50 MGD or greater 
in Phase II will address those existing power generating facilities 
with the greatest potential to cause or contribute to adverse 
environmental impact. In addition, EPA has limited data on impacts at 
facilities withdrawing less than 50 MGD. Deferring regulation of such 
facilities to Phase III provides additional opportunity for the Agency 
to collect impingement and entrainment data for these smaller 
facilities. EPA requests comment on both the 50 MGD and 25 percent 
cooling water thresholds.
---------------------------------------------------------------------------

    \4\ Source: Initial SBREFA Analysis, 6/01.
---------------------------------------------------------------------------

F. When Must a Phase II Existing Facility Comply With the Proposed 
Requirements?

    If your facility is subject to the rule, proposed Sec. 125.92 would 
require that you must comply when an NPDES permit containing 
requirements consistent with this subpart is issued to you.

G. What Special Definitions Apply to This Proposal?

    Definitions specific to this proposal are set forth in proposed 
Sec. 125.93. Except for the definitions of ``cooling water'' and 
``existing facility,'' which are separately defined for Phase II 
facilities in proposed Sec. 125.93, the definitions in the new facility 
rule, 40 CFR 125.83, also apply to this proposed rule. The definitions 
in the new facility rule that would apply to Phase II existing 
facilities are as follows:
    Annual mean flow means the average of daily flows over a calendar 
year. Historical data (up to 10 years) must be used where available.
    Closed-cycle recirculating system means a system designed, using 
minimized makeup and blowdown flows, to withdraw water from a natural 
or other water source to support contact and/or noncontact cooling uses 
within a facility. The water is usually sent to a cooling canal or 
channel, lake, pond, or tower to allow waste heat to be dissipated to 
the atmosphere and then is returned to the system. (Some facilities 
divert the waste heat to other process operations.) New source water 
(make-up water) is added to the system to replenish losses that have 
occurred due to blowdown, drift, and evaporation.
    Cooling water intake structure means the total physical structure 
and any associated constructed waterways used to withdraw cooling water 
from waters of the U.S. The cooling water intake structure extends from 
the point at which water is withdrawn from the surface water source up 
to, and including, the intake pumps.
    Design intake flow means the value assigned (during the facility's 
design) to the total volume of water withdrawn from a source waterbody 
over a specific time period.
    Design intake velocity means the value assigned (during the design 
of a cooling water intake structure) to the average speed at which 
intake water passes through the open area of the intake screen (or 
other device) against which organisms might be impinged or through 
which they might be entrained.
    Entrainment means the incorporation of all life stages of fish and 
shellfish with intake water flow entering and passing through a cooling 
water intake structure and into a cooling water system.
    Estuary means a semi-enclosed body of water that has a free 
connection with open seas and within which the seawater is measurably 
diluted with fresh water derived from land drainage. The salinity of an 
estuary exceeds 0.5 parts per thousand (by mass) but is typically less 
than 30 parts per thousand (by mass).
    Freshwater river or stream means a lotic (free-flowing) system that 
does not receive significant inflows of water from oceans or bays due 
to tidal action. For the purposes of this rule, a flow-through 
reservoir with a retention time of 7 days or less will be considered a 
freshwater river or stream.
    Hydraulic zone of influence means that portion of the source 
waterbody hydraulically affected by the cooling water intake structure 
withdrawal of water.
    Impingement means the entrapment of all life stages of fish and 
shellfish on the outer part of an intake structure or against a 
screening device during periods of intake water withdrawal.
    Lake or reservoir means any inland body of open water with some 
minimum surface area free of rooted vegetation and with an average 
hydraulic retention time of more than 7 days. Lakes or reservoirs might 
be natural water bodies or impounded streams, usually fresh, surrounded 
by land or by land and a man-made retainer (e.g., a dam). Lakes or 
reservoirs might be fed by rivers, streams, springs, and/or local 
precipitation. Flow-through reservoirs with an average hydraulic 
retention time of 7 days or less should be considered a freshwater 
river or stream.
    Maximize means to increase to the greatest amount, extent, or 
degree reasonably possible.
    Minimum ambient source water surface elevation means the elevation 
of the 7Q10 flow for freshwater streams or rivers; the conservation 
pool level for lakes or reservoirs; or the mean low tidal water level 
for estuaries or oceans. The 7Q10 flow is the lowest average 7 
consecutive day low flow with an average frequency of one in 10 years 
determined hydrologically. The conservation pool is the minimum depth 
of water needed in a reservoir to ensure proper performance of the 
system relying upon the reservoir. The mean low tidal water level is 
the average height of the low water over at least 19 years.
    Minimize means to reduce to the smallest amount, extent, or degree 
reasonably possible.
    Natural thermal stratification means the naturally-occurring 
division of a waterbody into horizontal layers of differing densities 
as a result of variations in temperature at different depths.
    New facility means any building, structure, facility, or 
installation that meets the definition of a ``new source'' or ``new 
discharger'' in 40 CFR 122.2

[[Page 17131]]

and 122.29(b)(1), (2), and (4) and is a greenfield or stand-alone 
facility; commences construction after January 17, 2002; and uses 
either a newly constructed cooling water intake structure, or an 
existing cooling water intake structure whose design capacity is 
increased to accommodate the intake of additional cooling water. New 
facilities include only ``greenfield'' and ``stand-alone'' facilities. 
A greenfield facility is a facility that is constructed at a site at 
which no other source is located, or that totally replaces the process 
or production equipment at an existing facility (see 40 CFR 
122.29(b)(1)(i) and (ii)). A stand-alone facility is a new, separate 
facility that is constructed on property where an existing facility is 
located and whose processes are substantially independent of the 
existing facility at the same site (see 40 CFR 122.29(b)(1)(iii)). New 
facility does not include new units that are added to a facility for 
purposes of the same general industrial operation (for example, a new 
peaking unit at an electrical generating station).
    (1) Examples of ``new facilities'' include, but are not limited to 
the following scenarios: (i) A new facility is constructed on a site 
that has never been used for industrial or commercial activity. It has 
a new cooling water intake structure for its own use. (ii) A facility 
is demolished and another facility is constructed in its place. The 
newly-constructed facility uses the original facility's cooling water 
intake structure, but modifies it to increase the design capacity to 
accommodate the intake of additional cooling water. (iii) A facility is 
constructed on the same property as an existing facility, but is a 
separate and independent industrial operation. The cooling water intake 
structure used by the original facility is modified by constructing a 
new intake bay for the use of the newly constructed facility or is 
otherwise modified to increase the intake capacity for the new 
facility.
    (2) Examples of facilities that would NOT be considered a ``new 
facility'' include, but are not limited to, the following scenarios: 
(i) A facility in commercial or industrial operation is modified and 
either continues to use its original cooling water intake structure or 
uses a new or modified cooling water intake structure. (ii) A facility 
has an existing intake structure. Another facility (a separate and 
independent industrial operation), is constructed on the same property 
and connects to the facility's cooling water intake structure behind 
the intake pumps, and the design capacity of the cooling water intake 
structure has not been increased. This facility would not be considered 
a ``new facility'' even if routine maintenance or repairs that do not 
increase the design capacity were performed on the intake structure.
    Ocean means marine open coastal waters with a salinity greater than 
or equal to 30 parts per thousand (by mass).
    Source water means the waterbody (waters of the U.S.) from which 
the cooling water is withdrawn.
    Thermocline means the middle layer of a thermally stratified lake 
or reservoir. In this layer, there is a rapid decrease in temperatures.
    Tidal excursion means the horizontal distance along the estuary or 
tidal river that a particle moves during one tidal cycle of ebb and 
flow.
    Tidal river means the most seaward reach of a river or stream where 
the salinity is typically less than or equal to 0.5 parts per thousand 
(by mass) at a time of annual low flow and whose surface elevation 
responds to the effects of coastal lunar tides.

III Summary of Data Collection Activities

    EPA focused its data collection activities on traditional utilities 
and nonutility power producers. Based on the 1982 Census of 
Manufacturers, these industries account for more than 90 percent of 
cooling water use in the United States. Traditional utilities and 
nonutility power producers that use cooling water were further limited 
to those plants that generate electricity by means of steam as the 
thermodynamic medium (steam electric) because they are associated with 
large cooling water needs. Other power producers generate electricity 
by means other than steam (e.g., gas turbines) and typically require 
only small amounts of cooling water, if any.
    Facilities in the traditional steam electric utility category are 
classified under Standard Industrial Classification (SIC) codes 4911 
and 493, while nonutility power producers are classified under the 
major code that corresponds to the primary purpose of the facility. 
Nonutility facilities are classified under SIC codes 4911 and 493 if 
the primary purpose of the facility is to generate electricity, and it 
is these nonutility facilities that are potentially subject to this 
rule.

A. Existing Data Sources

    EPA collected data from multiple sources, both public and 
proprietary, in order to compile an accurate profile of the potentially 
regulated community. EPA reviewed information collected by other 
Federal agencies, as well as data compiled by private companies. In 
those instances where databases are considered confidential, or where 
raw data was unavailable for review, EPA did not consider the 
information. Summaries of the reviewed data sources are listed below.
1. Traditional Steam Electric Utilities
    Federal Energy Regulatory Commission Data Sources. The Federal 
Energy Regulatory Commission (FERC) is an independent agency that 
oversees America's natural gas industry, electric utilities, nonfederal 
hydroelectric projects, and oil pipeline transportation system. FERC 
requires that utilities, companies, or individuals subject to its 
regulations periodically file data or information relating to such 
matters as financial operations, energy production or supply, and 
compliance with applicable regulations. Following are brief 
descriptions of the relevant FERC data collection forms associated with 
traditional steam electric utilities:
     FERC Form 1, the Annual Report for Major Electric 
Utilities, Licensees and Others, collects extensive accounting, 
financial, and operating data from major privately-owned electric 
utilities. A privately-owned electric utility is considered ``major'' 
if its sales and transmission services, in each of the three previous 
calendar years, exceeded one of the following: (1) One million megawatt 
hours of total annual sales; (2) 100 megawatt hours of annual sales for 
resale; (3) 500 megawatt hours of annual power exchanges delivered; or 
(4) 500 megawatt hours of annual wheeling for others. Utility-level 
information (e.g., number of employees, detailed revenue and expense 
information, balance sheet information, and electricity generation 
information) and plant-level information (e.g., production expenses, 
balance sheet information, and electricity generation information) was 
used in the economic analysis of the proposed regulation. EPA used FERC 
Form 1 data as compiled and distributed by other organizations than 
FERC (see below). (Note that FERC Form 1 applies only to privately-
owned utilities. Publicly-owned utilities and rural electric 
cooperatives are discussed below.)
     FERC Form 1-F, the Annual Report of Nonmajor Public 
Utilities and Licensees, collects accounting, financial, and operating 
data from nonmajor privately-owned electric utilities. A privately-
owned electric utility is considered ``nonmajor'' if it had total 
annual sales of 10,000 megawatt hours or more in the previous calendar 
year but is not classified as ``major'' under the FERC Form 1 
definition. FERC Form

[[Page 17132]]

1-F collects utility- and plant-level data similar to that on FERC Form 
1, albeit less detailed.
    Energy Information Administration Data Sources. The Energy 
Information Administration (EIA) is an independent statistical and 
analytical agency within the U.S. Department of Energy (DOE). In 
support of its analytic activities, the EIA administers a series of 
data collection efforts including extensive surveys of electric 
utilities' financial operations, and their production and disposition 
of electricity. Following are brief descriptions of the EIA data 
collection forms associated with traditional steam electric utilities 
that EPA has used as data sources:
     Form EIA-412, the Annual Report of Public Electric 
Utilities, collects accounting, financial, and operating data from 
publicly-owned electric utilities. The information collected in Form 
EIA-412 is similar to, but less detailed than data collected from major 
privately-owned electric utilities in FERC Form 1. EPA use of Form EIA-
412 data included both utility-level information (e.g., number of 
employees, detailed revenue and expense information, balance sheet 
information, and electricity generation information) and plant-level 
information (e.g., production expenses, balance sheet information, and 
electricity generation information).
     Form EIA-767, the Steam-Electric Plant Operation and 
Design Report, collects data on air and water quality from steam-
electric power plants with generating capacity of 100 megawatts or 
greater. A subset of these data are provided for steam-electric power 
plants with generating capacity between 10 and 100 megawatts. EPA use 
of Form EIA-767 data included unit-level information on net electricity 
generation, hours in operation, and the quantity of fuel burned.
    Form EIA-860, the Annual Electric Generator Report, collects data 
on the status of electric generating plants and associated equipment in 
operation and those scheduled to be in operation within the next 10 
years of filing the report. Each utility that operates or plans to 
operate a power plant in the United States is required to file Form 
EIA-860. EPA use of Form EIA-860 data included unit-level information 
on operating status, nameplate capacity, and ownership percentage.
    Form EIA-861, the Annual Electric Utility Report, collects data on 
generation, wholesale purchases, and sales and revenue by class of 
consumer and State. Respondents include each electric utility that is 
engaged in the generation, transmission, distribution, or sale of 
electric energy primarily for use by the public. Data used from Form 
EIA-861 included sales and revenue by consumer class, the utility's 
NERC region, and address information. In addition, EPA used data on 
utility ownership to classify each utility as either a privately-owned 
utility, a publicly-owned utility, or a rural electric cooperative.
    In addition to data from the EIA data collection forms outlined 
above, EPA used EIA's database of FERC Form 1 data, containing the 
majority of utility-level financial and operating data submitted on the 
FERC Form 1. While these data are directly available from FERC, the EIA 
database is published in an electronic format that is more convenient 
to use than the FERC data. Because EIA conducts basic quality assurance 
activities, EPA expects that the EIA data is more reliable than the 
FERC data.
    Rural Utility Service Data Sources. The Rural Utility Service (RUS) 
is a Federal agency that provides rural infrastructure assistance in 
electricity, water and telecommunications. As a Federal credit agency 
in the U.S. Department of Agriculture, RUS plays a leadership role in 
financial lending and technical guidance for the rural utilities 
industries. Rural utilities that borrow from RUS are subject to annual 
reporting requirements administered by RUS. Following are brief 
descriptions of the relevant RUS data collection forms associated with 
traditional steam electric utilities:
     RUS Form 12, the Electric Operating Report, collects 
accounting, financial, and operating data from rural electric 
cooperatives \7\. The information collected in RUS Form 12 is similar 
to data collected from major privately-owned electric utilities in FERC 
Form 1. EPA use of RUS Form 12 data included utility-level information 
(e.g., number of employees, detailed revenue and expense information, 
balance sheet information, and electricity generation information), 
plant-level information (e.g., production expenses, balance sheet 
information, and electricity generation information), as well as unit-
level information (e.g., fuel consumption, operating hours, and 
electricity generation).
---------------------------------------------------------------------------

    \7\ Note that this data collection form only applies to rural 
electric cooperatives. Corresponding data collection forms for 
privately-owned and publicly-owned utilities are discussed in other 
parts of this section.
---------------------------------------------------------------------------

    U.S. Nuclear Regulatory Commission Data Sources. The U.S. Nuclear 
Regulatory Commission (NRC) is an independent agency established to 
ensure the protection of the public health and safety, the common 
defense and security, and the environment in the use of nuclear 
materials in the United States. In carrying out its responsibilities of 
regulating commercial nuclear power reactors, the NRC compiles and 
publishes data and reports regarding the operation and maintenance of 
commercial nuclear power plants around the country. EPA collected 
information from the NRC regarding the configuration of cooling water 
intake structures to assist in estimating the capacities of condenser 
flows.
    Opri Data Sources. Opri is a private firm located in Boulder, 
Colorado, that has compiled extensive databases related to the 
traditional steam electric utility industry. Opri's Electric Generating 
Plant Database includes plant-level data for privately-owned utilities, 
publicly-owned utilities, and cooperatives for 1988-1997. While these 
data are available from FERC, EIA, and RUS, these agencies do not make 
the information available in an easily accessible electronic format. As 
a consequence, EPA purchased plant-level data from Opri to support its 
economic analyses. Because the compilation of data in the Electric 
Generating Plant Database is proprietary, EPA has included a summary of 
the data utilized in its analyses in the public record.
2. Steam Electric Nonutility Power Producers
    Energy Information Administration Data Sources. Form EIA-867, the 
Annual Nonutility Power Producer Report, collects data on electricity 
generation, installed capacity, and energy consumption from nonutility 
power producers that own or plan on installing electric generation 
equipment with a total capacity of one megawatt or more. The form does 
not collect any economic or financial data. EPA did not utilize 
company-level data from the Form EIA-867 because the confidential 
nature of this data prevented EIA from releasing it. EPA did use Form 
EIA-867 to assess the population of potentially affected facilities and 
to identify survey recipients.
    Utility Data Institute Data Sources. The UDI Directory of U.S. 
Cogeneration, Small Power, and Industrial Power Plants contains data 
for more than 4,300 nonutility power producer plants. The database, 
however, is not exclusive to facilities that have steam electric 
generators. The database also contains nonutility power producers with 
turbines that do not use cooling water such as gas turbines, geothermal 
units, wind and solar installations, and a

[[Page 17133]]

variety of other plant types. The primary focus of the UDI nonutility 
database is on facilities that provide at least some electricity for 
sale to utilities. EPA used the UDI database to compare the names and 
addresses of steam electric plants with those in the Form EIA-867 
database to ensure comprehensive coverage of nonutility power 
producers.
    Edison Electric Institute Data Sources. EEI conducts an annual 
survey and presents statistics on nonutility power producers in a 
document entitled, Capacity and Generation of Nonutility Sources of 
Energy. However, the data are considered confidential and EEI will only 
disseminate data in an aggregated form. Because EPA must have the raw 
data on a facility-specific basis for this rulemaking, EPA was unable 
to use this database.
3. Repowering of Steam Electric Power Generating Facilities (Utility 
and Nonutility)
    As discussed in part B of this Section, the section 316(b) Survey 
acquired technological and economic information from facilities for the 
years 1998 and 1999. With this information, the Agency established a 
subset of facilities potentially subject to this rule. Since 1999, some 
existing facilities have proposed and/or enacted changes to their 
facilities in the form of repowering that could potentially affect the 
applicability of today's proposal or a facility's compliance costs. The 
Agency therefore conducted research into repowering facilities for the 
section 316(b) existing facility rule and any information available on 
proposed changes to their cooling water intake structures. The Agency 
defines repowering as existing facilities either undertaking 
replacement of existing generating capacity or making additions to 
existing capacity. The Agency used two separate databases to assemble 
available information for the repowering facilities: RDI's NEWGen 
Database, November 2001 version and the Section 316(b) Survey.
    In January 2000, EPA conducted a survey of the technological and 
economic characteristics of 961 steam-electric generating plants. Only 
the detailed questionnaire, filled out by 283 utility plants and 50 
nonutility plants, contains information on planned changes to the 
facilities' cooling systems (Part 2, Section E). Of the respondents to 
the detailed questionnaire, only six facilities (three utility plants 
and three nonutility plants) indicated that their future plans would 
lead to changes in the operation of their cooling water intake 
structures.
    The NEWGen database is a compilation of detailed information on new 
electric generating capacity proposed over the next several years. The 
database differentiates between proposed capacity at new (greenfield) 
facilities and additions/modifications to existing facilities. To 
identify repowering facilities of interest, the Agency screened the 
1,530 facilities in the NEWGen database with respect to the following 
criteria: Facility status, country, and steam electric additions. The 
Agency then identified 124 NEWGen facilities as potential repowering 
facilities.
    Because the NEWGen database provides more information on repowering 
than the section 316(b) survey, the Agency used it as the starting 
point for the analysis of repowering facilities. Of the 124 NEWGen 
facilities identified as repowering facilities, 85 responded to the 
section 316(b) survey. Of these 85 facilities, 65 are in-scope and 20 
are out of scope of this proposal. For each of the 65 in scope 
facilities, the NEWGen database provided an estimation of the type and 
extent of the capacity additions. The Agency found that 36 of the 65 
facilities would be combined-cycle facilities after the repowering 
changes. Of these, 34 facilities are projected to decrease their 
cooling water intake after repowering (through the conversion from a 
simple steam cycle to a combined-cycle plant). The other 31 facilities 
within the scope of the rule would increase their cooling water intake. 
The Agency examined the characteristics of these facilities projected 
to undergo repowering and determined the waterbody type from which they 
withdraw cooling water. The results of this analysis are presented in 
Exhibit 1.

 Exhibit 1.--In-Scope Existing Facilities Projected to Enact Repowering
                                 Changes
------------------------------------------------------------------------
                                                              Number of
                                                 Number of      plants
                                                   plants     projected
                                                 projected        to
                Waterbody type                       to      decrease or
                                                  increase     maintain
                                                  cooling      cooling
                                                   water        water
                                                 withdrawal   withdrawal
------------------------------------------------------------------------
Ocean.........................................          N/A          N/A
Estuary/Tidal River...........................            3           17
Freshwater River/Stream.......................           14           10
Freshwater Lake/Reservoir.....................           10            1
Great Lake....................................            0            1
------------------------------------------------------------------------

    Of the 65 in-scope facilities identified as repowering facilities 
in the NEWGen database, 24 received the detailed questionnaire, which 
requested information about planned cooling water intake structures and 
changes to capacity. Nineteen of these 24 facilities are utilities and 
the remaining five are nonutilities. The Agency analyzed the section 
316(b) detailed questionnaire data for these 24 facilities to identify 
facilities that indicated planned modifications to their cooling 
systems which will change the capacity of intake water collected for 
the plant and the estimated cost to comply with today's proposal. Four 
such facilities were identified, two utilities and two nonutilities. 
Both utilities responded that the planned modifications will decrease 
their cooling water intake capacity and that they do not have any 
planned cooling water intake structures that will directly withdraw 
cooling water from surface water. The two nonutilities, on the other 
hand, indicated that the planned modifications will increase their 
cooling water intake capacity and that they do have planned cooling 
water intake structures that will directly withdraw cooling water from 
surface water.
    Using the NEWGen and section 316(b) detailed questionnaire 
information on repowering facilities, the Agency examined the extent to 
which planned and/or enacted repowering changes would effect cooling 
water withdrawals and, therefore, the potential costs of compliance 
with this proposal. Because the Agency developed a cost estimating 
methodology that primarily utilizes design intake flow as the 
independent variable, the Agency examined the extent to which 
compliance costs would change if the repowering data summarized above 
were incorporated into the cost analysis of this rule. The Agency 
determined that projected compliance costs for facilities withdrawing 
from estuaries could be lower after incorporating the repowering 
changes. The primary reason for this is the fact that the majority of 
estuary repowering facilities would change from a full-steam cycle to a 
combined-cycle, thereby maintaining or decreasing their cooling water 
withdrawals (note that a combined-cycle facility generally will 
withdraw one-third of the cooling water of a comparably sized full-
steam facility). Therefore, the portion of compliance costs for 
regulatory options that included flow reduction requirements or 
technologies would significantly decrease if the Agency incorporated 
repowering changes into the analysis. As shown in Exhibit 1 the

[[Page 17134]]

majority of facilities projected to increase cooling water withdrawals 
due to the repowering changes use freshwater sources. In turn, the 
compliance costs for these facilities would increase if the Agency 
incorporated repowering for this proposal.
    For the final rule, the Agency intends to continue its research 
into repowering at existing facilities. The Agency will consider the 
results of its repowering research and any comments provided on this 
subject for the final rule. The Agency therefore requests comment on 
planned and enacted repowering activities and the above summary of its 
repowering research to date. The Agency is especially interested in 
information from facilities that have enacted repowering changes and 
the degree to which these changes have changed their design intake 
flow.

B. Survey Questionnaires

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

C. Site Visits

    From 1993 to the present, EPA has conducted site visits to numerous 
power generating stations around the country to observe cooling water 
intake structure design and operations and document examples of 
different cooling water intake structure configurations. EPA has 
visited the plants (each with either a once-through or closed-cycle, 
recirculating cooling system, except as noted) listed below:

 California: Moss Landing Power Plant and Pittsburg Power Plant
 Florida: Big Bend Power Station, St. Lucie Plant, Martin 
Plant, and Riviera Beach Power Plant
 Illinois: Will County Station and Zion Nuclear Power Station

[[Page 17135]]

 Indiana: Clifty Creek Station and Tanners Creek Plant
 Maryland: Calvert Cliffs Nuclear Power Plant and Chalk Point 
Generating Station
 Massachusetts: Pilgrim Nuclear Power Station
 Nevada: El Dorado Energy Power Plant (dry cooling)
 New York: Indian Point Nuclear Power Plant and Lovett 
Generating Station
 New Jersey: Salem Generating Station
 Ohio: Cardinal Plant, W.H. Zimmer Plant, and W.C. Beckjord 
Station
 Wisconsin: Valley Power Plant and Pleasant Prairie Power Plant

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

1. Public Participation
    EPA has worked extensively with stakeholders from industry, public 
interest groups, state agencies, and other Federal agencies in the 
development of this proposed rule. These public participation 
activities have focused on various section 316(b) issues, including 
general issues, as well as issues relevant to development of the Phase 
I rule and issues relevant to the proposed Phase II rule. See section 
I.C.5 of this preamble for a discussion of key public participation 
activities.
2. Data and Documents Collected by EPA
    Since 1993, EPA has developed cooling water regulations as part of 
a collaborative effort with industry and environmental stakeholders, 
other Federal agencies, the academic and scientific communities as well 
as the general public. As such, EPA has reviewed and considered the 
many documents, demonstration studies, scientific analyses and 
historical perspectives offered in support of each phase of the 
regulatory process. For example, during the early stages of data 
gathering EPA created an internal library of reference documents 
addressing cooling water intake structure issues. This library 
currently holds over 2,800 documents, many of which were referenced in 
the rulemaking process and are contained in the record (see below for 
further information on the record). The library contains a thorough 
collection of a wide variety of documents, including over 80 316(b) 
demonstration documents, over 300 impingement and entrainment studies, 
over 100 population modeling studies, over 500 fish biology and stock 
assessment documents, over 350 biological studies commissioned by power 
generators, over 80 NPDES decisions and NPDES or SPDES-related 
documents, over 120 intake technology reports, over 10 databases on the 
electric power industry, and documents from interagency committees such 
as the Ohio River Valley Water Sanitation Commission (ORSANCO).
    The record for the new facility rule contains nearly 1,000 
documents (research articles, databases, legal references, memorandums, 
meeting notes, and other documents), consisting of approximately 47,000 
pages of supporting material available for public review. The record 
for this proposed rule contains over 40 additional documents.
    For a more complete list of reference and technical documents, see 
the record for this proposed rule.

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

    As discussed above, today's proposed rule would apply to Phase II 
existing facilities, which include any existing facility that both 
generates and transmits electric power, or generates electric power but 
sells it to another entity existing for transmission and that meets the 
other applicability criteria in Sec. 125.91: (1) They are a point 
source that uses or proposes to use a cooling water intake structure; 
(2) they have at least one cooling water intake structure that uses at 
least 25 percent of the water it withdraws for cooling purposes; (3) 
they have a design intake flow of 50 million gallons per day (MGD) or 
greater; and (4) they have an NPDES permit or are required to obtain 
one. Today's rule does not apply to facilities whose primary business 
activity is not power generation, such as manufacturing facilities that 
produce electricity by co-generation.
    Based on data collected from the Short Technical Industry 
Questionnaire and Detailed Questionnaire, and compliance requirements 
in today's proposed rule, EPA has identified 539 facilities to which 
today's rule will apply, and estimates that the total number could be 
549. The Agency has identified 420 plants owned by utilities that are 
potentially subject to proposed rule. The Agency estimates that 129 
nonutilities may potentially be subject to the proposed rule. This 
number, however, is subject to some uncertainty. The Agency has 
identified 119 plants owned by nonutilities that are potentially 
subject to the proposed rule, and after taking into account a small 
non-response rate to the survey among nonutilities, the Agency's best 
estimate of the total number is 129.
    Sources of Surface Water. The source of surface water withdrawn for 
cooling is an important factor in determining potential environmental 
impacts. An estimated 8 nonutility facilities and 15 utility facilities 
withdraw all cooling water from an ocean. An estimated 55 nonutility 
facilities and 50 utility facilities withdraw all cooling water from an 
estuary or tidal river. An estimated 50 nonutility facilities and 203 
utility facilities withdraw all cooling water from a freshwater stream 
or river. An estimated 12 or 13 nonutility facilities and 136 utility 
facilities withdraw all cooling water from a lake or reservoir, 
including 15 utilities on the Great Lakes. Fewer than 20 plants 
withdraw cooling water from a combination of these sources.
    Average Daily Cooling Water Intake in 1998. Of the estimated 129 
nonutility plants that are potentially subject to this proposed rule, 
EPA estimates that in 1998, 4 plants had an average intake of not more 
than 10 million gallons per day (MGD), 12 had an average intake more 
than 10 MGD and not over 50 MGD, 20 had an average intake more than 50 
MGD but not over 100 MGD, and 90 had an average intake over 100 MGD 
(three had zero or unreported intake). Note that coverage under the 
rule is based on design intake, not average intake flow. Of the 420 
utility plants that are potentially subject to this proposed rule, EPA 
found that in 1998, 8 plants had an average intake of not more than 10 
million gallons per day (MGD), 59 had an average intake more than 10 
MGD and not over 50 MGD, 58 had an average intake more than 50 MGD but 
not over 100 MGD, and 288 had an average intake over 100 MGD (seven had 
zero or unreported intake).
    Cooling Water Systems. Facilities may have more than one cooling 
water system. Therefore, in providing the information on cooling water 
systems, a plant may be counted multiple times (as many times as it has 
distinct cooling water systems). Thus, of the plants that are 
potentially subject to this proposed rule, the 129 nonutility plants 
are counted 165 times; the 420 utility plants are counted 599 times. As 
a consequence, the percentages reported sum to more than 100 percent. 
Among nonutility plants, 110 plants (85 percent) use once-through 
cooling systems, 16 plants (12 percent) use closed-cycle, recirculating 
cooling systems, and an estimated 6 plants (5 percent) use another type 
of system. Of the estimated 599 utility plants, 314 plants (75 percent) 
use once-through cooling systems, 65 plants (15 percent)

[[Page 17136]]

use closed-cycle, recirculating cooling systems, and 49 plants (12 
percent) use another type of system.
    Cooling Water Intake Structure Configurations. Facilities may have 
more than one cooling water intake structure configuration. Therefore, 
in providing the information on cooling water systems, a plant may be 
counted multiple times (as many times as it has distinct cooling water 
intake structure configurations). Thus, of the plants that are 
potentially subject to this proposed rule, the 129 nonutility plants 
are counted 194 times and the 420 utility plants are counted 690 times. 
As a consequence, the percentages reported sum to more than 100 
percent. Of the estimated 129 nonutility plants that are potentially 
subject to this proposed rule, 30 (23 percent) withdraw cooling water 
through a canal or channel, 13 (10 percent) have an intake structure 
situated in a natural or constructed bay or cove, 96 (74 percent) have 
an intake structure (surface or submerged) that is flush with the 
shoreline, and 16 (12 percent) have a submerged offshore intake 
structure. Of the 420 utility plants that are potentially subject to 
this proposed rule, 142 (34 percent) withdraw cooling water through a 
canal or channel, 41 (10 percent) have an intake situated in a bay or 
cove, 251 (60 percent) have a shoreline intake, 59 (14 percent) have a 
submerged offshore intake, and 6 (1 percent) have another type of 
configuration or reported no information.

V. Environmental Impacts Associated With Cooling Water Intake 
Structures

    The majority of environmental impacts associated with intake 
structures are caused by water withdrawals that ultimately result in 
aquatic organism losses. This section describes the general nature of 
these biological impacts; discusses specific types of impacts that are 
of concern to the Agency; and presents examples of documented impacts 
from a broad range of facilities. EPA believes that in light of the 
national scope of today's proposed rule, it is important to present the 
variety of impacts observed for facilities located on different 
waterbody types, under high and low flow withdrawal regimes, and 
operating with and without technologies designed to reduce 
environmental impacts.
    Based on preliminary estimates from the questionnaire sent to more 
than 1,200 existing power plants and factories, industrial facilities 
in the United States withdraw more than 279 billion gallons of cooling 
water a day from waters of the U.S.\8\ The withdrawal of such large 
quantities of cooling water affects large quantities of aquatic 
organisms annually, including phytoplankton (tiny, free-floating 
photosynthetic organisms suspended in the water column), zooplankton 
(small aquatic animals, including fish eggs and larvae, that consume 
phytoplankton and other zooplankton), fish, crustaceans, shellfish, and 
many other forms of aquatic life. Aquatic organisms drawn into cooling 
water intake structures are either impinged on components of the 
cooling water intake structure or entrained in the cooling water system 
itself.
---------------------------------------------------------------------------

    \8\ EPA 2000. Detailed Industry Questionnaire: Phase II Cooling 
Water Intake Structures. U.S. Environmental Protection Agency, 
Office of Wastewater Management, Washington, DC. OMB Control No. 
2040-0213.
---------------------------------------------------------------------------

    Impingement takes place when organisms are trapped against intake 
screens by the force of the water passing through the cooling water 
intake structure. Impingement can result in starvation and exhaustion 
(organisms are trapped against an intake screen or other barrier at the 
entrance to the cooling water intake structure), asphyxiation 
(organisms are pressed against an intake screen or other barrier at the 
entrance to the cooling water intake structure by velocity forces that 
prevent proper gill movement, or organisms are removed from the water 
for prolonged periods of time), and descaling (fish lose scales when 
removed from an intake screen by a wash system) as well as other 
physical harms.
    Entrainment occurs when organisms are drawn through the cooling 
water intake structure into the cooling system. Organisms that become 
entrained are normally relatively small benthic,\9\ planktonic,\10\ and 
nektonic \11\ organisms, including early life stages of fish and 
shellfish. Many of these small organisms serve as prey for larger 
organisms that are found higher on the food chain. As entrained 
organisms pass through a plant's cooling system they are subject to 
mechanical, thermal, and/or toxic stress. Sources of such stress 
include physical impacts in the pumps and condenser tubing, pressure 
changes caused by diversion of the cooling water into the plant or by 
the hydraulic effects of the condensers, sheer stress, thermal shock in 
the condenser and discharge tunnel, and chemical toxemia induced by 
antifouling agents such as chlorine. The mortality rate of entrained 
organisms varies by species; mortality rates for fish can vary from 2 
to 97 percent depending on the species and life stage entrained.\12,\ 
\13\ Naked goby larvae demonstrated mortality rates as low as 2 percent 
whereas bay anchovy larvae mortality rates were as high as 97 
percent.\14\ Macroinvertebrate mortality ranged from 0 to 84 percent 
for several species evaluated, but rates were usually less than 29 
percent.\15,\ \16\
---------------------------------------------------------------------------

    \9\ Refers to bottom dwellers that are generally small and 
sessile (attached) such as mussels and anemones, but can include 
certain large motile (able to move) species such as crabs and 
shrimp. These species can be important members of the food chain.
    \10\ Refers to free-floating microscopic plants and animals, 
including the egg and larval stages of fish and invertebrates that 
have limited swimming abilities. Plankton are also an important 
source of food for other aquatic organisms and an essential 
component of the food chain in aquatic ecosystems.
    \11\ Refers to free-swimming organisms (e.g., fish, turtles, 
marine mammals) that move actively through the water column and 
against currents.
    \12\ Mayhew, D.A., L.D. Jensen, D.F. Hanson, and P.H. Muessig. 
2000. A comparative review of entrainment survival studies at power 
plants in estuarine environments. Environmental Science and Policy 
3:S295-S301.
    \13\ EPRI. 2000. Review of entrainment survival studies: 1970-
2000. Prepared by EA Engineering Science and Technology for the 
Electric Power Research Institute, Palo Alto, CA.
    \14\ Ibid.
    \15\ Mayhew, D.A., L.D. Jensen, D.F. Hanson, and P.H. Muessig. 
2000. A comparative review of entrainment survival studies at power 
plants in estuarine environments. Environmental Science and Policy 
3:S295-S301.
    \16\ EPRI. 2000. Review of entrainment survival studies: 1970-
2000. Prepared by EA Engineering Science and Technology for the 
Electric Power Research Institute, Palo Alto, CA.
---------------------------------------------------------------------------

    In addition to impingement and entrainment losses associated with 
the operation of the cooling water intake structure, EPA is concerned 
about the cumulative overall degradation of the aquatic environment as 
a consequence of (1) multiple intake structures operating in the same 
watershed or in the same or nearby reaches and (2) intakes located 
within or adjacent to an impaired waterbody. Historically, impacts 
related to cooling water intake structures have been evaluated on a 
facility-by-facility basis. The potential cumulative effects of 
multiple intakes located within a specific waterbody or along a coastal 
segment were not typically assessed and thus are largely unknown. (One 
relevant example is provided for the Hudson River; see discussion 
below. Also see recently completed case studies for the Delaware 
Estuary and Ohio River in the Case Study Document). There is concern, 
however, about the effects of multiple intakes on fishery stocks. As an 
example, the Atlantic States Marine Fisheries Commission has been 
requested by its member States to investigate the cumulative impacts on 
commercial fishery stocks, particularly overutilized stocks, 
attributable to

[[Page 17137]]

cooling water intakes located in coastal regions of the Atlantic.\17\ 
Specifically, the study will focus on revising existing fishery 
management models so that they accurately consider and account for fish 
losses from multiple intake structures.
---------------------------------------------------------------------------

    \17\ Personal communication, D. Hart (EPA) and L. Kline (ASMFC), 
2001.
---------------------------------------------------------------------------

    Further, the Agency believes that cooling water intakes potentially 
contribute additional stress to waters already showing aquatic life 
impairment from other sources such as industrial discharges and urban 
stormwater. EPA notes that the top four leading causes of waterbody 
impairment (siltation, nutrients, bacteria, and metals) affect the 
aquatic life uses of a waterbody. Thus, the Agency is concerned that 
many of the aquatic organisms subject to the effects of cooling water 
withdrawals reside in impaired waterbodies and are therefore 
potentially more vulnerable to cumulative impacts from an array of 
physical and chemical anthropogenic stressors.
    When enough individual aquatic organisms are subject to lethal or 
function-impairing stressors, whether from cooling water intake 
structures or water pollutants, the structure of their ecosystem can 
change significantly in response. Changes in ecosystem structure can 
then affect all organisms within the ecosystem, including those 
organisms a cooling water intake structure does not directly impact.
    Decreased numbers of aquatic organisms can have any or several of 
the following ecosystem-level effects: (1) Disruption of food webs,\18\ 
(2) disruption of nutrient, carbon, and energy transfers among the 
physical and biological ecosystem compartments,\19\ (3) alteration of 
overall aquatic habitat,\20\ and (4) alteration of species composition 
and overall levels of biodiversity.\21\
---------------------------------------------------------------------------

    \18\ Food webs are modified by cooling water intake structure 
impacts because (1) some species within the ecosystem suffer heavier 
mortality impacts than others, and (2) cooling water intake 
structures convert living organisms to various forms of organic 
matter, thereby removing food resources from consumers of living 
organisms, and increasing food resources for scavengers and 
decomposers.
    \19\ Cooling water intake structures can transfer large amounts 
of nutrients, carbon, and energy from living organisms (in some 
cases highly mobile or migratory organisms) to the physical 
environment. Nutrients, carbon, and energy may re-enter the 
biological compartment, but they will do so via different pathways 
than those used prior to cooling water intake structures operation 
(see alteration of food webs).
    \20\ In addition to altering the physical nature of aquatic 
habitat directly (e.g., current modification and water withdrawal), 
cooling water intake structure may modify habitat by reducing 
numbers of habitat-modifying organisms (e.g., Pacific salmon).
    \21\ Species may disappear from a site in response to cooling 
water intake structure impacts. Threatened and endangered or 
otherwise rare or sensitive species may be at greater risk. New 
species (including invasive species), may establish themselves 
within the disrupted area if they are able to withstand cooling 
water intake structure impacts.
---------------------------------------------------------------------------

    The nature and extent of the ecosystem-level effect depends on the 
characteristics of the aquatic organism and its interactions with other 
members of the ecosystem. Some species, known as ``keystone species,'' 
have a larger impact on ecosystem structure and function than other 
species. Examples of keystone species from cooling water intake 
structure-impacted water bodies include menhaden, Pacific salmon, and 
Eastern oysters.
    As discussed above, structural changes at the ecosystem level are 
influenced by a large number of forces at work within the ecosystem. 
Because of the large number of these forces and the complexity of their 
interactions, ecologists can find it difficult to determine the 
contribution of any one stressor to a structural change in an 
ecosystem. Much work remains to be done to determine the extent to 
which cooling water intake structures induce structural change in their 
host ecosystems through impingement and entrainment of aquatic 
organisms. Nevertheless, EPA believes that many cooling water intake 
structures clearly have a significant negative impact on aquatic 
organisms at the individual level. The studies discussed below suggest 
that these individual-level impacts can lead to negative impacts at 
higher organizational levels.
    In addition to ecosystem-level impacts, EPA is concerned about the 
potential impacts of cooling water intake structures located in or near 
habitat areas that support threatened, endangered, or other protected 
species. Although limited information is available on locations of 
threatened or endangered species that are vulnerable to impingement or 
entrainment, such impacts do occur. For example, EPA is aware that from 
1976 to 1994, approximately 3,200 threatened or endangered sea turtles 
entered enclosed cooling water intake canals at the St. Lucie Nuclear 
Generating Plant in Florida.\22\ The plant developed a capture-and-
release program in response to these events. Most of the entrapped 
turtles were captured and released alive; however, approximately 160 
turtles did not survive. More recently, the number of sea turtles being 
drawn into the intake canal increased to approximately 600 per year. 
Elevated numbers of sea turtles found within nearshore waters are 
thought to be part of the reason for the rising numbers of turtles 
entering facility waters. In response to this increase, Florida Power 
and Light Co. proposed installation of nets with smaller size mesh (5-
inch square mesh rather than 8-inch square mesh) at the St. Lucie 
facility to minimize entrapment.\23\
---------------------------------------------------------------------------

    \22\ Florida Power and Light Company. 1995. Assessment of the 
impacts at the St. Lucie Nuclear Generating Plant on sea turtle 
species found in the inshore waters of Florida.
    \23\ Ibid.
---------------------------------------------------------------------------

    Finally, EPA is concerned about environmental impacts associated 
with re-siting or modification of existing cooling water intake 
structures. Three main factors contribute to the environmental impacts: 
Displacement of biota and habitat resulting from the physical siting or 
modification of a cooling water intake structure in an aquatic 
environment, increased levels of turbidity in the aquatic environment, 
and effects on biota and habitat associated with aquatic disposal of 
materials excavated during re-siting or modification activities. 
Existing programs, such as the CWA section 404 program, National 
Environmental Policy Act (NEPA) program, and programs under State/
Tribal law, include requirements that address many of the environmental 
impact concerns associated with the intake modifications (see Section X 
for applicable Federal statutes).

A. Facility Examples

    The following discussion provides a number of examples of 
impingement and entrainment impacts that can be associated with 
existing facilities. It is important to note that these examples are 
meant to illustrate the range of impacts that can occur nationally at 
facilities sited at diverse geographic locations, differing waterbody 
types, and with a variety of control technologies in place. In some 
cases, the number of organisms impinged and entrained by a facility can 
be substantial and in other examples impingement and entrainment may be 
minimal due to historical impacts from anthropogenic activities such as 
stream or river channelization. EPA notes that these examples are not 
representative of all sites whose facilities use cooling water intake 
structures and that these examples may not always reflect subsequent 
action that may have been taken to address these impacts on a site-
specific basis. (Facility reports documenting the efficacy of more 
recently installed control technologies are not always available to the 
Agency.) With this background, EPA provides the following examples, 
illustrating that the impacts attributable to impingement

[[Page 17138]]

and entrainment at individual facilities may result in appreciable 
losses of early life stages of fish and shellfish (e.g., three to four 
billion individuals annually \24\), serious reductions in forage 
species and recreational and commercial landings (e.g., 23 tons lost 
per year \25\), and extensive losses over relatively short intervals of 
time (e.g., one million fish lost during a three-week study 
period).\26\
---------------------------------------------------------------------------

    \24\ EPA Region IV. 1979. Brunswick Nuclear Steam Electric 
Generating Plant of Carolina Power and Light Company, historical 
summary and review of section 316(b) issues.
    \25\ EPA Region IV. 1986. Findings and determination under 33 
U.S.C. 1326, In the Matter of Florida Power Corporation Crystal 
River Power Plant Units 1, 2, and 3, NPDES permit no. FL0000159.
    \26\ Thurber, N.J. and D.J. Jude. 1985. Impingement losses at 
the D.C. Cook Nuclear Power Plant during 1975-1982 with a discussion 
of factors responsible and possible impact on local populations. 
Special report no. 115 of the Great Lakes Research Division, Great 
Lakes and Marine Waters Center, University of Michigan.
---------------------------------------------------------------------------

    In addition, some studies estimating the impact of impingement and 
entrainment on populations of key commercial or recreational fish have 
predicted substantial declines in population size. This has led to 
concerns that some populations may be altered beyond recovery. For 
example, a modeling effort evaluating the impact of entrainment 
mortality on a representative fish species in the Cape Fear estuarine 
system predicted a 15 to 35 percent reduction in the species 
population.\27\ More recent modeling studies of Mount Hope Bay, 
Massachusetts, predicted 87 percent reductions in overall finfish 
abundance (see Brayton Point Generating Station discussion below for 
additional detail.) EPA acknowledges that existing fishery resource 
baselines may be inaccurate.\28\ Further, according to one article, 
``[e]ven seemingly gloomy estimates of the global percentage of fish 
stocks that are overfished are almost certainly far too low.'' \29\ 
Thus, EPA is concerned that historical overfishing may have increased 
the sensitivity of aquatic ecosystems to subsequent disturbance, making 
them more vulnerable to human impact and potential collapse.
---------------------------------------------------------------------------

    \27\ EPA Region IV. 1979. Brunswick Nuclear Steam Electric 
Generating Plant of Carolina Power and Light Company, historical 
summary and review of section 316(b) issues.
    \28\ Watson, R. and D. Pauly. 2001. Systematic distortions in 
world fisheries catch trends. Nature 414-534-536.
    \29\ Jackson J.B.C., M.X. Kirby, W.H. Berger, K.A. Bjorndal, 
L.W. Botsford, B.J. Bourque, R.H. Bradbury, R. Cooke, J. Erlandson, 
J.A. Estes, T.P. Hughes, S. Kidwell, C.B. Lange, H.S. Lenihan, J.M. 
Pandolfi, C.H. Peterson, R.S. Steneck, M.J. Tegner, and R.R. Warner, 
2001. Historical overfishing and the recent collapse of coastal 
ecosystems. Science 293(5530): 629-638.
---------------------------------------------------------------------------

    Further, studies of entrainment at five Hudson River power plants 
during the 1980s predicted year-class reductions ranging from six 
percent to 79 percent, depending on the fish species.\30\ An updated 
analysis completed in 2000 of entrainment at three of these power 
plants predicted year-class reductions of up to 20 percent for striped 
bass, 25 percent for bay anchovy, and 43 percent for Atlantic tom cod, 
even without assuming 100 percent mortality of entrained organisms.\31\ 
The New York Department of Environmental Conservation concluded that 
these reductions in year-class strength were ``wholly unacceptable'' 
and that any ``compensatory responses to this level of power plant 
mortality could seriously deplete any resilience or compensatory 
capacity of the species needed to survive unfavorable environmental 
conditions.'' \32\
---------------------------------------------------------------------------

    \30\ Boreman J. and P. Goodyear. 1988. Estimates of entrainment 
mortality for striped bass and other fish species inhabiting the 
Hudson River Estuary. American Fisheries Society Monograph 4:152-
160.
    \31\ Consolidated Edison Company of New York. 2000. Draft 
environmental impact statement for the state pollutant discharge 
elimination system permits for Bowline Point, Indian Point 2 & 3, 
and Roseton steam electric generating stations.
    \32\ New York Department of Environmental Conservation (NYDEC). 
2000. Internal memorandum provided to the USEPA on NYDEC's position 
on SPDES permit renewals for Roseton, Bowline Point 1 & 2, and 
Indian Point 2 & 3 generating stations.
---------------------------------------------------------------------------

    In contrast, facilities sited on waterbodies previously impaired by 
anthropogenic activities such as channelization may demonstrate limited 
entrainment and impingement losses. The Neal Generating Complex 
facility, located near Sioux City, Iowa, on the Missouri River is coal-
fired and utilizes once-through cooling systems. According to a ten-
year study conducted from 1972-82, the Missouri River aquatic 
environment near the Neal complex was previously heavily impacted by 
channelization and very high flow rates meant to enhance barge traffic 
and navigation.\33\ These anthropogenic changes to the natural river 
system resulted in significant losses of habitat necessary for 
spawning, nursery, and feeding. At this facility, fish impingement and 
entrainment by cooling water intakes were found to be minimal.
---------------------------------------------------------------------------

    \33\ Morningside College. 1982. Missouri River aquatic ecology 
studies. Prepared for Iowa Public Service Company, Sioux City, Iowa.
---------------------------------------------------------------------------

    The following are summaries of other, documented examples of 
impacts occurring at existing facilities sited on a range of waterbody 
types. Also, see the Case Study Document and the benefits discussion in 
Section IX of this notice.
    Brayton Point Generating Station. The Brayton Point Generating 
Station is located on Mt. Hope Bay, in Somerset, Massachusetts, within 
the northeastern reach of Narragansett Bay. Because of problems with 
electric arcing caused by salt drift from an open spray pod design 
located near transmission wires, and lack of fresh water to replace the 
salt water used for the closed-cycle recirculating spray pod cooling 
water system, the company converted Unit 4 from a closed-cycle, 
recirculating system to a once-through cooling water system in July 
1984. The modification of Unit 4 resulted in a 41 percent increase in 
coolant flow, amounting to a maximum average intake flow of 
approximately 1.3 billion gallons per day and increased thermal 
discharge to the bay.\34\ An analysis of fisheries data by the Rhode 
Island Division of Fish and Wildlife using a time series-intervention 
model showed an 87 percent reduction in finfish abundance in Mt. Hope 
Bay coincident with the Unit 4 modification.\35\ The analysis also 
indicated that, in contrast, finfish abundance trends have been 
relatively stable in adjacent coastal areas and portions of 
Narragansett Bay that are not influenced by the operation of Brayton 
Point station. Thus, overall finfish biomass and finfish species 
diversity declined in Mount Hope Bay but not in Narragansett Bay. There 
appear to be multiple, interacting factors that influence these 
declines including overfishing and climate change as well as 
temperature increases from thermal discharges and impingement and 
entrainment losses associated with the Brayton Point facility.
---------------------------------------------------------------------------

    \34\ Metcalf & Eddy. 1992. Brayton Point station monitoring 
program technical review. Prepared for USEPA.
    \35\ Gibson, M. 1995 (revised 1996). Comparison of trends in the 
finfish assemblages of Mt. Hope Bay and Narragansett Bay in relation 
to operations of the New England Power Brayton Point station. Rhode 
Island Division of Fish and Wildlife, Marine Fisheries Office.
---------------------------------------------------------------------------

    San Onofre Nuclear Generating Station. The San Onofre Nuclear 
Generating Station (SONGS) is located on the coastline of the Southern 
California Bight, approximately 2.5 miles southeast of San Clemente, 
California.\36\ The marine portions of Units 2 and 3, which are once-
through, open-cycle cooling systems, began commercial operation in 
August 1983 and April 1984, respectively.\37\ Since

[[Page 17139]]

then, many studies evaluated the impact of the SONGS facility on the 
marine environment.
---------------------------------------------------------------------------

    \36\ Southern California Edison. 1988. Report on 1987 data: 
marine environmental analysis and interpretation, San Onofre Nuclear 
Generating Station.
    \37\ Ibid.
---------------------------------------------------------------------------

    In a normal (non-El Nino) year, an estimated 121 tons of midwater 
fish (primarily northern anchovy, queenfish, and white croaker) may be 
entrained at SONGS.\38\ The fish lost include approximately 350,000 
juveniles of white croaker, a popular sport fish; this number 
represents 33,000 adult individuals or 3.5 tons of adult fish. Within 3 
kilometers of SONGS, the density of queenfish and white croaker in 
shallow-water samples decreased by 34 and 36 percent, respectively. 
Queenfish declined by 50 to 70 percent in deepwater samples.\39\ In 
contrast, relative abundances of bottom-dwelling adult queenfish and 
white croaker increased in the vicinity of SONGS.\40\ Increased numbers 
of these and other bottom-dwelling species were believed to be related 
to the enriching nature of SONGS discharges, which in turn support 
elevated numbers of prey items for bottom fish.\41\
---------------------------------------------------------------------------

    \38\ Swarbrick, S. and R.F. Ambrose. 1989. Technical report C: 
entrapment of juvenile and adult fish at SONGS. Prepared for Marine 
Review Committee.
    \39\ Kastendiek, J. and K. Parker. 1988. Interim technical 
report: midwater and benthic fish. Prepared for Marine Review 
Committee.
    \40\ Swarbrick, S. and R.F. Ambrose. 1989. Technical report C: 
entrapment of juvenile and adult fish at SONGS. Prepared for Marine 
Review Committee.
    \41\ Kastendiek, J. and K. Parker. 1988. Interim technical 
report: midwater and benthic fish. Prepared for Marine Review 
Committee.
---------------------------------------------------------------------------

    Pittsburg and Contra Costa Power Plants. The Pittsburg and Contra 
Costa Power Plants are located in the San Francisco Bay-Delta Estuary, 
California. Several local fish species (e.g., Delta smelt, Sacramento 
splittail, chinook salmon, and steelhead) found in the vicinity of the 
facilities are now considered threatened or endangered by Sate and/or 
Federal authorities. EPA evaluated facility data on impingement and 
entrainment rates for these species and estimated that potential losses 
of special status fish species at the two facilities may reach 145,003 
age 1 equivalents per year resulting from impingement and 269,334 age 1 
equivalents per year due to entrainment \42\ Based on restoration costs 
for these species, EPA estimates that the value of the potential 
impingement losses of these species is $12.8 to 43.2 million per year 
and the value of potential entrainment is $25.6 million to $83.2 
million per year (all in $2001).
---------------------------------------------------------------------------

    \42\ Impingement and entrainment data were obtained from the 
2000 Draft Habitat Conservation Plan for the Pittsburg and Contra 
Costa facilities. Please see EPA's Case Study Document for detailed 
information on EPA's evaluation of impingement and entrainment at 
these facilities.
---------------------------------------------------------------------------

    Lovett Generating Station. The Lovett Generating Station is located 
in Tompkins Cove, New York, on the western shore of the Hudson River. 
As a method of reducing ichthyoplankton (free floating fish eggs and 
larvae) entrainment at the Lovett station, the Gunderboom Marine Life 
Exclusion System was installed in 1995 at the Unit 3 intake structure. 
Gunderboom is a woven mesh material initially designed to prevent 
waterborne pollutants from entering shoreline environments during 
construction or dredging activities. Since its initial installation, 
the Gunderboom system has undergone a series of tests and modifications 
to resolve problems with fabric clogging, anchoring, and the boom 
system. Data from testing in 1998 demonstrated that with the Gunderboom 
system in place, entrainment of eggs, larvae, and juveniles was reduced 
by 80 percent.\43\
---------------------------------------------------------------------------

    \43\ Lawler, Matusky & Skelly Engineers. 1998. Lovett Generating 
Station Gunderboom system evaluation program 1998.
---------------------------------------------------------------------------

    Ohio River. EPA evaluated entrainment and impingement impacts at 
nine in-scope facilities along a 500-mile stretch of the Ohio River as 
one of its case studies. Results from these nine facilities were 
extrapolated to 20 additional in-scope facilities. All in-scope 
facilities spanned a stretch of the Ohio River that extended from the 
western portion of Pennsylvania, along the southern border of Ohio, and 
into eastern Indiana. Impingement losses for all in-scope facilities 
were approximately 11.3 million fish (age 1 equivalents) annually; 
entrainment losses totaled approximately 23.0 million fish (age 1 
equivalents) annually.\44\ EPA believes that the results from this case 
study may not be representative of entrainment and impingement losses 
along major U.S. rivers because they are based on limited data 
collected nearly 25 years ago. In addition, due to improvements in 
water quality and implementation of fishery management plans, fish 
populations near these facilities may have increased and therefore 
these results may underestimate current entrainment and impingement at 
Ohio River facilities.
---------------------------------------------------------------------------

    \44\ Please see EPA's Case Study Document for more detailed 
information on these facilities and the data and methods used by EPA 
to calculate age 1 equivalent losses.
---------------------------------------------------------------------------

    Power Plants with Flows Less Than 500 MGD. The following results 
from the case studies conducted by EPA under this rulemaking effort 
provide an indication of impingement and entrainment rates for 
facilities with lower flows than the previous examples. Impingement and 
entrainment rates are expressed as numbers of age 1 equivalents, 
calculated by EPA from the impingement and entrainment data provided in 
facility monitoring reports.\45\
---------------------------------------------------------------------------

    \45\ Ibid.
---------------------------------------------------------------------------

      The Pilgrim Nuclear Power Station, located on Cape Cod 
Bay, Massachusetts, has an intake flow of 446 MGD.\46\ The average 
annual number of age 1 equivalents impinged at Pilgrim from 1974-1999 
was 52,800 fish. The average annual number entrained was 14.4 million 
fish.
---------------------------------------------------------------------------

    \46\ U.S. Department of Energy. 1999. Form EIA-767 (1999). 
Steam-electric plant operation and design report. Edison Electric 
Institute.
---------------------------------------------------------------------------

      The Miami Fort Power Plant, located on the Ohio River 
about 20 miles downstream of Cincinnati, has an intake flow of about 
98.7 MGD \47\ and combined average impingement and entrainment of about 
1.8 million age 1 equivalent fish per year (298,027 impinged and 
1,519,679 entrained).
---------------------------------------------------------------------------

    \47\ Ibid.
---------------------------------------------------------------------------

      The JR Whiting Plant, located in Michigan on Lake Erie 
has an intake flow of 308 MGD.\48\ The average annual number of age 1 
equivalent fish entrained was 1.8 million. Before installation of a 
deterrent net in 1980 to reduce impingement, some 21.5 million age 1 
equivalents were lost to impingement at the facility each year. These 
losses were reduced by nearly 90 percent with application of the 
deterrent net.\49\
---------------------------------------------------------------------------

    \48\ Ibid.
    \49\ Consumers Power Company. 1984, 1988, and 1992 reports of 
deterrent net performance, J.R. Whiting Plant. Prepared for the 
Michigan Water Resources Commission.
---------------------------------------------------------------------------

    Studies like those described in this section may provide only a 
partial picture of the severity of environmental impact associated with 
cooling water intake structures. Most important, the methods for 
evaluating adverse environmental impact used in the 1970s and 1980s, 
when most section 316(b) evaluations were performed, were often 
inconsistent and incomplete, making detection and consideration of all 
impacts difficult in some cases, and making cross-facility comparison 
difficult for developing a national rule. For example, some studies 
reported only gross fish losses; others reported fish losses on the 
basis of species and life stage; still others reported percent losses 
of the associated population or subpopulation (e.g., young-of-year 
fish). Recent advances in environmental assessment techniques provide 
new and in some cases better tools for monitoring impingement and 
entrainment and detecting impacts associated with the

[[Page 17140]]

operation of cooling water intake structures.50 51
---------------------------------------------------------------------------

    \50\ Schmitt, R.J. and C.W. Osenberg. 1996. Detecting ecological 
impacts. Academic Press, San Diego, CA.
    \51\ EPRI. 1999. Catalog of assessment methods for evaluating 
the effects of power plant operations on aquatic communities. TR-
112013, EPRI, Palo Alto, CA.
---------------------------------------------------------------------------

VI. Best Technology Available for Minimizing Adverse Environmental 
Impact at Phase II Existing Facilities

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

1. How Will Requirements Reflecting Best Technology Available for 
Minimizing Adverse Environmental Impact Be Established for My Phase II 
Existing Facility?
    Today's proposed rule would establish national minimum performance 
requirements for the location, design, construction, and capacity of 
cooling water intake structures at Phase II existing facilities. These 
requirements would represent best technology available for minimizing 
adverse environmental impact based on the type of waterbody in which 
the intake structure is located, the volume of water withdrawn by a 
facility, and the facility's capacity utilization rate. Under this 
proposal, EPA would set technology-based performance requirements, but 
the Agency would not mandate the use of any specific technology.
    A facility may use one of three different methods for establishing 
the best technology available for minimizing adverse environmental 
impact. Under the first method, a facility would demonstrate to the 
Director issuing the permit that the facility's existing design and 
construction technologies, operational measures, and/or restoration 
measures already meet the national minimum performance requirements 
that EPA is proposing.
    Under the second method, a facility would select design and 
construction technology, operational measures, restoration measures or 
some combination thereof. The facility would then demonstrate to the 
Director that its selected approach would meet the performance 
requirements EPA is proposing.
    Under the third method, a facility would calculate its cost of 
complying with the presumptive performance requirements and compare 
those costs either to the compliance costs EPA estimated in the 
analysis for this proposed rule or to a site-specific determination of 
the benefits of meeting the presumptive performance requirements. If 
the facility's costs are significantly greater than EPA's estimated 
costs or site-specific benefits, the facility would qualify for a site-
specific determination of best technology available.
    The Agency discusses each of these three methods for compliance and 
the proposed presumptive minimum performance requirements in greater 
detail below. EPA invites comments on all aspects of this proposed 
regulatory framework as well as the alternative regulatory approaches 
discussed later in this section.
a. What Are the Performance Standards for the Location, Design, 
Construction, and Capacity of Cooling Water Intake Structures To 
Reflect Best Technology Available for Minimizing Adverse Environmental 
Impact?
    EPA is proposing four performance standards at Sec. 125.94(b), all 
of which reflect best technology available for minimizing adverse 
environmental impact from cooling water intake structures. Under 
proposed Sec. 125.94(b)(1), any owner or operator able to demonstrate 
that a facility employs technology that reduces intake capacity to a 
level commensurate with the use of a closed-cycle, recirculating 
cooling system would meet the performance requirements proposed in 
today's rule. Use of this type of technology satisfies both impingement 
and entrainment performance requirements for all waterbodies.
    The performance standards at proposed Sec. 125.94(b)(2),(3), and 
(4) are based on the type of waterbody in which the intake structure is 
located, the volume of water withdrawn by a facility, the facility 
capacity utilization rate, and the location of a facility's intake 
structure in relation to fishery resources of concern to permit 
authorities or fishery managers. Under the proposed rule, EPA would 
group waterbodies into five categories: (1) Freshwater rivers or 
streams, (2) lakes or reservoirs, (3) Great Lakes, (4) tidal rivers and 
estuaries, and (5) oceans. The Agency considers location to be an 
important factor in addressing adverse environmental impact caused by 
cooling water intake structures. Because different waterbody types have 
different potential for adverse environmental impact, the requirements 
proposed to minimize adverse environmental impact would vary by 
waterbody type. For example, estuaries and tidal rivers have a higher 
potential for adverse impact because they contain essential habitat and 
nursery areas for the vast majority of commercial and recreational 
important species of shell and fin fish, including many species that 
are subject to intensive fishing pressures. Therefore, these areas 
require a higher level of control that includes both impingement and 
entrainment controls. Organisms entrained may include small species of 
fish and immature life stages (eggs and larvae) of many species that 
lack sufficient mobility to move away from the area of the intake 
structure. The reproductive strategies of many estuarine species 
include pelagic or planktonic larvae, which are very susceptible to 
entrainment.
    EPA discussed these concepts in a Notice of Data Availability 
(NODA) for the new facility rule (66 FR 28853, May 25, 2001) and 
invited comment on a number of documents which may support a judgment 
that the reproductive strategies of tidal river and estuarine species, 
together with other physical and biological characteristics of those 
waters, which make them more susceptible than other waterbodies to 
impacts from cooling water intake structures. In addition to these 
documents, the NODA presented information regarding the low entrainment 
susceptibility of non-tidal freshwater rivers and streams to cooling 
water intake structure impacts. This information also may be relevant 
in determining whether tidal rivers and estuaries are more sensitive to 
cooling water intake structures than some parts of other waterbodies.
    In general, commenters on the NODA agreed that location is an 
important factor in assessing the impacts of cooling water intake 
structure, but that creating a regulatory framework to specifically 
address locational issues would be extremely difficult. In the end, EPA 
elected not to vary requirements for new facilities on the basis of 
whether a cooling water intake structure is located in one or another 
broad category of waterbody type. Instead, EPA promulgated the same 
technology-based performance requirements for all new facilities, 
regardless of the waterbody type after finding this approach to be 
economically practicable.
    For the Phase II existing facility rule, which would establish the 
best technology available for minimizing adverse environmental impact 
in all waterbody types, EPA is again proposing an approach that it 
believes is economically practicable, but is proposing to require the 
most control in areas where such controls would yield the greatest 
reduction in impingement and entrainment. EPA believes that section 
316(b) affords EPA such

[[Page 17141]]

discretion because unlike the sections authorizing technology-based 
effluent limitations guidelines and new source performance standards 
for the discharge of pollutants, section 316(b) expressly states that 
its objective is to require best technology available for minimizing 
adverse environmental impact. EPA believes this language affords the 
Agency discretion to consider the environmental effects of various 
technology options. Therefore, EPA is proposing to vary technology-
based performance requirements by waterbody type, requiring more 
effective controls in waterbodies with higher overall productivity or 
greater sensitivity to impingement and entrainment. (Appendix 1 to the 
preamble presents the proposed regulatory framework in a flow chart).
    Under this approach, facilities that operate at less than 15 
percent capacity utilization would be required to have only impingement 
control technology. This level of control was found to be the most 
economically practicable given these facilities' reduced operating 
levels. In addition, these facilities tend to operate most often in 
mid-winter or late summer, times of peak energy demand but periods of 
generally low abundance of entrainable life stages of fish and 
shellfish. The flow or capacity of a cooling water intake structure is 
also a primary factor affecting the entrainment of organisms. The lower 
the intake flow at a site, the lesser the potential for entrained 
organisms.
    As in the Phase I (new facility) rule, EPA is proposing to set 
performance standards for minimizing adverse environmental impact based 
on a relatively easy to measure and certain metric-reduction of 
impingement mortality and entrainment. EPA is choosing this approach to 
provide certainty about permitting requirements and to streamline and 
speed the issuance of permits.
    Facilities with cooling water intake structures located in a 
freshwater river or stream would have different requirements depending 
on the proportion of the source waterbody that is withdrawn. If the 
intake flow is 5 percent or less of the source water annual mean flow, 
then the facility would be required to reduce fish and shellfish 
impingement mortality by 80 to 95 percent. If the intake flow is 5 
percent or more of the source water annual mean flow, then the facility 
would be required to reduce fish and shellfish impingement mortality by 
80 to 95 percent and reduce entrainment by 60 to 90 percent. As 
described in the new facility proposed rule (65 FR 49060) and NODA (66 
FR 28853), EPA believes that, absent entrainment control technologies 
entrainment, at a particular site is proportional to intake flow at 
that site. As we discuss above, EPA believes it is reasonable to vary 
the suite of technologies by the potential for adverse environmental 
impact in a waterbody type. EPA is therefore proposing to limit the 
requirement for entrainment control in fresh waters to those facilities 
that withdraw the largest proportion of water from freshwater rivers or 
streams.
    Facilities with cooling water intake structures located in a lake 
or reservoir would have to implement impingement control technology to 
reduce impingement mortality by 80 to 95 percent for fish and 
shellfish, and, if they expand their design intake capacity, the 
increase in intake flow must not disrupt the natural thermal 
stratification or turnover pattern of the source water. Cooling water 
intake structures withdrawing from the Great Lakes would be required to 
reduce fish and shellfish impingement mortality by 80 to 95 percent and 
to reduce entrainment by 60 to 90 percent. As described in the new 
facility proposed rule (65 FR 49060) and NODA (66 FR 28853), EPA 
believes that the Great Lakes are a unique system that should be 
protected to a greater extent than other lakes and reservoirs. The 
Agency is therefore proposing to specify entrainment controls as well 
as impingement controls for the Great Lakes.
    Facilities with cooling water intake structures located in a tidal 
river or estuary would need to implement impingement control technology 
to reduce impingement mortality by 80 to 95 percent and entrainment by 
60 to 90 percent for fish and shellfish. As discussed above, estuaries 
and tidal rivers are more susceptible than other water bodies to 
adverse impacts from impingement and entrainment.
    Facilities with cooling water intake structures located in an ocean 
would have to implement impingement control technology to reduce 
impingement mortality by 80 to 95 percent and entrainment by 60 to 90 
percent for fish and shellfish. EPA is establishing requirements for 
facilities withdrawing from oceans that are similar to those proposed 
for tidal rivers and estuaries because the coastal zone of oceans 
(where cooling water intakes withdraw) are highly productive areas. 
(See the new facility proposed rule (65 FR 45060) and documents in the 
record (Docket # W-00-03) such as 2-013A through O, 2-019A-R11, 2-019A-
R12, 2-019A-R33, 2-019A-R44, 2-020A, 3-0059.) EPA is also concerned 
about the extent to which fishery stocks that rely upon tidal rivers, 
estuaries and oceans for habitat are overutilized and seeks to minimize 
the impact that cooling water intake structures may have on these 
species or forage species on which these fishery stocks may depend. 
(See documents 2-019A-R11, 2-019A-R12, 2-019A-R33, 2-019A-R44, 2-020A, 
2-024A through O, and 3-0059 through 3-0063 in the record of the Final 
New Facility Rule (66 FR 65256), Docket # W-00-03).
    EPA is proposing a range of impingement mortality and entrainment 
reduction in its requirements for facilities that are required to 
select and implement design and construction technologies or 
operational or restoration measures to minimize potential impact from 
their cooling water intake structures. The calculation baseline against 
which compliance with the performance standards should be assessed is a 
shoreline intake with the capacity to support once-through cooling and 
no impingement mortality or entrainment controls. In many cases 
existing technologies at the site achieve some reduction in impingement 
and entrainment when compared to this baseline. In such cases, 
impingement mortality and entrainment reductions (relative to the 
calculated baseline) achieved by these existing technologies should be 
counted toward compliance with the performance standards.
    EPA is proposing performance ranges rather than a single 
performance benchmark because of the uncertainty inherent in predicting 
the efficacy of a technology on a site-specific basis. The lower end of 
the range is being proposed as the percent reduction that EPA, based on 
the available efficacy data, has determined that all facilities could 
achieve if they were to implement available technologies and 
operational measures on which the performance standards are based. (See 
Chapter 5, ``Efficacy of Cooling Water Intake Structure Technologies,'' 
of the Technical Development Document for the Final Rule for New 
Facilities, EPA-821-R-01-036, November 2001). The baseline for 
assessing performance is a Phase II existing facility with a shoreline 
intake with the capacity to support once-through cooling and no 
impingement or entrainment controls. The lower end of the range would 
take into account sites where there may be more fragile species that 
may not have a high survival rate after coming in contact with fish 
protection technologies at the cooling water intake structure (i.e., 
fine mesh screens). The higher end of the range is being proposed as a 
percent reduction that

[[Page 17142]]

available data show many facilities can and have achieved with the 
available technologies on which the performance standards are based. 
Some facilities may be able to exceed the high end of the performance 
range, though they would not be required to do so by today's proposed 
rule. In specifying a range, EPA anticipates that facilities will 
select technologies or operational measures to achieve the greatest 
cost-effective reduction possible (within today's proposed performance 
range) based on conditions found at their site, and that Directors will 
review the facility's application to ensure that appropriate 
alternatives were considered. EPA also expects that some facilities may 
be able to meet these performance requirements by selecting and 
implementing a suite (i.e., more than one) of technologies and 
operational measures and/or, as discussed below, by undertaking 
restoration measures. EPA invites comment on whether the Agency should 
establish regulatory requirements to ensure that facilities achieve the 
greatest possible reduction (within the proposed ranges) that can be 
achieved at their site using the technologies on which the performance 
standards are based. EPA also invites comment on whether EPA should 
leave decisions about appropriate performance levels for a facility to 
the Director, provided that the facility will achieve performance that 
is no lower than the bottom of the performance ranges in today's 
proposal.
    EPA based the presumptive performance standards specified at 
125.94(b), (c), and (d) for impingement mortality reduction, compared 
with conventional once-through systems, on the following technologies: 
(1) Design and construction technologies such as fine and wide-mesh 
wedgewire screens, as well as aquatic filter barrier systems, that can 
reduce mortality from impingement by up to 99 percent or greater 
compared with conventional once-through systems; (2) barrier nets that 
may achieve reductions of 80 to 90 percent; and (3) modified screens 
and fish return systems, fish diversion systems, and fine mesh 
traveling screens and fish return systems that have achieved reductions 
in impingement mortality ranging from 60 to 90 percent as compared to 
conventional once-through systems. (See Chapter 5 of the Technical 
Development Document for the Final Rule for New Facilities.)
    Less full-scale performance data are available for entrainment 
reduction. Aquatic filter barrier systems, fine mesh wedgewire screens, 
and fine mesh traveling screens with fish return systems achieve 80 to 
90 percent greater reduction in entrainment compared with conventional 
once-through systems. EPA notes that screening to prevent organism 
entrainment may cause impingement of those organisms instead. Questions 
regarding impingement survival of relatively delicate fish, larvae, and 
eggs would need to be considered by the Director and the facility in 
evaluating the efficacy of the technology. In addition, all of these 
screening-and-return technologies would need to be evaluated on a case-
by-case basis to determine if they are capable of screening and 
protecting the specific species of fish, larvae and eggs that are of 
concern at a particular facility.
    Several additional factors suggest that the performance levels 
discussed above and described in more detail in Chapter 5 of the 
Technical Development Document for the Final New Facility Rule can be 
improved. First, some of the performance data reviewed is from the 
1970's and 1980's and does not reflect recent developments and 
innovations (e.g., aquatic filter barrier systems, sound barriers). 
Second, these conventional barrier and return system technologies have 
not been optimized on a widespread level to date, as would be 
encouraged by this rule. Third, EPA believes that many facilities could 
achieve further reductions (estimated at 15-30 percent) in impingement 
mortality and entrainment by providing for seasonal flow restrictions, 
variable speed pumps, and other operational measures and innovative 
flow reduction alternatives. For additional discussion, see section 
5.5.11 in the Technical Development Document for the new facility rule.
    EPA notes that available data described in Chapter 5 of the 
Technical Development Document for the Final Rule for New Facilities 
suggest that closed-cycle, recirculating cooling systems (e.g., cooling 
towers or ponds) can reduce mortality from impingement by up to 98 
percent and entrainment by up to 98 percent when compared with 
conventional once-through systems. Therefore, although closed-cycle, 
recirculating cooling is not one of the technologies on which the 
presumptive standards are base, use of a closed-cycle, recirculating 
cooling system would achieve the presumptive standards. The proposed 
rule, at Sec. 124.94(b)(1) would thus establish the use of a closed-
cycle, recirculating cooling system as one method for meeting the 
presumptive standards.
    Based on an analysis of data collected through the detailed 
industry questionnaire and the short technical questionnaire, EPA 
believes that today's proposed rule would apply to 539 existing steam 
electric power generating facilities. Of these, 53 facilities that 
operate at less than 15 percent capacity utilization would potentially 
require only impingement controls, with 34 of these estimated to 
actually require such controls. (The remaining 19 facilities have 
existing impingement controls). Of the remaining 486 facilities, the 
proposed rule would not require any changes at approximately 69 large 
existing facilities with recirculating wet cooling systems (e.g., wet 
cooling towers or ponds).
    Of the remaining 417 steam electric power generating facilities 
(i.e., those that exceed 15 percent capacity utilization and have non-
recirculating systems), EPA estimates that 94 are located on freshwater 
lakes or reservoirs, 13 are located on the Great Lakes, 109 are located 
on oceans, estuaries, or tidal rivers, and 201 are located on 
freshwater rivers or streams.
    Of the 94 Phase II existing facilities located on freshwater lakes 
or reservoirs, EPA estimates that 67 of these facilities would have to 
install impingement controls and that 27 facilities already have 
impingement controls that meet the proposed rule requirements. As for 
existing steam electric power generating facilities located on the 
Great Lakes, EPA estimates that the proposed rule would require all 13 
such facilities to install impingement and entrainment controls.
    Of the 109 facilities located on estuaries, tidal rivers, or 
oceans, EPA estimates that 15 facilities would already meet today's 
proposed impingement and entrainment controls. The remaining 94 
facilities would need to install additional technologies to reduce 
impingement, entrainment, or both.
    For Phase II existing facilities located on freshwater river or 
streams, the proposed rule would establish an intake flow threshold of 
five (5) percent of the mean annual flow. Facilities withdrawing more 
than this threshold would have to meet performance standards for 
reducing both impingement mortality and entrainment. Facilities 
withdrawing less than the threshold would only have to meet performance 
standards for reducing impingement mortality. EPA estimates that of 201 
facilities located on freshwater river or streams, 94 are at or below 
the flow threshold, and that only 53 of these facilities would have to 
install additional impingement controls (the remaining facilities have 
controls in place to meet the proposed rule requirements). EPA 
estimates that 107 facilities exceed the flow threshold. Twenty one 
(21) of these facilities have

[[Page 17143]]

sufficient controls in place; 86 would require entrainment or 
impingement and entrainment controls.
b. How Could a Phase II Existing Facility Use Existing Design and 
Construction Technologies, Operational Measures, and/or Restoration 
Measures To Establish Best Technology Available for Minimizing Adverse 
Environmental Impact?
    Under the first option for determination of best technology 
available, as specified in proposed Sec. 125.94(a)(1), an owner or 
operator of a Phase II existing facility may demonstrate to the permit-
issuing Director that it already employs design and construction 
technologies, operational measures, or restoration measures that meet 
the performance requirements proposed today. To do this the owner or 
operator would calculate impingement mortality and entrainment 
reductions of existing technologies and measures relative to the 
calculation baseline and compare these reductions to those specified in 
the applicable performance standards. EPA expects that owners and 
operators of some facilities may be able to demonstrate compliance 
through a suite of (i.e., multiple) existing technologies, operational 
measures, and/or restoration measures.
    To adequately demonstrate the efficacy of existing technologies, 
operational measures, and/or restoration measures, a facility owner or 
operator must conduct and submit for the Director's review a 
Comprehensive Demonstration Study as specified in proposed 
Sec. 125.95(b) and described in section VII of today's preamble. In 
this Study, the owner or operator would characterize the impingement 
mortality and entrainment due to the cooling water intake structure, 
describe the nature and operation of the intake structure, and describe 
the nature and performance levels of the existing technologies, 
operational measures, and restoration measures for mitigating 
impingement and entrainment impacts. Owners and operators may use 
existing data for the Study as long as it adequately reflects current 
conditions at the facility and in the waterbody from which the facility 
withdraws cooling water.
c. How Could a Phase II Existing Facility Use Newly Selected Design and 
Construction Technologies, Operational Measures, and/or Restoration 
Measures To Establish Best Technology Available for Minimizing Adverse 
Environmental Impact?
    Under the second option for determination of best technology 
available specified in proposed Sec. 125.94(a)(2), an owner or operator 
of a Phase II existing facility that does not already employ sufficient 
design and construction technologies, operational measures, or 
restoration measures to meet the proposed performance standards must 
select additional technologies and operational or restoration measures. 
The owner or operator must demonstrate to the permit-issuing Director 
that these additions will, in conjunction with any existing 
technologies and measures at the site, meet today's proposed 
performance standards. EPA expects that some facilities may be able to 
meet their performance requirements by selecting and implementing a 
suite (i.e., more than one) of technologies, operational, or 
restoration measures.
    To adequately demonstrate the efficacy of the selected 
technologies, operational measures, and/or restoration measures, a 
facility must conduct and submit for the Director's review a 
Comprehensive Demonstration Study as specified in proposed 
Sec. 125.95(b) and described in section VII of today's preamble. In 
this Study, the owner or operator would characterize the impingement 
mortality and entrainment due to the cooling water intake structure, 
describe the nature and operation of the intake structure, and describe 
the nature and performance levels of both the existing and proposed 
technologies, operational measures, and restoration measures for 
mitigating impingement and entrainment impacts. Owners and operators 
may use existing data for the Study as long as it adequately reflects 
current conditions at the facility and in the waterbody from which the 
facility withdraws cooling water.
    If compliance monitoring determines that the design and 
construction, operating measures, or restoration measures prescribed by 
the permit have been properly installed and were properly operated and 
maintained, but were not achieving compliance with the applicable 
performance standards, the Director could modify permit requirements 
consistent with existing NPDES program regulations (e.g., 40 CFR 
122.62, 122.63, and 122.41) and the provisions of this proposal. In the 
meantime, the facility would be considered in compliance with its 
permit as long as it was satisfying all permit conditions. EPA solicits 
comment on whether the proposed regulation should specify that proper 
design, installation, operation and maintenance would satisfy the terms 
of the permit until the permit is reissued pursuant to a revised Design 
and Construction Technology Plan. If EPA were to adopt this approach, 
EPA would specify in the regulations that the Director should require 
as a permit condition the proper design, installation, operation and 
maintenance of design and construction technologies and operational 
measures rather than compliance with performance standards.
d. How Could a Phase II Existing Facility Qualify for a Site-Specific 
Determination of Best Technology Available for Minimizing Adverse 
Environmental Impact?
    Under the third option for determination of best technology 
available, specified in proposed Sec. 125.94(a)(3), the owner or 
operator of a Phase II existing facility may demonstrate to the 
Director that a site-specific determination of best technology 
available is appropriate for the cooling water intake structure(s) at 
that facility if the owner or operator can meet one of the two cost 
tests specified in proposed Sec. 125.94(c)(1). To be eligible to pursue 
this approach, the facility must first demonstrate to the Director 
either: (1) that its costs of compliance with the applicable 
performance standards specified in Sec. 125.94(b) would be 
significantly greater than the costs considered by the Administrator in 
establishing such performance standards; or (2) that the facility's 
costs would be significantly greater than the benefits of complying 
with the performance standards at the facility's site. A discussion of 
applying the cost test is provided in section VI.A.12 of this proposed 
rule. A discussion of applying the test in which costs are compared to 
benefits is provided in Section VI.A.8.
    To adequately demonstrate the efficacy of the selected 
technologies, operational measures, and/or restoration measures 
considered in the site-specific cost tests, a facility must conduct and 
submit for the Director's review a Comprehensive Demonstration Study as 
specified in proposed Sec. 125.95(b) and described in section VII of 
today's preamble. In this Study, the owner or operator would 
characterize the impingement mortality and entrainment due to the 
cooling water intake

[[Page 17144]]

structure, describe the nature and operation of the intake structure, 
and describe the nature and performance levels of the existing 
technologies, operational measures, and restoration measures for 
mitigating impingement and entrainment impacts. Owners or operators 
would also need to document the costs to the facility of any additional 
technologies or measures that would be needed to meet the performance 
standards and in the case of the site-specific cost to benefits test, 
the monetized benefits of meeting the standards. Owners and operators 
may use existing data for the Study as long as it adequately reflects 
current conditions at the facility and in the waterbody from which the 
facility withdraws cooling water.
    Where a Phase II existing facility demonstrates that it meets 
either of the cost tests, the Director is to make a site-specific 
determination of best technology available for minimizing adverse 
environmental impact. This determination would be based on less costly 
design and construction technologies, operational measures, and/or 
restoration measures proposed by the facility and approved by the 
Director. The Director would approve less costly technologies to the 
extent justified by the significantly greater cost.
    Phase II Existing facilities that pursue this option would have to 
assess the nature and degree of adverse environmental impact associated 
with their cooling water intake structures, and then identify the best 
technology available to minimize such impact. Owners and operators 
would be required to submit to the Director for approval a Site-
Specific Technology Plan. This plan would be based on a Comprehensive 
Cost Evaluation Study and a Valuation of Monetized Benefits of Reducing 
Impingement and Entrainment, as required by proposed 
Sec. 125.95(b)(6)(i) and (ii). (See section VII). The Plan would 
describe the design and operation of all design and construction 
technologies, operational measures, and restoration measures selected, 
and provide information that demonstrates the effectiveness of the 
selected technologies or measures for reducing the impacts on the 
species of concern.
    To document that its site-specific costs would be significantly 
greater than those EPA considered, the facility would need to develop 
engineering cost estimates as part of its Comprehensive Cost Evaluation 
Study. The facility would then consider the model plants presented in 
EPA's Technical Development Document, determine which model plant most 
closely matches its fuel source, mode of electricity generation, 
existing intake technologies, waterbody type, geographic location, and 
intake flow and compare its engineering estimates to EPA's estimated 
cost for this model plant .
2. What Available Technologies Are Proposed as Best Technology 
Available for Minimizing Adverse Environmental Impact?
    Currently, 14 percent of Phase II existing facilities potentially 
subject to this proposal already have a closed-cycle recirculating 
cooling water system (69 facilities operating at 15 percent capacity 
utilization or more and 4 facilities operating at less than 15 percent 
capacity utilization). In addition, 50 percent of the remaining 
potentially regulated facilities have some other technology in place 
that reduces impingement or entrainment. Thirty-three percent of these 
facilities have fish handling or return systems that reduce the 
mortality of impinged organisms.
    EPA finds that the design and construction technologies necessary 
to meet the proposed requirements are commercially available and 
economically practicable, because facilities can and have installed 
many of these technologies years after a facility began operation. 
Typically, additional design and construction technologies such as fine 
mesh screens, wedgewire screens, fish handling and return systems, and 
aquatic fabric barrier systems can be installed during a scheduled 
outage (operational shutdown). Referenced below are examples of 
facilities that installed these technologies after they initially 
started operating.
    Lovett Generating Station. A 495 MW facility (nameplate, gas-fired 
steam), Lovett is located in Tomkins Cove, New York, along the Hudson 
River. The facility first began operations in 1949 and has 3 generating 
units with once-through cooling systems. In 1994, Lovett began the 
testing of an aquatic filter fabric barrier system to reduce 
entrainment, with a permanent system being installed the following 
year. Improvements and additions were made to the system in 1997, 1998, 
and 1999, with some adjustments being accepted as universal 
improvements for all subsequent installations of this vendor's 
technology at other locations.
    Big Bend Power Station. Situated on Tampa Bay, Big Bend is a 1998 
MW (nameplate, coal-fired steam) facility with 4 generating units. The 
facility first began operations in 1970 and added generating units in 
1973, 1976, and 1985. Big Bend supplies cooling water to its once-
through cooling water systems via two intake structures. When the 
facility added Unit 4 in 1985, regulators required the facility to 
install additional intake technologies. A fish handling and return 
system, as well as a fine-mesh traveling screen (used only during 
months with potentially high entrainment rates), were installed on the 
intake structure serving both the new Unit 4 and the existing Unit 3.
    Salem Generating Station. A 2381 MW facility (nameplate, nuclear), 
Salem is located on the Delaware River in Lower Alloways Creek 
Township, New Jersey. The facility has two generating units, both of 
which use once-through cooling and began operations in 1977. In 1995, 
the facility installed modified Ristroph screens and a low-pressure 
spray wash with a fish return system. The facility also redesigned the 
fish return troughs to reduce fish trauma.
    Chalk Point Generating Station. Located on the Patuxent River in 
Price George's County, Maryland, Chalk Point has a nameplate capacity 
of 2647 MW (oil-fired steam). The facility has 4 generating units and 
uses a combination of once-through and closed cycle cooling (two once-
through systems serving two generating units and one recirculating 
system with a tower serving the other two generating units). In 1983, 
the facility installed a barrier net, followed by a second set of 
netting in 1985, giving the facility a coarse mesh (1.25") outer net 
and a fine mesh (.75") inner net. The barrier nets are anchored to a 
series of pilings at the mouth of the intake canal that supplies the 
cooling water to the facility and serve to reduce both entrainment and 
the volume of trash taken in at the facility.
    EPA believes that the technologies used as the basis for today's 
proposal are commercially available and economically practicable (see 
discussion below) for the industries affected as a whole, and have 
negligible non-water quality environmental impacts, including energy 
impacts. The proposed option would meet the requirement of section 
316(b) of the CWA that the location, design, construction, and capacity 
of cooling water intake structures reflect the best technology 
available for minimizing adverse environmental impact.
3. Economic Practicability
    EPA believes that the requirements of this proposal are 
economically practicable. EPA examined the annualized post-tax 
compliance costs of the proposed rule as a percentage of annual 
revenues to determine whether

[[Page 17145]]

the options are economically practicable. This analysis was conducted 
both at the facility and firm levels.
a. Facility Level
    EPA examined the annualized post-tax compliance costs of the 
proposed rule as a percentage of annual revenues, for each of the 550 
facilities subject to this proposed rule. \52\ The revenue estimates 
are facility-specific baseline projections from the Integrated Planning 
Model (IPM) for 2008 (see Section VIII. Economic Analysis of this 
document for a discussion of EPA's analyses using the IPM). The results 
of this analysis show that the vast majority of facilities subject to 
the proposed rule, 409 out of 550, or approximately 74 percent, would 
incur annualized costs of less than 1 percent of revenues. Of these, 
331 facilities would incur compliance costs of less than 0.5 percent of 
revenues. Eighty-two facilities, or 15 percent, would incur costs of 
between 1 and 3 percent of revenues, and 46 facilities, or 8 percent, 
would incur costs of greater than 3 percent. Eleven facilities are 
estimated to be baseline closures, and for one facility, revenues are 
unknown. \53\ Exhibit 2 below summarizes these findings.
---------------------------------------------------------------------------

    \52\ EPA's 2000 Section 316(b) Industry Survey identified 539 
facilities that are subject to this proposed rule. EPA applied 
sample weights to the 539 facilities to account for non-sampled 
facilities and facilities that did not respond to the survey. The 
539 analyzed facilities represent 550 facilities in the industry.
    \53\ IPM revenues for 2008 were not available for 11 facilities 
estimated to be baseline closures, 10 facilities not modeled by the 
IPM, and 9 facilities projected to have zero baseline revenues. EPA 
used facility-specific electricity generation and firm-specific 
wholesale prices as reported to the Energy Information 
Administration (EIA) to calculate the cost-to-revenue ratio for the 
19 non-baseline closure facilities with missing information. The 
revenues for one of these facilities remained unknown.

               Exhibit 2.--Proposed Rule (Facility Level)
------------------------------------------------------------------------
                                                                Percent
         Annualized cost-to-revenue ratio              All      of total
                                                     phase II   phase II
------------------------------------------------------------------------
0.5%..............................................        331         60
0.5-1.0%..........................................         78         14
1.0-3.0%..........................................         82         15
>3.0%.............................................         46          8
Baseline Closure..................................         11          2
n/a...............................................          1          0
                                                   ---------------------
  Total...........................................        550        100
------------------------------------------------------------------------

b. Firm Level
    Facility-leval compliance costs are low compared to facility-level 
revenues. However, the firms owning the facilities subject to the 
proposed rule may experience greater impacts if they own more than one 
facility with compliance costs. EPA therefore also analyzed the 
economic practicability of this proposed rule at the firm level. EPA 
identified the domestic parent entity of each in-scope facility and 
obtained their sales revenue from publicly available data sources (the 
1999 Forms EIA-860A, EIA-860B, and EIA-861; and the Dun and Bradstreet 
database) as well as EPA's 2000 Section 316(b) Industry Survey. This 
analysis showed that 131 unique domestic parent entities own the 
facilities subject to this proposed rule. EPA compared the aggregated 
annualized post-tax compliance costs for each facility owned by the 131 
parent entities to the firms' total sales revenue. Based on the results 
from this analysis, EPA concludes that the proposed rule will be 
economically practicable at the firm level.
    EPA estimates that the compliance costs will comprise a very low 
percentage of firm-level revenues. Of the 131 unique entities, 3 would 
incur compliance costs of greater than 3 percent of revenues; 10 
entities would incur compliance costs of between 1 and 3 percent of 
revenues; 12 entities would incur compliance costs of between 0.5 and 1 
percent of revenues; and the remaining 104 entities would incur 
compliance costs of less than 0.5 percent of revenues.\54\ The 
estimated annualized compliance costs represent between 0.002 and 5.3 
percent of the entities' annual sales revenue. Exhibit 3 below 
summarizes these findings.
---------------------------------------------------------------------------

    \54\ Two entities only own Phase II facilities that are 
projected to be baseline closures. EPA estimated that for both 
entities, the compliance costs incurred would have been less than 
0.5 percent of revenues.

               Exhibit 3.--Proposed Rule (Facility Level)
------------------------------------------------------------------------
                                                   Number of  Percentage
         Annualized cost-to-revenue ratio           phase II    of total
                                                    entities   phase II
------------------------------------------------------------------------
0.5%.............................................        104          79
0.5-1.0%.........................................         12           9
1.0%-3.0.........................................         10           8
>3.0%............................................          3           2
Baseline Closures................................          2           2
                                                  ----------------------
  Total..........................................        131         100
------------------------------------------------------------------------

c. Additional Impacts
    As described in Sections VIII and X.J below, EPA also considered 
the potential effects of the proposed rule on installed electric 
generation capacity, electrical production, production costs, and 
electricity prices. EPA determined that the proposed rule would not 
lead to the early retirement of any existing generating capacity, and 
would have very small or no energy effects. After considering all of 
these factors, EPA concludes that the costs of the proposed rule are 
economically practicable.
d. Benefits
    As described in Section IX., EPA estimates the annualized benefits 
of the proposed rule would be $70.3 million for impingement reductions 
and $632.4 million for reduced entrainment. For a more detailed 
discussion, also see the Economic and Benefits Analysis for the 
Proposed Section 316(b) Phase II Existing Facilities Rule.
4. Site-Specific Determination of Best Technology Available
    Under today's proposed rule, the owner or operator of an Phase II 
existing facility may demonstrate to the Director that a site-specific 
determination of best technology available is appropriate for the 
cooling water intake structures at that facility if the owner or 
operator can meet one of the two cost tests specified under 
Sec. 125.94(c)(1). To be eligible to pursue this approach, the facility 
must first demonstrate to the Director either (1) that its costs of 
compliance with the applicable performance standards specified in 
Sec. 125.94(b) would be significantly greater than the costs considered 
by the Administrator in establishing such performance standards, or (2) 
that its costs of complying with such standards would be significantly 
greater than the environmental benefits at the site.
    The proposed factors that may justify a site-specific determination 
of the best technology available requirements for Phase II existing 
facilities differ in two major ways from those in EPA's recently 
promulgated rule for new facilities. First, the new facility rule 
required costs to be ``wholly disproportionate'' to the costs EPA 
considered when establishing the requirement at issue rather than 
``significantly greater'' as proposed today. EPA's record for the Phase 
I rule shows that those facilities could technically achieve and 
economically afford the requirements of the Phase I rule. New 
facilities have greater flexibility than existing facilities in 
selecting the location of their intakes and technologies for minimizing 
adverse environmental impact so as to avoid potentially high costs. 
Therefore, EPA believes it appropriate to push new facilities to a more 
stringent economic standard. Additionally, looking at the question in 
terms of its national effects on the economy, EPA notes that in 
contrast to the Phase I rule, this rule would affect facilities 
responsible for a

[[Page 17146]]

significant portion (about 55 percent) of existing electric generating 
capacity, whereas the new facility rule only affects a small portion of 
electric generating capacity projected to be available in the future 
(about 5 percent). EPA believes it is appropriate to set a lower cost 
threshold in this rule to avoid economically impracticable impacts on 
energy prices, production costs, and energy production that could occur 
if large numbers of Phase II existing facilities incurred costs that 
are more than significantly greater than but not wholly 
disproportionate to the costs in EPA's record. EPA invites comment on 
whether a ``significantly greater'' cost test is appropriate for 
evaluating requests for alternative requirements by Phase II existing 
facilities.
    Second, today's proposal includes an opportunity for a facility to 
demonstrate significantly greater costs as compared to environmental 
benefits at a specific site. As stated above, EPA's record for the 
Phase I rule shows that new facilities could technically achieve and 
economically afford the requirements of the Phase I rule. At the same 
time, EPA was interested in expeditious permitting for these new 
facilities, due to increased energy demand, and particular energy 
issues facing large portions of the country. For this reason, EPA chose 
not to engage in a site-specific analysis of costs and benefits, 
because to do this properly would take time. Balancing the desire for 
expeditious permitting with a record that supported the achievability 
of the Phase I requirements, EPA believes it was reasonable not to 
adopt a cost benefit alternative for the Phase I rule. By contrast, 
Phase II existing facilities will be able to continue operating under 
their existing permits pending receipt of a permit implementing the 
Phase II regulations, even where their existing permit has expired 
(Permits may be administratively continued under section 558(c) of the 
Administrative Procedure Act if the facility has filed a timely 
application for a new permit). Therefore, delay in permitting, which 
could affect the ability of a new facility to begin operations while 
such a site-specific analysis is conducted, is not an issue for 
existing facilities. Also, EPA recognizes that Phase II existing 
facilities have already been subject to requirements under section 
316(b). EPA is not certain that it is necessary to overturn the work 
done in making those determinations by necessarily requiring retrofit 
of the existing system without allowing facilities and permit 
authorities to examine what the associated costs and benefits. Once 
again, because today's proposal would affect so many facilities that 
are responsible for such a significant portion of the country's 
electric generating capacity, EPA is interested in reducing costs where 
it can do so without significantly impacting aquatic communities 
(recognizing this could increase permitting work loads for the State 
and Federal permit writers).
    EPA invites comment on whether the standards proposed today might 
allow for backsliding by facilities that have technologies or 
operational measures in place that are more effective than in today's 
proposal. EPA invites comment on approaches EPA might adopt to ensure 
that backsliding from more effective technologies does not occur.
    If a facility satisfies one of the two cost tests in the proposed 
Sec. 125.94(c)(1), it must propose less costly design and construction 
technologies, operational measures, and restoration measures to the 
extent justified by the significantly greater costs. In some cases the 
significantly greater costs may justify a determination that no 
additional technologies or measures are appropriate. This would be most 
likely in cases where either (1) the monetized benefits at the site 
were very small (e.g., a facility with little impingement mortality and 
entrainment, even in the calculated baseline), or (2) the costs of 
implementing any additional technologies or measures at the site were 
unusually high.
5. What Is the Role of Restoration Under Today's Preferred Option?
    Under today's preferred option, restoration measures can be 
implemented by a facility in lieu of or in combination with reductions 
in impingement mortality and entrainment. Thus, should a facility 
choose to employ restoration measures rather than reduce impingement 
mortality or entrainment, the facility could demonstrate to the 
Director that the restoration efforts will maintain the fish and 
shellfish in the waterbody, including the community structure and 
function, at a level comparable to that which would be achieved through 
Sec. 125.94 (b) and (c). In those cases where it is not possible to 
quantify restoration measures, the facility may demonstrate that such 
restoration measures will maintain fish and shellfish in the waterbody 
at a level substantially similar to that which would be achieved under 
Sec. 125.94 (b) and (c).
    Similarly, should a facility choose to implement restoration 
measures in conjunction with reducing impingement mortality and 
entrainment through use of design and construction technologies or 
operational measures, the facility would demonstrate to the Director 
that the control technologies combined with restoration efforts will 
maintain the fish and shellfish, including the community structure and 
function, in the waterbody at a comparable or substantially similar 
level to that which would be achieved through Sec. 125.94 (b) and (c). 
EPA invites comment on all aspects of this approach. EPA specifically 
invites comment on whether restoration measures should be allowed only 
as a supplement to technologies or operational measures. EPA also seeks 
comment on the most appropriate spatial scale under which restoration 
efforts should be allowed ``should restoration measures be limited to 
the waterbody at which a facility's intakes are sited, or should they 
be implemented on a broader scale, such as at the watershed or State 
boundary level.
    Under today's preferred option, any restoration demonstration must 
address species of concern identified by the permit director in 
consultation with Federal, State, and Tribal fish and wildlife 
management agencies that have responsibility for aquatic species 
potentially affected by a facility's cooling water intake structure(s). 
EPA invites comment on the nature and extent of consultations with 
Federal, State, and Tribal fish and wildlife management agencies that 
would be appropriate in order to achieve the objectives of section 
316(b) of the CWA. In general, EPA believes that consultations should 
seek to identify the current status of species of concern located 
within the subject waterbody and provide general life history 
information for those species, including preferred habitats for all 
life stages. Consultations also should include discussion of potential 
threats to species of concern found within the waterbody other than 
cooling water intake structures (i.e., identify all additional 
stressors for the species of concern), appropriate restoration methods, 
and monitoring requirements to assess the overall effectiveness of 
proposed restoration projects. EPA believes that it is important that 
the consultation occur because natural resource management agencies 
typically have the most accurate information available and thus are the 
most knowledgeable about the status of the aquatic resources they 
manage. EPA seeks comment on the type of information that would be 
appropriate to include in a written request for consultation submitted 
to the State, Tribal, and Federal agencies

[[Page 17147]]

responsible for management of aquatic resources within the waterbody at 
which the cooling water intake is sited. A copy of the request and any 
agency responses would be included in the permit application.
    Under the preferred option, an applicant who wishes to include 
restoration measures as part of its demonstration of comparable 
performance would submit the following information to the Director for 
review and approval:
     A list and narrative description of the proposed 
restoration measures;
     A summary of the combined benefits resulting from 
implementation of technology and operational controls and/or 
restoration measures and the proportion of the benefits that can be 
attributed to these;
     A plan for implementing and maintaining the efficacy of 
selected restoration measures and supporting documentation that shows 
that restoration measures or restoration measures in combination with 
control technologies and operational measures will maintain the fish 
and shellfish, including community structure, at substantially similar 
levels to those specified at Sec. 125.94 (b) and (c);
     A summary of any past or voluntary consultation with 
appropriate Federal, State, and Tribal fish and wildlife management 
agencies related to proposed restoration measures and a copy of any 
written comments received as a result of consultations; and
     Design and engineering calculations, drawings, and maps 
documenting that proposed restoration measures will meet the 
performance standard at Sec. 125.94 (d).
    EPA believes this information is necessary and sufficient for the 
proper evaluation of a restoration plan designed to achieve comparable 
performance for species of concern identified by the Director in 
consultation with fish and wildlife management agencies. EPA invites 
comment on whether this information is appropriate and adequate or if 
it should be augmented or streamlined. EPA invites comment on what 
specific, additional information should be included in a facility's 
restoration plan and/or which of the proposed information requirements 
are unnecessary.
    For restoration measures such as fish restocking programs, EPA 
expects that applicants will be able to quantitatively demonstrate 
increases in fish and shellfish that are comparable to the performance 
that would be achieved by meeting the performance standards for 
reducing impingement and entrainment. However, as it did in the 
preamble to the final new facility rule, EPA recognizes that, due to 
data and modeling limitations as well as the uncertainty associated 
with restoration measures such as creation of new habitats to serve as 
spawning or nursery areas, it may be difficult to establish 
quantitatively that some restoration measures adequately compensate for 
entrainment and impingement losses from cooling water withdrawals. The 
success of many approaches to restoration depends on the functions, 
behavior, and dynamics of complex biological systems that are often not 
scientifically understood as well as engineered technologies.
    There are, however, several steps that can be taken to increase the 
certainty of attainment of performance levels by restoration measures. 
Most of these steps require detailed planning prior to initiation of 
restoration efforts. Under today's preferred option, restoration 
planners would take care to incorporate allowances in their plans for 
the uncertainties stemming from incomplete knowledge of the dynamics 
underlying aquatic organism survival and habitat creation. Plans would 
include provisions for monitoring and evaluating the performance of 
restoration measures over the lifetime of the measures. Provisions 
would also be made for mid-course corrections as necessary. Unexpected 
natural forces can alter the direction of a restoration project.\55\ If 
uncertainty regarding levels of performance is high enough, restoration 
planners would consider restoration measures in addition to those 
otherwise calculated as sufficient in order to ensure adequate levels 
of performance. EPA invites comment on how to measure ``substantially 
similar performance'' of restoration measures and methods that can be 
used to reduce the uncertainty of restoration activities undertaken as 
part of today's preferred option.
---------------------------------------------------------------------------

    \55\ For a discussion of the extensive range of experience with 
wetland restoration efforts, see Wetlands, Third Edition, William J. 
Mitsch and James G. Gosselink, pp. 653-686.
---------------------------------------------------------------------------

    EPA recognizes that substantial information exists regarding 
wetlands mitigation and restoration. For example, tools and procedures 
exist to assess wetlands in the context of section 404 of the Clean 
Water Act.\56\ However, restoration of other aquatic systems such as 
estuaries is complex and continues to evolve. EPA seeks comment on how 
it may measure the success or failure of restoration activities given 
the high degree of uncertainty associated with many areas of this 
developing science and that many of these activities do not produce 
measurable results for many months or years after they are implemented. 
For these reasons, EPA requests comment on whether to require that a 
facility using restoration measures restore more fish and shellfish 
than the number subjected to impingement mortality or entrainment. EPA 
believes that restoring or mitigating above the level that reflects 
best technology available for minimizing adverse environmental impact 
(e.g., restocking higher numbers of fish than those impinged or 
entrained by facility intakes or restoring aquatic system acreages at 
ratios greater than one-to-one) would help build a margin of safety, 
particularly when the uncertainties associated with a particular 
restoration activity are known to be high.
---------------------------------------------------------------------------

    \56\ For a general discussion on different assessment procedures 
see The Process of Selecting a Wetland Assessment Procedure: Steps 
and Considerations, by Candy C. Bartoldus, Wetland Journal, Vol. 12, 
No. 4, Fall 2000.
---------------------------------------------------------------------------

    The concept of compensatory mitigation ratios being greater than 
one-to-one is found in other programs. For example, under the CWA 
section 404 program no set mitigation ratio exists, however, current 
policies require no net loss of aquatic resources on a programmatic 
basis. The permitting authority often requires permit applicants to 
provide more than one-to-one mitigation on an acreage basis to address 
the time lapse between when the permitted destruction of wetlands takes 
place and when the newly restored or created wetlands are in place and 
ecologically functioning. The permit may also require more than one-to-
one replacement to reflect the fact that mitigation is often only 
partially successful. Alternatively, in circumstances where there is a 
high confidence that the mitigation will be ecologically successful, 
the restoration/creation has already been completed prior to permitted 
impacts, or when the replacement wetlands will be of greater ecological 
value than those they are replacing, the permitting authority may 
require less than one-to-one replacement.
    In the case of section 316(b), restocking numbers and restoration 
ratios could be established either by the Director on a permit-by-
permit basis or by EPA in the final rule. EPA requests comment on 
establishing margins of safety for restoration measures (particularly 
for activities associated with outcomes having a high degree of 
uncertainty) and identifying the appropriate authority for establishing 
safety measures. EPA also seeks comment on an appropriate basis for

[[Page 17148]]

establishing safety margins (e.g., based exclusively on project 
uncertainty, relative functional value or rareness of the system being 
restored, or a combination of these) to ensure that restoration 
measures achieve performance comparable to intake technologies.
    EPA also recognizes that restoration measures may in some cases 
provide additional environmental benefits that design and construction 
technologies and operational measures focused solely on reducing 
impingement and entrainment would not provide. For example, fish 
restocking facilities may be able to respond, on relatively short 
notice, to species-specific needs or threats, as identified by fish and 
wildlife management agencies. Habitat restoration measures may provide 
important benefits beyond direct effects on fish and shellfish numbers, 
such as flood control, habitat for other wildlife species, pollution 
reduction, and recreation. EPA requests comment on whether and how 
additional environmental benefits should also be considered in 
determining appropriate fish and shellfish rates for restoration 
projects.
    Assessing the full range of requirements necessary for the survival 
of aquatic organisms requires understanding and use of knowledge from 
multiple scientific disciplines (aquatic biology, hydrology, landscape 
ecology) that together address the biological and physical requirements 
of particular species. Under today's preferred option, restoration 
planners would utilize the full range of disciplines available when 
designing restoration measures for a facility. Plans utilizing an 
insufficient range of knowledge are more likely to fail to account for 
all aquatic organism survival requirements.
    For some aquatic organisms, or for certain life stages of some 
aquatic organisms, there may not be sufficient knowledge of the factors 
required for that organism's survival and thus restoration planners 
would be unable to address those factors directly in a restoration 
plan. In such cases, it may be necessary for restoration planners to 
plan to create habitat that replicates as closely as possible those 
habitats in which the aquatic organisms are found to thrive naturally. 
Suitable habitat can be created or restored, or existing habitats can 
be enhanced in order to provide suitable habitat for the organisms of 
concern. In this manner, appropriate conditions can be created even 
without full understanding of an organism's requirements. Habitat 
approaches also have the benefit, when properly designed, of 
simultaneously providing suitable survival conditions for multiple 
species. In contrast, measures such as stocking and fish ladders 
provide benefits for much more limited number of species and life 
stages.
    In some cases, conservation of existing, functional habitats--
particularly conservation of habitats that are vulnerable to human 
encroachment and other anthropogenic impacts--may be desirable as part 
of a facility's restoration effort. In the case of conservation, the 
functionality of the habitat would not be compromised, therefore 
eliminating much of the uncertainty associated with measuring the 
success of other restoration efforts such as habitat enhancement or 
creation. However, because conserved habitat is already contributing to 
the relative productivity and diversity of an aquatic system, 
conservation measures would not necessarily ensure a net benefit to the 
waterbody or watershed of concern. EPA seeks comment on whether habitat 
conservation would be an appropriate component of a facility's 
restoration efforts.
    Restoration projects should not unduly compromise the health of 
already-existing aquatic organisms in order to restore aquatic 
organisms for purposes of section 316(b). Such alterations could negate 
or detract from accomplishments under a restoration plan and produce an 
insufficient net benefit. For example, fish stocking programs might 
introduce disease or weaken the genetic diversity of an ecosystem. 
Habitat creation programs should not alter well-functioning habitats to 
better support species of concern identified in the restoration plan, 
but rather should focus on restoring degraded habitats that 
historically supported the types of aquatic organisms currently 
impacted by a facility's cooling water intake.
    Another issue to consider when relying on restoration projects that 
involve habitat creation is that many such projects can take months or 
years to reach their full level of performance. The performance of 
these projects often relies heavily on establishment and growth of 
higher vegetation and of the natural communities that rely on such 
vegetation. Establishment and growth of both vegetation and natural 
communities can take months to years depending on the type of habitat 
under development. Restoration planners need to ensure that performance 
levels are met at all points in a mitigation process. Where facilities 
are depending in part on habitat creation, this may entail 
supplementing habitat creation measures with other restoration measures 
during the early stages of habitat creation in order to ensure all 
facility impacts are properly mitigated.
    Under the preferred option, restoration plans should be developed 
in sufficient detail to address the issues above before significant 
resources are committed or other actions taken that are difficult to 
reverse. EPA invites comment on the role of restoration in addressing 
the impact of cooling water intake structures. EPA invites commenters 
to suggest alternative approaches to ensuring that restoration efforts 
are successful.
6. Impingement and Entrainment Assessments
a. What Are the Minimum Elements of an Impingement Mortality and 
Entrainment Characterization Study?
    Today's proposal requires the permit applicant to conduct an 
Impingement Mortality and Entrainment Characterization Study 
Sec. 125.95(b)(3) to support many important analyses and decisions. The 
data from this Study supports development of the calculation baseline 
for evaluating reductions in impingement mortality and entrainment, 
documents current impingement mortality and entrainment, and provides 
the basis for evaluating the performance of potential technologies, 
operational measures and/or restoration measures. Should a facility 
request a site-specific determination of best technology available for 
minimizing adverse environmental impact, the Study would provide the 
critical biological data for estimating monetized benefits.
    EPA invites comment on whether the narrative criteria at 
Sec. 125.95(b)(1) are sufficiently comprehensive and specific to ensure 
that scientifically valid, representative data are used to support the 
various approaches for determining best technology available for 
minimizing adverse environmental impact in today's proposal. EPA 
recognizes the difficulties in obtaining accurate and precise samples 
of aquatic organisms potentially subject to impingement and 
entrainment. EPA also recognizes that biological activity in the 
vicinity of a cooling water intake structure can vary to great degree, 
both within and between years, seasons and intervals including time-of-
day. EPA invites comment on whether it should set specific, minimum 
monitoring frequencies and/or whether it should specify requirements 
for ensuring appropriate consideration of uncertainty in the 
impingement mortality and entrainment estimates.

[[Page 17149]]

b. What Should Be the Minimum Frequencies for Impingement and 
Entrainment Compliance Monitoring?
    Today's proposal requires compliance monitoring as specified by the 
Director in Sec. 125.96, but does not specify minimum sampling 
frequencies or durations. EPA is considering specifying minimum 
frequencies for impingement and entrainment sampling for determining 
compliance. EPA invites comment on including minimum sampling 
frequencies and durations as follows: for at least two years following 
the initial permit issuance, impingement samples must be collected at 
least once per month over a 24 hour period and entrainment samples must 
be collected at least biweekly over a 24 hour period during the primary 
period of reproduction, larval recruitment and peak abundance. These 
samples would need to be collected when the cooling water intake 
structure is in operation. Impingement and entrainment samples would be 
sufficient in number to give an accurate representation of the annual 
and seasonal impingement and entrainment losses for all commercial, 
recreational and forage based fish and shellfish species and their life 
stages at the Phase II existing facility as identified in the 
Impingement Mortality and Entrainment Characterization Study required 
under Sec. 125.95(b)(3). Sample sets would be of sufficient size to 
adequately address inter-annual variation of impingement and 
entrainment losses. Sampling would be planned to eliminate variation in 
data due to changes in sampling methods. Data would also be collected 
using appropriate quality assurance/quality control procedures.
    EPA invites comment on whether more frequent sampling would be 
appropriate to accurately assess diel, seasonal, and annual variation 
in impingement and entrainment losses. EPA also invites comment on 
whether less frequent compliance biological monitoring would be 
appropriate (perhaps depending on the technologies selected and 
implemented by a facility).
7. How Is Entrainment Mortality and Survival Considered in Determining 
Compliance With the Proposed Rule?
    Today's proposed rule sets a performance standard for reducing 
entrainment rather than reducing entrainment mortality. EPA choose this 
approach because EPA does not have sufficient data to establish 
performance standards based on entrainment mortality for the 
technologies used as the basis for today's proposal. Entrainment 
mortality studies can be very difficult to conduct and interpret for 
use in decisionmaking (see section VI.A.8.b.below). EPA invites comment 
on regulatory approaches that would allow Phase II existing facilities 
to incorporate estimates of entrainment mortality and survival when 
determining compliance with the applicable performance standards 
proposed in Sec. 125.94(b) of today's proposed rule. EPA invites 
commenters to submit any studies that document entrainment survival 
rates for the technologies used as the basis for today's performance 
standards and for other technologies.
8. What Should Be Included in a Demonstration To Compare Benefits to 
Costs?
    As part of a Site-Specific Determination of Best Technology 
Available specified proposed in Sec. 125.94(c) of today's proposed 
rule, a Phase II existing facility can attempt to demonstrate to the 
Director that the costs of compliance with the applicable performance 
standards proposed in Sec. 125.94(b) would be significantly greater 
than the benefits of complying with such performance standards at the 
site. EPA is considering whether it should develop regulatory 
requirements or guidance to outline appropriate methodologies to ensure 
that a reliable and objective valuation of benefits is derived from the 
best available information. The elements in the benefit assessment 
guidance would, at a minimum, include standards for data quality, 
acceptable methodologies, technical peer review, and public comment.
a. What Should Be the Appropriate Methodology for Benefits Assessment?
    EPA believes that a rigorous environmental and economic analysis 
should be performed when a facility seeks a site-specific determination 
of best technology available due to significantly greater cost as 
compared to the benefits of compliance with the applicable performance 
standards. EPA invites comment on which of these methodologies, or any 
other, is the most appropriate for determining a fair estimate of the 
benefits that would occur should the Phase II existing facility 
implement technology to comply with the applicable performance 
standards. In addition, EPA invites comment on whether narrative 
benefits assessments should supplement these methodologies to properly 
account for those benefits which cannot be quantified and monetized.
(1) Quantified and Monetized Baseline Impingement and Entrainment 
Losses
    To evaluate the total economic impact to fisheries with regard to 
impingement and entrainment losses at an existing facility, the impacts 
on commercial, recreational, and forage species must be evaluated. 
Commercial fishery impacts are relatively easy to value because 
commercially caught fish are a commodity with a market price for the 
individual species. Recreation fishery impacts are based on benefits 
transfer methods, applying the results from nonmarket valuation 
studies. Valuing recreational impacts involves the use of willingness-
to-pay values for increases in recreational catch rates. The analysis 
of the economic impact of forage species losses can be determined by 
estimating the replacement costs of these fish if they were to be 
restocked with hatchery fish, or by considering the foregone biomass 
production of forage fish resulting from impingement and entrainment 
losses and the consequential foregone production of commercial and 
recreation species that prey on the forage species. Trophic transfer 
efficiency is used to estimate the value of forage fish in terms of the 
foregone biomass production and the consequential foregone production 
of commercial and recreational species that prey upon them. This 
methodology can also incorporate nonuse or passive values. Nonuse or 
passive use values include the concepts of existence (stewardship) and 
bequest (intergenerational equity) motives to value environmental 
changes. In Regulatory Impact Analyses, EPA values nonuse impacts at 
50% of value of the recreational use impact. \57\ EPA invites comment 
on the inclusion of this approach for estimating nonuse or passive 
values. Examples of the use of this method for evaluating benefits are 
provided in the Case Study Document.
---------------------------------------------------------------------------

    \57\ Fisher, A. and R. Raucher. 1984. Intrinsic benefits of 
improved water quality: Conceptual and empirical perspectives. 
Advances in Applied Micro-Economics. 3:37-66.
---------------------------------------------------------------------------

    EPA notes that in locations where fisheries have been depleted by 
cumulative and long term impingement and entrainment losses from 
cooling water intake structures, this methodology may not be the most 
appropriate as it may have a tendency to underestimate the long term 
benefits associated with technology implementation.
(2) Random Utility Model
    The Random Utility Model (RUM) estimates the effect of improved 
fishing opportunities to determine recreational

[[Page 17150]]

fishing benefits due to reduced impingement and entrainment. The main 
assumption of this model is that anglers will get greater satisfaction, 
and thus greater economic value, from sites where the catch rate is 
higher. When anglers enjoy fishing trips with higher catch rates, they 
may take more fishing trips resulting in a greater overall value for 
fishing in the region. This method requires information on the 
socioeconomic characteristics of anglers and their fishing preference 
in terms of location and target species, information on site 
characteristics that are important determinants of anglers' behavior, 
and the estimated price of visiting the sites. Two models are used for 
estimating the total economic value of recreational fish to anglers, 
the discrete choice model which focuses on the choice of fishing site 
by individual anglers and the trip participation model which estimates 
the number of trips that an angler will take annually. A more thorough 
description of the RUM can be found in Chapter A10 of the Case Study 
Document. Examples of its use are provided in Chapter 5 of the case 
studies for Delaware Bay (Part B), Ohio River (Part C) and Tampa Bay 
(Part F).
    The greatest strength of this model is that it is able to estimate 
a theoretically defensible monetary value for recreational fishing 
benefits. The weakness in the model is its dependence on the 
availability of survey data on angler preferences, and the bias 
associated with conducting a survey. This approach is also limited to 
estimating recreational benefits only, and should be used in 
conjunction with another methodology that values commercial and forage 
species impacts and other benefit categories where these are 
significant.
(3) Contingent Valuation Approach
    Stated preference methods attempt to measure willingness-to-pay 
values directly. Unlike the revealed preference methods, such as the 
RUM described above, that determine values for environmental goods and 
services from observed behavior, stated preference methods rely on data 
from surveys that directly question respondents about their preferences 
to measure the value of environmental goods and services. Contingent 
valuation is one of the most well developed of the stated preference 
methods. Contingent valuation surveys either ask respondents if they 
would pay a specified amount for a described commodity (usually a 
change in environmental quality) or ask their highest willingness-to-
pay for that commodity. For example, in the case of section 316(b), a 
contingent valuation survey might ask how much individuals would be 
willing to have their electricity bill increase from their utility's 
power plants to avoid the impacts of impingement and entrainment on 
fish and shellfish, as well as impacts on threatened and endangered 
species. One strength of contingent valuation estimates is that they 
include the nonuse values such as option, existence, and bequest 
values, so adjustments to the estimates to cover these values are not 
needed. A weakness of this approach is that respondents are asked to 
value a hypothetical good and they do not have to back up their stated 
willingness-to-pay with actual expenditures. However, this concern can 
be minimized by placing the valuation questions in the context of 
familiar economic transactions (e.g., increases in electricity bills).
b. Should Estimates of Entrainment Mortality and Survival Be Included 
in Benefits Assessments?
    The proposed rule language for Phase II existing facilities does 
not preclude the use of estimates of entrainment mortality and survival 
when presenting a fair estimation of the monetary benefits achieved 
through the installation of the best technology available, instead of 
assuming 100 percent entrainment mortality. In EPA's view, estimates of 
entrainment mortality and survival used for this purpose should be 
based on sound scientific studies. EPA believes such studies should 
address times of both full facility capacity and peak abundance of 
entrained organisms. EPA requests comment on whether it is appropriate 
to allow consideration of entrainment mortality and survival in benefit 
estimates, and if so, should EPA set minimum data quality objectives 
and standards for a study of entrainment mortality and survival used to 
support a site-specific determination of best technology available for 
minimizing adverse environmental impact. EPA may decide to specify such 
data quality objectives and standards either in the final rule language 
or through guidance.
    A more thorough discussion of entrainment survival is provided in 
Chapter D7 of the EBA. In this chapter, EPA has reviewed a number of 
entrainment survival studies (see DCN 2-017A-R7 in Docket W-00-03). 
EPA's preliminary review of these studies has raised a number of 
concerns regarding the quality of data used to develop some estimates 
of entrainment survival. Specifically, the majority of studies reviewed 
collected samples at times of low organismal abundance, at times when 
the facility was not operating at full capacity, at times when biocides 
were not in use, and at times which may not reflect current entrainment 
rates at the facility. These sampling conditions may lead to 
overestimation of entrainment survival. In addition, the majority of 
studies reviewed had very low sample sizes and calculated survival for 
only a few of all species entrained. EPA is also concerned that 
entrainment survival estimates were based on mortal effects only and 
did not address sub-lethal entrainment effects, which can include 
changes to organismal growth, development, and reproduction. EPA 
invites comment on its preliminary review of the data quality of 
entrainment survival studies provided in Chapter D7. EPA also requests 
that commenters submit additional entrainment survival or mortality 
studies for review.
9. When Could the Director Impose More Stringent Requirements?
    Proposed Sec. 125.94(e) provides that the Director could establish 
more stringent requirements relating to the location, design, 
construction, or capacity of a cooling water intake structure at a 
Phase II existing facility than those that would be required based on 
the proposed performance standards in the rule (Sec. 125.94(b)), or 
based on the proposed site-specific determination of best technology 
allowed under the rule (Sec. 125.94(c)), where compliance with the 
proposed requirements of Sec. 125.94(b) or (c) would not meet the 
requirements of applicable Tribal, State or other Federal law. The 
relevant State law may include, but is not necessarily limited to, 
State or Tribal water quality standards, including designated uses, 
criteria, and antidegradation provisions; endangered or threatened 
species or habitat protection provisions; and other resource protection 
requirements. The term ``other Federal law'' is intended to denote 
Federal laws others than section 316(b), and could include, but not be 
limited to, the Endangered Species Act, 16 U.S.C. 1531 et seq., the 
Coastal Zone Management Act, 16 U.S.C. 1451 et seq., the Fish and 
Wildlife Coordination Act, 16 U.S.C. 661 et seq., the Wild and Scenic 
Rivers Act, 16 U.S.C. 1273 et seq., and potentially the Magnuson-
Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq. 
See 40 CFR 122.49 for a brief description of these and certain other 
laws. Note that these laws may apply to federally issued NPDES permits 
independent of this proposed rule.
    EPA expects that Federal, State, and Tribal resource protection 
agencies will work with Federal and State Directors and permittees to 
identify and assess

[[Page 17151]]

situations where Federal, State, or Tribal law might be violated, 
particularly where such violations involve impacts to species of 
concern. For example, the U.S. Fish and Wildlife Service and the 
National Marine Fisheries Service implement the Endangered Species Act. 
Where a NPDES permit for a cooling water intake structure would comply 
with the performance requirements of Sec. 125.94(b) or (c) but may harm 
endangered species or critical habitat, EPA expects the resource 
agencies to contribute their expertise to the evaluation and 
decisionmaking process.
    EPA is considering whether to establish additional criteria for 
when the Director could establish more stringent requirements. EPA 
requests comment on specifying that more stringent requirements would 
be appropriate when compliance with the applicable requirements in 
Sec. 125.94(b) and (c) would (1) result in unacceptable effects on 
migratory and/or sport or commercial species of concern to the 
Director; and (2) not adequately address cumulative impacts caused by 
multiple intakes or multiple stressors within the waterbody of concern. 
Unacceptable effects on sport or commercial species of concern might 
include a significant reduction in one or more such species due to 
direct or indirect effects of one or more cooling water intake 
structures. Examples of unacceptable effects on migratory species of 
concern might include the interference with or disruption of migratory 
pathways, patterns, or behavior. Multiple stressors within the 
waterbody of concern might include toxics, nutrients, low dissolved 
oxygen, habitat loss, non-point source runoff, and pathogen 
introductions. EPA is also concerned about the potential stress from 
multiple intakes because demonstration studies are typically conducted 
on an individual facility basis and do not consider the effects of 
multiple intakes on local aquatic organisms.
    EPA notes that under section 510 of the CWA, States already have 
the authority to establish more stringent conditions in any permit in 
accordance with State law. However, this provision does not apply in 
cases where EPA is the permitting authority. EPA requests comment on 
whether any explicit regulatory provision for more stringent 
requirements is needed in light of section 510.
    EPA also notes that States have designated many waterbodies for the 
propagation of fish and shellfish that are not attaining such uses due 
to pollution, and that, in these waters, aquatic communities may be 
significantly stressed or under-populated. EPA also believes that in 
some waterbodies, heavy fishing pressures have greatly altered and 
reduced aquatic communities. EPA anticipates that studies valuing the 
monetized benefits of reducing impingement and entrainment may not 
identify significant site-specific benefits in such areas and, should 
one or more permit applicants request site-specific determinations of 
less-costly best technology available for minimizing adverse 
environmental impact, a State may not have authority to deny such 
requests. EPA requests comment on whether recovery of aquatic 
communities in such waterbodies might be delayed by use of the 
significantly greater cost-to-benefit test proposed today. EPA requests 
comment on an regulatory alternative that would explicitly allow the 
Director to require more stringent technologies or measures where not 
doing so would delay recovery of an aquatic species or community that 
fish and wildlife agencies are taking active measures to restore, such 
as imposing significant harvesting restrictions.
10. Discussion of the 5% Flow Threshold in Freshwater Rivers
    The withdrawal threshold is based on the concept that, absent any 
other controls, withdrawal of a unit volume of water from a waterbody 
will result in the entrainment of an equivalent unit of aquatic life 
(such as eggs and larval organisms) suspended in that volume of the 
water column. This, in turn, is related to the idea that, absent any 
controls, the density of aquatic organisms withdrawn by a cooling water 
intake structure is equivalent to the density of organisms in the water 
column. Thus, if 5% of the mean annual flow is withdrawn, it would 
generally result in the entrainment of 5% of the aquatic life within 
the area of hydraulic influence of the intake. EPA believes that it is 
unacceptable to impact more than 5% of the organisms within the area of 
an intake structure. Hence, if the facility withdraws more than 5% of 
the mean annual flow of a freshwater river or stream, the facility 
would be required to reduce entrainment by 60-90%. EPA discussed these 
concepts in more detail and invited comment on the use of this 
threshold and supporting documents in its NODA for the New Facility 
Rule (66 FR 28863). In today's proposed rule, EPA again invites comment 
on use of this threshold for Phase II existing facilities and on the 
supporting documents for this threshold that were referenced in the 
NODA.
    EPA also requests comment on the following alternative withdrawal 
thresholds for triggering the requirement for entrainment controls: (1) 
5% of the mean flow measured during the spawning season (to be 
determined by the average of flows during the spawning season, but 
remaining applicable to non-spawning time periods); (2) 10% or 15% of 
the mean annual or spawning season flow; (3) 25% of the 7Q10; and (4) a 
species-specific flow threshold that would use minimum flow 
requirements of a representative species to determine allowable 
withdrawals from the waterbody.
11. State or Tribal Alternative Requirements That Achieve Comparable 
Environmental Performance to the Regulatory Standards Within a 
Watershed
    In Sec. 125.90, today's proposal includes an alternative where an 
authorized State or Tribe may choose to demonstrate to the 
Administrator that it has adopted alternative regulatory requirements 
that will result in environmental performance within a watershed that 
is comparable to the reductions in impingement mortality and 
entrainment that would otherwise be achieved under Sec. 125.94. If a 
State or Tribe can successfully make this demonstration, the 
Administrator is to approve the State or Tribe's alternative regulatory 
requirements.
    EPA is proposing that such alternative requirements achieve 
comparable performance at the watershed level, rather than at larger 
geographic scales or at the individual facility-level, to allow States 
and Tribes greater flexibility and, potentially, greater efficiency in 
efforts to prevent or compensate for impingement mortality and 
entrainment losses, while still coordinating those efforts within 
defined ecological boundaries where the increased impacts are directly 
offset by controls or restoration efforts. Requiring performance level 
assessment to take place at the watershed level ensures that facility 
mitigation efforts take the overall health of the waterbody in the 
target watershed into account.
    The Agency requests comment on all aspects of this approach, 
including the appropriate definition of watershed. A watershed is 
generally a hydrologically-delineated geographic area, typically the 
area that drains to a surface waterbody or that recharges or overlays 
ground waters or a combination of both. Watersheds can be defined at a 
variety of geographic scales. The United States Geological Survey 
(USGS) defines watersheds (hydrologic units) in the United States at 
scales ranging from the drainage areas of major rivers, such as

[[Page 17152]]

the Missouri, to small surface drainage basins, combinations of 
drainage basins, or distinct hydrologic features. The USGS is currently 
defining additional, more detailed subdivisions of currently existing 
hydrologic units. (See http://water.usgs.gov/GIS/huc.html.) Watersheds 
have been defined for other natural resource programs as well (e.g., 
the Total Maximum Daily Load program, actions under section 306 of the 
Coastal Zone Management Act).
    In general, the appropriate scale at which to define a watershed 
depends on a program's goals. EPA believes that the watershed scale 
selected for the purposes of determining comparability of a State or 
Tribal alternative requirements should allow confident accounting of 
impingement and entrainment levels at facilities within the watershed 
and of the results of the actions taken to prevent or compensate for 
impingement and entrainment losses. EPA invites comment on use of the 
USGS eight-digit hydrologic unit (generally about the size of a county) 
as the maximum geographic scale at which an authorized State or Tribe 
could establish alternative regulatory requirements. A State or Tribe 
could seek to establish the comparability of alternative regulatory 
requirements for as many eight-digit hydrologic units as it saw fit, 
but would need to demonstrate that its alternative requirements achieve 
environmental performance comparable to the performance standards 
proposed in today's rule within each such unit.
    EPA believes that defining watersheds at too small a scale might 
not allow sufficient flexibility. However, EPA is concerned that 
defining watersheds at a very large scale increases the potential that 
there will be no direct ecological connection between increased impacts 
in one area and compensatory efforts in another.
    EPA also recognizes that States sometimes assign higher priority to 
protecting some waters over others. This may be due to the exceptional 
environmental, historic, or cultural value of some waters, or 
conversely to a concern with multiple stresses already occurring in a 
watershed. It could also be based on the presence of individual species 
of particular commercial, recreational, or ecological importance. For 
these reasons, States with alternative requirements might choose to 
provide more protection that would be achieved under Sec. 125.94 in 
some watersheds and less protection in others. Under current language 
in proposed Sec. 125.90, States could not use such an approach because 
they would not be able to demonstrate comparable environmental 
performance within each watershed. EPA requests comment on whether it 
should instead allow States to demonstrate comparable environmental 
performance at the State level, thus allowing States the flexibility to 
focus protection on priority watersheds.
    The standard provided in proposed Sec. 125.90 for evaluating 
alternate State requirements is ``environmental performance that is 
comparable to the reductions that would otherwise be achieved under 
Sec. 125.94.'' EPA recognizes that it may not always be possible to 
determine precisely the reductions in impingement and entrainment 
associated with either Sec. 125.94 or the alternate State requirements, 
particularly at the watershed level or State-wide. Furthermore, 
alternate State requirements may provide additional environmental 
benefits, beyond impingement and entrainment reductions, that the State 
may wish to factor into its comparability demonstration. However, in 
making this demonstration, the State should make a reasonable effort to 
estimate impingement and entrainment reductions that would occur under 
Sec. 125.94 and under its alternate requirements, and should clearly 
identify any other environmental benefits it is taking into account and 
explain how their comparability to impingement and entrainment 
reduction under Sec. 125.94 is being evaluated. EPA invites comment on 
the most appropriate scale at which to define a watershed to reflect 
the variability of the nature of the ecosystems impacted by cooling 
water intake structures within a State or Tribal area and on methods 
for ensuring ecological comparability within watershed-level 
assessments. EPA also invites comment on whether defined watershed 
boundaries for the purpose of section 316(b) programs should lie 
entirely within the political boundaries of a Tribe or State unless 
adjoining States and/or Tribes jointly propose to establish alternative 
regulatory requirements for shared watersheds.
12. Comprehensive Cost Evaluation Study
    Section 125.94 of today's proposal allows a facility to request a 
site-specific determination of best technology available for minimizing 
adverse environmental impact based on costs significantly greater than 
in EPA's record, or significantly greater than site-specific benefits. 
Section 125.95(b)(6)(i) requires a facility seeking such a 
determination to conduct a Comprehensive Cost Evaluation Study.
    To adequately demonstrate site-specific compliance costs, EPA 
believes that a facility would need to provide engineering cost 
estimates that are sufficiently detailed to allow review by a third 
party. The preferred cost estimating methodology, in the Agency's view, 
is the adaption of empirical costs from similar projects tailored to 
the facility's characteristics. The submission of generic costs relying 
on engineering judgment should be verified with empirical data wherever 
possible. In the cases where empirical demonstration costs are not 
available, the level of detail should allow the costs to be reproduced 
using standard construction engineering unit cost databases. These 
costs should be supported by estimates from architectural and 
engineering firms. Further, the engineering assumptions forming the 
basis of the cost estimates should be clearly documented for the key 
cost items.
    The Agency and other regulatory entities have reviewed recent cost 
estimates submitted by permittees for several section 316(b) and 316(a) 
demonstrations. As discussed in Chapter X of the Technical Development 
Document, in several cases where the level of detail provided by the 
permittee was sufficient to afford a detailed review, EPA has some 
concerns about the magnitude of these cost estimates. In other cases, 
the engineering assumptions that formed the basis of the cost 
submissions were insufficiently documented to afford a critical review. 
Based in part on these examples, the Agency emphasizes the importance 
of empirically verified and well documented engineering cost 
submissions.
    The Agency anticipates that the inclusion of a site-specific cost 
to benefit test will continue to be of concern to local regulatory 
entities and the regulated community in light of the associated burden 
on permit writers. In two recent cases, significant burden was 
associated with engineering cost reviews. In one case, a regional 
authority utilized a significant portion of its annual permitting 
budget (over $80,000) and significant man-hours (approximately 500 
hours) to review the engineering cost estimates submitted in a single 
permit demonstration. In another case, EPA conducted approximately 200 
hours of senior-level review of a single engineering estimate that had 
already undergone significant, and costly, local regulatory review. In 
each of these cases, the reviewers identified areas where they believed 
the

[[Page 17153]]

permit applicant had significantly overestimated costs of a potential 
compliance option. The level of effort was sufficient to identify the 
areas of concern, but not to develop counter proposals for cost 
estimates.
    However, EPA believes it is important to have a site-specific 
option in the rule to cover cases of exceptionally high costs and/or 
minimal benefits. By EPA's estimates, the costs for some of the 
technologies on which the presumptive performance standards are based 
may be several million dollars. In cases where, due to the site-
specific factors, an individual facility's costs are significantly 
higher, or the benefits are minimal, the additional permitting burden 
hours (upwards of several hundred hours) associated with the site-
specific estimate may be appropriate. EPA anticipates that many, if not 
most, facilities will choose to comply with the presumptive standards, 
but believes that for those facilities with exceptionally high costs or 
exceptionally low benefits, the site-specific provisions provide an 
important ``safety valve.''
    EPA invites comment on whether the Agency should establish minimum 
standards for a Comprehensive Cost Evaluation Study and on whether such 
standards should be established by regulation or as guidance only. EPA 
also invites comment on the above discussion of the burden that 
reviewing site-specific cost studies poses for permitting authorities 
and on its belief that site-specific provisions to address cases of 
unusually high costs or unusually low benefits are necessary.
13. Cost-Benefit Test
    EPA requests comment on the cost-benefit provision in Sec. 124.95. 
EPA placed several documents in the docket for the new facilities final 
rule (see docket items 2-034A and 2-034B) that summarized information 
from several States on the burdens of site-specific decisionmaking. To 
make section 316(b) determinations for large power plants in the 
Southeast in the late 1970s and early 1980s, EPA estimates a workload 
of as much as 650 person hours per permit and $25,000 contract dollars, 
with an additional (and potentially larger) resource investment by 
State permitting authorities. To reissue a permit to the Salem Nuclear 
Generating Station, the New Jersey Department of Environment Protection 
recently reviewed and considered a 36-volume permit application 
supported by 137 volumes of technical and reference materials. The 
facility filed its application in 1994; NJDEP made its decision in 
2001. EPA invites comments on these burden estimates.
    As noted above, however, while concerned about the burden of site-
specific section 316(b) determinations, EPA also recognizes the much 
larger costs of complying with the presumptive performance standards 
and believes that some provision for situations where costs are 
significantly greater than benefits is appropriate. EPA notes that at 
some sites, impingement and entrainment losses are minimal. In such 
cases it may not make sense to require a facility to spend a lot of 
dollars to comply with presumptive performance requirements. EPA is 
also concerned about the potential for members of the public who object 
to the authority's site-specific determinations to raise challenges 
that must be resolved in administrative appeals that can be very 
lengthy and burdensome, followed in some cases by judicial challenges. 
An ongoing State study of permitting workloads estimates that appeals 
of NPDES permits issued to major facilities require 40 hours to resolve 
in a simple case and up to 240 hours for a very complex permit. \58\ 
EPA Region 1 estimates that one year is required to resolve a complex 
administrative appeal, involving significant amounts of technical and 
legal resources. Should the permit appeal be followed by a judicial 
challenge, EPA Region 1 estimates an additional two years or more of 
significant investment of technical and legal resources in one 
decision, with additional time and resources needed if the initial 
judicial decision is appealed. \59\ Again, however, EPA notes that 
these burdens may be small compared to the potential costs of complying 
with presumptive performance standards. EPA invites comments on ways to 
incorporate site-specific consideration of costs and benefits without 
undue burden on the Director. In particular, EPA invites comment on 
decision factors and criteria for weighing and balancing these factors 
that could be included in a regulation or guidance that would 
streamline the workload for evaluating site-specific applications and 
minimize the potential for legal challenges.
---------------------------------------------------------------------------

    \58\ State Water Quality Management Resource Model, ver.3.16 (9/
00). (See Docket for today's proposal.) This is an on-going joint 
effort between states and EPA to develop information on the resource 
``gap'' facing State water quality management programs. The 
information included in the model reflects the consensus of the 
participating states and is intended to reflect averages.
    \59\ Communication from Mr. Mark Stein, Office of Regional 
Counsel, US EPA Region I, Boston, MA, dated January 24, 2002. (See 
Docket for today's proposal.)
---------------------------------------------------------------------------

14. Capacity Utilization
    In Sec. 125.94 (b)(2), the Agency proposes standards for reducing 
impingement mortality but not entrainment when a facility operates less 
than 15 percent of the available operating time over the course of 
several years. Fifteen percent capacity utilization corresponds to 
facility operation for roughly 55 days in a year (that is, less than 
two months). The Agency refers to this differentiation between 
facilities based on their operating time as a capacity utilization cut-
off. The Agency's record demonstrates that facilities operating at 
capacity utilization factors of less than 15 percent are generally 
facilities of significant age, including the oldest facilities within 
the scope of the rule. Frequently, entities will refer to these 
facilities as peaker plants, though the definition extends to a broader 
range of facilities. These peaker plants are less efficient and more 
costly to operate than other facilities. Therefore, operating companies 
generally utilize them only when demand is highest and, therefore, 
economic conditions are favorable. Because these facilities operate 
only a fraction of the time compared to other facilities, such as base-
load plants, the peaking plants achieve sizable flow reductions over 
their maximum design annual intake flows. Therefore, the concept of an 
entrainment reduction requirement for such facilities does not appear 
necessary. Additionally, the plants typically operate during two 
specific periods: the extreme winter and the extreme summer demand 
periods. Each of these periods can, in some cases, coincide with 
periods of abundant aquatic concentrations and/or sensitive spawning 
events. However, it is generally accepted that peak winter and summer 
periods will not be the most crucial for aquatic organism communities 
on a national basis.
    Of the facilities exceeding the capacity utilization cut-off, the 
median and average capacity utilization is 50 percent. As a general 
rule, steam plants operate cyclically between 100 percent load and 
standby. In turn, the intake flow rate of a typical steam plant cycles 
between full design intake flow and standby. Facilities operating with 
an average capacity utilization of 50 percent would generally withdraw 
more than three times as much water over the course of time than a 
facility with a capacity utilization of less than 15. Therefore, the 
capacity utilization cut-off coincides with an approximate flow 
reduction, and hence entrainment reduction, of roughly 70 percent as 
compared to the average facility above

[[Page 17154]]

the cut-off, which is within the range of the performance standard for 
entrainment reduction. Of the 539 facilities for which the Agency has 
detailed intake flow information, 53 would fall under the capacity 
utilization cut-off. Were the Agency to establish the cut-off at less 
than 20 percent capacity utilization, an additional 18 facilities would 
be subject to the reduced requirements and the comparable flow 
reduction would be roughly 60 percent. However, the operating period 
would extend to approximately 75 days (that is, 2.5 months). Were the 
Agency to establish the cut-off at less than 25 percent capacity, 108 
of the 539 facilities would be subject to the reduced standards, and 
the comparable entrainment reduction would be roughly 54 percent. For a 
hypothetical 25 percent capacity utilization cut-off, the operating 
period would extend to approximately three months.
    EPA invites comment on its proposed approach to regulating Phase II 
existing facilities with limited capacity utilization. EPA specifically 
invites comment on the above alternative thresholds for using capacity 
utilization to establish performance standard that address impingement 
mortality but not entrainment.

B. Other Technology-Based Options Under Consideration

    EPA also considered a number of other technology-based options for 
regulating Phase II existing facilities. As in the proposed option, any 
technology-based options considered below would allow for voluntary 
implementation of restoration measures by facilities that choose to 
reduce their intake flow to a level commensurate with performance 
requirements. Thus, under these options, facilities would be able to 
implement restoration measures that would result in increases in fish 
and shellfish if a demonstration of comparable performance is made for 
species of concern identified by the Director in consultation with 
national, State, and Tribal fish and wildlife management agencies with 
responsibility for aquatic resources potentially affected by the 
cooling water intake structure.
    Similarly, any technology-based options considered also would allow 
facilities to request alternative requirements that are less stringent 
than those specified, but only if the Director determines that data 
specific to the facility indicate that compliance with the relevant 
requirement would result in compliance costs significantly greater than 
those EPA considered in establishing the requirement at issue, or would 
result in significant adverse impacts on local air quality or local 
energy markets. The alternative requirement could be no less stringent 
than justified by the significantly greater cost or the significant 
adverse impacts on local air quality or local energy markets. EPA 
invites comment on these provisions and on other factors that might 
form the basis for alternative regulations.
    The example regulatory language presented in section VI.B.3 below 
does not include a provision similar to the 40 CFR 125.85 in the new 
facility final rule for alternative requirements based on significant 
adverse impact on local water resources other than impingement and 
entrainment. In EPA's judgement, this provision would primarily be used 
to address water allocation and quantity issues which do not arise in 
tidal rivers, estuaries and oceans, where salinity limits competing 
water uses.
1. Intake Capacity Commensurate with Closed-Cycle, Recirculating 
Cooling System for All Facilities
    EPA considered a regulatory option that would require Phase II 
existing facilities having a design intake flow 50 MGD or more to 
reduce the total design intake flow to a level, at a minimum, 
commensurate with that which can be attained by a closed-cycle 
recirculating cooling system using minimized make-up and blowdown 
flows. In addition, facilities in specified circumstances (e.g., 
located where additional protection is needed due to concerns regarding 
threatened, endangered, or protected species or habitat; migratory, 
sport or commercial species of concern) would have to select and 
implement design and construction technologies to minimize impingement 
mortality and entrainment. This option does not distinguish between 
facilities on the basis of the waterbody from which they withdraw 
cooling water. Rather, it would ensure that the same stringent controls 
are the nationally applicable minimum for all waterbody types. This is 
the regulatory approach EPA adopted for new facilities.
    Reducing the cooling water intake structure's capacity is one of 
the most effective means of reducing entrainment (and impingement). For 
the traditional steam electric utility industry, facilities located in 
freshwater areas that have closed-cycle, recirculating cooling water 
systems can, depending on the quality of the make-up water, reduce 
water use by 96 to 98 percent from the amount they would use if they 
had once-through cooling water systems, though many of these areas 
generally contain species that are less susceptible to entrainment. 
Steam electric generating facilities that have closed-cycle, 
recirculating cooling systems using salt water can reduce water usage 
by 70 to 96 percent when make-up and blowdown flows are minimized. \60\
---------------------------------------------------------------------------

    \60\ The lower range would be appropriate where State water 
quality standards limit chloride to a maximum increase of 10 percent 
over background and therefore require a 1.1 cycle of concentraction. 
The higher range may be attained where cycles of concentration up to 
2.0 are used for the design.
---------------------------------------------------------------------------

    Of the 539 existing steam electric power generating facilities that 
EPA believes would potentially be subject to the Phase II existing 
facility proposed rule, 73 of these facilities already have a 
recirculating wet cooling system (e.g., wet cooling towers or ponds). 
These facilities would meet the requirements under this option unless 
they are located in areas where the director or fisheries managers 
determine that fisheries need additional protection. Therefore, under 
this option, 466 steam electric power generating facilities would be 
required to meet performance standards for reducing impingement 
mortality and entrainment based on a reduction in intake flow to a 
level commensurate with that which can be attained by a closed-cycle 
recirculating system.
    A closed-cycle recirculating cooling system is an available 
technology for facilities that currently have once-through cooling 
water systems. There are a few examples of existing facilities 
converting from one type of cooling system to another (e.g., from once-
through to closed-cycle recirculating cooling system). Converting to a 
different type of cooling water system, however, is significantly more 
expensive than the technologies on which the proposed performance 
standards are based (generally by a factor of 10 or greater) and 
significantly more expensive that designing new facilities to run on 
recirculating systems. EPA has identified four power plants that would 
be regulated by today's proposal that have converted from once-through 
to closed-cycle recirculating cooling systems. Three of these 
facilities--Palisades Nuclear Plant in Michigan, Jefferies Coal in 
South Carolina, and Canadys Steam in South Carolina-- converted from 
once-through to closed-cycle recirculating cooling systems after 
significant periods of operation utilizing the once-through system. The 
fourth facility--Pittsburg Unit 7--is not a full conversion in that it 
never operated with its once-through system. In this case, the 
``conversion'' occurred just prior to construction, after initial 
design of the once-through system design and power plant had

[[Page 17155]]

occurred. A brief description of these conversions follows. The 
Technical Development Document for the Proposed Section 316(b) Phase II 
Existing Facilities Rule provides additional detail.
    The Palisades Nuclear Plant. Located in Covert, Michigan, the 
Palisades Nuclear Plant is a 812 MW (nameplate, steam capacity) 
facility with a pressurized water reactor, utilizing a mechanical draft 
wood cooling tower to condense the steam load of the plant. The reactor 
began operation in 1972 utilizing a once-through cooling system and 
subsequently converted to a closed-cycle, recirculating system at the 
beginning of 1974.
    Canadys Steam Plant. This 490 MW (nameplate, steam capacity) coal-
fired facility with three generating units is located in Colleton 
County, South Carolina. The first unit initially came online in 1962, 
the second in 1964, and the third in 1967. All three units operated 
with a once-through cooling water system for many years. The Canadys 
Steam plant was converted from a once-through to a closed-cycle 
recirculating cooling system in two separate projects. Unit 3 (218 MW) 
was first converted in 1972. Units 1 and 2, both with nameplate 
capacities of 136 MW, were converted from a once-through to a closed-
cycle, recirculating cooling system in 1992.
    Jefferies Coal Units 3 & 4. Located in Moncks Corner, South 
Carolina, this facility has a combined, coal-fired capacity of 346 MW 
(nameplate, steam). The coal units came online in 1970 and operated for 
approximately 15 years utilizing once-through cooling. After the Army 
Corps of Engineers re-diverted the Santee Cooper River, thereby 
limiting the plant's available water supply, the cooling system was 
converted from once-through to recirculating towers. The plant 
conducted an empirical energy-penalty study over several years to 
determine the economic impact of the cooling system conversion.
    Pittsburg Power Plant, Unit 7. Located in Contra Costa County, 
California, this 750 MW (nameplate, gas-fired steam) unit was designed 
and planned with a once-through cooling water system. However, late in 
the construction process, the plant switched to a closed-cycle, 
recirculating cooling system with a mechanical draft cooling tower. The 
system utilizes the condenser, conduit system, and circulating pumps 
originally designed for the once-through cooling water system.
    EPA did not select closed-cycle, recirculating cooling systems as 
the best technology available for existing facilities because of the 
generally high costs of such conversions. According to EPA's cost 
estimates, capital costs for individual high-flow plants to convert to 
wet towers generally ranged from 130 to 200 million dollars, with 
annual operating costs in the range of 4 to 20 million dollars. EPA 
estimates that the total annualized post-tax cost of compliance for 
this option is approximately $2.26 billion. Not included in this 
estimate are 9 facilities that are projected to be baseline closures. 
Including compliance costs for these 9 facilities would increase the 
total cost of compliance with this option to approximately $2.32 
billion. EPA also has serious concerns about the short term energy 
implications of a massive concurrent conversion and the potential for 
supply disruptions that it would entail. EPA requests comment on its 
decision not to base best technology available for all Phase II 
existing facilities on closed-cycle, recirculating technology.
    The estimated annual benefits (in $2001) for requiring all Phase II 
existing facilities to reduce intake capacity commensurate with the use 
of closed-cycle, recirculating cooling systems are $83.9 million per 
year and $1.08 billion for entrainment reductions.
2. Intake Capacity Commensurate with Closed-Cycle, Recirculating 
Cooling Systems Based on Waterbody Type
    EPA also considered an alternate technology-based option in which 
closed-cycle, recirculating cooling systems would be required for all 
facilities on certain waterbody types. Under this option, EPA would 
group waterbodies into the same five categories as in today's proposal: 
(1) Freshwater rivers or streams, (2) lakes or reservoirs, (3) Great 
Lakes, (4) tidal rivers or estuaries; and (5) oceans. Because oceans, 
estuaries and tidal rivers contain essential habitat and nursery areas 
for the vast majority of commercial and recreational important species 
of shell and fin fish, including many species that are subject to 
intensive fishing pressures, these waterbody types would require more 
stringent controls based on the performance of closed-cycle, 
recirculating cooling systems. EPA discussed the susceptibility of 
these waters in a Notice of Data Availability (NODA) for the new 
facility rule (66 FR 28853, May 25, 2001) and invited comment on 
documents that may support its judgment that these waters are 
particularly susceptible to adverse impacts from cooling water intake 
structures. In addition, the NODA presented information regarding the 
low susceptibility of non-tidal freshwater rivers and streams to 
impacts from entrainment from cooling water intake structures.
    Under this alternative option, facilities that operate at less than 
15 percent capacity utilization would, as in the proposed option, only 
be required to have impingement control technology. Facilities that 
have a closed-cycle, recirculating cooling system would require 
additional design and construction technologies to increase the 
survival rate of impinged biota or to further reduce the amount of 
entrained biota if the intake structure was located within an ocean, 
tidal river, or estuary where there are fishery resources of concern to 
permitting authorities or fishery managers.
    Facilities with cooling water intake structures located in a 
freshwater (including rivers and streams, the Great Lakes and other 
lakes) would have the same requirements as under the proposed rule. If 
a facility chose to comply with Track II, then the facility would have 
to demonstrate that alternative technologies would reduce impingement 
and entrainment to levels comparable to those that would be achieved 
with a closed-loop recirculating system (90% reduction). If such a 
facility chose to supplement its alternative technologies with 
restoration measures, it would have to demonstrate the same or 
substantially similar level of protection. (For additional discussion 
see the new facility final rule 66 FR 65256, at 65315 columns 1 and 2.)
    EPA has estimated that there are 109 facilities located on oceans, 
estuaries, or tidal rivers that do not have a closed cycle 
recirculating system and would be required to meet performance 
standards for reducing impingement mortality and entrainment based on a 
reduction in intake flow to a level commensurate with that which can be 
attained by a closed-cycle recirculating system. The other 430 
facilities would be required to meet the same performance standards in 
today's proposal.
    The potential environmental benefits of this option have been 
estimated at $87.8 million and $1.24 billion for entrainment reductions 
annually. Although this option is estimated (a full cost analysis was 
not done for this option) to be less expensive at a national level than 
requiring closed-cycle, recirculating cooling systems for all Phase II 
existing facilities, EPA is not proposing this option. Facilities 
located on oceans, estuaries, and tidal rivers would incur high capital 
and operating and maintenance costs for conversions of their cooling 
water systems. Furthermore, since impacted facilities would be 
concentrated in coastal

[[Page 17156]]

regions, there is the potential for short term energy impacts and 
supply disruptions in these areas. EPA also invites comment on this 
option.
3. Intake Capacity Commensurate With Closed-Cycle, Recirculating 
Cooling System Based on Waterbody Type and Proportion of Waterbody Flow
    EPA is also considering a variation on the above approach that 
would require only facilities withdrawing very large amounts of water 
from an estuary, tidal river, or ocean to reduce their intake capacity 
to a level commensurate with that which can be attained by a closed-
cycle, recirculating cooling system.
    For example, for facilities with cooling water intake structures 
located in a tidal river or estuary, if the intake flow is greater than 
1 percent of the source water tidal excursion, then the facility would 
have to meet standards for reducing impingement mortality and 
entrainment based on the performance of wet cooling towers. These 
facilities would have the choice of complying with Track I or Track II 
requirements. If a facility on a tidal river or estuary has intake flow 
equal to or less than 1 percent of the source water tidal excursion, 
the facility would only be required to meet the performance standards 
in the proposed rule. These standards are based on the performance of 
technologies such as fine mesh screens and traveling screens with well-
designed and operating fish return systems. The more stringent, closed-
cycle, recirculating cooling system based requirements would also apply 
to a facility that has a cooling water intake structure located in an 
ocean with an intake flow greater than 500 MGD.
    Regulatory language implementing the Waterbody Type and Intake 
Capacity Based Option could read as follows:

    (a)(1) The owner or operator of an existing steam electric power 
generating facility must comply with:
    (i) The requirements of (b)(1) if your cooling water intake 
structure has a utilization rate less than 15 percent;
    (i) The requirements of (b)(2) if your cooling water intake 
structure withdraws water for use in a closed-cycle, recirculating 
system;
    (ii) The requirements of (b)(3) if your cooling water intake 
structure is located in a freshwater river or stream;
    (iii) The requirements of (b)(4) if your cooling water intake 
structure is located in a lake (other than one of the Great Lakes) 
or reservoir;
    (iv) The requirements of (b)(5) or (c) if your cooling water 
intake structure is located in an estuary or tidal river;
    (v) The requirements of (b)(6) if your cooling water intake 
structure is located in one of the Great Lakes;
    (vi) The requirements of (b)(7) or (c) if your cooling water 
intake structure is located in an ocean.
    (2) In addition to meeting the requirements of (b) or (c), the 
owner or operator of an existing steam electric power generating 
facility must meet any more stringent requirements imposed under 
(d).
    (b) Track I Requirements. Based on the design characteristics of 
your facility and cooling water intake structure(s) you must meet 
the requirements of paragraphs (b)(1) through (10).
    (1) Requirements for Facilities With a Capacity Utilization 
Rates Less Than 15 Percent. If you own or operate an existing 
facility with a cooling water intake structure that has a capacity 
utilization rate less than 15 percent, you must select and implement 
design and construction technologies or operational measures to 
reduce impingement mortality by 80 to 95% for fish and shellfish.
    (2) Requirements for Cooling Water Intake Structures that 
Withdraw Water for Closed-Cycle, Recirculating Systems Only. If you 
own or operate a cooling water intake structure that withdraws water 
from an estuary, tidal river, or ocean for a closed-cycle, 
recirculating system only, you must comply with the requirements in 
paragraphs (b)(2)(i) and (ii) as follows:
    (i) Impingement Design and Construction Technologies or 
Operational Measures. You must select and implement design and 
construction technologies or operational measures to minimize 
impingement mortality for fish and shellfish if:
    (A) There are threatened or endangered or otherwise protected 
Federal, State, or Tribal species, or critical habitat for these 
species, within the hydraulic zone of influence of the cooling water 
intake structure; or
    (B) There are migratory and/or sport or commercial species of 
impingement concern to the Director or any fishery management 
agency(ies), which pass through the hydraulic zone of influence of 
the cooling water intake structure; or
    (C) It is determined by the Director or any fishery management 
agency(ies) that the facility contributes unacceptable stress to the 
protected species, critical habitat of those species, or species of 
concern.
    (ii) Entrainment Design and Construction Technologies or 
Operational Measures. You must select and implement design and 
construction technologies or operational measures to minimize 
entrainment for entrainable life stages of fish and shellfish if:
    (A) There are threatened or endangered or otherwise protected 
Federal, State, or Tribal species, or critical habitat for these 
species, within the hydraulic zone of influence of the cooling water 
intake structure; or
    (B) There are or would be undesirable cumulative stressors 
affecting entrainable life stages of species of concern to the 
Director or any fishery management agency(ies), and it is determined 
by the Director or any fishery management agency(ies) that the 
facility contributes unacceptable stress to these species of 
concern.
    (3) Requirements for Cooling Water Intake Structures Located in 
Freshwater Rivers or Streams. If you own or operate an existing 
facility with a cooling water intake structure located in a 
freshwater river or stream, you must comply with paragraphs 
(b)(3)(i) or (ii) as follows:
    (i) If your total design intake flow is equal to or less than 5 
percent of the source water annual mean flow, you must select and 
implement design and construction technologies or operational 
measures to reduce impingement mortality by 80 to 95% for all life 
stages of fish and shellfish; or
    (ii) If your total design intake flow is greater than 5 percent 
of the source water annual mean flow, you must select and implement 
design and construction technologies or operational measures to 
reduce impingement mortality by 80 to 95% and entrainment by 60 to 
90% for all life stages of fish and shellfish.
    (4) Requirements for Cooling Water Intake Structures Located in 
Lakes (Other Than one of the Great Lakes) or Reservoirs. If you own 
or operate an existing facility with a cooling water intake 
structure located in a lake (other than one of the Great Lakes) or 
reservoir, you must comply with paragraphs (b)(4)(i) and (ii) as 
follows:
    (i) Your total design intake flow must not disrupt the natural 
thermal stratification or turnover pattern (where present) of the 
source water except in cases where the disruption is determined to 
be beneficial to the management of fisheries for fish and shellfish 
by any fisheries management agency(ies); and
    (ii) You must select and implement design and construction 
technologies or operational measures to reduce impingement mortality 
by 80 to 95% for fish and shellfish.
    (5) Requirements for Cooling Water Intake Structures Located in 
Estuaries or Tidal Rivers. If you own or operate an existing 
facility with a cooling water intake structure located in an estuary 
or tidal river you must comply with paragraphs (b)(5)(i) or (ii) as 
follows:
    (i) If your total design intake flow over one tidal cycle of ebb 
and flow is equal to or less than one (1) percent of the volume of 
the water column within the area centered about the opening of the 
intake with a diameter defined by the distance of one tidal 
excursion at the mean low water level, you must select and implement 
design and construction technologies or operational measures to 
reduce impingement mortality by 80 to 95% and entrainment by 60 to 
90% for all life stages of fish and shellfish; or
    (ii) If your total design intake flow over one tidal cycle of 
ebb and flow is greater than one (1) percent of the volume of the 
water column within the area centered about the opening of the 
intake with a diameter defined by the distance of one tidal 
excursion at the mean low water level, you must meet the 
requirements in paragraphs (b)(5)(ii)(A) or (B):
    (A) Reduce your intake flow to a level commensurate with that 
which can be attained by a closed-cycle recirculating system and 
select and implement design and construction technologies or 
operational measures as follows:
    (1) Impingement Design and Construction Technologies or 
Operational Measures. You must select and implement design and 
construction technologies or operational

[[Page 17157]]

measures to minimize impingement mortality for fish and shellfish 
if:
    (i) There are threatened or endangered or otherwise protected 
Federal, State, or Tribal species, or critical habitat for these 
species, within the hydraulic zone of influence of the cooling water 
intake structure; or
    (ii) There are migratory and/or sport or commercial species of 
impingement concern to the Director or any fishery management 
agency(ies), which pass through the hydraulic zone of influence of 
the cooling water intake structure; or
    (iii) It is determined by the Director or any fishery management 
agency(ies) that the facility contributes unacceptable stress to the 
protected species, critical habitat of those species, or species of 
concern.
    (2) Entrainment Design and Construction Technologies or 
Operational Measures. You must select and implement design and 
construction technologies or operational measures to minimize 
entrainment for entrainable life stages of fish and shellfish if:
    (i) There are threatened or endangered or otherwise protected 
Federal, State, or Tribal species, or critical habitat for these 
species, within the hydraulic zone of influence of the cooling water 
intake structure; or
    (ii) There are or would be undesirable cumulative stressors 
affecting entrainable life stages of species of concern to the 
Director or any fishery management agency(ies), and it is determined 
by the Director or any fishery management agency(ies) that the 
facility contributes unacceptable stress to these species of 
concern.
    (B) Comply with the requirements of Track II in (c).
    (6) Requirements for Cooling Water Intake Structures Located in 
One of the Great Lakes. If you own or operate an existing facility 
with a cooling water intake structure located in one of the Great 
Lakes you must select and implement design and construction 
technologies or operational measures to reduce impingement mortality 
by 80 to 95% and entrainment by 60 to 90% for all life stages of 
fish and shellfish.
    (7) Requirements for Cooling Water Intake Structures Located in 
an Ocean. If you own or operate an existing facility with a cooling 
water intake structure located in an ocean you must comply with 
paragraphs (b)(7)(i) or (ii) as follows:
    (i) If your total design intake flow is less than 500 MGD, you 
must select and implement design and construction technologies or 
operational measures to reduce impingement mortality by 80 to 95% 
and entrainment by 60 to 90% for all life stages of fish and 
shellfish; or
    (ii) If your total design intake flow is equal to, or greater 
than 500 MGD, you must meet the requirements in paragraphs 
(b)(7)(ii)(A) or (B):
    (A) Reduce your intake flow to a level commensurate with that 
which can be attained by a closed-cycle recirculating system and 
select and implement design and construction technologies or 
operational measures as follows:
    (1) Impingement Design and Construction Technologies or 
Operational Measures. You must select and implement design and 
construction technologies or operational measures to minimize 
impingement mortality for fish and shellfish if:
    (i) There are threatened or endangered or otherwise protected 
Federal, State, or Tribal species, or critical habitat for these 
species, within the hydraulic zone of influence of the cooling water 
intake structure; or
    (ii) There are migratory and/or sport or commercial species of 
impingement concern to the Director or any fishery management 
agency(ies), which pass through the hydraulic zone of influence of 
the cooling water intake structure; or
    (iii) It is determined by the Director or any fishery management 
agency(ies) that the facility contributes unacceptable stress to the 
protected species, critical habitat of those species, or species of 
concern.
    (2) Entrainment Design and Construction Technologies or 
Operational Measures. You must select and implement design and 
construction technologies or operational measures to minimize 
entrainment for entrainable life stages of fish and shellfish if:
    (i) There are threatened or endangered or otherwise protected 
Federal, State, or Tribal species, or critical habitat for these 
species, within the hydraulic zone of influence of the cooling water 
intake structure; or
    (ii) There are or would be undesirable cumulative stressors 
affecting entrainable life stages of species of concern to the 
Director or any fishery management agency(ies), and it is determined 
by the Director or any fishery management agency(ies) that the 
facility contributes unacceptable stress to these species of 
concern.
    (B) Comply with the requirements of Track II in (c).
    (8) You must submit the application information required;
    (9) You must implement the monitoring requirements specified;
    (10) You must implement the record-keeping requirements 
specified;
    (c) Track II Requirements. If you are an existing steam electric 
power generating facility with a cooling water intake structure 
located in an estuary, tidal river, or ocean that chooses to meet 
the requirements of Track II in lieu of Track I in (b)(5)(ii) or 
(b)(7)(ii), you must comply with the following:
    (1) You must demonstrate to the Director that the technologies, 
operational measures, and supplemental restoration measures employed 
will reduce the level of adverse environmental impact from your 
cooling water intake structures to a level comparable to that which 
you would achieve were you to reduce your intake flow to a level 
commensurate with that which can be attained by a closed-cycle 
recirculating system.
    (2) Except as specified in subparagraph (c)(4) below, your 
demonstration must include a showing that the impacts to fish and 
shellfish, including important forage and predator species, within 
the watershed will be comparable to those which would result if you 
were to reduce your intake flow to a level commensurate with that 
which can be attained by a closed-cycle recirculating system. This 
showing may include consideration of impacts other than impingement 
mortality and entrainment.
    (3) Restoration Measures. Phase II existing facilities complying 
with the requirements of Track II may supplement technologies with 
restoration measures that will result in increases in fish and 
shellfish if you can demonstrate that they will result in a 
comparable performance for species that the Director, in 
consultation with national, State and Tribal fishery management 
agencies with responsibility for fisheries potentially affected by 
your cooling water intake structure, identifies as species of 
concern.
    (4) In cases where air emissions and/or energy impacts that 
would result from reducing your intake flow to a level commensurate 
with that which can be attained by a closed-cycle recirculating 
system would result in significant adverse impacts on local air 
quality, or significant adverse impact on local energy markets, you 
may request alternative requirements.
    (5) You must submit the application information required;
    (6) You must implement the monitoring requirements specified;
    (7) You must implement the record-keeping requirements 
specified;

    EPA notes that of these, some facilities would likely opt to comply 
through Track II and estimates that 21 facilities would select this 
option. These facilities would perform site-specific studies and 
demonstrate compliance using alternative technologies, perhaps 
supplemented by habitat enhancement or fishery restocking efforts. 
Assuming as a high impact scenario that all 51 of these facilities 
install wet cooling towers, the energy impacts associated with these 51 
facilities would comprise 0.2 percent of total existing electric 
generating capacity from facilities with an intake flow of 50 MGD or 
more. The environmental impacts associated with increased air emissions 
(SO2, NOX, CO2, and Hg) associated 
with this option would be a 0.1 percent increase of emissions of these 
pollutants from the total existing electric generators.
    The Nuclear Regulatory Commission estimates that a steam-electric 
plant utilizing a once-through cooling system would consume 
approximately 40 percent less water than a comparably sized plant 
equipped with recirculating wet cooling towers because a wet cooling 
tower uses a small amount of water many times and evaporates most of 
this water to provide its cooling (which can sometimes be seen as a 
white vapor plume). In contrast, a once-through cooling system uses a 
much larger volume of water, one time. While no cooling water 
evaporates directly to the air, once the heated water is discharged 
back into the waterbody, some evaporation occurs. Thus, in some areas, 
conversion to closed-cycle cooling could raise water quantity issues.

[[Page 17158]]

    Based on an analysis of data collected through the detailed 
industry questionnaire and the short technical questionnaire, EPA 
estimates there are potentially 109 Phase II existing facilities 
located on estuaries, tidal rivers, or oceans which may incur capital 
cost under this option. Of these 109 facilities, EPA estimates that 51 
would exceed the applicable flow threshold and be required to meet 
performance standards for reducing impingement mortality and 
entrainment based on a reduction in intake flow to a level commensurate 
with that which can be attained by a closed-cycle recirculating system. 
Of the 58 facilities estimated to fall below the applicable flow 
threshold, 10 facilities already meet these performance standards and 
would not require any additional controls, whereas 48 facilities would 
require entrainment or impingement controls, or both. Because this 
option would only require cooling tower-based performance standards for 
facilities located on tidal rivers, estuaries or oceans where they 
withdraw saline or brackish waters, EPA does not believe that this 
option would raise any significant water quantity issues.
    Total annualized post-tax cost of compliance for the waterbody/
capacity-based option is approximately $585 million. Not included in 
this estimate are 9 facilities that are projected to be baseline 
closures. Including compliance costs for these 9 facilities would 
increase the total cost of compliance with this option to approximately 
$595 million.
    EPA also examined the annualized post-tax compliance costs of the 
waterbody/capacity-based option as a percentage of annual revenues to 
assess the economic practicability of this alternative option. This 
analysis was conducted at the facility and firm levels. The revenue 
estimates are the same as those used in the analysis in Section VI.A.3 
above: facility-specific baseline projections from the Integrated 
Planning Model (IPM) for 2008. The results at the facility level are 
similar to those of the proposed rule: 355 out of 550 facilities, or 65 
percent, would incur annualized costs of less than 0.5 percent of 
revenues; 60 facilities would incur costs of between 0.5 and 1 percent 
of revenues; 57 facilities would incur costs of between 1 and 3 
percent; and 67 facilities would incur costs of greater than 3 percent. 
Nine facilities are estimated to be baseline closures, and for one 
facility, revenues are unknown. Exhibit 4 below summarizes these 
findings.

      Exhibit 4.--Waterbody/Capacity-based Option (Facility Level)
------------------------------------------------------------------------
                                                                Percent
         Annualized cost-to-revenue ratio              All      of total
                                                     phase II   phase II
------------------------------------------------------------------------
 0.5 %............................................        355         65
0.5-1.0...........................................         60         11
1.0-3.0%..........................................         57         10
> 3.0 %...........................................         67         12
Baseline Closure..................................          9          2
n/a...............................................          1          0
                                                   ---------------------
  Total...........................................        550        100
------------------------------------------------------------------------

    Similar to the preferred option, EPA estimates that the compliance 
costs for the waterbody/capacity-based option would also be low 
compared to firm-level revenues. Of the 131 unique parent entities that 
own the facilities subject to this rule, 108 entities would incur 
compliance costs of less than 0.5 percent of revenues; 12 entities 
would incur compliance costs of between 0.5 and 1 percent of revenues; 
6 entities would incur compliance costs of between 1 and 3 percent of 
revenues; and three entities would incur compliance costs of greater 
than 3 percent of revenues. Two entities only own facilities that are 
estimated to be baseline closures. The estimated annualized facility 
compliance costs for this option represent between 0.001 and 5.4 
percent of the entities' annual sales revenue. Exhibit 5 below 
summarizes these findings.

        Exhibit 5.--Waterbody/Capacity-based Option (Firm Level)
------------------------------------------------------------------------
                                                    Number of   Percent
         Annualized cost-to-revenue ratio            phase II   of total
                                                     entities   phase II
------------------------------------------------------------------------
 0.5 %............................................        108         82
0.5-1.0 %.........................................         12          9
1.0-3.0%..........................................          6          5
> 3.0 %...........................................          3          2
Baseline Closure..................................          2          2
                                                   ---------------------
  Total...........................................        131        100
------------------------------------------------------------------------

    The results of EPA's approach to estimating national benefits are 
$79.86 million per year for impingement reduction and $769.0 million 
annually for entrainment reduction. Additional details of EPA's 
economic practicability and benefits analysis of this and other options 
can be found in the Economic and Benefits Analysis for the Proposed 
Section 316(b) Phase II Existing Facilities Rule and the Technical 
Development Document for the Proposed Section 316(b) Phase II Existing 
Facilities Rule.
    While the national costs of this option are lower than those of 
requiring wet cooling towers-based performance standard for all 
facilities located on oceans, estuaries and tidal rivers, the cost for 
facilities to meet these standards could be substantial if they 
installed a cooling tower. Under this option, EPA would provide an 
opportunity to seek alternative requirements to address locally 
significant air quality or energy impacts. EPA notes that the 
incremental costs of this option relative to the proposed option ($413 
million) significantly outweigh the incremental benefits ($146 
million). While EPA is not proposing this option, EPA is considering it 
for the final rule. To facilitate informed public comment, EPA has 
drafted sample rule language reflecting this option (see above). EPA 
invites comment on this alternative technology based option for 
establishing best technology available for minimizing adverse 
environmental impacts from cooling water intake structures at Phase II 
existing facilities.
4. Impingement Mortality and Entrainment Controls Everywhere
    Under an additional alternative being considered, EPA would 
establish national minimum performance requirements for the location, 
design, construction, and capacity of cooling water intake structures 
based on the use of design and construction technologies that reduce 
impingement and entrainment at all Phase II existing facilities without 
regard to waterbody type and with no site-specific compliance option 
available. Under this alternative the Agency would set performance 
requirements based on the use of design and construction technologies 
or operational measures that reduce impingement and entrainment. EPA 
would specify a range of impingement mortality and entrainment 
reduction that is the same as the performance requirements proposed in 
Sec. 125.94(b)(3) (i.e., Phase II existing facilities would be required 
to reduce impingement mortality by 80 to 95 percent for fish and 
shellfish, and to reduce entrainment by 60 to 90 percent for all life 
stages of fish and shellfish). However, unlike the proposed option, 
performance requirements under this alternative would apply to all 
Phase II existing facilities regardless of the category of waterbody 
used for cooling water withdrawals.
    Like the proposed option, the percent impingement and entrainment 
reduction under this alternative would be relative to the calculation 
baseline. Thus, the baseline for assessing performance would be an 
existing facility with a shoreline intake with the capacity to support 
once-through

[[Page 17159]]

cooling water systems and no impingement or entrainment controls. In 
addition, as proposed, a Phase II existing facility could demonstrate 
either that it currently meets the performance requirements or that it 
would upgrade its facility to meet these requirements. Further, under 
this alternative, EPA would set technology-based performance 
requirements, but the Agency would not mandate the use of any specific 
technology.
    Unlike the proposed option, this alternative would not allow for 
the development of best technology available on a site-specific basis 
(except on a best professional judgment basis). This alternative would 
not base requirements on the percent of source water withdrawn or 
restrict disruption of the natural thermal stratification of lakes or 
reservoirs. It also would impose entrainment performance requirements 
on Phase II existing facilities located on freshwater rivers or 
streams, and lakes or reservoirs. Finally, under this alternative, 
restoration could be used, but only as a supplement to the use of 
design and construction technologies or operational measures.
    This alternative would establish clear performance-based 
requirements that are simpler and easier to implement that those 
proposed and are based on the use of available technologies to reduce 
adverse environmental impact. Such an alternative would be consistent 
with the focus on use of best technology required under section 316(b). 
Total annualized post-tax cost of compliance for the modified proposed 
option is approximately $191 million. Not included in this estimate are 
11 facilities that are projected to be baseline closures. Including 
compliance costs for these 11 facilities would increase the total cost 
of compliance with this option to approximately $195 million. The 
benefits calculated for reduced impingement under this option were 
$64.5 million per year; entrainment reduction benefits were estimated 
to be $0.65 billion annually.

C. Site-Specific Based Options Under Consideration

1. Sample Site-Specific Rule
    EPA also invites comment on site-specific approaches for 
determining the best technology available for minimizing adverse 
environmental impact at existing facilities. In general, a site-
specific option is a formal process for determining the best technology 
available for minimizing adverse environmental impact at particular 
facilities that focuses on the site-specific interactions between 
cooling water intakes and the affected environment and the costs of 
implementing controls. This approach would be based on the view that 
the location of each power plant and the associated intake structure 
design, construction, and capacity are unique, and that the optimal 
combination of measures to reflect best technology available for 
minimizing adverse environmental impact must be determined on a case-
by-case basis.
    In order to focus public comment, EPA, in consultation with other 
interested Federal agencies, has drafted sample regulatory text for a 
site-specific approach, which is set forth below. The Site-Specific 
Sample Rule omits regulatory text on two key subjects: (1) The 
definition of adverse environmental impact; and (2) the components of 
the analysis that is used to determine the best technology available 
for minimizing adverse environmental impact. Instead, the Sample Rule 
contains references to the preamble discussion of these subjects (see 
Sec. 125.93, definition of ``adverse environmental impact'' and 
Sec. 125.94(b)(2), concerning analysis of the best technology 
available). Regulatory text is not offered on these subjects because 
the various site-specific approaches described in the discussion 
following the Sample Rule deal with them in significantly different 
ways.

Site-Specific Alternative: Sample Rule

Sec.
125.90  What are the purpose and scope of this subpart?
125.91  Who is subject to this subpart?
125.92  When must I comply with this subpart?
125.93  What special definitions apply to this subpart?
125.94  As an owner or operator of an existing facility, what must I 
do to comply with this subpart?
125.95  As an owner or operator of an existing facility, may I 
undertake restoration measures to mitigate adverse environmental 
impact?
125.96  Will alternate State requirements and methodologies for 
determining the best technology available for minimizing adverse 
environmental impact be recognized?
125.97  As an owner or operator of an existing facility, what must I 
collect and submit when I apply for my reissued NPDES permit?
125.98  As an owner or operator of an existing facility, must I 
perform monitoring?
125.99  As an owner or operator of an existing facility, must I keep 
records and report?
125.100   As the Director, what must I do to comply with the 
requirements of this subpart?

Section 125.90   What Are the Purpose and Scope of This Subpart?

    (a) This subpart establishes requirements that apply to the 
location, design, construction, and capacity of cooling water intake 
structures at existing facilities that have a design intake flow of 
equal to or greater than 50 million gallons per day (MGD). The 
purpose of these requirements is to establish the best technology 
available for minimizing any adverse environmental impact associated 
with the use of cooling water intake structures. These requirements 
are implemented through National Pollutant Discharge Elimination 
System (NPDES) permits issued under section 402 of the Clean Water 
Act (CWA).
    (b) This subpart implements section 316(b) of the CWA for 
existing facilities that have a design flow of equal to or greater 
than 50 MGD. Section 316(b) of the CWA provides that any standard 
established pursuant to sections 301 or 306 of the CWA and 
applicable to a point source shall require that the location, 
design, construction, and capacity of cooling water intake 
structures reflect the best technology available for minimizing 
adverse environmental impact. The process established in this 
subpart for determining the best technology available for intake 
design, location, construction, and capacity provides for a case-by-
case determination based on the unique, site-specific interactions 
between intakes and the environment and the costs of implementing 
controls at existing facilities.

Section 125.91  Who Is Subject to This Subpart?

    (a) This subpart applies to an existing facility if it:
    (1) Is a point source that uses or proposes to use a cooling 
water intake structure;
    (2) Has at least one cooling water intake structure that uses at 
least 25 percent of the water it withdraws for cooling purposes as 
specified in paragraph (c) of this section; and
    (3) Has a design intake flow equal to or greater than 50 MGD;
    (b) Use of a cooling water intake structure includes obtaining 
cooling water by any sort of contract or arrangement with an 
independent supplier (or multiple suppliers) of cooling water if the 
supplier or suppliers withdraw(s) water from waters of the United 
States. Use of cooling water does not include obtaining cooling 
water from a public water system or use of treated effluent that 
otherwise would be discharged to a water of the U.S. This provision 
is intended to prevent circumvention of these requirements by 
creating arrangements to receive cooling water from an entity that 
is not itself a point source.
    (c) The threshold requirement that at least 25 percent of water 
withdrawn be used for cooling purposes must be measured on an 
average monthly basis.

Section 125.92  When Must I Comply With This Subpart?

    You must comply with this subpart when an NPDES permit 
containing requirements consistent with this subpart is issued to 
you.

[[Page 17160]]

Section 125.93  What Special Definitions Apply to This Subpart?

    The definitions in Subpart I of Part 125 apply to this subpart. 
The following definitions also apply to this subpart:
    Adverse Environmental Impact [Reserved; see discussion at 
V.C.5.a below.]
    Existing facility means any facility that both generates and 
transmits electric power and any facility that generates electric 
power but sells it to another entity for transmission. This 
definition specifically includes (1) any major modification of a 
facility; (2) any addition of a new unit to a facility for purposes 
of the same industrial operation; (3) any addition of a unit for 
purposes of a different industrial operation that uses an existing 
cooling water intake structure but does not increase the design 
capacity of the cooling water intake structure; and (4) any facility 
that is constructed in place of a facility that has been demolished, 
but that uses an existing cooling water intake structure whose 
design intake flow has not been increased to accommodate the intake 
of additional cooling water.

Section 125.94  How Will Requirements Reflecting Best Technology 
Available for Minimizing Adverse Environmental Impact Be Established 
for My Existing Facility?

    (a)(1) Except as provided in paragraph (a)(2) of this section, 
an owner or operator of an existing facility covered by this subpart 
must conduct a baseline biological survey and provide any other 
information specified in Sec. 125.97 that the Director concludes is 
necessary for determining the magnitude of any adverse environmental 
impact occurring at the facility.
    (2) A previously conducted section 316(b) demonstration may be 
used to determine whether the location, design, construction and 
capacity of the facility's cooling water intake structure reflect 
best technology available for minimizing adverse environmental 
impact if it reflects current biological conditions in the water 
body and the current location and design of the cooling water intake 
structure. A previously conducted section 316(b) demonstration 
generally would reflect current conditions or circumstances if:
    (i) The previous section 316(b) demonstration used data 
collection and analytical methods consistent with guidance or 
requirements of the permitting agency and/or the Administrator;
    (ii) The available evidence shows that there have been no 
significant changes in the populations of critical aquatic species; 
and
    (iii) The owner or operator can show there have been no 
significant changes in the location, design, construction, and 
capacity of the facility's cooling water intake structure that would 
lead to a greater adverse environmental impact.
    (b) The determination of best technology available for 
minimizing adverse environmental impact required by paragraph (c) of 
this section may be based on:
    (1) A previously conducted section 316(b) demonstration that is 
shown to be still valid in the current circumstances, as described 
in paragraph (a)(2) of this section; or
    (2) An analysis of best technology available based on the Design 
and Construction Technology Plan, operational measures, and any 
restoration measures allowed under Sec. 125.95, that are submitted 
pursuant to Sec. 125.97. This analysis may include use of risk 
assessment. [See V.C.5.c below for a discussion of possible 
additional components of this analysis.]
    (c) In determining the best technology available for minimizing 
adverse environmental impact at an existing facility, the Director 
shall :
    (1) Minimize impingement mortality for fish and shellfish;
    (2) Minimize entrainment mortality for entrainable life stages 
of fish and shellfish;
    (3) Take into account non-aquatic environmental impacts, 
including energy requirements, and impacts on local air quality or 
water resources; and
    (4) Not require any technologies for location, design, 
construction or capacity or operational and/or restoration measures 
the costs of which would be significantly greater than the estimated 
benefits of such technology or measures.
    (d) The Director may establish more stringent requirements as 
best technology available for minimizing adverse environmental 
impact if the Director determines that your compliance with the 
requirements of paragraph (c) would not ensure compliance with State 
or other Federal law.
    (e) The owner or operator of an existing facility must comply 
with any permit requirements imposed by the Director pursuant to 
Sec. 125.100(b) of this section.

Section 125.95  As an Owner or Operator of an Existing Facility, May I 
Undertake Restoration Measures To Mitigate Adverse Environmental 
Impact?

    (a) An owner or operator of an existing facility may undertake 
restoration measures (such as habitat improvement and fish stocking) 
that will mitigate adverse environmental impact from the facility's 
cooling water intake structure.
    (b) In determining whether adverse environmental impact is 
minimized, the Director must take into account any voluntary 
restoration measures.

Section 125.96  Will Alternative State Requirements and Methodologies 
for Determining the Best Technology Available for Minimizing Adverse 
Environmental Impact Be Recognized?

    Notwithstanding any other provisions of this subpart, if a State 
demonstrates to the Administrator that it has adopted alternative 
regulatory requirements that will result in environmental 
performance within a watershed that is comparable to the reductions 
of impingement mortality and entrainment that would otherwise be 
achieved under this subpart, the Administrator shall approve such 
alternative regulatory requirements.

Section 125.97  As an Owner or Operator of an Existing Facility, What 
Must I Collect and Submit When I Apply for My Reissued NPDES Permit?

    (a) As an owner or operator of an existing facility covered by 
this part, you must submit the information required by Sec. 125.94 
and this section to the Director when you apply for a reissued NPDES 
permit in accordance with 40 CFR 122.21.
    (b) Biological Survey. (1) The biological survey must include:
    (i) A taxonomic identification and characterization of aquatic 
biological resources including a determination and description of 
the target populations of concern (those species of fish and 
shellfish and all life stages that are most susceptible to 
impingement and entrainment), and a description of the abundance and 
temporal/spatial characterization of the target populations based on 
the collection of a sufficient number of years of data to capture 
the seasonal and diel variations (e.g., spawning, feeding and water 
column migration) of all life stages of fish and shellfish found in 
the vicinity of the cooling water intake structure; and
    (ii) An identification of threatened or endangered or otherwise 
protected Federal, state or tribal species that might be susceptible 
to impingement and entrainment by the cooling water intake 
structure(s); and
    (iii) A description of additional chemical, water quality, and 
other anthropogenic stresses on the source water body based on 
available information.
    (2) As provided in Sec. 125.94(a)(2) and (d)(1), biological 
survey data previously produced to demonstrate compliance with 
section 316(b) of the CWA may be used in the biological survey if 
the data are representative of current conditions.
    (c) Design and Construction Technology Plan. (1) The Design and 
Construction Technology Plan must explain the technologies and 
measures you have selected to minimize adverse environmental impact 
based on information collected for the biological survey.
    (2) In-place technologies implemented previously to comply with 
section 316(b), and information regarding their effectiveness, may 
be included in the Design and Construction Technology Plan for an 
existing facility.
    (3) Design and engineering calculations, drawings, maps, and 
costs estimates supporting the technologies and measures you have 
selected to minimize adverse environmental impact.
    (d) Operational Measures. Operational measures that may be 
proposed include, but are not limited to, seasonal shutdowns or 
reductions in flow and continuous operation of screens.
    (e) Restoration Measures. If you propose to use restoration 
measures to minimize adverse environmental impact as allowed in 
Sec. 125.95, you must provide the following information to the 
Director for review:
    (1) Information and data to show that you have coordinated with 
the appropriate fish and wildlife management agency;
    (2) A plan that provides a list of the measures you have 
selected and will implement and how you will demonstrate that your 
restoration measures will maintain the fish and shellfish in the 
water body to the level required to offset mortality from 
entrainment and impingement; and
    (3) Design and engineering calculations, drawings, maps, and 
costs estimates

[[Page 17161]]

supporting the proposed restoration measures.

Section 125.98  As an Owner or Operator of an Existing Facility, Must I 
Perform Monitoring?

    (a) Following issuance of an NPDES permit, an owner or operator 
of an existing facility must submit to the Director a program for 
monitoring that will be adequate to verify that the location, 
design, construction, and capacity of the cooling water intake 
structure reflect the best technology available for minimizing 
adverse environmental impact.
    (b) The Director may require modifications of the monitoring 
program proposed by the owner or operator based on, but not limited 
to, consideration of the following factors:
    (1) Whether or not the facility has been determined to cause 
adverse environmental impacts under Sec. 125.100;
    (2) The types of modifications and restoration that are required 
in the NPDES permit under Sec. 125.100;
    (3) The amount and quality of the data or information available 
on the water body health and quality of the fishery; and
    (4) The stability or flux in the environmental factors that 
influence biological response in the water body.
    (c) The monitoring program for an existing facility that the 
Director has determined is not causing adverse environmental impact 
must provide for monitoring sufficient for the Director to make the 
subsequent 5-year permit decision.
    (d) The monitoring program for an existing facility that the 
Director has determined to cause adverse environmental impact must 
provide for monitoring sufficient to demonstrate that the 
modifications to facility operations and intake technology and any 
restoration measures included in the NPDES permit have been 
effective for minimizing adverse environmental impact. The 
monitoring must begin during the first year following implementation 
of the modifications and restoration measures, and must continue 
until the Director is satisfied that adverse environmental impact 
caused by the facility's cooling water intake has been minimized.

Section 125.99  As an Owner or Operator of an Existing Facility, Must I 
Keep Records and Report?

    (a) As an owner or operator of an existing facility, you must 
keep records of all the data used to complete the permit application 
and show compliance with the requirements in the permit and any 
compliance monitoring data for a period of at least three (3) years 
from the date of permit issuance.
    (b) The Director may require that these records be kept for a 
longer period.

Section 125.100  As the Director, What Must I Do To Comply With the 
Requirements of This Subpart?

    (a) Permit Applications. As the Director, you must review 
materials submitted by the applicant under 40 CFR 122.21(r)(3) and 
Sec. 125.94 before each permit renewal or reissuance.
    (1) After receiving the permit application from the owner or 
operator of a new facility, the Director must determine if the 
applicant is subject to the requirements of this subpart.
    (2) For each subsequent permit renewal for a covered facility, 
the Director must review the application materials and monitoring 
data to determine whether requirements, or additional requirements, 
for design and construction technologies or operational measures 
should be included in the permit, as provided in paragraph (b) of 
this section.
    (b) Permitting Requirements. (1) Section 316(b) requirements are 
implemented for a facility through an NPDES permit. As the Director, 
you must:
    (i) Determine whether the location, design, construction and 
capacity of the cooling water intake structure at the existing 
facility reflects best technology available for minimizing adverse 
environmental impact, based on the information provided under 
Sec. 125.94(a) and Sec. 125.97 and any other available, relevant 
information; and
    (ii) If the location, design, construction and capacity of the 
cooling water intake structure at the existing facility does not 
reflect best technology available for minimizing adverse 
environmental impact, specify the requirements and conditions for 
the location, design, construction, and capacity of the cooling 
water intake structure(s) that must be included in the permit for 
minimizing adverse environmental impact. This determination must be 
based on information provided under Sec. 125.94 and Sec. 125.97 and 
any other available, relevant information.
    (2) (i) Before issuing an NPDES permit containing section 316(b) 
requirements, the Director must consult with and consider the views 
and any information provided by interested fish and wildlife 
management agencies.
    (ii) If any fish and wildlife management agency having 
jurisdiction over the water body used for cooling water withdrawal 
determines that the cooling water intake structure(s) of an existing 
facility contributes to unacceptable stress to aquatic species or 
their habitat, the fish and wildlife management agency may recommend 
design, construction, or operational changes to the Director that 
will minimize that stress.
    (c) Monitoring Requirements. At a minimum, the Director must 
ensure that the permit requires the permittee to perform the 
monitoring required in Sec. 125.98. You may modify the monitoring 
program when the permit is reissued and during the term of the 
permit based on changes in the physical or biological conditions in 
the vicinity of the cooling water intake structure.

    The Agency invites comment on the above framework as an appropriate 
approach for implementing section 316(b) as an alternative to today's 
proposed requirements. The Agency also invites comments on the 
following site-specific approaches for implementing section 316(b) on a 
site-specific basis within the general framework set forth in the 
Sample Rule.
2. Site-Specific Alternative Based on EPA's 1977 Draft Guidance
    Since the Fourth Circuit remanded EPA's section 316(b) regulations 
in 1977, decisions implementing section 316(b) have been made on a 
case-by-case, site-specific basis. EPA published guidance addressing 
section 316(b) implementation in 1977. See Draft Guidance for 
Evaluating the Adverse Impact of Cooling Water Intake Structures on the 
Aquatic Environment: Section 316(b) P.L. 92-500 (U.S. EPA, 1977). This 
guidance describes the studies recommended for evaluating the impact of 
cooling water intake structures on the aquatic environment, and it 
establishes a basis for determining the best technology available for 
minimizing adverse environmental impact. The 1977 Section 316(b) Draft 
Guidance states, ``The environmental-intake interactions in question 
are highly site-specific and the decision as to best technology 
available for intake design, location, construction, and capacity must 
be made on a case-by-case basis.'' (Section 316(b) Draft Guidance, U.S. 
EPA, 1977, p. 4). This case-by-case approach also is consistent with 
the approach described in the 1976 Development Document referenced in 
the remanded regulation.
    The 1977 Section 316(b) Draft Guidance recommends a general process 
for developing information needed to support section 316(b) decisions 
and presenting that information to the permitting authority. The 
process involves the development of a site-specific study of the 
environmental effects associated with each facility that uses one or 
more cooling water intake structures, as well as consideration of that 
study by the permitting authority in determining whether the facility 
must make any changes to minimize adverse environmental impact. Where 
adverse environmental impact is occurring and must be minimized by 
application of best technology available, the 1977 guidance suggests a 
``stepwise'' approach that considers screening systems, size, location, 
capacity, and other factors.
    Although the Draft Guidance describes the information to be 
developed, key factors to be considered, and a process for supporting 
section 316(b) determinations, it does not establish national standards 
for best technology available to minimize adverse environmental impact. 
Rather, the guidance leaves the decisions on the appropriate location, 
design, capacity, and construction of each facility to the permitting 
authority. Under this framework, the Director determines whether 
appropriate studies have been performed and whether a given facility 
has minimized adverse environmental impact.

[[Page 17162]]

3. The Utility Water Act Group (UWAG) Approach
    The Utility Water Act Group (UWAG), an association of more than 100 
individual electric utility companies and three national trade 
associations of electric utilities, provided EPA with a recommended 
site-specific regulatory framework, entitled ``316(b) Decision 
Principles for Existing Facilities.'' UWAG's recommended approach for 
decision making under section 316(b) includes the following components:
     A definition of ``Adverse Environmental Impact;
     Use of Representative Indicator Species (RIS) for the 
assessment of adverse environmental impact;
     Making decisions under section 316(b) that complement, but 
do not duplicate, other Federal, state, and local regulatory programs;
     Use of de minimis criteria to exempt small cooling water 
users that pose no appreciable risk of causing adverse environmental 
impact because only a small amount of cooling water is withdrawn from a 
water body at a location that does not require special protection;
     Determination of adverse environmental impact or its 
absence using the facility's choice of three methods, either alone or 
in combination: (1) Use of previously conducted section 316(b) 
demonstrations that are still valid in light of current circumstances; 
(2) use of ecological risk assessment by means of demonstration of no 
appreciable risk of adverse environmental impact using conservative 
decision criteria; or assessment of risk using a structured decision 
making process consistent with EPA's Ecological Risk Assessment 
Guidelines;
     A ``maximize net benefits'' approach for selecting the 
best technology available for minimizing adverse environmental impact;
     At the option of the permittee, recognition of voluntary 
enhancements such as fish stocking or habitat improvements; and
     Providing data or information with NPDES permit renewal 
applications if new information shows that previously conducted section 
316(b) demonstrations are no longer scientifically valid.
    These features of UWAG's recommended approach are discussed in the 
Discussion of Site-Specific Approach Issues and Questions for Comment 
that follows. UWAG's submission is included in the rulemaking record.
4. Site-Specific Alternative Suggested by PSEG
    EPA also received a suggested site-specific regulatory framework 
from the Public Service Electricity and Gas Company (PSEG). The 
framework includes three alternative decision-making approaches that 
would allow permittees and permit writers to utilize prior analyses and 
data that may be appropriate and helpful, consider previous best 
technology available determinations that were based on these analyses 
and data, and take into account the benefits of prior section 316(b) 
implementing actions. The following summary of the framework suggested 
by PSEG closely tracks PSEG's submission, which is included in the 
rulemaking record.
    PSEG's submission states that EPA guidance and other precedents 
have identified certain ecological criteria as relevant factors for 
considering adverse environmental impact, including entrainment and 
impingement; reductions of threatened, endangered, or other protected 
species; damage to critical aquatic organisms, including important 
elements of the food chain; diminishment of a population's compensatory 
reserve; losses to populations, including reductions of indigenous 
species populations, commercial fishery stocks, and recreational 
fisheries; and stresses to overall communities or ecosystems as 
evidenced by reductions in diversity or other changes in system 
structure or function. Many existing section 316(b) decisions are based 
upon extensive data and analyses pertaining to those factors. Those 
factors would remain applicable for all existing facilities.
    Under PSEG's recommended approach, permitting authorities would 
have the authority to continue to place emphasis on the factors they 
believe are most relevant to a given situation. For example, when long-
term data are available that meet appropriate data quality standards, 
and when analyses using appropriate techniques such as models that 
already have been developed to allow population-level analysis of the 
potential for adverse environmental impact, permit writers would focus 
on those adverse environmental impact factors related to population-
level impacts. In other situations, especially where permittees do not 
wish to invest the time and financial resources necessary for 
biological data gathering and analysis, permitting authorities would 
have the discretion to focus on other factors by applying different 
decision-making paths.
5. Discussion of Site-Specific Approach Issues and Associated Questions 
for Comment
    The following sections focus on several key aspects of any site-
specific approach, specifically requesting comment on an appropriate 
definition of adverse environmental impact and associated decision-
making criteria.
a. Determination of Adverse Environmental Impact
    EPA's 1977 Draft Guidance assumes there will be adverse 
environmental impact whenever there is entrainment or impingement 
``damage'' as a result of a cooling water intake structure, and focuses 
study on the magnitude of the impact to determine the appropriate 
technologies needed to minimize the impact. The evaluation criteria for 
assessing the magnitude of an adverse impact are broad and recommend 
consideration both in terms of absolute damage (e.g., numbers of fish) 
and percentages of populations. Although the UWAG and PSEG site-
specific approaches contain different definitions of the term ``adverse 
environmental impact,'' there is general agreement among them that the 
focus should be on the health of critical aquatic populations or 
ecosystems, rather than on absolute numbers of fish and other aquatic 
organisms impinged or entrained by the cooling water intake structure. 
UWAG offered the most detailed and specific recommendations for making 
a determination of adverse environmental impact.
(1) EPA's 1977 Definition of Adverse Environmental Impact and Examples 
of Its Current Use
    In EPA's 1977 Draft Guidance, adverse environmental impact is 
defined as follows:

    Adverse environmental impact means the adverse aquatic 
environmental impact that occurs whenever there will be entrainment 
or impingement damage as a result of the operation of a specific 
cooling water intake structure. The critical question is the 
magnitude of any adverse impact which should be estimated both in 
terms of short term and long term impact with respect to (1) 
absolute damage (number of fish impinged or percentage of larvae 
entrained on a monthly or yearly basis); (2) percentage damage 
(percentage of fish or larvae in existing populations which will be 
impinged or entrained, respectively); (3) absolute and percentage 
damage to any endangered species; (4) absolute and percentage damage 
to any critical aquatic organism; (5) absolute and percentage damage 
to commercially valuable and/or sport species yield; and (6) whether 
the impact would endanger (jeopardize) the protection and 
propagation of a balanced population of shellfish and fish

[[Page 17163]]

in and on the body of water from which the cooling water is 
withdrawn (long term impact).

    Over the past 25 years, permitting agencies have interpreted this 
definition in a variety of ways. Some agencies consider the absolute 
number of organisms subjected to impingement and entrainment by 
facility cooling water intakes. Permitting authorities that evaluate 
adverse environmental impact by enumerating losses of numbers of fish 
individuals find this approach removes much of the uncertainty 
associated with evaluating effects to species at higher organizational 
levels such as populations, communities, or ecosystems. Other 
permitting authorities have focused on evaluating effects on 
populations in determining whether an adverse environmental impact is 
occurring.
(2) An Alternative Definition
    EPA solicits comment on an alternative definition of ``adverse 
environmental impact'' as follows:

    Adverse environmental impact means one or more of the following: 
entrainment and impingement of significant numbers of a critical 
aquatic organisms or percentages of aquatic populations; adverse 
impacts to threatened, endangered or other protected species, or 
their designated critical habitat; significant losses to 
populations, including reductions of indigenous species populations, 
commercial fishery stocks, and recreational fisheries; and stresses 
to overall communities or ecosystems as evidenced by reductions in 
diversity or other changes in system structure or function.
(3) Discussion of UWAG Recommendation for Determining Adverse 
Environmental Impact
    UWAG offers the following definition:

    Adverse environmental impact is a reduction in one or more 
representative indicator species (RIS) \61\ that (1) creates an 
unacceptable risk to a population's ability to sustain itself, to 
support reasonably anticipated commercial or recreational harvests, 
or to perform its normal ecological function and (2) is attributable 
to operation of the cooling water intake structure.
---------------------------------------------------------------------------

    \61\ Drawing on the concept of ``critical aquatic organisms''in 
EPA's 1977 draft guidance, UWAG would define a representative 
indicator species (RIS) as a species of commercial or recreational 
importance, a Federal or state threatened or endangered or specially 
designated species, an important species for ecological community 
structure or function, or on the basis of species and life stage 
vulnerability.

    In UWAG's view, defining adverse environmental impact in terms of 
``unacceptable risk'' combines science with the judgments society makes 
about the value of different resources. UWAG argues that this 
recommended definition is scientifically sound and environmentally 
protective because it focuses on protecting populations or species that 
are subject to impingement and entrainment by cooling water intake 
structures and because it requires that the level of population 
protection be adequate to ensure protection of the integrity of the 
ecosystem (community structure and function). However, it notes that 
this definition does not create a ``bright line'' test based on 
engineering or science. In addition to use of a valid, previously 
conducted section 316(b) demonstration, UWAG would allow facilities to 
use two risk assessment approaches to make a demonstration of ``no 
adverse environmental impact.'' The first approach involves 
demonstrating that the facility meets one or more of a set of 
conservative decision criteria. Under the second approach, a facility 
would cooperate with regulators and stakeholders to determine the 
benchmarks for a risk analysis to determine whether there is an 
appreciable risk of adverse environmental impact.
(a) Protective Decision Criteria for Determining Adverse Environmental 
Impact
    UWAG recommends protective decision criteria that it believes are 
conservative enough to eliminate the risk of adverse environmental 
impact for all practical purposes. The recommended physical and 
biological decision criteria are as follows:

Physical Criteria

    Locational Criterion: An existing cooling water intake structure 
would be considered not to create a risk of adverse environmental 
impact if it withdraws water from a zone of a water body that does not 
support aquatic life due to anoxia or other reasons, such as lack of 
habitat, poor habitat, or water quality conditions.
    Design Criterion: An existing cooling water intake structure would 
not be considered to create a risk of adverse environmental impact if 
it uses wet closed-cycle cooling or technologies that achieve a level 
of protection reasonably consistent with that achieved by wet closed-
cycle cooling. However, wet closed-cycle cooling or reasonably 
consistent protection would be considered insufficient if permit 
writers or natural resource agencies identify special local 
circumstances such as impacts to threatened, endangered, or otherwise 
protected species or areas designated for special protection.
    Proportion of Flow or Volume Criterion: On fresh water rivers, 
lakes (other than the Great Lakes), and reservoirs, a cooling water 
intake structure would be considered not to create a risk of adverse 
environmental impact if it withdraws no more than 5% of either the 
source water body or the ``biological zone of influence.'' This 
criterion would apply only to entrainable life stages. Because it might 
not be appropriate for many RIS to consider the entire source water 
body in making this decision, determining the appropriate flow or 
volume would be of critical importance. UWAG recommends how the 
``biological zone of influence'' would be determined for different RIS.

Biological Criteria

    Percent Population Loss Criterion: On freshwater rivers, lakes 
(other than the Great Lakes), and reservoirs, a facility would be 
considered not to create a risk of adverse environmental impact if the 
cooling water intake structure causes the combined loss, from 
entrainment and impingement, of (1) no more than 1% of the population 
of any harvested RIS and (2) no more than 5% of the population of any 
non-harvested RIS, with fractional losses summed over life stages for 
the entire lake, reservoir, or river reach included in the evaluation. 
UWAG explains that the 1%/5% population loss criteria are based in part 
on the recognition that these percentages are small relative to the 
inter-annual fluctuations typical of fish populations and also small 
relative to the compensatory responses typical of many species.
    No Significant Downward Trend: On freshwater rivers, lakes (other 
than the Great Lakes), and reservoirs, a cooling water intake structure 
would be considered to create no risk of adverse environmental impact 
if adequate data collected over a representative period of years, 
including preoperational data, show no statistically significant 
downward trend in the population abundance of RIS.
    The foregoing criteria would be applied independently. Passing a 
single criterion could serve as the basis for a successful 
demonstration of no risk of adverse environmental impact for a 
facility. If population-based biological criteria are used, they would 
be applied independently to each RIS species, and each species would 
need to meet the criteria for the facility to demonstrate no risk of 
adverse environmental impact.
    UWAG states that most of these recommended criteria have 
limitations on their use, such as being limited to certain water body 
types or to use with either impingeable or entrainable organisms, but 
not both. Some facilities, therefore, might use the criteria for only

[[Page 17164]]

some of their RIS and would address the remainder through the 
structured adverse environmental impact decision making process 
discussed below.
    (b) The Structured Adverse Environmental Impact Decision Making 
Process Consistent with EPA Ecological Risk Assessment Guidelines
    Under this alternative for determining adverse environmental 
impact, a facility would work with permit writers, resource managers, 
other appropriate technical experts, and stakeholders to determine what 
constitutes an ``unacceptable'' risk of adverse environmental impact in 
a water body. The process would be based on EPA's 1998 Ecological Risk 
Assessment Guidelines. The key steps would be as follows:
     Stakeholders would be involved in identifying issues of 
concern caused by the cooling water intake structure relative to RIS. 
To focus the effort to identify RIS at risk, previous section 316 
studies, the results of demonstrations using the criteria discussed 
above, information on the design and operation of the facility, water 
body fisheries management data and plans, and other relevant water body 
information could be used.
     The permit writer, with input from the facility, would 
then determine what data collection and assessment studies are 
necessary to address the RIS of concern. Decisions regarding the scope 
of the assessment would include identification of RIS; study design, 
sampling methods, locations, and durations; and analytical methods and/
or models to be employed.
     The facility and regulators also would identify explicit 
measurement endpoints and criteria for assessing adverse environmental 
impact before any studies are conducted. If the studies demonstrate 
that predetermined endpoints are not exceeded, the intake structure 
would be considered not to cause adverse environmental impact. If not, 
the facility would proceed to identify best technology available 
alternatives or to identify enhancements that would eliminate adverse 
environmental impact.
(4) Questions for Comment on the Determination of Adverse Environmental 
Impact
    (a) EPA invites public comment on all aspects of the foregoing 
approaches to defining adverse environmental impact and for making the 
preliminary determination on adverse environmental impact, and on which 
approach should be included if the Agency adopts a site-specific 
approach for the final rule.
    (b) Should the final rule adopt the 1977 Draft Guidance approach to 
defining adverse environmental impact as any entrainment or impingement 
damage caused by a cooling water intake structure?
    (c) Should the final rule state that any impingement and 
entrainment is an adverse environmental impact and focus site-specific 
assessment on whether that impact is minimized by technologies already 
in place or potential changes in technology? Alternatively, should the 
final rule define adverse environmental impact in terms of population-
level or community-level effects?
    (d) Should EPA adopt an approach that makes more explicit use of 
threshold determinations of whether adverse environmental impact is 
occurring, If so, should EPA adopt any or all of the conservative 
decision criteria suggested by UWAG in a final rule?
    (e) Should the structured risk assessment decision process that 
UWAG recommends for determining adverse environmental impact be 
adopted?
    b. Use of Previous Section 316(b) Demonstration Studies
    The Sample Site-Specific Rule and the PSEG and UWAG approaches 
would all give the permittee an opportunity to show that a previously 
conducted section 316(b) demonstration study was conducted in 
accordance with accepted methods and guidance, reflects current 
conditions, and supports decisions regarding the existence of adverse 
environmental impact and the best technology available for minimizing 
adverse environmental impact.
(1) Sample Site-Specific Rule Approach for Using Previous Demonstration 
Studies
    Sections 125.94(a)(2) and 125.94(c)(1) of the Sample Rule would 
permit use of a previously conducted section 316(b) demonstration if 
the previous study was performed using data collection and analytical 
methods that conformed to applicable guidance or requirements of the 
permitting agency or EPA and there have been no significant changes to 
either the aquatic populations affected by the cooling water intake 
structure or to the design, construction, or operation of the facility. 
The burden would be on the owner or operator of the facility to show 
that these conditions were met.
(2) PSEG Recommendation for Using Previous Demonstration Studies
    PSEG would permit use of previous section 316(b) determinations 
that were based upon analysis deemed to be thorough and based on the 
appropriate statutory factors and detailed, site-specific data and 
information. In PSEG's view, such prior decisions need not be subject 
to a complete re-evaluation in subsequent permit renewal proceedings 
absent indications that the current cooling water intake structure is 
allowing adverse environmental impacts to occur or that there have been 
material changes in any of the key factors the agency relied upon in 
reaching the prior determination.
    Under PSEG's approach, if a cooling water intake structure at an 
existing facility has previously been determined to employ best 
technology available based upon a diligent review of a section 316(b) 
demonstration that was conducted in conformance with the 1977 EPA 
Guidance, then the existing intake would continue to be determined to 
employ best technology available for the next permit cycle. The permit 
renewal application would have to include information sufficient to 
allow the permitting agency to determine that: (1) There has been no 
material change in the operation of the facility that would affect 
entrainment or impingement; (2) any in-place technologies have been 
properly operated, maintained, and are not allowing losses to occur in 
excess of the levels the agency considered in its prior determination; 
(3) any conservation or mitigation measures included in prior permits 
are in place and are producing the intended benefits; (4) the economics 
of applying a different technology have not changed; and (5) data and/
or analyses show that fish species of concern are being maintained or 
that any declines in those species are not attributable to the cooling 
water intake structure.
    In the Fact Sheet accompanying the draft permit, the permitting 
agency would be required specifically to: (1) Make a finding of fact 
that the prior section 316(b) determination had been based upon a 
demonstration conducted in conformance with the Agency's 1977 Guidance; 
and (2) identify the data and information that the permittee provided 
in support of the reaffirmance of its prior section 316(b) 
determination. Interested third parties as well as Federal, state and 
interstate resource protection agencies (e.g., National Marine 
Fisheries Service and the United States Fish and Wildlife Service) 
would have an opportunity to comment on the draft section 316(b) 
determination and to challenge the final determination if they were 
aggrieved by the agency's final decision.

[[Page 17165]]

(3) UWAG Recommendation for Using Previous Demonstration Studies
    UWAG also would permit use of a previously conducted section 316 
demonstration if the past demonstration reflects current biological 
conditions in the water body and the current location, design, 
construction, and capacity of the cooling water intake structure. UWAG 
argues that many States have developed section 316(b) regulatory 
programs with significant information-gathering requirements and that 
this information would provide, for many existing facilities, a 
sufficient basis for determination of compliance with section 316(b). 
More specifically, UWAG's approach would consider (1) Whether the RIS 
used in past determinations are still the appropriate ones; (2) whether 
the data collection and analytical tools used were adequate in light of 
current circumstances; (3) whether water body biological conditions at 
the time of the study reflect current conditions; (4) whether the 
location, design, construction, or capacity of the cooling water intake 
structure has been altered since the previous section 316(b) 
demonstration; and (5) other factors that should be considered if there 
is reason to believe that the previous demonstrations are inadequate.
(4) Questions for Comment on Using Previous Demonstration Studies
    EPA invites public comment on whether a final rule should permit 
the use of a previous section 316(b) demonstration for determining 
whether there is adverse environmental impact and the best technology 
available for minimizing adverse environmental impact. If such a 
provision is included in the final rule, what criteria or conditions 
should be included to ensure that the previously conducted 
demonstration is an adequate basis for section 316(b) decisions?
c. Process for Determining the Best Technology Available for Minimizing 
Adverse Environmental Impact and the Role of Costs and Benefits
    Once it is determined that there is adverse environmental impact 
attributable to a cooling water intake structure, the facility and 
permitting agency must decide on a site-specific basis what changes to 
the location, design, construction, or capacity of the intake or what 
alternative voluntary measures, must be installed and implemented to 
minimize the impact.
(1) EPA's Draft 1977 Guidance and Development Document
    EPA's draft 1977 draft guidance and development document provide 
guidance on how to select best technology for minimizing adverse 
environmental impact but are silent on the role of costs and benefits 
in determining best technology available for minimizing adverse 
environmental impact. In 1979, the U.S. Court of Appeals for the First 
Circuit found that cost is an acceptable consideration in section 
316(b) determinations. Seacoast Anti-Pollution League v. Costle, 597 
F.2d 306, 311 (1st Cir. 1979). Over the years, section 316(b) 
determinations have focused on whether the costs of technologies 
employed would be wholly disproportionate to the environmental gains to 
be derived from their use. See e.g., Seacoast Anti-Pollution League v. 
Costle; Decision of the General Counsel No. 63 (July 29, 1977); 
Decision of the General Counsel No. 41 (June 1, 1976).
(2) Sample Site-Specific Rule
    The Sample Rule would require that the analysis of best technology 
available for minimizing adverse environmental impact be based on a 
biological survey of the part of the water body affected by the cooling 
water intake structure and a Design and Construction Technology Plan 
submitted by the permittee, together with any voluntary operational 
measures or restoration measures that would be implemented at the 
facility. (See Sample Rule Secs. 125.94, 125.95 and 125.97.)
    Examples of appropriate technologies a facility could propose in 
the Design and Construction Technology Plan include wedgewire screens, 
fine mesh screens, fish handling and return systems, barrier nets, 
aquatic filter barrier systems, an increase in the opening of the 
cooling water intake structure to reduce velocity and, if warranted by 
site specific conditions, cooling tower technology. Under the Sample 
Rule, in-place technologies implemented previously to comply with 
section 316(b), and information regarding their effectiveness, may be 
included in the Design and Construction Technology Plan. Operational 
measures that may be proposed include seasonal shutdowns or reductions 
in flow and continuous operation of screens.
    The Sample Rule also would provide that the Director could exclude 
any design or construction technology if the costs of such technology 
would be significantly greater than the estimated benefits of the 
technology (Sec. 125.94(f)(2)).
(3) Processes Structured on Incremental Cost-Benefit Assessment
    EPA solicits comment on whether an evaluation of the cost-
effectiveness (i.e., the incremental cost to benefit ratio) of cooling 
water intake structure technologies and any operational and/or 
restoration measures offered by the owner or operator of a facility is 
an appropriate component of the analysis that would be undertaken in a 
site-specific approach to determining best technology available for 
minimizing adverse environmental impact. The UWAG and PSEG 
recommendations for selecting technologies and other measures based on 
an evaluation of costs and benefits are discussed below.
(A) UWAG Recommendation for a Process
    Under the UWAG approach, if the facility is not able to demonstrate 
that its cooling water intake structure is not causing adverse 
environmental impact, it would then select and implement the best 
technology available. As the first step in choosing best technology 
available, a facility would identify technology alternatives. It would 
then estimate the costs and benefits of the alternatives. Relevant 
benefits typically would include preservation of fish and other aquatic 
life and economic benefits from recreational and commercial fisheries. 
Relevant costs typically would include the capital cost of constructing 
a technology, operation and maintenance costs (including energy 
penalties), and adverse environmental effects such as evaporative loss, 
salt drift, visible plumes, noise, or land use. For those facilities 
for which the technologies will lower the generating output of the 
facility, the cost of replacement power and the environmental effects 
of increased air pollution and waste generation from generating the 
replacement power also would be considered.
    Facilities then would calculate the net benefits for each 
technology and rank them by cost-effectiveness. Those with marginal 
costs greater than marginal benefits would be rejected. The technology 
with the greatest net benefit would be the ``best'' technology for the 
site. UWAG believes use of existing EPA cost-benefit calculation 
methodologies, such as those used for natural resource damage valuation 
under CERCLA and under NEPA would be sufficient.
(B) PSEG Recommendation for a Process
    PSEG suggests two options for determining best technology available 
where prior section 316(b) determinations were not based upon

[[Page 17166]]

data and analyses sufficient to allow a permittee to seek renewal.
    Under the first option, the permittee would provide the permit 
writer with an assessment that would address: (1) The alternative 
technologies or other measures that are available for addressing the 
cooling water intake structure's effects, and (2) the incremental costs 
and benefits of alternative technologies or other measures relative to 
the existing cooling water intake structure's operation. The 
application would include: an engineering report identifying the suite 
of technologies potentially applicable to the facility; an analysis 
describing the bases for the selection of technologies applicable to 
the facility; an assessment of the issues associated with retrofitting 
the facility to include each of the applicable technologies and their 
costs; and an assessment of the reasonably likely reductions in 
entrainment and impingement losses that would be achieved if the 
facility were to be retrofitted to operate with the technology. The 
application also would include a cost-benefit analysis that would 
address and assess: the effects of the reductions in entrainment and 
impingement losses on life stages of the species for which an economic 
value can be determined utilizing readily available information, such 
as market values of commercial species, and recreational costs based on 
methods determined to be appropriate by the Director and the 
appropriate fisheries management agencies. The Director would then 
select the best alternative technology or other measures, the costs of 
which are not wholly disproportionate to the benefits, unless the 
proposed technology or other measures clearly would not result in any 
substantial improvement to the species of concern.
    In evaluating the benefits of alternative technologies, and in 
determining whether there is likely to be a substantial improvement to 
the species of concern, permittees and permitting authorities would 
undertake the level of biological analysis that was appropriate to the 
situation, supported by the applicable data, and commensurate with the 
resources available for developing and reviewing the necessary studies.
    PSEG's second option would be appropriate where the permittee 
elects to undertake an in-depth analysis of the potential adverse 
environmental impact attributable to its cooling water intake 
structure, followed by a site-specific determination of the appropriate 
best technology available to minimize that adverse environmental 
impact. This path represents the most resource-intensive and 
scientifically rigorous approach to implementing section 316(b). Under 
this option, the permittee would provide the permit writer with a 
detailed assessment that evaluates the effects of the existing cooling 
water intake structure's operation, and demonstrates the extent to 
which the operation may be jeopardizing the sustainability of the 
populations of the species of concern, or assesses other appropriate 
factors for determining adverse environmental impact. If the permitting 
agency concurs in an assessment that no adverse environmental impact is 
being caused by the existing operation, then the existing cooling water 
intake structure would be deemed to be best technology available. If 
the assessment demonstrates that the cooling water intake structure is 
causing adverse environmental impact or the permitting authority 
rejects the applicant's determination, then the permit applicant would 
proceed to evaluate alternative technologies or other measures.
(4) Questions for Comment on a Process for Determining the Best 
Technology Available for Minimizing Adverse Environmental Impact and 
the Role of Costs and Benefits
    EPA invites public comment on the standard that would be included 
in any site-specific final rule for determining best technology 
available for minimizing adverse environmental impact, including the 
appropriate role for a consideration of costs and benefits. EPA invites 
comment on whether the long-standing ``wholly disproportionate'' cost-
to-benefit test is an appropriate measure of costs and benefits in 
determining best technology available for minimizing adverse 
environmental impact. EPA also invites comment on the use of the 
``significantly-greater'' cost to benefit test in today's sample site-
specific rule. EPA also invites comment on whether a test based on the 
concept that benefits should justify costs would be more appropriate, 
as is used in various other legal and regulatory contexts (see, e.g., 
Safe Drinking Water Act Section 1412(b)(6)(A) and Executive Order 
12866, Section 1(b)(6)). EPA also invites public comment on whether 
variances are appropriate and, if so, what test or tests should be used 
for granting a variance.
d. Use of Voluntary Restoration Measures or Enhancements
    The Sample Site-Specific Rule and the UWAG and PSEG approaches 
would all permit the owner or operator of an existing facility to 
voluntarily undertake restoration (or enhancement) measures in 
combination with, or in lieu of, technologies to minimize adverse 
environmental impact.
    Section 125.95 of the Sample Rule provides that an owner or 
operator of an existing facility may undertake restoration measures, 
and the Director would be required to take into account the expected 
benefits of those measures to fish and shellfish in determining whether 
the facility has minimized adverse environmental impact. The permittee 
would include in its section 316(b) plan a list of the measures it 
proposed to implement and the methods for evaluating the effectiveness 
of the restoration measures.
    UWAG gives the following as examples of potential enhancements: (1) 
Stocking fish to replace impaired RIS; (2) creating or restoring 
spawning or nursery habitat for RIS; (3) raising the dissolved oxygen 
in anoxic areas to expand the carrying capacity of the RIS in a water 
body; and (4) removing obstructions to migratory species. UWAG would 
require the objectives of particular enhancements to be established in 
advance, and appropriate monitoring and/or reporting obligations would 
be included in the facility's permit to confirm that enhancement 
objectives have been achieved. UWAG argues that using enhancements 
might lower compliance costs, might possibly be of more benefit to RIS 
than technologies, and might provide a longer-term benefit to RIS.
    EPA invites public comment on whether a final site-specific rule 
should permit voluntary restoration or enhancement measures to be taken 
into account in determining compliance with section 316(b) and, if so, 
what criteria should be included for evaluating the effectiveness of 
such measures.
e. Consultation With Fish and Wildlife Management Agencies
    Because the central focus of any site-specific approach is the 
effect of the cooling water intake structure on the aquatic populations 
or ecosystems, it is important that fish and wildlife management 
agencies with jurisdiction over the affected water body have an 
opportunity to provide information and views to the Director before 
section 316(b) determinations are made. The Sample Rule would provide 
for this in Sec. 125.100(b)(2). The UWAG recommendations also recognize 
the important role of stakeholders, including fish and wildlife 
management

[[Page 17167]]

agencies, in a structured site-specific alternative (UWAG, pp. 8-9).
    EPA invites public comment on the appropriate role of fish and 
wildlife management agencies if the final rule implements a site-
specific approach.
6. Implementation Burden Under Any Site-Specific Approach
    Although well-implemented, site-specific approaches for determining 
best technology available to minimize adverse environmental impact can 
ensure that technologies are carefully tailored to site-specific 
environmental needs, EPA also recognizes that site-specific regulatory 
approaches can lead to difficult implementation challenges for State 
and Federal permitting agencies. EPA invites comment on the following 
discussion of the burdens associated with implementing section 316(b) 
on a site-specific basis, the competing demands on permitting agencies, 
and resources available to permitting agencies. EPA invites comment on 
ways to employ a site-specific approach while minimizing implementation 
burdens on permitting agencies.
    The site-specific decision-making process requires each regulated 
facility to develop, submit, and refine studies that characterize or 
estimate potential adverse environmental impact. Although some 
approaches allow facilities to use existing studies in renewal 
applications, States must still conduct evaluations to ascertain the 
continued validity of these studies and assess existing conditions in 
the water body. Such studies can be resource intensive and require the 
support of a multidisciplinary team. A Director's determinations as to 
whether the appropriate studies have been performed and whether a given 
facility has minimized adverse environmental impact have often been 
subject to challenges that can take significant periods of time to 
resolve and can impose significant resource demands on permitting 
agencies, the public, and the permit applicant.
    Some examples of the workload that can be required for permitting 
agencies to implement a site-specific approach follow. Since, 1999, EPA 
New England has devoted 0.6 full-time employees a year, including a 
permit writer, a biologist and attorney, to reissuance of a permit for 
the Pilgrim Nuclear Power Station (PNPS), \62\ At the Seabrook Nuclear 
Power Station, EPA Region I has invested about one full-time employee 
per year over four years to determine the nature and degree of adverse 
environmental impacts and the appropriate permit conditions the permit 
renewal. The State of New York Department of Environmental 
Conservation's Division of Fish, Wildlife and Marine Resources spent 
$169,587 in 1997 and $167,564 in 1998 to review cooling systems at 
steam-motivated electricity generating facilities. The Division 
estimated a total effort expenditure of approximately 2.2 full-time 
employees in 1997 and 1998 and 4.3 full-time employees for 2001. These 
figures do not include the level of effort associated with review time 
spent by the Division of Environmental Permits, the Division of Water, 
or the Division of Legal Affairs. (See Docket W-00-03.) Because of 
workload concerns, some States have requested that EPA adopt 
regulations that set clear requirements specifying standards of 
performance, monitoring and compliance. \63\
---------------------------------------------------------------------------

    \62\ Information provided by EPA Region I. Region I serves as 
permitting authority for the non-delegated states of Massachusetts 
and New Hampshire.
    \63\ See communications from Mr. William McCracken, Chief of the 
Permits Section, Surface Water Quality Division, Michigan Department 
of Environmental Quality, January 24, 2002.
---------------------------------------------------------------------------

    These levels of burden are of particular concern to the Agency and 
to some State permitting agencies given the heavy permit workloads, 
pressure on resources available to permitting agencies, and the 
complexity of finalizing permits required to address 316(b) 
requirements. Recent data indicate that most States are struggling to 
meet their major permits issuance targets set for decreasing the permit 
backlog. For example, these data indicate that for major facilities 
engaged in the generation, transmission and/or distribution of electric 
energy for sale (SIC 4911), the permit backlog is 30.3 percent \64\, 
that is, higher than other categories of major permits (data indicate a 
backlog of 23.1 percent for major permits in general), \65\ In 1998, 
the EPA Office of Inspector General identified the backlog in issuance 
of National Pollutant Discharge Elimination System permits as a 
material weakness pursuant to the Federal Managers' Financial Integrity 
Act (FMFIA). As part of its Fiscal Year 2001 FMFIA Report, EPA 
recommended that the permit backlog be identified as a continuing 
material weaknesses in its programs. EPA's Office of Water is examining 
strategies to correct this weakness. \66\ The evidence does not, 
however, establish that section 316(b) determinations are a factor in 
the backlog in issuance of National Pollutant Discharge Elimination 
System permits.
---------------------------------------------------------------------------

    \64\ Backlog counts for these facilities are based on permits 
expired as of November 21, 2001 or if the permit expired field in 
the database is blank.
    \65\ NPDES Permit Backlog Trend Report: October 31, 2001, issued 
on November 30, 2001 by EPA's Water Permits Division, US EPA, 
Washington, DC.
    \66\Decision Memorandum from the Deputy Chief Financial Officer 
of EPA to the Administrator, December 18, 2001.
---------------------------------------------------------------------------

    EPA is also aware that resources available to State permitting 
agencies are limited. In a recent survey conducted by ECOS 
(Environmental Council of States) \67\ on States environmental agency 
budget reductions during the current fiscal year and for the upcoming 
fiscal year, 42 States reported that their agency was asked to cut or 
reduce their budgets for the current fiscal year. \68\ For the 
following fiscal year, 23 of the responding States expected additional 
budget cuts. EPA is aware that at least one State, the State of 
Maryland, has used State law to impose a small surcharge on electric 
bills in the State to support a State research program, and that funds 
from that program are used for section 316(b) studies.
---------------------------------------------------------------------------

    \67\ The Environmental Council Of States is a national non-
profit association of state and territorial environmental 
commissioners. See website: www.sso.org/ecos/. When the Axe Falls: 
How State Environmental Agencies Deal with Budget Cuts by R. Steven 
Brown, Deputy Executive Director and Chief Operating Officer of 
ECOS. (See Docket for today's proposed rule.)
    \68\ This state budget outlook is supported by a report 
published on October 31, 2001, by the National Conference of State 
Legislatures (NCSL).
---------------------------------------------------------------------------

    EPA seeks additional information and data on the resources 
necessary and available for the review of section 316(b) determinations 
in existing facilities' permit renewals.
    EPA invites comment on whether the resource requirements of the 
site-specific approach also have served as a disincentive to a 
comprehensive revisiting of section 316(b) permit conditions during 
each renewal (typically every 5 years), despite advances in 
technologies for reducing impingement mortality and entrainment.
    EPA seeks comment on the above discussion of the resource 
implications of implementing the requirements of section 316(b) on a 
case-by-case basis. EPA invites comment on how the workload of a site-
specific approach could be streamlined so as to provide for the 
benefits of a site-specific approach (e.g., application of technologies 
specifically tailored to site-specific conditions) while recognizing 
the resource constraints faced by so many permitting agencies.

[[Page 17168]]

D. Why EPA Is Not Considering Dry Cooling Anywhere?

    EPA conducted a full analysis for the new facility rule (Phase I) 
and rejected dry cooling as an economically practicable option on a 
national basis. Dry cooling systems use either a natural or a 
mechanical air draft to transfer heat from condenser tubes to air. In 
conventional closed-cycle recirculating wet cooling towers, cooling 
water that has been used to cool the condensers is pumped to the top of 
a recirculating cooling tower; as the heated water falls, it cools 
through an evaporative process and warm, moist air rises out of the 
tower, often creating a vapor plume. Hybrid wet-dry cooling towers 
employ both a wet section and dry section and reduce or eliminate the 
visible plumes associated with wet cooling towers.
    For the new facility rule, EPA evaluated zero or nearly zero intake 
flow regulatory alternatives, based on the use of dry cooling systems. 
EPA determined that the annual compliance cost to industry for this 
option would be at least $490 million. EPA based the costs on 121 
facilities having to install dry cooling. The cost for Phase II 
existing facilities would be significantly higher. EPA estimates that 
539 Phase II existing facilities would be subject to this proposal. The 
cost would be significantly higher because existing facilities have 
less flexibility, thus incurring higher compliance costs (capital and 
operating) than new facilities. For example, existing facilities might 
need to upgrade or modify existing turbines, condensers, and/or cooling 
water conduit systems, which typically imposes greater costs than use 
of the same technology at a new facility. In addition, retrofitting a 
dry cooling tower at an existing facility would require shutdown 
periods during which the facility would lose both production and 
revenues, and decrease the thermal efficiency of an electric generating 
facility.
    The disparity in costs and operating efficiency of dry cooling 
systems compared with wet cooling systems is considerable when viewed 
on a nationwide or regional basis. For example, under a uniform 
national requirement based on dry cooling, facilities in the southern 
regions of the U.S. would be at an unfair competitive disadvantage 
compared to those in cooler northern climates. Even under a regional 
subcategorization strategy for facilities in cool climatic regions of 
the U.S., adoption of a minimum requirement based on dry cooling could 
impose unfair competitive restrictions for steam electric power 
generating facilities. This relates primarily to the elevated capital 
and operating costs associated with dry cooling. Adoption of 
requirements based on dry cooling for a subcategory of facilities under 
a particular capacity would pose similar competitive disadvantages for 
those facilities.
    EPA does not consider dry cooling a reasonable option for a 
national requirement, nor for subcategorization under this proposal, 
because the technology of dry cooling carries costs that are sufficient 
to cause significant closures for Phase II existing facilities. Dry 
cooling technology would also have a significant detrimental effect on 
electricity production by reducing energy efficiency of steam turbines. 
Unlike a new facility that can use direct dry cooling, an existing 
facility that retrofits for dry cooling would most likely use indirect 
dry cooling which is much less efficient than direct dry cooling. In 
contrast to direct dry cooling, indirect dry cooling does not operate 
as an air-cooled condenser. In other words, the steam is not condensed 
within the structure of the dry cooling tower, but instead indirectly 
through an indirect heat exchanger. Therefore, the indirect dry cooling 
system would need to overcome additional heat resistance in the shell 
of the condenser compared to the direct dry cooling system. Ultimately, 
the inefficiency penalties of indirect dry cooling systems will exceed 
those of direct dry cooling systems in all cases.
    Although the dry cooling option is extremely effective at reducing 
impingement and entrainment and would yield annual benefits of $138.2 
million for impingement reductions and $1.33 billion for entrainment 
reductions, it does so at a cost that would be unacceptable. EPA 
recognizes that dry cooling technology uses extremely low-level or no 
cooling water intake, thereby reducing impingement and entrainment of 
organisms to dramatically low levels. However, EPA interprets the use 
of the word ``minimize'' in section 316(b) in a manner that allows EPA 
the discretion to consider technologies that very effectively reduce, 
but do not completely eliminate, impingement and entrainment and 
therefore meet the requirements of section 316(b). Although EPA has 
rejected dry cooling technology as a national minimum requirement, EPA 
does not intend to restrict the use of dry cooling or to dispute that 
dry cooling may be the appropriate cooling technology for some 
facilities. For example, facilities that are repowering and replacing 
the entire infrastructure of the facility may find that dry cooling is 
an acceptable technology in some cases. A State may choose to use its 
own authorities to require dry cooling in areas where the State finds 
its fishery resources need additional protection above the levels 
provided by these technology-based minimum standards.

E. What Is the Role of Restoration and Trading?

1. Restoration Measures
    Restoration measures, as used in the context of section 316(b) 
determinations, include practices that seek to conserve fish or aquatic 
organisms, compensate for lost fish or aquatic organisms, or increase 
or enhance available aquatic habitat used by any life stages of 
entrained or impinged species. Such measures have been employed in some 
cases in the past as one of several means of fulfilling the 
requirements imposed by section 316(b). Examples of restoration 
measures that have been included as conditions of permits include 
creating, enhancing, or restoring wetlands; developing or operating 
fish hatcheries or fish stocking programs; removing impediments to fish 
migration; and other projects designed to replace fish or restore 
habitat valuable to aquatic organisms. Restoration measures have been 
used, however, on an inconsistent and somewhat limited basis in the 
context of the 316(b) program. Their role under section 316(b) has 
never been explicitly addressed in EPA regulations or guidance until 
EPA promulgated the final section 316(b) regulations for new 
facilities, which is discussed below in more detail. Prior to the 
section 316(b) new facility regulations, restoration projects were 
undertaken as part of section 316(b) determinations at Phase II 
existing facilities and in permitting actions where the cost of the 
proposed technology was considered to be wholly disproportionate to the 
demonstrated environmental benefits that could be achieved. Often such 
cases involved situations where retrofitting with a technology such as 
cooling towers was under consideration. In addition to the role for 
restoration outlined as part of the today's proposed rule (see Section 
VI.A. above), EPA invites comment on the following alternatives for 
restoration as part of regulations for Phase II existing facilities.
a. The Role of Restoration in the Section 316(b) New Facility 
Regulations
    The final rule for new facilities includes restoration measures as 
part of Track II. EPA did not include restoration in Track I because it 
was

[[Page 17169]]

intended to be expeditious and provide certainty for the regulated 
community and a streamlined review process for the permitting 
authority. To do this for new facilities, EPA defined the best 
technology available for minimizing adverse environmental impact in 
terms of reduction of impingement and entrainment, a relatively 
straightforward metric for environmental performance of cooling water 
intake structures. In contrast, restoration measures in general require 
complex and lengthy planning, implementation, and evaluation of the 
effects of the measures on the populations of aquatic organisms or the 
ecosystem as a whole.
    EPA included restoration measures in Track II to the extent that 
the Director determines that the measures taken will maintain the fish 
and shellfish in the waterbody in a manner that represents performance 
comparable to that achieved in Track I. Applicants in Track II need not 
undertake restoration measures, but they may choose to undertake such 
measures. Thus, to the extent that such measures achieve performance 
comparable to that achieved in Track I, it is within EPA's authority to 
authorize the use of such measures in the place of Track I 
requirements. This is similar to the compliance alternative approach 
EPA took in the effluent guidelines program for Pesticide Chemicals: 
Formulating, Packaging and Repackaging. There EPA established a numeric 
limitation but also a set of best management practices that would 
accomplish the same numeric limitations. See 61 FR 57518, 57521 (Nov. 
6, 1997). EPA believed that section 316(b) of the Clean Water Act 
provided EPA with sufficient authority to allow the use of voluntary 
restoration measures in lieu of the specific requirements of Track I 
where the performance is substantially similar under the principles of 
Chevron USA v. NRDC, 467 U.S. 837, 844-45 (1984). In section 316(b) of 
the Clean Water Act, Congress is silent concerning the role of 
restoration technologies both in the statute and in the legislative 
history, either by explicitly authorizing or explicitly precluding 
their use. In the context of the new facility rule EPA also believes 
that appropriate restoration measures or conservation measures that are 
undertaken on a voluntary basis by a new facility to meet the 
requirements of that rule fall within EPA's authority to regulate the 
``design'' of cooling water intake structures. Bailey v. U.S., 516 U.S. 
137 (1995) (In determining the meaning of words used in a statute, the 
court considers not only the bare meaning of the word, but also its 
placement and purpose in the statutory scheme.)
    In the new facility rule EPA recognized that restoration measures 
have been used at existing facilities implementing section 316(b) on a 
case-by-case, best professional judgment basis as an innovative tool or 
as a tool to conserve fish or aquatic organisms, compensate for the 
fish or aquatic organisms killed, or enhance the aquatic habitat harmed 
or destroyed by the operation of cooling water intake structures. Under 
Track II, that flexibility will continue to be available to new 
facilities to the extent that they can demonstrate performance 
comparable to that achieved in Track I. For example, if a new facility 
that chooses Track II is on an impaired waterbody, that facility may 
choose to demonstrate that velocity controls in concert with measures 
to improve the productivity of the waterbody will result in performance 
comparable to that achieved in Track I. The additional measures may 
include such things as reclamation of abandoned mine lands to eliminate 
or reduce acid mine drainage along a stretch of the waterbody, 
establishment of riparian buffers or other barriers to reduce runoff of 
solids and nutrients from agricultural or silvicultural lands, removal 
of barriers to fish migration, or creation of new habitats to serve as 
spawning or nursery areas. Another example might be a facility that 
chooses to demonstrate that flow reductions and less protective 
velocity controls, in concert with a fish hatchery to restock fish 
being impinged and entrained with fish that perform a similar function 
in the community structure, will result in performance comparable to 
that achieved in Track I.
    Finally, in the new facility rule, EPA recognized that it may not 
always be possible to establish quantitatively that the reduction in 
impact on fish and shellfish is comparable using the types of measures 
discussed above as would be achieved in Track I, due to data and 
modeling limitations. Despite such limitations, EPA stated that there 
may be situations where a qualitative demonstration of comparable 
performance could reasonably assure substantially similar performance. 
For that reason, EPA provided, in Sec. 125.86 of the new facility rule, 
that the Track II Comprehensive Demonstration Study should show that 
either: (1) The Track II technologies would result in reduction in both 
impingement mortality and entrainment of all life stages of fish and 
shellfish of 90 percent or greater of the reduction that would be 
achieved through Track I (quantitative demonstration) or, (2) if 
consideration of impacts other than impingement mortality and 
entrainment is included, the Track II technologies would maintain fish 
and shellfish in the waterbody at a substantially similar level to that 
which would be achieved under Track I (quantitative or qualitative 
demonstration).
b. Restoration Approaches Being Considered for the Existing Facilities 
Rule
    In the existing facilities rule, EPA is proposing to allow 
restoration as one means of satisfying the compliance requirements for 
any one of the three alternatives in Sec. 125.94(a). The demonstration 
a facility would make to show that the restoration measures provide 
comparable performance to design and construction technologies and/or 
operational measures would be similar to the demonstration that a 
facility would make under Track II in the new facility rule. EPA is 
also inviting comment on other restoration approaches it is 
considering. These include discretionary and mandatory regulatory 
approaches involving restoration measures as well as restoration 
banking, which are discussed below.
(1) Discretionary Restoration Approaches
    An approach being considered by EPA would provide the Director with 
the discretion to specify appropriate restoration measures under 
section 316(b), but would not require that he or she do so. This 
approach is consistent with several precedents in which the permitting 
authority allowed the use of restoration measures when the cost to 
retrofit an existing facility's cooling water intake structures with 
control technologies was determined to be wholly disproportionate to 
the benefits the control technology would provide (e.g., John Sevier, 
Crystal River, Chalk Point, Salem). \69\
---------------------------------------------------------------------------

    \69\ In re Tennessee Valley Authority John Sevier Steam Plant, 
NPDES Permit No. TN0005436 (1986); In re Florida Power Corp. Crystal 
River Power Plant Units 1, 2, & 3, NPDES Permit FL0000159 (1988); 
Chalk Point, MDE, State of Maryland, Discharge Permit, Potomac 
Electric Power Co., State Discharge Permit No. 81-DP-0627B, NPDES 
Permit No. MD0002658B (1987, modified 1991); Draft NJDEP Permit 
Renewal Including Section 316(a) Variance Determination and Section 
316(b) BTA Decision: NJDEP Permit No. NJ0005622 (1993).
---------------------------------------------------------------------------

(2) Mandatory Restoration Approach
    Under this approach, the use of restoration measures would be 
required as an element of a section 316(b) determination in all cases 
or in some defined set of cases (e.g., for intake structures located on 
oceans, estuaries,

[[Page 17170]]

or tidal rivers). Restoration would be required to compensate for 
organisms that were not protected following facility installation of 
control technologies. Phase II existing facilities with cooling water 
intake structures would be required to implement some form of 
restoration measures in addition to implementing direct control 
technologies to minimize adverse environmental impact. Under this 
approach, an existing facility would submit a plan to restore fish and 
shellfish to the extent necessary for offsetting fish and shellfish 
entrainment and impingement losses estimated to continue to occur after 
any required control technology is installed. This restoration plan 
would be reviewed and approved by the Director and incorporated in the 
permit. This is similar to the mitigation sequence used under CWA 
section 404, wherein environmental impacts are avoided and minimized 
prior to consideration of compensatory mitigation measures although in 
section 404, not all projects require mitigation. The development of 
restoration measures applicable to a cooling water intake structure 
would focus on the unique situation faced by each facility and would 
allow for review and comment by the permitting agency and the public.
(3) Restoration Banking
    Restoration plans could potentially use a banking mechanism similar 
to those used in the CWA section 404 program, that would allow the 
permittee to meet requirements by purchasing restoration credits from 
an approved bank. For example, should wetlands restoration be an 
appropriate mechanism for offsetting the adverse impact caused by a 
cooling water intake structure, the permittee could purchase credits 
from an existing wetlands mitigation bank established in accordance 
with the Federal Guidance for the Establishment, Use and Operation of 
Mitigation Banks (50 FR 58605; November 28, 1995). As in the CWA 
section 404 program, public or private entities could establish and 
operate the banks providing mitigation for impacts under 316(b). EPA 
views the use of restoration banking for the purposes of this proposed 
rule as one way to facilitate compliance and reduce the burden on the 
permit applicant, while at the same time potentially enhancing the 
ecological effectiveness of the required restoration activities.
2. Entrainment Trading
    Under Sec. 125.90(d) of today's proposed rule, States may adopt 
alternative regulatory requirements that will result in environmental 
performance within a watershed that is comparable to the reductions of 
impingement mortality and entrainment specified in the proposed 
Sec. 125.94. EPA is considering an approach for implementing section 
316(b) that would allow specific Phase II existing facilities to trade 
entrainment reductions to achieve an overall standard of performance 
for entrainment reduction in a watershed at a lower cost through a 
voluntary State or authorized Tribal section 316(b) trading program. 
EPA believes such an approach might be appropriate in light of section 
316(b)'s objective of minimizing adverse environmental impact. The goal 
of the trading approach is to provide an incentive for some Phase II 
existing facilities to implement more protective technologies than 
required by today's proposed rule, resulting in credits that can be 
traded with other facilities that may not find the most protective 
technologies economically practicable.
    EPA acknowledges that the trading framework that EPA is 
contemplating under section 316(b) differs from previous trading 
strategies implemented by EPA because it involves trading living 
resources rather than pollutant loads. Because this is a novel approach 
to trading, it raises many questions. For example, how would the 
program address concerns that some species have greater economic value 
than others, or the counter-argument that some species may not be 
economically valuable but nonetheless have high ecological value? What 
is an appropriate spatial scale under which trading can occur to ensure 
protection of water quality and aquatic organisms? The following 
section addresses these questions and others and seeks comment on the 
appropriate elements of a trading approach under section 316(b) that 
would conserve and protect water quality and aquatic resources.
a. Entrainment Reduction vs. Impingement Reduction as a Basis for 
Trading
    Entrainment and impingement are the main causes of adverse 
environmental impact from cooling water intake withdrawals. However, 
impingement reduction technologies are relatively inexpensive compared 
to entrainment reduction (see Chapter 2 of the Technical Development 
Document for the New Facility Rule, EPA-821-R-01-036, November 2001). 
Impingement reduction measures include decreasing intake velocities and 
installation of traveling screens with fish baskets and fish return 
systems. The implementation of a section 316(b) trading program for 
impingement may not justify the cost of monitoring susceptible species 
and administrating the program. EPA believes that a trading program 
that focuses on entrainment is more viable. However, EPA requests 
comment on whether to extend trading to include impingement of aquatic 
organisms.
    In contrast to impingement controls, entrainment reduction 
technologies can be relatively expensive. Section 316(b) trading would 
enable smaller facilities that cannot afford to install more costly 
technologies to reduce their costs by trading with other Phase II 
existing facilities that face relatively lower costs of entrainment 
reduction. For the purpose of a section 316(b) trading program, an 
entrainment reduction performance standard for a watershed would be set 
by the authorized State or Tribe within the range of 60 to 90 percent 
for all life stages of entrained fish and shellfish. The performance 
standard would be set to reflect site-specific facility and ecological 
characteristics. All facilities located in the watershed would need to 
reach the performance standard through the installation of technologies 
to reduce entrainment (or, potentially, restoration measures to 
compensate for entrainment losses at the facility). A facility that can 
afford to implement technologies to reduce entrainment above the 
performance standard would have entrainment reduction credits to sell 
to other facilities that cannot afford or choose not to meet the 
performance standard by technology alone. EPA notes that in 
Sec. 125.94(c) of today's proposed rule, Phase II existing facilities 
may request a site-specific determination of best technology available 
if the costs of compliance with the applicable performance standards 
are significantly greater than the costs EPA considered when 
establishing the performance standards or significantly greater than 
site-specific benefits. If a section 316(b) trading program was 
available, these facilities could potentially have a lower cost option 
for meeting the applicable performance standard for their respective 
waterbodies by purchasing credits from another facility that implements 
more protective technologies. EPA seeks comment on whether a section 
316(b) trading program would generally afford greater watershed 
protection by increasing the number of facilities meeting the 
performance standard and whether consideration of credit purchases 
should be mandatory prior to the Director setting alternative 
requirements.

[[Page 17171]]

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

[[Page 17172]]

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

[[Page 17173]]

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

VII. Implementation

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

A. When Does the Proposed Rule Become Effective?

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

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

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

[[Page 17174]]

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

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

[[Page 17175]]

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

[[Page 17176]]

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

[[Page 17177]]

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

[[Page 17178]]

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

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

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

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

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

[[Page 17179]]

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

D. What Would I Be Required To Monitor?

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

[[Page 17180]]

E. How Would Compliance Be Determined?

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

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

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

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

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

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

H. Alternative Site-Specific Requirements

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

[[Page 17181]]

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

VIII. Economic Analysis

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

A. Proposed Rule

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

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

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

[[Page 17182]]

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

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

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

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

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

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

[[Page 17183]]

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

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

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

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

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

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


[[Page 17184]]

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

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

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

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

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

[[Page 17185]]

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

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

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

B. Alternative Regulatory Options

    EPA is considering four alternative options that would establish 
substantive requirements for best technology available for minimizing 
adverse environmental impact by specific rule rather than by site-
specific analysis. These include: (1) Requiring existing facilities 
located on estuaries and tidal rivers to reduce intake capacity 
commensurate with the use of a closed-cycle recirculating cooling 
system; (2) requiring all Phase II existing facilities to reduce intake 
capacity commensurate with the use of closed-cycle, recirculating 
cooling systems; (3) requiring all Phase II existing facilities to 
reduce impingement and entrainment to levels established based on the 
use of design and construction (e.g., fine mesh screens, fish return 
systems) or operational measures; and (4) requiring all existing 
facilities to reduce their intake capacity to a level commensurate with 
the use of a dry cooling system.
    EPA conducted an electricity market model analysis of alternative 
options one and two as defined above. Section VIII.B.1 below presents 
the national costs of these two alternative regulatory options 
considered by EPA. Section VIII.B.2 discusses the impacts associated 
with these two alternative regulatory options.
1. Costs
    EPA estimated total national annualized post-tax cost of compliance 
for two alternative options: (1) The ``Intake Capacity Commensurate 
with Closed-Cycle, Recirculating Cooling System based on Waterbody 
Type/Capacity'' Option (waterbody/capacity-based option) and (2) the 
``Intake Capacity Commensurate with Closed-Cycle, Recirculating Cooling 
System for All Facilities'' Option (all closed-cycle option). The 
estimated total annualized post-tax cost of compliance for the 
waterbody/capacity-based option is approximately $585 million. EPA 
further estimates that the total annualized post-tax cost of compliance 
for the all cooling tower option is approximately $2.26 billion. Not 
included in either estimate are 9 facilities that are projected to be 
baseline closures. Including compliance costs for these 9 facilities 
would increase the total cost of compliance with the waterbody/
capacity-based option to approximately $595 million, and to roughly 
$2.32 billion for the all cooling tower option.
2. Economic Impacts
    As stated in Section VIII.A.2 above, EPA used the IPM 2000 
electricity market model to assess impacts associated with the proposed 
rule and regulatory options. These impacts are assessed by comparing 
model output for the base case and post compliance scenarios for each 
regulatory option. In support of this rule, EPA completed an 
electricity market model analysis of two post compliance scenarios: (1) 
The ``Intake Capacity Commensurate with Closed-Cycle, Recirculating 
Cooling System based on Waterbody Type/Capacity'' Option (waterbody/
capacity-based option) and (2) the ``Intake Capacity Commensurate with 
Closed-Cycle, Recirculating Cooling System for All Facilities'' Option 
(all closed-cycle option). This section presents the results of the IPM 
2000 analysis of these two post-compliance scenarios.
a. Intake Capacity Commensurate With Closed-Cycle, Recirculating 
Cooling System Based on Waterbody Type/Capacity
    This section presents the market level and Phase II existing 
facility level impacts of the alternative waterbody/capacity-based 
option. This option would require facilities that withdraw water from 
an estuary, tidal river, or ocean and that meet certain intake flow 
requirements, to reduce their intake capacity to a level that can be 
attained by a closed-cycle, recirculating cooling system. This 
requirement would be met within five to ten years of promulgation of 
the final rule (2004 to 2012) depending on when a permittee's first 
NPDES permit after promulgation expires. The impacts of compliance with 
this option are calculated using base case and post compliance results 
for model run year 2013. This run year reflects the long-term 
operational changes of the regulatory option with all in-scope 
facilities operating in their post compliance condition.
(1) Market Level Impacts
    EPA used five measures to identify changes to economic and 
operational characteristics of existing facilities and assess market 
level impacts due to compliance with the alternative waterbody/
capacity-based option: (1) Capacity retirements, calculated as the 
total capacity of facilities identified as economic closures due to the 
alternative

[[Page 17186]]

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

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

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

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


[[Page 17187]]

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

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

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

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

[[Page 17188]]

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

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

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

(2) Phase II Existing Facility Level Impacts:

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

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

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

[[Page 17189]]

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

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

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

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

IX. Benefit Analysis

A. Overview of Benefits Discussion

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

B. The Physical Impacts of Impingement and Entrainment

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

[[Page 17190]]

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

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

D. Data and Methods Used to Estimate Benefits

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

[[Page 17191]]

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

[[Page 17192]]

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

Data Limitations

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

Estimated Technology Effectiveness

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

Potential Cumulative Impacts

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

Recreational Benefits

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

Secondary (Indirect) Economic Impacts

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

Commercial Benefits

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

Forage Species

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

[[Page 17193]]

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

Nonuse Benefits

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

Incidental Benefits

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

E. Summary of Benefits Findings: Case Studies

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

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

[[Page 17194]]

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

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

[[Page 17195]]

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

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

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

[[Page 17196]]

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

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

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

[[Page 17197]]

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

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


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

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

[[Page 17198]]

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

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

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

[[Page 17199]]

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

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

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

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


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

[[Page 17200]]

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

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

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

F. Estimates of National Benefits

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

[[Page 17201]]

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

Estuaries

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

Rivers and Lakes

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

Oceans and Great Lakes

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

[[Page 17202]]

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

Results

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

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

Waterbody

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

[[Page 17203]]

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

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

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

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

[[Page 17204]]

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

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

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

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

[[Page 17205]]



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

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

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

[[Page 17206]]

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

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

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


[[Page 17207]]


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


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


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

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

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


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

[[Page 17208]]

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

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

X. Administrative Requirements

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

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

B. Paperwork Reduction Act

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

[[Page 17209]]

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

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

[[Page 17210]]

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

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

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

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

C. Unfunded Mandates Reform Act

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

[[Page 17211]]

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

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

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

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

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

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

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

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

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

[[Page 17212]]

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

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

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

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

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

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

[[Page 17213]]

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

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

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

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

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

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

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

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

[[Page 17214]]

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

H. E.O. 13158: Marine Protected Areas

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

I. E.O. 13211: Energy Effects

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

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

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

J. National Technology Transfer and Advancement Act

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

K. Plain Language Directive

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

L. Executive Order 13132: Federalism

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

[[Page 17215]]

that have federalism implications'' are defined in the Executive Order 
to include regulations that have ``substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.''
    Under section 6 of Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute unless the 
Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law, unless 
the Agency consults with State and local officials early in the process 
of developing the proposed regulation.
    This proposed rule does not have federalism implications. It will 
not have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. Rather, this proposed rule would 
result in minimal administrative costs on States that have an 
authorized NPDES program. EPA expects an annual burden of 146,983 hours 
with an annual cost of $41,200 (non-labor costs) for States to 
collectively administer this proposed rule. EPA has identified 65 Phase 
II existing facilities that are owned by federal, state or local 
government entities. The annual impacts on these facilities is not 
expected to exceed 2,252 burden hours and $56,739 (non-labor costs) per 
facility.
    The proposed national cooling water intake structure requirements 
would be implemented through permits issued under the NPDES program. 
Forty-three States and the Virgin Islands are currently authorized 
pursuant to section 402(b) of the CWA to implement the NPDES program. 
In States not authorized to implement the NPDES program, EPA issues 
NPDES permits. Under the CWA, States are not required to become 
authorized to administer the NPDES program. Rather, such authorization 
is available to States if they operate their programs in a manner 
consistent with section 402(b) and applicable regulations. Generally, 
these provisions require that State NPDES programs include requirements 
that are as stringent as Federal program requirements. States retain 
the ability to implement requirements that are broader in scope or more 
stringent than Federal requirements. (See section 510 of the CWA.)
    Today's proposed rule would not have substantial direct effects on 
either authorized or nonauthorized States or on local governments 
because it would not change how EPA and the States and local 
governments interact or their respective authority or responsibilities 
for implementing the NPDES program. Today's proposed rule establishes 
national requirements for Phase II existing facilities with cooling 
water intake structures. NPDES-authorized States that currently do not 
comply with the final regulations based on today's proposal might need 
to amend their regulations or statutes to ensure that their NPDES 
programs are consistent with Federal section 316(b) requirements. See 
40 CFR 123.62(e). For purposes of this proposed rule, the relationship 
and distribution of power and responsibilities between the Federal 
government and the States and local governments are established under 
the CWA (e.g., sections 402(b) and 510); nothing in this proposed rule 
would alter that. Thus, the requirements of section 6 of the Executive 
Order do not apply to this rule.
    Although section 6 of Executive Order 13132 does not apply to this 
rule, EPA did consult with State governments and representatives of 
local governments in developing the proposed rule. During the 
development of the proposed section 316(b) rule for new facilities, EPA 
conducted several outreach activities through which State and local 
officials were informed about this proposal and they provided 
information and comments to the Agency. The outreach activities were 
intended to provide EPA with feedback on issues such as adverse 
environmental impact, BTA, and the potential cost associated with 
various regulatory alternatives.
    EPA has made presentations on the section 316(b) rulemaking effort 
in general at eleven professional and industry association meetings. 
EPA also conducted two public meetings in June and September of 1998 to 
discuss issues related to the section 316(b) rulemaking effort. In 
September 1998 and April 1999, EPA staff participated in technical 
workshops sponsored by the Electric Power Research Institute on issues 
relating to the definition and assessment of adverse environmental 
impact. EPA staff have participated in other industry conferences, met 
upon request on numerous occasions with industry representatives, and 
met on a number of occasions with representatives of environmental 
groups.
    In the months leading up to publication of the proposed Phase I 
rule, EPA conducted a series of stakeholder meetings to review the 
draft regulatory framework for the proposed rule and invited 
stakeholders to provide their recommendations for the Agency's 
consideration. EPA managers have met with the Utility Water Act Group, 
Edison Electric Institute, representatives from an individual utility, 
and with representatives from the petroleum refining, pulp and paper, 
and iron and steel industries. EPA conducted meetings with 
environmental groups attended by representatives from between 3 and 15 
organizations. EPA also met with the Association of State and 
Interstate Water Pollution Control Administrators (ASIWPCA) and, with 
the assistance of ASIWPCA, conducted a conference call in which 
representatives from 17 states or interstate organizations 
participated. EPA also met with OMB and utility representatives and 
other federal agencies (the Department of Energy, the Small Business 
Administration, the Tennessee Valley Authority, the National Oceanic 
and Atmospheric Administration's National Marine Fisheries Service and 
the Department of Interior's U.S. Fish and Wildlife Service). After 
publication of the proposed Phase I rule, EPA continued to meet with 
stakeholders at their request.
    EPA received more than 2000 comments on the Phase I proposed rule 
and NODA. In some cases these comments have informed the development of 
the Phase II rule proposal.
    In January, 2001, EPA also attended technical workshops organized 
by the Electric Power Research Institute and the Utilities Water Action 
Group. These workshops focused on the presentation of key issues 
associated with different regulatory approaches considered under the 
Phase I proposed rule and alternatives for addressing 316(b) 
requirements.
    On May 23, 2001, EPA held a day-long forum to discuss specific 
issues associated with the development of regulations under section 
316(b). At the meeting, 17 experts from industry, public interest 
groups, States, and academia reviewed and discussed the Agency's 
preliminary data on cooling water intake structure technologies that 
are in place at existing facilities and the costs associated with the 
use of available technologies for reducing impingement and entrainment. 
Over 120 people attended the meeting.

[[Page 17216]]

    Finally, in August 21, 2001, EPA staff participated in a technical 
symposium sponsored by the Electric Power Research Institute in 
association with the American Fisheries Society on issues relating to 
the definition and assessment of adverse environmental impact for 
section 316(b) of the CWA.
    In the spirit of this Executive Order and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.
BILLING CODE 6560-50-P

[[Page 17217]]

[GRAPHIC] [TIFF OMITTED] TP09AP02.000

BILLING CODE 6560-50-C

[[Page 17218]]

List of Subjects

40 CFR Part 9

    Reporting and recordkeeping requirements.

40 CFR Part 122

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

40 CFR Part 123

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

40 CFR Part 124

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

40 CFR Part 125

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

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

PART 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

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

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

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


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

* * * * *

------------------------------------------------------------------------
        40 CFR citation                      OMB control No.
------------------------------------------------------------------------
 
*                  *                  *                  *
                  *                  *                  *
------------------------------------------------------------------------
   EPA Administered Permit Programs: The National Pollutant Discharge
                           Elimination System
------------------------------------------------------------------------
 
*                  *                  *                  *
                  *                  *                  *
122.21(r)......................  2040-0241, xxxxx-xxxxx
 
*                  *                  *                  *
                  *                  *                  *
------------------------------------------------------------------------
 Criteria and Standards for the National Pollutant Discharge Elimination
                                 System
------------------------------------------------------------------------
 
*                  *                  *                  *
                  *                  *                  *
125.95.........................  xxxx-xxxx
125.96.........................  xxxx-xxxx
125.97.........................  xxxx-xxxx
125.98.........................  xxxx-xxxx
 
*                  *                  *                  *
                  *                  *                  *
------------------------------------------------------------------------

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

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

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

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


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

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

[[Page 17219]]

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


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

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

PART 123--STATE PROGRAM REQUIREMENTS

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

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

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


Sec. 123.25  Requirements for permitting.

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

PART 124--PROCEDURES FOR DECISIONMAKING

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

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

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


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

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

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

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

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

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


Sec. 125.83  What special definitions apply to this subpart?

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

[[Page 17220]]

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

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


Sec. 125.90  What are the purpose and scope of this subpart?

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


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

    (a) This subpart applies to an existing facility, as defined in 
Sec. 125.93, if it:
    (1) Is a point source that uses or proposes to use a cooling water 
intake structure;
    (2) Both generates and transmits electric power, or generates 
electric power but sells it to another entity for transmission;
    (3) Has at least one cooling water intake structure that uses at 
least 25 percent of the water it withdraws for cooling purposes as 
specified in paragraph (c) of this section; and
    (4) Has a design intake flow of 50 million gallons per day (MGD) or 
more. Facilities that meet these criteria are referred to as ``Phase II 
existing facilities.''
    (b) In the case of a cogeneration facility that shares a cooling 
water intake structure with another existing facility, only that 
portion of the cooling water intake flow that is used in the 
cogeneration process shall be considered for purposes of determining 
whether the 50 MGD and 25 percent criteria in paragraphs (a)(3) and (4) 
of this section are met.
    (c) Use of a cooling water intake structure includes obtaining 
cooling water by any sort of contract or arrangement with an 
independent supplier (or multiple suppliers) of cooling water if the 
supplier or suppliers withdraw(s) water from waters of the United 
States. Use of cooling water does not include obtaining cooling water 
from a public water system or use of treated effluent that otherwise 
would be discharged to a water of the U.S. This provision is intended 
to prevent circumvention of these requirements by creating arrangements 
to receive cooling water from an entity that is not itself a point 
source.
    (d) Whether or not 25 percent of water withdrawn is used for 
cooling purposes must be measured on an average monthly basis. The 25 
percent threshold is met if any monthly average of cooling water over 
any 12 month period is 25 percent or more of the total water withdrawn.


Sec. 125.92  When must I comply with this subpart?

    You must comply with this subpart when an NPDES permit containing 
requirements consistent with this subpart is issued to you.


Sec. 125.93  What special definitions apply to this subpart?

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

[[Page 17221]]

institutional, heating, and/or cooling purposes at one or more host 
facilities.
    Cooling water means water used for contact or noncontact cooling, 
including water used for equipment cooling, evaporative cooling tower 
makeup, and dilution of effluent heat content. The intended use of the 
cooling water is to absorb waste heat rejected from the process or 
processes used, or from auxiliary operations on the facility's 
premises. Cooling water that is used in a manufacturing process either 
before or after it is used for cooling is considered process water for 
the purposes of calculating the percentage of a facility's intake flow 
that is used for cooling purposes in Sec. 125.91(c).
    Diel means sample variation in organismal abundance and density 
over a 24-hour period due to the influence of water movement and 
changes in light intensity.
    Director means the same as defined in 40 CFR 122.2.
    Existing facility means any facility that commenced construction 
before January 17, 2002; and
    (1) Any modification of such a facility;
    (2) Any addition of a unit at such a facility for purposes of the 
same industrial operation;
    (3) Any addition of a unit at such a facility for purposes of a 
different industrial operation, if the additional unit uses an existing 
cooling water intake structure and the design capacity of the intake 
structure is not increased; or
    (4) Any facility constructed in place of such a facility, if the 
newly constructed facility uses an existing cooling water intake 
structure whose design intake flow is not increased to accommodate the 
intake of additional cooling water.
    Once-through cooling water system means a system designed to 
withdraw water from a natural or other water source, use it at the 
facility to support contact and/or noncontact cooling uses, and then 
discharge it to a water body without recirculation. Once-through 
cooling systems sometimes employ canals/channels, ponds, or non-
recirculating cooling towers to dissipate waste heat from the water 
before it is discharged.
    Phase II existing facility means any existing facility that meets 
the criteria specified in Sec. 125.91.


Sec. 125.94  How will requirements reflecting best technology available 
for minimizing adverse environmental impact be established for my Phase 
II existing facility?

    (a) You may choose one of the following three alternatives for 
establishing best technology available for minimizing adverse 
environmental impact at your site:
    (1) You may demonstrate to the Director that your existing design 
and construction technologies, operational measures, and/or restoration 
measures meet the performance standards specified in paragraph (b) of 
this section;
    (2) You may demonstrate to the Director that you have selected 
design and construction technologies, operational measures, and/or 
restoration measures that will, in combination with any existing design 
and construction technologies, operational measures, and/or restoration 
measures, meet the performance standards specified in paragraph (b) of 
this section; or
    (3) You may demonstrate to the Director that a site-specific 
determination of best technology available for minimizing adverse 
environmental impact is appropriate for your site in accordance with 
paragraph (c) of this section.
    (b) Performance Standards. If you choose the alternative in 
paragraphs (a)(1) or (a)(2) of this section, you must meet the 
following performance standards:
    (1) You must reduce your intake capacity to a level commensurate 
with the use of a closed-cycle, recirculating cooling system; or
    (2) You must reduce impingement mortality of all life stages of 
fish and shellfish by

80 to 95 percent from the calculation baseline if your facility has a 
capacity utilization rate less than 15 percent, or your facility's 
design intake flow is 5 percent or less of the mean annual flow from a 
freshwater river or stream; or
    (3) You must reduce impingement mortality of all life stages of 
fish and shellfish by

80 to 95 percent from the calculation baseline, and you must reduce 
entrainment of all life stages of fish and shellfish by 60 to 90 
percent from the calculation baseline if your facility has a capacity 
utilization rate of 15 percent or greater and withdraws cooling water 
from a tidal river or estuary, from an ocean, from one of the Great 
Lakes, or your facility's design intake flow is greater than 5 percent 
of the mean annual flow of a freshwater river or stream; or
    (4) If your facility withdraws cooling water from a lake (other 
than one of the Great Lakes) or reservoir:
    (i) You must reduce impingement mortality of all life stages of 
fish and shellfish by

80 to 95 percent from the calculation baseline; and
    (ii) If you propose to increase your facility's design intake flow, 
your increased flow must not disrupt the natural thermal stratification 
or turnover pattern (where present) of the source water, except in 
cases where the disruption is determined by any Federal, State or 
Tribal fish or wildlife management agency(ies) to be beneficial to the 
management of fisheries.
    (c)(1) Site-Specific Determination of Best Technology Available. If 
you choose the alternative in paragraph (a)(3) of this section, you 
must demonstrate to the Director that your costs of compliance with the 
applicable performance standards in paragraph (b) of this section would 
be significantly greater than the costs considered by the Administrator 
when establishing such performance standards, or that your costs would 
be significantly greater than the benefits of complying with such 
performance standards at your site.
    (2) If data specific to your facility indicate that your costs 
would be significantly greater than those considered by the 
Administrator in establishing the applicable performance standards, the 
Director shall make a site-specific determination of best technology 
available for minimizing adverse environmental impact that is based on 
less costly design and construction technologies, operational measures, 
and/or restoration measures to the extent justified by the 
significantly greater cost. The Director's site-specific determination 
may conclude that design and construction technologies, operational 
measures, and/or restoration measures in addition to those already in 
place are not justified because of significantly greater costs.
    (3) If data specific to your facility indicate that your costs 
would be significantly greater than the benefits of complying with such 
performance standards at your facility, the Director shall make a site-
specific determination of best technology available for minimizing 
adverse environmental impact that is based on less costly design and 
construction technologies, operational measures, and/or restoration 
measures to the extent justified by the significantly greater costs. 
The Director's site-specific determination may conclude that design and 
construction technologies, operational measures, and/or restoration 
measures in addition to those already in place are not justified 
because the costs would be significantly greater than the benefits at 
your facility.
    (d) Restoration Measures. In lieu of, or in combination with, 
reducing impingement mortality and entrainment

[[Page 17222]]

by implementing design and construction technologies or operational 
measures to comply with the performance standards specified in 
paragraph (b) of this section or the Director's determination pursuant 
to paragraph (c) of this section, you may, with the Director's 
approval, employ restoration measures that will result in increases in 
fish and shellfish in the watershed. You must demonstrate to the 
Director that you are maintaining the fish and shellfish within the 
waterbody, including community structure and function, to a level 
comparable to those that would result if you were to employ design and 
construction technologies or operational measures to meet that portion 
of the requirements of paragraphs (b) or (c) of this section that you 
are meeting through restoration. Your demonstration must address 
species that the Director, in consultation with Federal, State, and 
Tribal fish and wildlife management agencies with responsibility for 
fisheries and wildlife potentially affected by your cooling water 
intake structure, identifies as species of concern.
    (e) More Stringent Standards. The Director may establish more 
stringent requirements as best technology available for minimizing 
adverse environmental impact if the Director determines that your 
compliance with the applicable requirements of paragraphs (b) and (c) 
of this section would not meet the requirements of other applicable 
Federal, State, or Tribal law.
    (f) If the Nuclear Regulatory Commission has determined that your 
compliance with this subpart would result in a conflict with a safety 
requirement established by the Commission, the Director shall make a 
site-specific determination of best technology available for minimizing 
adverse environmental impact that is less stringent than the 
requirements of this subpart to the extent necessary for you to comply 
with the Commission's safety requirement.
    (g) You must submit the application information required in 
Sec. 125.95, implement the monitoring requirements specified in 
Sec. 125.96, and implement the record-keeping requirements specified at 
Sec. 125.97.


Sec. 125.95  As an owner or operator of a Phase II existing facility, 
what must I collect and submit when I apply for my reissued NPDES 
permit?

    (a) You must submit to the Director the application information 
required by 40 CFR 122.21(r)(2), (3) and (5) and the Comprehensive 
Demonstration required by paragraph (b) of this section at least 180 
days before your existing permit expires, in accordance with 
Sec. 122.21(d)(2).
    (b) Comprehensive Demonstration Study. All facilities except those 
deemed to have met the performance standards in accordance with 
Sec. 125.94(b)(1), must submit a Comprehensive Demonstration Study 
(Study). This information is required to characterize impingement 
mortality and entrainment, the operation of your cooling water intake 
structures, and to confirm that the technology(ies), operational 
measures, and/or restoration measures you have selected and/or 
implemented at your cooling water intake structure meet the applicable 
requirements of Sec. 125.94. The Comprehensive Demonstration Study must 
include:
    (1) Proposal For Information Collection. You must submit to the 
Director for review and approval a description of the information you 
will use to support your Study. The proposal must include:
    (i) A description of the proposed and/or implemented 
technology(ies), operational measures, and/or restoration measures to 
be evaluated in the Study;
    (ii) A list and description of any historical studies 
characterizing impingement and entrainment and/or the physical and 
biological conditions in the vicinity of the cooling water intake 
structures and their relevance to this proposed Study. If you propose 
to use existing data, you must demonstrate the extent to which the data 
are representative of current conditions and that the data were 
collected using appropriate quality assurance/quality control 
procedures;
    (iii) A summary of any past, ongoing, or voluntary consultation 
with appropriate Federal, State, and Tribal fish and wildlife agencies 
that is relevant to this Study and a copy of written comments received 
as a result of such consultation; and
    (iv) A sampling plan for any new field studies you propose to 
conduct in order to ensure that you have sufficient data to develop a 
scientifically valid estimate of impingement and entrainment at your 
site. The sampling plan must document all methods and quality 
assurance/quality control procedures for sampling and data analysis. 
The sampling and data analysis methods you propose must be appropriate 
for a quantitative survey and include consideration of the methods used 
in other studies performed in the source waterbody. The sampling plan 
must include a description of the study area (including the area of 
influence of the cooling water intake structure), and provide a 
taxonomic identification of the sampled or evaluated biological 
assemblages (including all life stages of fish and shellfish).
    (2) Source Waterbody Flow Information. You must submit to the 
Director the following source waterbody flow information:
    (i) If your cooling water intake structure is located in a 
freshwater river or stream, you must provide the annual mean flow of 
the waterbody and any supporting documentation and engineering 
calculations to support your analysis of which requirements specified 
in Sec. 125.94(b)(2) or (3) would apply to your facility based on its 
water intake flow in proportion to the mean annual flow of the river or 
steam; and
    (ii) If your cooling water intake structure is located in a lake 
(other than one of the Great Lakes) or reservoir and you propose to 
increase your facility's design intake flow, you must provide a 
narrative description of the thermal stratification in the water body, 
and any supporting documentation and engineering calculations to show 
that the natural thermal stratification and turnover pattern will not 
be disrupted by the increased flow in a way that adversely impacts 
water quality or fisheries.
    (3) Impingement Mortality and Entrainment Characterization Study. 
You must submit to the Director an Impingement Mortality and 
Entrainment Characterization Study whose purpose is to provide 
information to support the development of a calculation baseline for 
evaluating impingement mortality and entrainment and to characterize 
current impingement mortality and entrainment. The Impingement 
Mortality and Entrainment Characterization Study must include:
    (i) Taxonomic identifications of those species of fish and 
shellfish and their life stages that are in the vicinity of the cooling 
water intake structure and are most susceptible to impingement and 
entrainment;
    (ii) A characterization of those species of fish and shellfish and 
life stages pursuant to paragraph (b)(3)(i) of this section, including 
a description of the abundance and temporal/spatial characteristics in 
the vicinity of the cooling water intake structure, based on the 
collection of a sufficient number of years of data to characterize 
annual, seasonal, and diel variations in impingement mortality and 
entrainment (e.g., related to climate/weather differences, spawning, 
feeding and water column migration);
    (iii) Documentation of the current impingement mortality and 
entrainment of all life stages of fish and shellfish at

[[Page 17223]]

your facility and an estimate of impingement mortality and entrainment 
under the calculation baseline. The documentation may include 
historical data that are representative of the current operation of 
your facility and of biological conditions at the site. Impingement 
mortality and entrainment samples to support the calculations required 
in paragraph (b)(4)(iii) and (b)(5)(ii) of this section must be 
collected during periods of representative operational flows for the 
cooling water intake structure and the flows associated with the 
samples must be documented;
    (iv) An identification of species that are protected under Federal, 
State, or Tribal law (including threatened or endangered species) that 
might be susceptible to impingement and entrainment by the cooling 
water intake structure(s).
    (4) Design and Construction Technology Plan. If you choose to use 
design and construction technologies or operational measures in whole 
or in part to meet the requirements of Sec. 125.94, you must submit a 
Design and Construction Technology Plan to the Director for review and 
approval. In the plan you must provide the capacity utilization rate 
for your facility and provide supporting data ( including the average 
annual net generation of the facility (in Mwh) measured over a five 
year period (if available) of representative operating conditions and 
the total net capacity of the facility (in MW)) and calculations. The 
plan must explain the technologies and operational measures you have in 
place or have selected to meet the requirements in Sec. 125.94. 
(Examples of potentially appropriate technologies may include, but are 
not limited to, wedgewire screens, fine mesh screens, fish handling and 
return systems, barrier nets, aquatic filter barrier systems, and 
enlargement of the cooling water intake structure opening to reduce 
velocity. Examples of potentially appropriate operational measures may 
include, but are not limited to, seasonal shutdowns or reductions in 
flow, and continuous operations of screens.) The plan must contain the 
following information:
    (i) A narrative description of the design and operation of all 
design and construction technologies or operational measures (existing 
and proposed), including fish handling and return systems, that you 
have in place or will use to meet the requirements to reduce 
impingement mortality of those species expected to be most susceptible 
to impingement, and information that demonstrates the efficacy of the 
technology for those species;
    (ii) A narrative description of the design and operation of all 
design and construction technologies or operational measures (existing 
and proposed) that you have in place or will use to meet the 
requirements to reduce entrainment of those species expected to be the 
most susceptible to entrainment, if applicable, and information that 
demonstrates the efficacy of the technology for those species;
    (iii) Calculations of the reduction in impingement mortality and 
entrainment of all life stages of fish and shellfish that would be 
achieved by the technologies and operational measures you have selected 
based on the Impingement Mortality and Entrainment Characterization 
Study in paragraph (b)(3) of this section. In determining compliance 
with any requirements to reduce impingement mortality or entrainment, 
you must assess the total reduction in impingement mortality and 
entrainment against the calculations baseline determined in paragraph 
(b)(3) of this section. Reductions in impingement mortality and 
entrainment from this calculation baseline as a result of any design 
and construction technologies and operational measures already 
implemented at your facility should be added to the reductions expected 
to be achieved by any additional design and construction technologies 
and operational measures that will be implemented, and any increases in 
fish and shellfish within the waterbody attributable to your 
restoration measures. Facilities that recirculate a portion of their 
flow may take into account the reduction in impingement mortality and 
entrainment associated with the reduction in flow when determining the 
net reduction associated with existing technology and operational 
measures. This estimate must include a site-specific evaluation of the 
suitability of the technology(ies) based on the species that are found 
at the site, and/or operational measures and may be determined based on 
representative studies (i.e., studies that have been conducted at 
cooling water intake structures located in the same waterbody type with 
similar biological characteristics) and/or site-specific technology 
prototype studies;
    (iv) Documentation which demonstrates that the location, design, 
construction, and capacity of the cooling water intake structure 
technologies you have selected reflect best technology available for 
meeting the applicable requirements in Sec. 125.94;
    (v) Design calculations, drawings, and estimates to support the 
descriptions required by paragraphs (b)(4)(ii) and (iii) of this 
section.
    (5) Information to Support Proposed Restoration Measures. If you 
propose to use restoration measures to meet the performance standards 
in Sec. 125.94, you must submit the following information with your 
application for review and approval by the Director:
    (i) A list and narrative description of the restoration measures 
you have selected and propose to implement;
    (ii) A quantification of the combined benefits from implementing 
design and construction technologies, operational measures and/or 
restoration measures and the proportion of the benefits that can be 
attributed to each. This quantification must include: the percent 
reduction in impingement mortality and entrainment that would be 
achieved through the use of any design and construction technologies or 
operational measures that you have selected (i.e., the benefits you 
would achieve through impingement and entrainment reduction); a 
demonstration of the benefits that could be attributed to the 
restoration measures you have selected; and a demonstration that the 
combined benefits of the design and construction technology(ies), 
operational measures, and/or restoration measures will maintain fish 
and shellfish at a level comparable to that which would be achieved 
under Sec. 125.94. If it is not possible to demonstrate quantitatively 
that restoration measures such as creation of new habitats to serve as 
spawning or nursery areas or establishment of riparian buffers will 
achieve comparable performance, you may make a qualitative 
demonstration that such measures will maintain fish and shellfish in 
the waterbody at a level substantially similar to that which would be 
achieved under Sec. 125.94;
    (iii) A plan for implementing and maintaining the efficacy of the 
restoration measures you have selected and supporting documentation to 
show that the restoration measures, or the restoration measures in 
combination with design and construction technology(ies) and 
operational measures, will maintain the fish and shellfish in the 
waterbody, including the community structure and function, to a level 
comparable or substantially similar to that which would be achieved 
through Sec. 125.94(b) or (c);
    (iv) A summary of any past, ongoing, or voluntary consultation with 
appropriate Federal, State, and Tribal fish and wildlife agencies 
regarding the proposed restoration measures that is relevant to this 
Study and a copy of any written comments received as a result of such 
consultation; and

[[Page 17224]]

    (v) Design and engineering calculations, drawings, and maps 
documenting that your proposed restoration measures will meet the 
restoration performance standard at Sec. 125.94(d).
    (6) Information to Support Site-specific Determination of Best 
Technology Available for Minimizing Adverse Environmental Impact. If 
you have chosen to request a site-specific determination of best 
technology available for minimizing adverse environmental impact 
pursuant to Sec. 125.94(c) because of costs significantly greater than 
those EPA considered in establishing the requirements at issue, or 
because costs are significantly greater than the benefits of complying 
with the otherwise applicable requirements of Sec. 125.94(b) and (e) at 
your site, you must provide the following additional information with 
your application for review by the Director:
    (i) Comprehensive Cost Evaluation Study. You must perform and 
submit the results of a Comprehensive Cost Evaluation Study. This 
information is required to document the costs of implementing your 
Design and Construction Plan under Sec. 125.95(b)(4) above and the 
costs of the alternative technologies and operational measures you 
propose to implement at your site. You must submit detailed engineering 
cost estimates to document the costs of implementing the technologies 
or operational measures in your Design and Construction Plan.
    (ii) Valuation of the Monetized Benefits of Reducing Impingement 
and Entrainment. If you are seeking a site-specific determination of 
best technology available for minimizing adverse environmental impact 
because of costs significantly greater than the benefits of complying 
with the otherwise applicable requirements of Sec. 125.94(b) and (e) at 
your site, you must use a comprehensive methodology to fully value the 
impacts of impingement mortality and entrainment at your site and the 
benefits achievable by compliance with the applicable requirements of 
Sec. 125.94. The benefit study must include a description of the 
methodology used, the basis for any assumptions and quantitative 
estimates, and an analysis of the effects of significant sources of 
uncertainty on the results of the study.
    (iii) Site-Specific Technology Plan. Based on the results of the 
Comprehensive Cost Evaluation Study and the valuation of the monetized 
benefits of reducing impingement and entrainment required by paragraphs 
(b)(7))(i) and (ii) of this section, you must submit a Site-Specific 
Technology Plan to the Director for review and approval. The plan must 
contain the following information:
    (A) A narrative description of the design and operation of all 
design and construction technologies and operational measures, and 
restoration measures (existing and proposed) that you have selected in 
accordance with Sec. 125.94(d), and information that demonstrates the 
efficacy of the technology for those species;
    (B) An engineering estimate of the efficacy of the proposed and/or 
implemented technologies or operational measures for reducing 
impingement mortality and entrainment of all life stages of fish and 
shellfish. This estimate must include a site-specific evaluation of the 
suitability of the technologies or operational measures for reducing 
impingement mortality and entrainment based on representative studies 
(e.g., studies that have been conducted at cooling water intake 
structures located in the same waterbody type with similar biological 
characteristics) and/or site-specific technology prototype studies;
    (C) Documentation which demonstrates that the technologies, 
operational measures, or restoration measures selected would reduce 
impingement mortality and entrainment to the extent necessary to 
satisfy the requirements of Sec. 125.94; and
    (D) Design calculations, drawings, and estimates to support the 
descriptions required by paragraphs (b)(6)(iii)(A) and (B) of this 
section.
    (7) Verification Monitoring Plan. You must include in the Study a 
plan to conduct, at a minimum, two years of monitoring to verify the 
full-scale performance of the proposed or implemented technologies, 
operational measures, or restoration measures. The verification study 
must begin once the technologies, operational measures, and restoration 
measures are implemented and continue for a period of time that is 
sufficient to demonstrate that the facility is reducing the level of 
impingement and entrainment to the levels documented pursuant to 
paragraphs (b)(4)(iii), (b)(5)(ii), and/or (b)(6)(iii)(B) of this 
section. The plan must describe the frequency of monitoring and the 
parameters to be monitored and the basis for determining the parameters 
and the frequency and duration for monitoring. The plan must also 
describe the information to be included in a yearly status report to 
the Director. The Director will use the verification monitoring to 
confirm that you are meeting the applicable requirements of 
Sec. 125.94.


Sec. 125.96  As an owner or operator of a Phase II existing facility, 
what monitoring must I perform?

    As an owner or operator of a Phase II existing facility, you must 
perform monitoring as specified by the Director to demonstrate 
compliance with the applicable requirements of Sec. 125.94.


Sec. 125.97  As an owner or operator of a Phase II existing facility, 
what records must I keep and what information must I report?

    As an owner or operator of a Phase II existing facility you are 
required to keep records and report information and data to the 
Director as follows:
    (a) You must keep records of all the data used to complete the 
permit application and show compliance with the requirements of 
Sec. 125.94, any supplemental information developed under Sec. 125.95, 
and any compliance monitoring data conducted under Sec. 125.96, for a 
period of at least three (3) years. The Director may require that these 
records be kept for a longer period.
    (b) You must provide annually to the Director a status report that 
includes appropriate monitoring data as specified by the Director.


Sec. 125.98  As the Director, what must I do to comply with the 
requirements of this subpart?

    (a) Permit Application. As the Director, you must review materials 
submitted by the applicant under 40 CFR 122.21(r) and Sec. 125.95 
before each permit renewal or reissuance.
    (1) After receiving the permit application from the owner or 
operator of a Phase II existing facility, the Director must determine 
which of the standards specified in Sec. 125.94 to apply to the 
facility. In addition, the Director must review materials to determine 
compliance with the applicable standards.
    (2) At each permit renewal, the Director must review the 
application materials and monitoring data to determine whether 
requirements, or additional requirements, for design and construction 
technologies or operational measures should be included in the permit.
    (b) Permitting Requirements. Section 316(b) requirements are 
implemented for a facility through an NPDES permit. As the Director, 
you must consider the information submitted by the Phase II existing 
facility in its permit application, and determine the appropriate 
requirements and conditions to include in the permit based on the 
alternative for establishing best technology available chosen by the 
facility. The following requirements must be included in each permit:

[[Page 17225]]

    (1) Cooling Water Intake Structure Requirements. The permit 
conditions must include the performance standards that implement the 
requirements of Sec. 125.94(b)(2), (3), and (4); Sec. 125.94(c)(1) and 
(2); Sec. 125.94(d); Sec. 125.94(e); and Sec. 125.94(f). In determining 
compliance with the flow requirement in Sec. 125.94(b)(4)(ii), the 
Director must consider anthropogenic factors (those not considered 
``natural'') unrelated to the Phase II existing facility's cooling 
water intake structure that can influence the occurrence and location 
of a thermocline. These include source water inflows, other water 
withdrawals, managed water uses, wastewater discharges, and flow/level 
management practices (e.g., some reservoirs release water from deeper 
bottom layers). The Director must coordinate with appropriate Federal, 
State, or Tribal fish or wildlife agencies to determine if any 
disruption is beneficial to the management of fisheries.
    (i) You must review the Design and Construction Technology Plan 
required in Sec. 125.96(b)(4) to evaluate the suitability and 
feasibility of the technology or operational measures proposed to meet 
the requirements of Sec. 125.94. In each reissued permit, you must 
include a condition requiring the facility to reduce impingement 
mortality and entrainment commensurate with the implementation of the 
technologies in the permit. In considering a permit application, the 
Director must review the performance of the technologies implemented 
and require additional or different design and construction 
technologies, if needed, to meet the impingement mortality and 
entrainment reduction requirements for all life stages of fish and 
shellfish. In addition, you may consider any chemical, water quality, 
and other anthropogenic stresses on the source waterbody in order to 
determine whether more stringent conditions are needed to comply with 
the requirements of other applicable Federal, State, or Tribal law in 
accordance with Sec. 125.94(e).
    (ii) If you determine that restoration measures are appropriate at 
the Phase II existing facility, you must review the Information to 
Support Proposed Restoration Measures required under Sec. 125.95(b)(5) 
and determine whether the proposed measures, alone or in combination 
with design and construction technologies and operational measures, 
will maintain the fish and shellfish in the waterbody at a comparable 
level to that which would be achieved under Sec. 125.94. If the 
application includes a qualitative demonstration for restoration 
measures that will result in increases in fish and shellfish that are 
difficult to quantify, you must determine whether the proposed measures 
will maintain fish and shellfish in the waterbody at a level 
substantially similar to that which would be achieved under 
Sec. 125.94. You must also review and approve the proposed Verification 
Monitoring Plan submitted under Sec. 125.95(b)(7) and require that the 
monitoring continue for a sufficient period of time to demonstrate that 
the restoration measures meet the requirements of Sec. 125.94(d).
    (iii) For a facility that requests requirements based on site-
specific best technology available for minimizing adverse environmental 
impact, you must review the application materials and any other 
information you may have that would be relevant to a determination of 
whether alternative requirements are appropriate for the facility. If 
you determine that alternative requirements are appropriate, you must 
make a site-specific determination of best technology available for 
minimizing adverse environmental impact in accordance with 
Sec. 125.95(c).
    (2) Monitoring Conditions. The permit must require the permittee to 
perform the monitoring required in Sec. 125.96. In determining 
applicable monitoring requirements, the Director must consider the 
facility's verification monitoring plan, as appropriate. You may modify 
the monitoring program when the permit is reissued and during the term 
of the permit based on changes in physical or biological conditions in 
the vicinity of the cooling water intake structure.
    (3) Record Keeping and Reporting. At a minimum, the permit must 
require the permittee to report and keep records as required by 
Sec. 125.97.

[FR Doc. 02-5597 Filed 4-8-02; 8:45 am]
BILLING CODE 6560-50-P