[Federal Register Volume 76, Number 76 (Wednesday, April 20, 2011)]
[Proposed Rules]
[Pages 22174-22288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8033]



[[Page 22173]]

Vol. 76

Wednesday,

No. 76

April 20, 2011

Part II





Environmental Protection Agency





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40 CFR Parts 122 and 125



National Pollutant Discharge Elimination System--Cooling Water Intake 
Structures at Existing Facilities and Phase I Facilities; Proposed Rule

  Federal Register / Vol. 76 , No. 76 / Wednesday, April 20, 2011 / 
Proposed Rules  

[[Page 22174]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 122 and 125

[EPA-HQ-OW-2008-0667, FRL-9289-2]
RIN 2040-AE95


National Pollutant Discharge Elimination System--Cooling Water 
Intake Structures at Existing Facilities and Phase I Facilities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish requirements under section 
316(b) of the Clean Water Act (CWA) for all existing power generating 
facilities and existing manufacturing and industrial facilities that 
withdraw more than 2 million gallons per day (MGD) of water from waters 
of the U.S. and use at least twenty-five (25) percent of the water they 
withdraw exclusively for cooling purposes. The proposed national 
requirements, which would be implemented through National Pollutant 
Discharge Elimination System (NPDES) permits, would establish national 
requirements applicable to the location, design, construction, and 
capacity of cooling water intake structures at these facilities by 
setting requirements that reflect the best technology available (BTA) 
for minimizing adverse environmental impact. The proposed rule 
constitutes EPA's response to the remand of the Phase II existing 
facility rule and the remand of the existing facilities portion of the 
Phase III rule. In addition, EPA is also responding to the decision in 
Riverkeeper I and proposing to remove from the Phase I new facility 
rule the restoration-based compliance alternative and the associated 
monitoring and demonstration requirements. EPA expects this proposed 
regulation would minimize adverse environmental impacts, including 
substantially reducing the harmful effects of impingement and 
entrainment. As a result, the Agency anticipates this proposed rule 
would help protect ecosystems affected by cooling water intake 
structures and preserve aquatic organisms and the ecosystems they 
inhabit in waters used by cooling water intake structures at existing 
facilities.

DATES: Comments must be received on or before July 19, 2011.

ADDRESSES: Submit your comments, identified by Docket No. EPA-HQ-OW-
2008-0667 by one of the following methods:
     http:www.regulations.gov: Follow the on-line instructions 
for submitting comments.
     E-mail: [email protected], Attention Docket ID No. EPA-HQ-
OW-2008-0667.
     Mail: Water Docket, U.S. Environmental Protection Agency, 
Mail Code: 4203M, 1200 Pennsylvania Ave., NW., Washington, DC 20460. 
Attention Docket ID No. EPA-HQ-OW-2008-0667. Please include a total of 
3 copies. In addition, please mail a copy of your comments on 
information collection provisions to the Office of Information and 
Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk 
Officer for EPA, 725 17th St., NW., Washington, DC 20503.
     Hand Delivery: Water Docket, EPA Docket Center, EPA West 
Building Room 3334, 1301 Constitution Ave., NW., Washington, DC, 
Attention Docket ID No. EPA-HQ-OW-2008-0667. Such deliveries are only 
accepted during the Docket's normal hours of operation, and special 
arrangements should be made for deliveries of boxed information by 
calling 202-566-2426.
    Instructions: Direct your comments to Docket No. EPA-HQ-OW-2008-
0667. EPA's policy is that all comments received will be included in 
the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Water Docket in 
the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution 
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is 202-566-1744, and the 
telephone number for the Water Docket is 202-566-2426.

FOR FURTHER INFORMATION CONTACT: For additional technical information, 
contact Paul Shriner at 202-566-1076; e-mail: [email protected]. For 
additional economic information, contact Erik Helm at 202-566-1049; e-
mail: [email protected]. For additional biological information, contact 
Tom Born at 202-566-1001; e-mail: [email protected].

SUPPLEMENTARY INFORMATION: 
    What Entities Are Regulated By This Action? This proposed rule 
would apply to existing facilities that use cooling water intake 
structures to withdraw water from waters of the U.S. and have or 
require a National Pollutant Discharge Elimination System (NPDES) 
permit issued under Section 402 of the CWA. Existing facilities subject 
to this regulation would include those with a design intake flow 
greater than 2 MGD. If a facility meets these conditions, it is subject 
to today's proposed regulations. If a facility has or requires a NPDES 
permit but does not meet the 2 MGD intake flow threshold, it would be 
subject to permit conditions implementing section 316(b), developed by 
the NPDES permit director, on a case-by-case basis, using best 
professional judgment. This proposal defines the term ``cooling water 
intake structure'' to mean the total physical structure and any 
associated waterways used to withdraw water from waters of the U.S., 
provided that at least twenty-five percent of the water withdrawn is 
used for cooling purposes. 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. Generally,

[[Page 22175]]

facilities that meet these criteria fall into two major groups: steam 
electric generating facilities and manufacturing facilities.
    The following table lists the types of entities that are 
potentially subject to this proposed rule. This table is not intended 
to be exhaustive, but rather provides a guide for readers regarding 
entities likely to be regulated by this action. Other types of entities 
not listed in the table could also be regulated.

----------------------------------------------------------------------------------------------------------------
                                  Examples of          Standard Industrial       North American Industry Codes
          Category            regulated entities      Classification Codes                   (NAIC)
----------------------------------------------------------------------------------------------------------------
Federal, State and Local     Operators of steam    4911 and 493..............  221111, 221112, 221113, 221119,
 Government.                  electric generating                               221121, 221122, 221111, 221112,
                              point source                                      221113, 221119, 221121, 221122.
                              dischargers that
                              employ cooling
                              water intake
                              structures..
Industry...................  Operators of          See below.................  See below.
                              industrial point
                              source dischargers
                              that employ cooling
                              water intake
                              structures..
                             Steam electric        4911 and 493..............  221111, 221112, 221113, 221119,
                              generating.                                       221121, 221122, 221111, 221112,
                                                                                221113, 221119, 221121, 221122.
                             Agricultural          0133......................  111991, 11193.
                              production.
                             Metal mining........  1011......................  21221.
                             Oil and gas           1311, 1321................  211111, 211112.
                              extraction
                              (Excluding offshore
                              and coastal
                              subcategories).
                             Mining and quarrying  1474......................  212391.
                              of nonmetallic
                              minerals.
                             Food and kindred      2046, 2061, 2062, 2063,     311221, 311311, 311312, 311313,
                              products.             2075, 2085.                 311222, 311225, 31214.
                             Tobacco products....  2141......................  312229, 31221.
                             Textile mill          2211......................  31321.
                              products.
                             Lumber and wood       2415, 2421, 2436, 2493....  321912, 321113, 321918, 321999,
                              products, except                                  321212, 321219.
                              furniture.
                             Paper and allied      2611, 2621, 2631, 2676....  3221, 322121, 32213, 322121,
                              products.                                         322122, 32213, 322291.
                             Chemical and allied   28 (except 2895, 2893,      325 (except 325182, 32591, 32551,
                              products.             2851, and 2879).            32532).
                             Petroleum refining    2911, 2999................  32411, 324199.
                              and related
                              industries.
                             Rubber and            3011, 3069................  326211, 31332, 326192, 326299.
                              miscellaneous
                              plastics products.
                             Stone, clay, glass,   3241......................  32731.
                              and concrete
                              products.
                             Primary metal         3312, 3313, 3315, 3316,     324199, 331111, 331112, 331492,
                              industries.           3317, 3334, 3339, 3353,     331222, 332618, 331221, 22121,
                                                    3363, 3365, 3366.           331312, 331419, 331315, 331521,
                                                                                331524, 331525.
                             Fabricated metal      3421, 3499................  332211, 337215, 332117, 332439,
                              products, except                                  33251, 332919, 339914, 332999.
                              machinery and
                              transportation
                              equipment.
                             Industrial and        3523, 3531................  333111, 332323, 332212, 333922,
                              commercial                                        22651, 333923, 33312.
                              machinery and
                              computer equipment.
                             Transportation        3724, 3743, 3764..........  336412, 333911, 33651, 336416.
                              equipment.
                             Measuring,            3861......................  333315, 325992.
                              analyzing, and
                              controlling
                              instruments;
                              photographic,
                              medical, and
                              optical goods;
                              watches and clocks.
                             Electric, gas, and    4911, 4931, 4939, 4961....  221111, 221112, 221113, 221119,
                              sanitary services.                                221121, 221122, 22121, 22133.
                             Educational services  8221......................  61131.
                             Engineering,          8731......................  54171.
                              accounting,
                              research,
                              management and
                              related services.
----------------------------------------------------------------------------------------------------------------

    To determine whether your facility could be regulated by this 
action, you should carefully examine the applicability criteria in 
Sec.  125.91 of the proposed rule. If you have questions regarding the 
applicability of this action to a particular entity, consult the person 
listed for technical information in the preceding FOR FURTHER 
INFORMATION CONTACT section.

Supporting Documentation

1. Docket

    EPA has established an official public docket for this action under 
Docket ID No. EPA-HQ-OW-2008-0667. The official public docket consists 
of the documents specifically referenced in this action, any public 
comments received, and other information related to this action. 
Although a part of the official docket, the public docket does not 
include information claimed as Confidential Business Information (CBI) 
or other information the disclosure of which is restricted by statute. 
For information on how to access materials in the docket, refer to the 
preceding ADDRESSES section. To view docket materials, please call 
ahead to schedule

[[Page 22176]]

an appointment. Every user is entitled to copy 266 pages per day before 
incurring a charge. The Docket may charge 15 cents for each page over 
the 266-page limit plus an administrative fee of $25.00.

2. Electronic Access

    You may access this Federal Register document and the docket 
electronically, as well as submit public comments, through the Web site 
http://www.regulations.gov by searching for Docket ID No. EPA-HQ-OW-
2008-0667. For additional information about the public docket, visit 
the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.

3. Technical Support Documents

    The proposed regulation is supported by three major documents:
    1. Economic and Benefits Analysis for the Proposed Section 316(b) 
Existing Facilities Rule (EPA-821-R-11-003), hereafter referred to as 
the Economic and Benefits Analysis (EBA or more simply EA). This 
document presents the analysis of compliance costs, closures, energy 
supply effects, and a summary of benefits associated with the proposed 
rule.
    2. Environmental and Economic Benefits Analysis for the Proposed 
Section 316(b) Existing Facilities Rule (EPA-821-R-11-002), hereafter 
referred to as the Environmental and Economic Benefits Analysis (EEBA). 
This document examines cooling water intake structure impacts and 
regulatory benefits at the regional level.
    3. Technical Development Document for the Proposed Section 316(b) 
Existing Facilities Rule (EPA-821-R-11-001), hereafter referred to as 
the Technical Development Document (TDD). 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 requirements.

Table of Contents

I. Legal Authority, Purpose, and Background of Today's Proposed 
Regulation
    A. Legal Authority
    B. Purpose of Today's Proposed Regulation
    C. Background
II. Proposed Amendments Related to the Phase I Rule
    A. Restoration Provisions Not Authorized
    B. Corrections to Subpart I
III. What new information has EPA obtained or developed in support 
of this proposed rule?
    A. Additional Data
    B. Implementation Experience
    C. New or Revised Analyses
IV. Revised Industry Description
    A. Water Use in Power Production and Manufacturing
    B. Overview of Electric Generators
    C. Overview of Manufacturers
    D. Other Existing Facilities
V. Scope and Applicability of the Proposed Section 316(b) Existing 
Facility Rule
    A. General Applicability
    B. What is an ``existing facility'' for purposes of the section 
316(b) Phase II rule?
    C. What is ``cooling water'' and what is a ``cooling water 
intake structure?''
    D. Would my facility be covered if it is a point source 
discharger?
    E. Would my facility be covered if it withdraws water from 
waters of the U.S.? What if my facility obtains cooling water from 
an independent supplier?
    F. What intake flow thresholds result in an existing facility 
being subject to this proposed rule?
    G. Offshore Oil and Gas Facilities, Seafood Processing Vessels 
or LNG Import Terminals BTA Requirements Under This Proposed Rule
    H. What is a ``new unit'' and how are new units addressed under 
this proposed rule?
VI. BTA Consideration
    A. EPA's Approach to BTA
    B. Technologies Considered To Minimize Impingement and 
Entrainment
    C. Technology Basis for Today's Proposed Regulation
    D. Options Considered for Today's Proposed Regulation
    E. Option Selection
    F. Four Factors Support EPA's Decision To Establish Site-
Specific BTA Entrainment Controls for Existing Facilities
    G. The Process for Establishing Site-Specific BTA Entrainment 
Controls
    H. Implementation
    I. EPA's Costing of the Preferred Option
    J. Consideration of Cost/Benefit on a Site-Specific Basis
VII. Economic Impact of the Proposed Rule
    A. Overview of Costs to Complying Facilities and Federal and 
State Governments
    B. Development of Compliance Costs
    C. Social Cost of the Regulatory Options
    D. Economic Impact
VIII. Benefits Analysis
    A. Introduction
    B. Regional Study Design
    C. Physical Impacts of I&E Mortality
    D. National Benefits of Today's Considered Options
    E. Uncertainty and Limitations
IX. Implementation
    A. How would the proposed requirements be applied?
    B. When would affected facilities be required to comply?
    C. What are my requirements?
    D. What information must I submit in my permit application?
    E. When are application studies due?
    F. What are the monitoring requirements in today's proposal for 
existing facilities?
    G. What reports would I be required to submit?
    H. What records would I be required to keep?
    I. Are there other federal statutes that could be incorporated 
into a facility's permit?
    J. What is the director's role under today's proposal?
X. Related Acts of Congress, Executive Orders, and Agency 
Initiatives
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Executive Order 13158: Marine Protected Areas
XI. Solicitation of Data and Comments
    A. General Solicitation of Comment
    B. Specific Solicitation of Comments and Data

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

A. Legal Authority

    Today's proposal is issued under the authority of sections 101, 
301, 304, 308, 316, 401, 402, 501, and 510 of the Clean Water Act 
(CWA), 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and 
1370.

B. Purpose of Today's Proposed Regulation

    The purpose of today's proposed rule is to propose national 
requirements for cooling water intake structures at existing facilities 
that implement section 316(b) of the CWA. 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.
    EPA first promulgated regulations to implement section 316(b) in 
1976. The U.S. Court of Appeals for the Fourth Circuit remanded these 
regulations to EPA which withdrew them, leaving in place a provision 
not remanded that directed permitting authorities to determine BTA for 
each facility on a case-by-case basis. In 1995, EPA entered into a 
consent decree establishing a schedule for taking final action on 
regulations to implement section 316(b).

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Pursuant to a schedule in the amended decree providing for final action 
on regulations in three phases, in 2001, EPA published a Phase I rule 
governing new facilities. The U.S. Court of Appeals for the Second 
Circuit, while generally upholding the rule, rejected the provisions 
allowing restoration to be used to meet the requirements of the rule. 
Riverkeeper, Inc. v. U.S. EPA, 358 F. 3d 174, 181 (2d Cir.2004) 
(``Riverkeeper I''). Today's proposed rule proposes to delete these 
restoration provisions.
    In 2004, EPA published the Phase II rule applicable to existing 
power plants with a design intake flow greater than or equal to 50 MGD. 
Following challenge, the Second Circuit remanded numerous aspects of 
the rule to the Agency, including the Agency's decision to reject 
closed-cycle cooling as BTA. The Agency made this determination, in 
part, based on a consideration of costs and benefits. The Second 
Circuit concluded that a comparison of the costs and benefits of 
closed-cycle cooling was not a proper factor to consider in determining 
BTA. Riverkeeper, Inc. v. U.S.EPA, 475 F. 3d 83 (2d Cir. 2007) 
(``Riverkeeper II''). In 2008, the U.S, Supreme Court agreed to review 
the Riverkeeper II decision limited to a single issue: whether section 
316(b) authorizes EPA to balance costs and benefits in 316(b) 
rulemaking. In April 2009, in Entergy Corp. v. Riverkeeper Inc., 129 S. 
Ct. 1498, 68 ERC 1001 (2009) (40 ER 770, 4/3/09), the Supreme Court 
ruled that it is permissible under section 316(b) to consider costs and 
benefits in determining the best technology available to minimize 
adverse environmental impacts. The court left it to EPA's discretion to 
decide whether and how to consider costs and benefits in 316(b) 
actions, including rulemaking and BPJ determinations. The Supreme Court 
remanded the rule to the Second Circuit. Subsequently, EPA asked the 
Second Circuit to return the rule to the Agency for further review of 
the rule.
    In 2006, EPA published the Phase III rule. The Phase III rule 
establishes 316(b) requirements for certain new offshore oil and gas 
extraction facilities. In addition, EPA determined that, in the case of 
electric generators with a design intake flow of less than 50 MGD and 
existing manufacturing facilities, 316(b) requirements should be 
established by NPDES permit directors on a case-by-case basis using 
their best professional judgment. In July 2010, the U. S. Court of 
Appeals for the Fifth Circuit issued a decision upholding EPA's rule 
for new offshore oil and gas extraction facilities. Further, the court 
granted the request of EPA and environmental petitioners in the case to 
remand the existing facility portion of the rule back to the Agency for 
further rulemaking. See section C.2 below for a more detailed 
discussion of the history of EPA's actions to address standards for 
cooling water intake structures.
    In response to the remand in Phase II, the remand of the existing 
facility portion of the Phase III rule, and the associated Supreme 
Court decision, EPA is today proposing a number of requirements. Most 
significantly, EPA is proposing requirements reflecting the best 
technology available for minimizing adverse environmental impact, 
applicable to the location, design, construction, and capacity of 
cooling water intake structures for existing facilities. EPA is 
treating existing power generating facilities and existing 
manufacturing and industrial facilities in one proceeding. Today's 
proposal applies to all existing power generating facilities and 
existing manufacturing and industrial facilities that have a design 
intake flow of at least two million gallons from waters of the United 
States and use at least twenty-five (25) percent of the water they 
withdraw exclusively for cooling purposes. In addition, EPA is today 
also responding to the decision in Riverkeeper I and proposing minor 
changes to the Phase I rule for new facilities. Specifically, EPA 
proposes to remove from the Phase I rule the restoration-based 
compliance alternative and the associated monitoring and demonstration 
requirements.

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). Among the goals of the Act is that wherever 
attainable, an interim goal of water quality which provides for the 
protection and propagation of fish, shellfish, and wildlife and 
provides for recreation in and on the water. 33 U.S.C. 1251(a)(2).
    In furtherance of these objectives, the CWA establishes a 
comprehensive regulatory program, key elements of which are (1) a 
prohibition on the discharge of pollutants from point sources to waters 
of the United States, except in compliance with the statute; (2) 
authority for EPA or authorized States or Tribes to issue National 
Pollutant Discharge Elimination System (NPDES) permits that authorize 
and regulate the discharge of pollutants; and (3) requirements for 
effluent limitations and other conditions in NPDES permits to implement 
applicable technology-based effluent limitations guidelines and 
standards and applicable State water quality standards.
    Section 402 of the CWA authorizes EPA (or an authorized State or 
Tribe) to issue an NPDES permit to any person discharging any pollutant 
or combination of pollutants from a point source into waters of the 
United States. Forty-seven 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 by requiring dischargers to meet technology-based effluent 
limitations guidelines (ELGs) or new source performance standards 
(NSPS) established pursuant to section 301 or section 306. Where such 
nationally applicable ELGs or NSPS exist, permit authorities must 
incorporate them into permit requirements. Where they do not exist, 
permit authorities establish effluent limitations and conditions, 
reflecting the appropriate level of control (depending on the type of 
pollutant) based on the best professional judgment (BPJ) of the permit 
writer. Limitations based on these guidelines, standards, or on best 
professional judgment are known as technology-based effluent limits. 
Where technology-based effluent limits are inadequate to meet 
applicable State water quality standards, section 301(b)(1)(C) of the 
Clean Water Act requires permits to include more stringent limits to 
meet applicable water quality standards. NPDES permits also routinely 
include standard conditions applicable to all permits, special 
conditions, and monitoring and reporting requirements. In addition to 
these requirements, NPDES permits must contain conditions to implement 
the requirements of section 316(b).
    Section 510 of the Clean Water Act provides that, except as 
provided in the Clean Water Act, nothing shall preclude or deny the 
right of any State (or political subdivision thereof) to adopt or 
enforce any requirement respecting control or abatement of pollution; 
except that if a limitation, prohibition or standard of performance is 
in effect under the Clean Water Act, such State may not adopt any other 
limitation, prohibition, or standard of performance which is less 
stringent than the limitation, prohibition, or standard of

[[Page 22178]]

performance under the Act. EPA interprets this to reserve for the 
States authority to implement requirements that are more stringent than 
the Federal requirements under state law. PUD No. 1 of Jefferson County 
v. Washington Dep't of Ecology, 511 U.S. 700, 705 (1994).
    Sections 301, 304, and 306 of the CWA require that EPA develop 
technology-based effluent limitations guidelines and new source 
performance standards that are used as the basis for discharge 
requirements in wastewater discharge permits. EPA develops 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 56 
industries. See 40 CFR parts 405 through 471. EPA has established 
effluent limitations guidelines and standards that apply to most of the 
industry categories that use cooling water intake structures (e.g., 
steam electric power generation, paper and allied products, petroleum 
refining, iron and steel manufacturing, and chemicals and allied 
products).
    Section 316(b) states that any standard established pursuant to 
section 301 or section 306 of [the Clean Water] Act and applicable to a 
point source shall require that the location, design, construction, and 
capacity of cooling water intake structures reflect the best technology 
available for minimizing adverse environmental impact.
    Section 316(b) addresses the adverse environmental impact caused 
specifically by the intake of cooling water, rather than discharges of 
pollutants, including thermal discharges, into waters of the United 
States. Despite this special focus, the requirements of section 316(b) 
remain 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. Thus, while effluent 
limitations apply to the discharge of pollutants by NPDES-permitted 
point sources to waters of the United States, section 316(b) applies to 
facilities subject to NPDES requirements that also withdraw water from 
a water of the United States for cooling and that use a cooling water 
intake structure to do so.
    The CWA does not describe the factors to be considered in 
establishing section 316(b) substantive performance requirements that 
reflect the ``best technology available for minimizing adverse 
environmental impact'' nor does it require that EPA develop nationally 
applicable performance requirements through rule making. The most 
recent guidance in interpreting 316(b) comes from the U.S. Supreme 
Court's decision in Entergy Corp. v. Riverkeeper, Inc. As noted, the 
decision was limited to the single question of whether Section 316(b) 
of the Clean Water Act authorizes EPA to compare costs and benefits of 
various technologies when setting national performance standards for 
cooling water intake structures under Section 316(b) of the Clean Water 
Act. In Riverkeeper II, the Second Circuit rejected EPA's determination 
that closed-cycle cooling was not BTA because it could not determine 
whether EPA had improperly considered costs and benefits in its 316(b) 
rulemaking. The Supreme Court reversed and remanded the Second Circuit 
ruling in a 6-3 opinion authored by Justice Scalia. The Court held that 
it is reasonable for EPA to conduct a cost-benefit analysis in setting 
national performance standards for cooling water intake structures 
under Section 316(b). The Court held that EPA has the discretion to 
consider costs and benefits under Section 316(b) but is not required to 
consider costs and benefits. The Court's discussion of the language of 
section 316(b)--section 316(b) is ``unencumbered by specified statutory 
factors''--and its critique of the Second Circuit's decision affirms 
EPA's broad discretion to consider a number of factors in standard 
setting under section 316(b). While the Supreme Court's decision is 
limited to whether or not EPA may consider one factor (cost/benefit 
analysis) under section 316(b), the language also suggests that EPA has 
wide discretion in considering other factors that it deems relevant to 
316(b) standard setting. (``It is eminently reasonable to conclude that 
Sec.  1326b's silence is meant to convey nothing more than a refusal to 
tie the agency's hands as to whether cost-benefit analysis should be 
used, and if so to what degree.'' 129 S.Ct. 1498, 1508 (2009).
    Regarding the other factors EPA may consider, section 316(b) cross 
references sections 301 and 306 of the CWA by requiring that any 
standards established pursuant to those sections also must require that 
the location, design, construction and capacity of intake structures 
reflect BTA. EPA has interpreted the cross reference as authorizing 
consideration of the same factors considered under those provisions 
Thus, for example, section 306 directs EPA to establish performance 
standards for new sources based on the ``best available demonstrated 
control technology'' (BADT). 33 U.S.C. 1316(a)(1). In establishing 
BADT, EPA ``shall take into consideration the cost of achieving such 
effluent reduction, and any non-water quality environmental impact and 
energy requirements.'' 33 U.S.C. 1316(b)(2)(B). The specific cross-
reference in CWA section 316(b) to CWA section 306 ``is an invitation 
to look to section 306 for guidance in discerning what factors Congress 
intended the EPA to consider in determining the `best technology 
available' '' for new sources. See Riverkeeper v. EPA, 358 F. 2d 174, 
186 (2nd Cir. 2004).
    Similarly, Section 301 of the CWA requires EPA to establish 
standards known as ``effluent limitations'' for existing point source 
discharges in two phases. In the first phase, applicable to all 
pollutants, EPA must establish effluent limitations based on the ``best 
practicable control technology currently available'' (BPT). 33 U.S.C. 
1311(b)(1)(A). In establishing BPT, the CWA directs EPA to consider the 
total cost of application of technology in relation to the effluent 
reduction benefits to be achieved from such application, and to also 
take into account the age of the equipment and facilities involved, the 
process employed, the engineering aspects of the application of various 
types of control techniques, process changes, non-water quality 
environmental impact (including energy requirements), and such other 
factors as [EPA] deems appropriate. 33 U.S.C. 1314(b)(1)(b).
    In the second phase, EPA must establish effluent limitations for 
conventional pollutants based on the ``best conventional pollution 
control technology'' (BCT), and for toxic pollutants based on the 
``best available technology economically achievable'' (BAT). 33 U.S.C. 
1311(b)(2)(A), (E).
    In determining BCT, EPA must consider, among other factors, the 
relationship between the costs of attaining a reduction in effluents 
and the effluent reduction benefits derived, and the comparison of the 
cost and level of reduction of such pollutants from the discharge from 
publicly owned treatment works to the cost and level of reduction of 
such pollutants from a class or category of industry source * * * and 
the age of equipment and

[[Page 22179]]

facilities involved, the process employed, the engineering aspects * * 
* of various types of control techniques, process changes, the cost of 
achieving such effluent reduction, non-water quality environmental 
impacts (including energy requirements), and such other factors as 
[EPA] deems appropriate. 33 U.S.C. 1314(b)(4)(B).
    In determining BAT, the CWA directs EPA to consider ``the age of 
equipment and facilities involved, the process employed, the 
engineering aspects * * * of various types of control techniques, 
process changes, the cost of achieving such effluent reduction, non-
water quality environmental impacts (including energy requirements), 
and such other factors as [EPA] deems appropriate.'' 33 U.S.C. 
1314(b)(2)(B).
    Section 316(b) expressly refers to section 301, and the phrase 
``best technology available'' is very similar to the phrases ``best 
available technology economically achievable'' and ``best practicable 
control technology currently available'' in that section. Thus, section 
316(b), section 301(b)(1)(A)--the BPT provision--and section 
301(b)(1)(B)--the BAT provision--all include the terms ``best,'' 
``technology,'' and ``available,'' but neither BPT nor BAT goes on to 
consider minimizing adverse environmental impacts, as BTA does. See 33 
U.S.C. 1311(b)(1)(A) and (2)(A). These facts, coupled with the brevity 
of section 316(b) itself, prompt EPA to look to section 301 and, 
ultimately, section 304 for further guidance in determining the ``best 
technology available to minimize adverse environmental impact'' of 
cooling water intake structures for existing facilities.
    By the same token, however, there are significant differences 
between section 316(b) and sections 301 and 304. See Riverkeeper, Inc. 
v. United States Environmental Protection Agency (2nd Cir. Feb. 3, 
2004) (``not every statutory directive contained [in sections 301 and 
306] is applicable'' to a section 316(b) rulemaking). Moreover, as the 
Supreme Court recognized, while the provisions governing the discharge 
of toxic pollutants must require the elimination of discharges if 
technically and economically achievable, section 316(b) has the less 
ambitious goal of ``minimizing adverse environmental impact.'' 129 
S.Ct. 1498, 1506. In contrast to the effluent limitations provisions, 
the object of the ``best technology available'' is explicitly 
articulated by reference to the receiving water: to minimize adverse 
environmental impact in the waters from which cooling water is 
withdrawn. This difference is reflected in EPA's past practices in 
implementing sections 301, 304, and 316(b). EPA has established BAT 
effluent limitations guidelines and NSPS based on the efficacy of one 
or more technologies to reduce pollutants in wastewater in relation to 
their costs without necessarily considering the impact on the receiving 
waters. This contrasts to 316(b) requirements, where EPA has previously 
considered the costs of technologies in relation to the benefits of 
minimizing adverse environmental impact in establishing 316(b) limits, 
which historically has been done on a case-by case basis. In Re Public 
Service Co. of New Hampshire, 10 ERC 1257 (June 17, 1977); In Re Public 
Service Co. of New Hampshire, 1 EBAD 455 (Aug. 4, 1978); Seacoast Anti-
Pollution League v. Costle, 597 F. 2d 306 (1st Cir. 1979). EPA 
concluded that, because both section 301 and 306 are expressly cross-
referenced in section 316(b), EPA reasonably interpreted section 316(b) 
as authorizing consideration of the same factors, including costs, as 
in those sections. EPA interpreted ``best technology available'' to 
mean the best technology available at an ``economically practicable'' 
cost. This approach squared with the limited legislative history of 
section 316(b) which suggested the BTA was to be based on technology 
whose costs were ``economically practicable.'' In debate on section 
316(b), one legislator explained that ``[t]he reference here to `best 
technology available' is intended to be interpreted to mean the best 
technology available commercially at an economically practicable 
cost.'' 118 Cong. Rec. 33,762 (1972) (statement of Rep. Clausen) 
(emphasis added).
    For EPA's initial Phase II rulemaking, as it had during 30 years of 
BPJ section 316(b) permitting, EPA therefore interpreted CWA section 
316(b) as authorizing EPA to consider not only the costs of 
technologies but also their effects on the water from which the cooling 
water is withdrawn.
2. History of Actions To Address Cooling Water Intake Structures Under 
the NPDES Program
a. 1976 Rulemaking
    In April 1976, EPA promulgated regulations under section 316(b) 
that addressed cooling water intake structures. 41 FR 17387 (April 26, 
1976), see also the proposed rule at 38 FR 34410 (December 13, 1973). 
The rule added a new Sec.  401.14 to 40 CFR Chapter I that reiterated 
the requirements of Clean Water Act section 316(b). It also added a new 
part 402, which included three sections: (1) Section 402.10 
(Applicability), (2) Sec.  402.11 (Specialized definitions), and (3) 
Sec.  402.12 (Best technology available for cooling water intake 
structures). Section 402.10 stated that the provisions of part 402 
applied to ``cooling water intake structures for point sources for 
which effluent limitations are established pursuant to section 301 or 
standards of performance are established pursuant to section 306 of the 
Act.'' Section 402.11 defined the terms ``cooling water intake 
structure,'' ``location,'' ``design,'' ``construction,'' ``capacity,'' 
and ``Development Document.'' Section 402.12 included the following 
language: The information contained in the Development Document shall 
be considered in determining whether the location, design, 
construction, and capacity of a cooling water intake structure of a 
point source subject to standards established under section 301 or 306 
reflect the best technology available for minimizing adverse 
environmental impact.
    In 1977, fifty-eight electric utility companies challenged those 
regulations, arguing that EPA had failed to comply with the 
requirements of the Administrative Procedure Act (APA) in promulgating 
the rule. Specifically, the utilities argued that EPA had neither 
published the Development Document in the Federal Register nor properly 
incorporated the document into the rule by reference. The U.S. Court of 
Appeals for the Fourth Circuit agreed and, without reaching the merits 
of the regulations themselves, remanded the rule. Appalachian Power Co. 
v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later withdrew part 402. 44 
FR 32956 (June 7, 1979). The regulation at Sec.  401.14, which 
reiterates the statutory requirement, remains in effect.
    Since the Fourth Circuit remanded EPA's section 316(b) regulations 
in 1977, NPDES permit authorities have made decisions implementing 
section 316(b) on a case-by-case, site-specific basis. EPA published 
draft guidance addressing section 316(b) implementation in 1977. See 
Draft Guidance for Evaluating the Adverse Impact of Cooling Water 
Intake Structures on the Aquatic Environment: Section 316(b) Pub. L. 
92-500 (U.S. EPA, 1977). This draft guidance described the studies 
recommended for evaluating the impact of cooling water intake 
structures on the aquatic environment and recommended a basis for 
determining the best technology available for minimizing adverse 
environmental impact. The 1977 section 316(b) draft guidance states, 
``[t]he 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-

[[Page 22180]]

by-case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4). 
This case-by-case approach was also consistent with the approach 
described in the 1976 Development Document referenced in the remanded 
regulation. The 1977 section 316(b) draft guidance suggested a general 
process for developing information needed to support section 316(b) 
decisions and presenting that information to the permitting authority. 
The process involved the development of a site specific study of the 
environmental effects associated with each facility that uses one or 
more cooling water intake structures, as well as consideration of that 
study by the permitting authority in determining whether the facility 
must make any changes for minimizing adverse environmental impact. 
Under this framework, the Director determined whether appropriate 
studies have been performed, whether a given facility has minimized 
adverse environmental impact, and what, if any, technologies may be 
required.
b. Phase I--New Facility Rule
    On November 9, 2001, EPA took final action on regulations governing 
cooling water intake structures at new facilities. See 66 FR 65255 
(December 18, 2001). On December 26, 2002, EPA made minor changes to 
the Phase I regulations. 67 FR 78947. The final Phase I new facility 
rule (40 CFR part 125, subpart I) establishes requirements applicable 
to the location, design, construction, and capacity of cooling water 
intake structures at new facilities that have a design capacity to 
withdraw at least two million gallons per day (MGD) and use at least 
twenty-five percent of the water they withdraw solely for cooling 
purposes.
    In the new facility rule, EPA adopted a two-track approach. Under 
Track I, for facilities that withdraw equal to or greater than 10 MGD, 
the intake flow of the cooling water intake structure is restricted, at 
a minimum, to a level commensurate with that which could be attained by 
use of a closed-cycle, recirculating cooling system. For facilities 
that withdraw greater than 2 MGD, the design through-screen intake 
velocity is restricted to 0.5 feet per second and the total quantity of 
intake is restricted to a proportion of the mean annual flow of a 
freshwater river or stream, or to a level necessary to maintain the 
natural thermal stratification or turnover patterns (where present) of 
a lake or reservoir except in cases where the disruption is beneficial, 
or to a percentage of the tidal excursions of a tidal river or estuary. 
If certain environmental conditions exist, an applicant that withdraws 
equal to or greater than 10 MGD must select and implement appropriate 
design and construction technologies for further minimizing impingement 
mortality and entrainment. Applicants with greater than 2 MGD but less 
than 10 MGD flows are not required to reduce intake flow to a level 
commensurate with a closed-cycle, recirculating cooling system, but 
must still meet specific operational criteria.
    Under Track II, the applicant has the opportunity to demonstrate to 
the Director that the technologies he employs will reduce the level of 
adverse environmental impact to a comparable level to what would be 
achieved by meeting the Track I requirements for restricting intake 
flow and velocity. In making this demonstration, the regulations allow 
an applicant to rely on a combination of measures in additional to 
technology controls for reducing impingement and entrainment to achieve 
results equivalent to the Track I intake flow and velocity 
requirements. These include measures to restore the affected water body 
such as restocking fish and improvement of the surrounding habitat to 
offset the adverse effects that would otherwise be caused by the 
operation of the intake structures. These restoration measures would 
result in increases in fish and shellfish which, in combination with 
any technologies employed, would result in a level of fish and 
shellfish in the water body comparable to that which would result from 
the reductions in impingement mortality and entrainment that would be 
achieved under Track I. Note that restoration provisions are no longer 
authorized (and EPA is proposing to delete them from the CFR in this 
rule making), but they are included in this description of the Phase I 
rule for completeness. See Chapter II of this preamble for more 
information.
    In addition, under the Phase I rule, the Director (i.e., the 
permitting authority) may establish less stringent alternative 
requirements for a facility if compliance with the Phase I standards 
would result in compliance costs wholly out of proportion to those EPA 
considered in establishing the Phase I requirements or would result in 
significant adverse impacts on local air quality, water resources, or 
local energy markets.
    EPA specifically excluded new offshore oil and gas extraction 
facilities from the Phase I new facility rule, but committed to 
consider establishing requirements for such facilities in the Phase III 
rulemaking. 66 FR 65338 (December 18, 2001).
c. Phase II--Large Flow Existing Power Plants
    On February 16, 2004, EPA took final action on regulations 
governing cooling water intake structures at certain existing power 
producing facilities. 69 FR 41576 (July 9, 2004). The final Phase II 
rule applied to existing facilities that are point sources; that, as 
their primary activity, both generate and transmit electric power or 
generate electric power for sale or transmission; that use or propose 
to use a cooling water intake structure with a total design intake flow 
of 50 MGD or more to withdraw water from waters of the United States; 
and that use at least 25 percent of the withdrawn water exclusively for 
cooling purposes. In addition, power producers fitting the description 
above were also subject to the final Phase II rule even if they obtain 
their cooling water from one or more independent suppliers of cooling 
water. Such facilities were subject to the rule if their supplier 
withdraws water from waters of the U.S. even if the supplier was not 
itself a Phase II existing facility. EPA included this provision to 
prevent circumvention of the Phase II rule requirements by a facility 
purchasing cooling water from entities not otherwise subject to Section 
316(b).
    The final Phase II rule and preamble also clarified the definition 
of an ``existing'' power producing facility. The Phase II rule defined 
an ``existing facility'' as ``any facility that commenced construction 
as described in Sec.  122.29(b)(4) on or before January 17, 2002; and 
any modification of, or addition of a unit at such a facility that does 
not meet the definition of a new facility at Sec.  125.83.'' Given that 
the definition of the term ``existing facility'' was based in part on 
the Phase I definition of the term ``new facility,'' the preamble to 
the final Phase II rule also clarified and provided some examples of 
how the definition of ``existing facility'' might apply to certain 
changes at power producing facilities.
    Under the Phase II rule, EPA established BTA performance standards 
for the reduction of impingement mortality and, under certain 
circumstances, entrainment (see 69 FR 41590-41593). The performance 
standards consisted of ranges of reductions in impingement mortality 
and/or entrainment (e.g., reduce impingement mortality by 80 to 95 
percent and/or entrainment by 60 to 90 percent) relative to a 
``calculation baseline'' that reflected the level of impingement 
mortality and entrainment that would occur absent specific controls. 
These performance standards

[[Page 22181]]

were not based on a single technology but, rather, on consideration of 
a combination of technologies that EPA determined were commercially 
available and economically achievable for the industries affected as a 
whole. (69 FR 41598-41610). EPA based the impingement mortality and 
entrainment (I&E) performance standards on a combination of 
technologies because it found no single technology to be most effective 
at all affected facilities. For impingement standards, these 
technologies included: (1) Fine and wide-mesh wedgewire screens, (2) 
barrier nets, (3) modified screens and fish return systems, (4) fish 
diversion systems, and (5) fine mesh traveling screens and fish return 
systems. With regard to entrainment reduction, these technologies 
include: (1) Aquatic filter barrier systems, (2) fine mesh wedgewire 
screens, and (3) fine mesh traveling screens with fish return systems. 
Because EPA based the performance standards on a combination of 
technologies and because of the uncertainty inherent in predicting the 
efficacy of one or more of these technologies as applied to different 
Phase II facilities, EPA promulgated these standards as ranges. 
Furthermore, because the site-specific performance was based on a 
comparison to a once-through system without any specific controls on 
the shoreline near the source waterbody (i.e., calculation baseline, 
see section III.A.2 for more details), the rule also allowed facilities 
to receive credit towards meeting the performance standards for I&E 
reduction associated with alternate locations of their intakes (eg, 
deep water where fish and shellfish were less abundant).
    The types of performance standard applicable to a particular 
facility (i.e., reductions in impingement mortality only or impingement 
mortality and entrainment) were based on several factors, including the 
facility's location (i.e., source waterbody), rate of use (capacity 
utilization rate), and the proportion of the waterbody withdrawn.
    The Phase II rule identified five compliance alternatives to meet 
the performance standards. A facility could demonstrate to the Director 
one of the following: (1) That it has already reduced its flow 
commensurate with a closed-cycle recirculating system (to meet both 
impingement mortality and entrainment), or that it has already reduced 
its maximum through-screen velocity to 0.5 feet per second or less (to 
meet the impingement performance standard only); (2) that its current 
cooling water intake structure configuration meets the applicable 
performance standards; (3) that it has selected design and construction 
technologies, operational measures, and/or restoration measures that, 
in combination with any existing design and construction technologies, 
operational measures, and/or restoration measures, meet the applicable 
performance standards; (4) that it meets the applicability criteria and 
has installed and is properly operating and maintaining a rule-
specified and/or approved State-specified design and construction 
technology (i.e., submerged cylindrical wedgewire screens) in 
accordance with Sec.  125.99(a) or an alternative technology that meets 
the appropriate performance standards and is approved by the Director 
in accordance with Sec.  125.99(b); or (5) that its costs of compliance 
would be significantly greater either than the costs considered by the 
Administrator for a like facility to meet the applicable performance 
standards, or than the benefits of meeting the applicable performance 
standards at the facility. Under the cost-cost comparison alternative, 
a Director could determine that the cost of compliance for a particular 
facility would be significantly greater than the costs considered by 
EPA in establishing the applicable impingement mortality and 
entrainment reduction performance standards. Similarly, under the cost-
benefit comparison alternative, a Director could determine that the 
cost of compliance for a particular facility would be significantly 
greater than the benefits of complying with the applicable performance 
standards. In the event of either of these determinations, the Director 
would have to make a site-specific determination of BTA for minimizing 
adverse environmental impact that came as close as possible to meeting 
the applicable performance standards at a cost that did not 
significantly exceed either the costs EPA considered in establishing 
these standards or the site-specific benefits of meeting these 
standards.
    The final Phase II rule also provided that a facility that chooses 
specified compliance alternatives might request that compliance with 
the requirements of the rule be determined based on the implementation 
of a Technology Installation and Operation Plan (TIOP) that would 
indicate how the facility would install and ensure the efficacy, to the 
extent practicable, of design and construction technologies, and/or 
operational measures, and/or a Restoration Plan. The rule also 
established requirements for the development and submittal of a TIOP 
(Sec.  125.95(b)(4)(ii)) as well as provisions that specified how 
compliance could be determined based on implementation of a TIOP (Sec.  
125.94(d)). Under these provisions, a TIOP could be requested in the 
first permit term and continued use of a TIOP could be requested where 
a facility was in compliance with such plan and/or its Restoration 
Plan.
d. Phase III Rulemaking--Low Flow Existing Power Plants, Existing 
Manufacturing Facilities, and New Offshore Oil and Gas Facilities
    On June 16, 2006, EPA published a final Phase III rule that 
established categorical regulations for new offshore oil and gas 
extraction facilities that have a design intake flow threshold of 
greater than 2 MGD and that withdraw at least 25 percent of the water 
exclusively for cooling purposes. For most such facilities, the rule 
establishes requirements virtually identical to the requirements 
applicable to new facilities in the Phase I rule. In the Phase III 
rule, EPA declined to establish national standards for Phase III 
existing facilities. Instead it concluded that CWA section 316(b) 
requirements for electric generators with a design intake flow of less 
than 50 MGD and all existing manufacturing facilities would continue to 
be established on a case-by-case basis under the NPDES permit program 
using best professional judgment. (71 FR 35006).
3. Rulings by the U.S. Court of Appeals for the Second Circuit
    Both the Phase I and Phase II 316(b) rules were challenged in the 
U.S. Court of Appeals for the Second Circuit. Key aspects of each of 
these decisions are discussed below.
a. Phase I Rule
    Various environmental and industry groups challenged the Phase I 
316(b) rule. In February 2004, the Second Circuit sustained the entire 
rule except for the restoration provision, ruling that restoration was 
not a technology as provided for in 316(b). With respect to the other 
provisions of the rule, the Court concluded the Phase I rule was based 
on a reasonable interpretation of the applicable statute and 
sufficiently supported by the record. Restoration provisions of the 
rule were remanded to EPA for further rulemaking consistent with the 
Court's decision. Riverkeeper, Inc. v. EPA, 358 F.3d 174, 191 (2nd 
Cir., 2004). Today's proposal rule would remove the restoration 
provisions from the Phase I rule. See Chapter II of this preamble for 
more details.

[[Page 22182]]

b. Phase II Rule
    Industry, environmental stakeholders, and some States \1\ 
challenged many aspects of the Phase II regulations. On January 25, 
2007, the Second Circuit (Riverkeeper, Inc. v. EPA, 475 F.3d 83, (2d 
Cir., 2007)) upheld several provisions of the Phase II rule and 
decision and remanded others to EPA for further rulemaking.
---------------------------------------------------------------------------

    \1\ Rhode Island, Connecticut, Delaware, Massachusetts, New 
Jersey, and New York.
---------------------------------------------------------------------------

    As noted above, for the final rule EPA rejected closed-cycle 
cooling as BTA. Instead, EPA selected a suite of technologies to 
reflect BTA, including e.g., screens, aquatic filter barriers, and 
barrier nets. Based on the chosen technologies, EPA established 
national performance standards for reducing impingement mortality and 
entrainment of fish and fish organisms but did not require the use of 
any specific technology. Among the aspects of the rule the Second 
Circuit remanded for further clarification was EPA's decision to reject 
closed-cycle cooling as BTA and EPA's determination of performance 
ranges as BTA. In addition, the Second Circuit found that, consistent 
with its Phase I decision, restoration was not a technology for BTA, 
and that EPA's cost-benefit site-specific compliance alternative was 
not in accord with the Clean Water Act. There are also several issues 
for which the court requested additional clarification, and some 
instances where the court determined that EPA had failed to provide 
adequate notice and opportunity to comment on certain provisions of the 
rule.
4. EPA Suspension of the Phase II Rule
    As a result of the decision of the Second Circuit Court of Appeals 
in Riverkeeper, Inc. v. EPA, 475 F.3d 83, (2d Cir., 2007), EPA, on July 
9, 2007 (72 FR 37107) suspended the requirements for cooling water 
intake structures at Phase II existing facilities, pending further 
rulemaking. Specifically, EPA suspended the provisions in Sec.  
122.21(r)(1)(ii) and (5), and part 125 Subpart J, with the exception of 
Sec. 125.90(b). EPA explained that suspending the Phase II requirements 
was an appropriate response to the Second Circuit's decision, and that 
such action would allow it to consider how to respond to the remand. In 
addition, suspending the Phase II rule was responsive to the concerns 
of the regulated community and permitting agencies, both of whom sought 
guidance regarding how to proceed in light of the approaching deadline 
of the remanded rule. EPA's suspension clarified that pending further 
rulemaking, permit requirements for cooling water intake structures at 
Phase II facilities should be established on a case-by-case, best 
professional judgment (BPJ) basis (see 125.90(b)).
5. Ruling by the U.S. Supreme Court
    Following the Phase II decision in the Second Circuit, several 
industry group litigants petitioned the U.S. Supreme Court to hear an 
appeal regarding several issues in the case. Entergy Corp. et al. v. 
EPA, S. Ct. No. 07-588, et al. On April 14, 2008, the Supreme Court 
granted the petitions for writs of certiorari submitted by these Phase 
II litigants, but limited its review to the issue of whether section 
316(b) authorizes EPA to compare costs with benefits in determining BTA 
for cooling water intake structures. The Supreme Court held oral 
arguments in this case on December 2, 2008, and issued a decision on 
April 1, 2009. The Supreme Court held that it is permissible for EPA to 
rely on cost-benefit analysis in decision making for setting the Phase 
II national performance standards, and in providing for cost-benefit 
variances from those standards as part of the Phase II regulations. The 
Court indicated that the phrase ``best technology available for 
minimizing adverse environmental impact'' does not unambiguously 
preclude use of cost-benefit analysis in decision making. The ruling 
supports EPA's discretion to consider costs and benefits, but imposes 
no obligation on the agency to do so.
6. Ruling by the U.S. Court of Appeals for the Fifth Circuit
    In 2009, EPA petitioned the Fifth Circuit to remand the existing 
facility portion of the Phase III rule. Specifically, EPA requested 
remand of those provisions in the Phase III rule that establish 316(b) 
requirements at electric generators with a design intake flow of less 
than 50 MGD, and at existing manufacturing facilities, on a case-by-
case basis using best professional judgment. This request did not 
affect the Phase III rule requirements that establish categorical 
regulations for new offshore oil and gas extraction facilities that 
have a design intake flow threshold of greater than 2 MGD and that 
withdraw at least 25 percent of the water exclusively for cooling 
purposes.
    On July 23, 2010, the U. S. Court of Appeals for the Fifth Circuit 
issued a decision regarding the Phase III rule. The Court granted EPA's 
motion to remand the rule with respect to existing facilities. In 
addition, the Fifth Circuit affirmed the portion of the rule that 
regulated cooling water intake structures for new offshore oil and gas 
facilities. In sustaining these requirements, the Fifth Circuit upheld 
EPA's decision not to use cost benefit balancing in determining the 
requirements for these new facilities. This was in accord with the 
discretion afforded by 316(b) and affirmed by the Supreme Court, namely 
that EPA properly interpreted section 316(b) as authorizing, but not 
requiring, the Agency to consider costs and benefits in its decision 
making.
7. Settlement of Litigation in U.S. District Courts
    On January 19, 1993, a group of individuals and environmental 
organizations \2\ filed, under section 505(a)(2) of the CWA, 33 U.S.C. 
1365(a)(2), a complaint in Cronin, et. al. v. Reilly, 93 Civ. 314 
(LTS)(S.D.N.Y.). The plaintiffs alleged that EPA had failed to perform 
a non-discretionary duty to issue regulations implementing section 
316(b) of the CWA, 33 U.S.C. 1326(b). In 1995, EPA and the plaintiffs 
executed a consent decree in the case that provided for EPA to 
implement section 316(b) of the CWA by prescribed dates in the three 
separate rulemaking proceedings described above. In late 2002, the 
district court entered an amended consent decree that modified the 
schedule for the Phase II and Phase III rulemakings for existing 
facilities.
---------------------------------------------------------------------------

    \2\ There are the following plaintiffs currently: Riverkeeper, 
Inc.; Alex Matthiessen, a/k/a The Hudson Riverkeeper; Maya K. Van 
Rossum, a/k/a The Delaware Riverkeeper; Terrance E. Backer, a/k/a 
The Soundkeeper; John Torgan, a/k/a The Narragansett BayKeeper; 
Joseph E. Payne, a/k/a The Casco BayKeeper; Leo O'Brien, a/k/a the 
San Francisco BayKeeper; Sue Joerger, a/k/a The Puget Soundkeeper; 
Steven E. Fleischli, a/k/a The Santa Monica BayKeeper; Andrew 
Willner, a/k/a The New York/New Jersey Baykeeper; The Long Island 
Soundkeeper Fund, Inc.; The New York Coastal Fishermen's 
Association, Inc.; and The American Littoral Society, Inc.
---------------------------------------------------------------------------

    On November 17, 2006, some of the same environmental organizations 
in the Cronin case filed a second complaint, amended on January 19, 
2007, in Riverkeeper, et al. v. EPA, 06 Civ. 12987 (S.D.N.Y.). Here, 
the plaintiffs alleged that EPA failed to perform a non-discretionary 
duty under section 316(b) of the CWA in its final regulation covering 
the Phase III facilities, and also had violated sections 706(2)(A) and 
706(2)(C) of the Administrative Procedure Act (APA) in the manner in 
which it had made that decision.
    Earlier, the same plaintiffs had also petitioned for review of the 
Phase III rule in the U.S. Court of Appeals for the Second Circuit. 
This and other petitions for review were consolidated for hearing

[[Page 22183]]

in the U.S. Court of Appeals for the Fifth Circuit. Conoco Phillips v. 
EPA (5th Cir. No. 06-60662). Following the Supreme Court decision in 
Entergy, EPA, Riverkeeper and others requested remand of the regulation 
to allow EPA to reconsider its decisions regarding Phase III facilities 
in light of more recent technical information and recent court 
decisions. As noted above, on July 23, 2010, the Fifth Circuit granted 
the joint motion of EPA and environmental petitioners for a voluntary 
remand. On September 3, 2010, one of the industry petitioners filed a 
petition asking the Fifth Circuit panel to rehear its grant of the 
motion to remand.
    On August 14, 2008, EPA filed a motion to terminate the Cronin 
proceeding because it had discharged its obligations (``to take final 
action'') under the decree with respect to the Phase II and III 
rulemakings. The plaintiffs in Cronin asserted that EPA had not 
discharged its obligations under the second amended decree because the 
Second Circuit remanded core provisions of the 316(b) rule for existing 
power plants to EPA, and EPA had suspended the Phase II rule. In the 
Riverkeeper proceeding, on February 7, 2007, EPA moved to dismiss 
arguing that the district court lacked jurisdiction to hear the 
challenge to the Phase III rule.
    EPA entered into a settlement with the plaintiffs in both lawsuits. 
Under the settlement agreement, EPA agreed to sign a notice of a 
proposed rulemaking implementing section 316(b) of the CWA at existing 
facilities no later than March 14, 2011 and to sign a notice taking 
final action on the proposed rule no later than July 27, 2012. 
Plaintiffs agreed to seek dismissal of both their suits, subject to a 
request to reopen the Cronin proceeding in the event EPA failed to meet 
the agreed deadlines. The district courts have now entered orders of 
dismissal. On March 11, 2011, the parties agreed to an amendment to the 
settlement agreement to extend the date for proposal to March 28, 2011.

II. Proposed Amendments Related to the Phase I Rule

    EPA is proposing several limited changes to the Phase I rule at 40 
CFR subpart I. The changes fall into two categories. The first is 
deletion of the provision in the rule that would allow a facility to 
demonstrate compliance with the Phase I BTA requirements in whole or in 
part through restoration measures. The proposed change responds to the 
decision of the U.S. Court of Appeals for the Second Circuit which 
remanded these provisions to EPA because it concluded the statute did 
not authorize restoration measures to comply with section 316(b) 
requirements. The second category of changes reflects technical 
corrections or errors that do not change the substance of the current 
Phase I rule. EPA is not reopening any other aspects of the Phase I 
rule other than the provisions specifically noted here.

A. Restoration Provisions Not Authorized

    As discussed above in Section I.C.2, the Phase I final rule 
established two compliance tracks. Track I requires facilities to 
restrict intake flow and velocity. Track II gives a facility the option 
of demonstrating to the Director that the control measures it employs 
will reduce the level of adverse environmental impact to a comparable 
level to what would be achieved by meeting the Track I requirements. As 
part of this demonstration, Track II allows a facility to make use of 
restoration measures. The Comprehensive Demonstration Study allowed a 
quantitative or qualitative demonstration that restoration measures 
would meet, in whole or in part, the performance levels of Track I. 
Similarly, the Verification Monitoring Plan could be tailored to verify 
that the restoration measures would maintain the fish and shellfish in 
the waterbody at a substantially similar level to that which would be 
achieved under Track I. See 65 FR 65280-65281.
    As discussed in Section I.C.3, the Second Circuit concluded that 
EPA exceeded its authority by allowing new facilities to comply with 
section 316(b) through restoration measures, and remanded that aspect 
of the rule to EPA. The Supreme Court did not grant the petitions for 
writs of certiorari concerning restoration provisions. Thus in EPA's 
view the Agency is bound by the Second Circuit decision. Today's 
proposed rule proposes to amend Phase I to remove those provisions in 
Sec.  125.84(d) and 125.89(b)(1)(ii) authorizing restoration measures. 
This proposed rule also specifically proposes deletion of application 
requirements contained in the Comprehensive Demonstration Study at 
Sec.  125.86(c)(2)(ii); evaluation of proposed restoration measures at 
125.86(c)(2)(iv)(C); and verification monitoring requirements at 
125.86(c)(2)(iv)(D)(2)) that are specific to restoration. EPA 
acknowledges these changes may reduce the alternatives available to 
some Phase I facilities. However, EPA notes that the deletion of 
restoration measures does not otherwise alter the availability of Track 
II. In any event, EPA's determination of BTA for Phase I did not 
presume reliance on the restoration provisions, and the deletion of 
restoration measures in no way alters the Agency's BTA determination 
for Phase I facilities.

B. Corrections to Subpart I

    Today's proposed rule proposes to change the applicability 
statement at 125.81(a)(3) to match the applicability of the technical 
requirements at 125.84 and application requirements at 125.86. The 
applicability in all three instances should specify design intake flow 
or withdrawals ``greater'' than the specified value of 2 MGD. See Basis 
for the Final Regulation at 66 FR 65270.
    Today's proposed rule also proposes a correction to the source 
waterbody flow information submission requirements. Track I 
requirements at 125.84(b)(3) apply to new facilities that withdraw 
equal to or greater than 10 MGD. Track I requirements at 125.84(c)(2) 
apply to facilities that withdraw less than 10 MGD. The source 
waterbody flow information under 125.86(b)(3) requires a facility to 
demonstrate it has met the flow requirements of both 125.84(b)(3) 
``and'' 125.84(c)(2). However, a facility cannot be subject to both 
125.84(b)(3) and 125.84(c)(2) at the same time. Accordingly, the word 
``and'' should read as ``or'' in 125.86(b)(3).
    In addition, today's proposed rule proposes corrections to the 
application requirement for the Source Water Biological 
Characterization at 122.21(r)(4). Accordingly, references to the Source 
Water Biological Characterization should read as (r)(4). However, the 
references to the Source Water Biological Characterization at 
125.86(b)(4)(iii), at 125.87(a), and at 125.87(a)(2) incorrectly refer 
to 122.21(r)(3) and are thus being corrected.

III. What New Information Has EPA Obtained or Developed in Support of 
This Proposed Rule?

    In developing the Phase I, Phase II, and Phase III rules, EPA 
collected and analyzed a substantial amount of information regarding 
cooling water intake structures, their biological impacts, available 
technologies to reduce those impacts, and other relevant subjects. EPA 
considered a sizable volume of material submitted during previous 
public comment periods, as well as additional data from stakeholders, 
industry groups, technology vendors, and environmental organizations 
since those comment periods. Many of the materials are summarized or 
discussed in the preambles to these regulations or in the 
administrative record for these rules

[[Page 22184]]

(see, e.g., docket numbers W-00-03, OW-2002-0049, and EPA-OW-2004-
0002). Today's proposal is based on data and information contained in 
the records supporting the Phase I, Phase II, and Phase III 
rulemakings, as well as new information. This section summarizes new 
data collected since the promulgation of the Phase III rule in June 
2006; it will not review or summarize previous data collection efforts 
except to frame discussions about the new data. For information on 
EPA's historic data collection efforts, refer to the preambles and 
records for the three rules (see, e.g., 65 FR 49070, 66 FR 28854, 68 FR 
17131, 68 FR 13524, 69 FR 41593, 69 FR 68457, and 70 FR 71059).

A. Additional Data

    EPA has supplemented the existing documents with additional 
information as summarized below.
1. Site Visits
    As documented in the suspended 2004 Phase II rule, EPA conducted 
site visits to 22 power plants in developing the 2004 rule. See 67 FR 
17134. Since 2007, EPA has conducted over 50 site visits to power 
plants and manufacturing sites. The purpose of these additional visits 
was to: Gather information on the intake technologies and cooling water 
systems in place at a wide variety of existing facilities; better 
understand how the site-specific characteristics of each facility 
affect the selection and performance of these systems; gather 
performance data for technologies and affected biological resources; 
and solicit perspectives from industry representatives. EPA used a 
number of criteria in selecting the sites to visit, including those 
sites representing a variety of geographical locations and different 
types of intakes, and sites that already had an impingement or 
entrainment technology in place for which the facility had collected 
performance data. EPA also asked trade associations to recommend sites 
facing unique circumstances that may affect the adoption of certain 
control technologies. EPA also collected information on 7 additional 
facilities that staff did not physically visit; usually, these were 
other facilities owned by the parent company of a site visited by EPA. 
EPA also held conference calls or met with representatives of other 
sites at EPA's Washington, DC location.
    Copies of the site visit reports (which provide an overall facility 
description as well as detailed information such as electricity 
generation, the facility's cooling water intake structure and 
associated fish protection and/or flow reduction technologies, 
impingement and/or entrainment sampling and associated data, and a 
discussion of the possible application of cooling towers) for each site 
are provided in the docket for the proposed rule. In addition, in 
response to stakeholder inquiries, EPA made these site reports publicly 
available well before publication of the proposed rule. A list of the 
facilities visited by EPA is provided in the TDD.
2. Data Provided to EPA by Industrial, Trade, Consulting, Scientific or 
Environmental Organizations or by the General Public
    EPA has continued to exchange information with various stakeholders 
in the development of today's proposal. EPA met several times with 
Electric Power Research Institute (EPRI), Edison Electric Institute, 
Nuclear Energy Institute, and Utility Water Act Group, along with other 
representatives from facilities and affected industries on topics 
including the latest advancements in fish protection technologies, 
permit experience, and the feasibility and cost of installing 
technologies at certain types of facilities.
    In 2010, the North American Electric Reliability Corporation (NERC) 
issued a reliability study and found potentially substantial 
reliability effects under a 316(b) rule scenario that would require 
closed-cycle cooling of all large power plants. See Potential Resource 
Adequacy Impacts of U.S. Environmental Regulations. October 2010. The 
scenario assumes all existing steam units with a capacity utilization 
factor of less than 35% would close,\3\ and assumes all in-scope 
electric generators would be required to install cooling towers within 
a 5-year window. While the report's focus was on energy reliability and 
reflects a regulatory scenario that is not directly comparable to any 
of the options explored for today's proposed rule, the report 
nevertheless serves as a useful upper bound estimate of (1) the 
potential for premature generating unit retirements to avoid the costs 
of retrofitting existing cooling water intake systems and (2) increased 
power needs as a result of a capacity derating (i.e., the energy 
penalty \4\).
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    \3\ IPM analyses do not predict all units with capacity 
utilization rates of less than 35% would close as a result of a 
closed-cycle cooling retrofit. Thus the total loss in capacity under 
EPA's Option 2 would be 14,418 MW or 1.3% of existing capacity.
    \4\ The report assumes the total energy penalty of 4 percent is 
a constant; EPA believes the energy penalty is reduced over time as 
units replace, repower, or make other modifications such as 
condenser replacement that would eliminate the turbine backpressure.
---------------------------------------------------------------------------

    The Edison Electric Institute published a study of the combined 
impact of EPA's upcoming air, water (316(b)), and solid waste 
rulemakings on the coal fired fleet of power plants. See Potential 
Impacts of Environmental Regulation on the U.S. Generation Fleet Final 
Report. January 2011. As with the NERC study, conservative assumptions 
were made about EPA rules yet to be proposed or promulgated. The report 
summarizes reductions in capacity, but does not distinguish how much of 
that capacity was unused in the baseline scenario. Conservative costing 
assumptions such as 21 percent higher average costs,\5\ and application 
of full retrofit costs to new capacity (instead of incremental costs 
for installing required technology at new construction) gives results 
that are not comparable to any of the options explored for today's 
proposed rule. While this study analyzed multiple scenarios, each 
scenario combines the effects of multiple rules so that the impact of 
the section 316(b) rule alone could not be determined. Even so, the 
report provides useful insight on the potential impact of multiple 
rulemakings if each EPA rule was promulgated at the level of stringency 
assumed in the study.
---------------------------------------------------------------------------

    \5\ EPRI's site-specific evaluation of 82 facilities provides an 
average capital cost of $275 per GPM, but the EEI report uses $319 
per GPM.
---------------------------------------------------------------------------

    EPA met with Riverkeeper and other environmental groups to discuss 
the progress of the revisions to the rule, advances in fish protection 
technologies, state programs, environmental issues associated with 
cooling water withdrawals, and the feasibility of closed-cycle cooling. 
Through these interactions, EPA has received additional data and 
information including, but not limited to: Efficacy data, operating 
information, cost information, feasibility studies, environmental 
impacts, and non-water quality related impact information for various 
candidate BTA technologies.
3. Other Resources
    EPA also collected information on cooling water intake structure-
related topics from a variety of other sources, such as state and 
international policies. For example, the California Office of 
Administrative Law approved the ``Policy on the Use of Coastal and 
Estuarine Waters for Power Plant Cooling'' on September 27, 2010, which 
requires that all coastal power plants reduce their intake flow to a 
level commensurate with closed-cycle cooling. The Delaware state 
legislature passed a resolution that urges the Delaware Department of 
Natural

[[Page 22185]]

Resources and Environmental Control (DNREC) to consider closed-cycle 
cooling as BTA and to require closed-cycle cooling at all facilities. 
The New York Department of Environmental Conservation (DEC) released a 
draft policy in March 2010 that would require flow reduction equivalent 
to closed-cycle cooling at all existing facilities that withdraw more 
than 20 MGD as part of the state's plan to restore the Hudson River. 
Additional examples of state programs are discussed further in the TDD.
    In addition to state-wide cooling water policies, some recent 
individual NPDES permits have incorporated requirements for significant 
reductions in cooling water flow. For example, EPA Region I (which 
develops NPDES permits for several non-delegated New England states) 
issued a final NPDES permit in October 2003 that required Brayton Point 
in Somerset, Massachusetts to reduce cooling water intake flow and 
thermal discharges approximately 95 percent.\6\ Brayton is currently 
constructing two natural draft cooling towers at the facility. New 
Jersey, as part of its policy for protecting marine life from the 
adverse impacts created by power plants, issued a draft permit for 
Oyster Creek that would require closed-cycle cooling, and is studying 
closed-cycle cooling for two units at Salem Generating Station. Other 
examples are documented in site visit reports found in the record for 
today's proposed action.
---------------------------------------------------------------------------

    \6\ See http://www.epa.gov/ne/braytonpoint/index.html.
---------------------------------------------------------------------------

    Electric generators are the subject of several rulemaking efforts 
that either are or will soon be underway. In addition to this 
rulemaking proposal, this includes regulation under section 
110(a)(2)(D) of the Clean Air Act (CAA) addressing the interstate 
transport of emissions contributing to ozone and PM air quality 
problems, coal combustion wastes, hazardous air pollutants under CAA 
section 112, and criteria pollutant NSPS standards under CAA section 
111. They will also soon be the subject of a rulemaking under CAA 
section 111 concerning emissions of greenhouse gases. EPA recognizes 
that it is important that each and all of these efforts achieve their 
intended environmental objectives in a common-sense manner that allows 
the industry to comply with its obligations under these rules as 
efficiently as possible and to do so by making coordinated investment 
decisions and, to the greatest extent possible, by adopting integrated 
compliance strategies. In addition, EO 13563 states that ``[i]n 
developing regulatory actions and identifying appropriate approaches, 
each agency shall attempt to promote such coordination, simplification, 
and harmonization. Each agency shall also seek to identify, as 
appropriate, means to achieve regulatory goals that are designed to 
promote innovation.'' Thus, EPA recognizes that it needs to approach 
these rulemakings, to the extent that its legal obligations permit, in 
ways that allow the industry to make practical investment decisions 
that minimize costs in complying with all of the final rules, while 
still achieving the fundamentally important environmental and public 
health benefits that the rulemakings must achieve. The Agency expects 
to have ample latitude to set requirements and guidelines in ways that 
can support the states' and industry's efforts in pursuing practical, 
cost-effective and coordinated compliance strategies encompassing a 
broad suite of its pollution-control obligations.

B. Implementation Experience

    Following promulgation of the 2004 Phase II rule, states and EPA 
Regions began to implement the rule. During that time, EPA worked to 
assist states in understanding the rule requirements, develop guidance 
materials, and support review of the documentation of the new 
requirements. As a result, EPA became aware of certain elements of the 
2004 rule that were particularly challenging or time-consuming to 
implement. In developing today's proposed rule, EPA has considered 
these challenges and crafted a revised regulatory framework that the 
Agency believes is easier for all stakeholders to understand and 
implement. Some of the key changes are described below.
1. Calculation Baseline
    The 2004 Phase II rule required that facilities reduce impingement 
mortality and entrainment from the calculation baseline. The 
calculation baseline was intended to represent a ``typical'' Phase II 
facility and outlined a configuration for a typical CWIS. (See 69 FR 
41590.) EPA defined the calculation baseline as follows:

an estimate of impingement mortality and entrainment that would 
occur at your site assuming that: the cooling water system has been 
designed as a once-through system; the opening of the cooling water 
intake structure is located at, and the face of the standard \3/8\ 
inch mesh traveling screen is oriented parallel to, the shoreline 
near the surface of the source waterbody; and the baseline 
practices, procedures, and structural configuration are those that 
[a] facility would maintain in the absence of any structural or 
operational controls, including flow or velocity reductions, 
implemented in whole or in part for the purposes or reducing 
impingement mortality and entrainment.

    Under this approach, a facility that had undertaken efforts to 
reduce impingement and entrainment impacts (e.g., by installing a fine 
mesh screen or reducing intake flow) would be able to ``take credit'' 
for its past efforts and only be required to incrementally reduce 
impingement mortality or entrainment to meet the performance standards.
    In practice, both permittees and regulatory agencies encountered 
difficulty with the calculation baseline, specifically how a facility 
should determine what the baseline represented and how a particular 
facility's site-specific configuration or operations compared to the 
calculation baseline. For facilities whose site configuration conforms 
to the calculation baseline, it was relatively easy to determine 
impingement mortality and entrainment at the conditions representing 
the calculation baseline. However, for facilities that have a different 
configuration, estimating a hypothetical calculation baseline could be 
difficult. For example, facilities with intake configuration that 
differed significantly from the calculation baseline (e.g., a submerged 
offshore intake) were unsure as to how to translate their biological 
and technological data to represent the calculation baseline (a 
shoreline CWIS). Oftentimes facilities encountered difficulty in 
determining the appropriate location for monitoring to take place. 
Other facilities were unsure as to how to take credit for retired 
generating units and other flow reductions practices. In site visits, 
EPA learned that facilities with little or no historical biological 
data encountered a particularly difficult and time-intensive task of 
collecting appropriate data and developing the calculation baseline. 
For example, EPA found that for some sites impingement was very 
difficult to convert into a baseline, as facilities needed to predict 
which fish would be impinged and then further estimate which of those 
impinged organisms survived. As a result, EPA has developed a new 
approach to the technology-based requirements proposed today that does 
not use a calculation baseline.
2. Entrainment Exclusion Versus Entrainment Survival
    As EPA worked towards revising the existing facility rules, EPA 
discovered a nuance to the performance based requirements of the 2004 
Phase II rule: Entrainment exclusion versus entrainment survival. As 
discussed in section III.C below, EPA re-reviewed the

[[Page 22186]]

data on the performance of intake technologies and conducted 
statistical analysis of the data. From this analysis, it became 
apparent that the 2004 Phase II rule did not fully consider the true 
performance of intake technologies in affecting ``entrainable'' 
organisms.
    By definition, entrainment is the incorporation of aquatic 
organisms into the intake flow, which passes through the facility and 
is then discharged. In order to pass through the technologies located 
at the CWIS (e.g., intake screens, nets, etc.), the organisms must be 
smaller than the smallest mesh size.\7\ For coarse mesh screens (3/8'' 
mesh size), most ``entrainables'' simply pass through the mesh (and 
through the facility) with only some contact with the screen.\8\ In 
this situation the mortality of organisms passing through the facility 
was assumed to be 100 percent. However, as mesh sizes are reduced,\9\ 
more and more entrainables will actually become impinged on the screens 
(i.e., ``converted'' from entrainable to impingeable) and would then be 
subjected to spray washes and returned along with larger impinged 
organisms as well as debris from the screens. Under the 2004 Phase II 
rule, these ``converts'' would be classified as a reduction in 
entrainment, since the entrainment performance standard simply required 
a reduction in the number (or mass) of entrained organisms entering the 
cooling system. However, for some facilities the low survival rate of 
converts resulted in the facility having difficulty complying with the 
impingement mortality limitations. By comparison, the performance 
standard for impingement was measured as impingement mortality. 
Organisms that were impinged (i.e., excluded) from the CWIS were 
typically washed into a return system and sent back to the source 
water. In this case, impingement mortality is an appropriate measure of 
the biological performance of the technology.
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    \7\ In the case of many soft-bodied organisms such as eggs and 
larvae, the force of the intake flow can be sufficient to bend 
organisms that are actually larger than the screen mesh and pull 
them into the cooling system.
    \8\ Eggs are generally smaller than 2 millimeters in diameter, 
while larvae head capsids are much more variable in size, increasing 
as they mature to the juvenile stage.
    \9\ Fine mesh screens were considered to be one technology that 
could be used to meet the entrainment performance standards under 
the 2004 Phase II rule. EPA also reviewed performance data for 
screens with mesh sizes as small as 0.5 mm, as described in section 
III.C.
---------------------------------------------------------------------------

    Through EPA's review of control technologies, the Agency found that 
the survival of ``converts'' on fine mesh screens was very poor, and in 
some extreme cases comparable to the extremely low survival of 
entrained organisms that are allowed to pass entirely through the 
facility.\10\ More specifically, EPA found that nearly 100 percent of 
eggs were entrained unless the mesh slot size was less than 2 mm, and 
mortality of eggs ``converted'' to impingement ranged from 20 to 30 
percent. Further, the mortality of larvae collected from a fine mesh 
screen was usually greater than 80 percent. As a result, a facility 
with entrainment exclusion technologies such as fine mesh screens could 
approach 90 percent performance, but the subsequent survival of eggs 
and larvae combined ranged from 0 to 52 percent (mean value of 12 
percent survival) depending on life stage and species, and the 
facility's impingement mortality rates increased. In other words, a 
facility that simply excluded entrainable organisms (with no attention 
being paid to whether they survive or not) could be deemed to have met 
its entrainment requirements under the 2004 Phase II rule, when in fact 
it may be causing the same level of mortality as a facility with no 
entrainment controls at all. EPA's current review of entrainment and 
entrainment mortality shows the same trends identified in the research 
reviews by EPRI (2003), namely that entrainment decreases with 
increasing larval length, increased sweeping flow, decreasing slot 
(intake) velocity, and decreasing slot width. In other words, by using 
screens with finer mesh, entrainment mortality can be converted to 
impingement mortality without necessarily protecting any more aquatic 
organisms.
---------------------------------------------------------------------------

    \10\ Through-plant entrainment survival has been studied 
extensively, with EPRI's Review of Entrainment Survival Studies 
being amongst the most comprehensive. See DCN 2-017A-R7 from the 
Phase I docket.
---------------------------------------------------------------------------

3. Cost-Cost Test
    In the 2004 Phase II rule, EPA developed facility-specific cost 
estimates, and published those costs in Appendix A (69 FR 41669). The 
2004 Phase II rule also included a cost-cost test (see 69 FR 41644) 
where a facility could demonstrate that its costs to comply with the 
2004 rule were significantly greater than those that EPA had 
considered. Since initial implementation of the July 9, 2004 316(b) 
Phase II rule, EPA has identified several concerns with the facility-
specific costs listed in Appendix A and their use in the cost-cost 
test. First, EPA has identified numerous inconsistencies between 
facility permit applications, responses in the facility's 316(b) 
survey, and overall plant capacity as reported in the most recent EIA 
database. These inconsistencies resulted in Appendix A costs that were 
different from the facility's own compliance cost estimates due to 
inconsistencies in the underlying parameters used to estimate these 
costs. In addition, as described more fully in Chapter 2 of this 
proposal's Technical Development Document, EPA does not have available 
technical data for all existing facilities. EPA obtained the technical 
data for facilities through industry questionnaires. In order to 
decrease burden associated with these questionnaires, EPA requested 
detailed information from a sample, rather than a census, of 
facilities. EPA has thus concluded that the costs provided in Appendix 
A are not appropriate for use in a facility-level cost-cost test. 
Moreover, for most of the national requirements EPA is proposing here, 
a cost-cost variance is not necessary for the reasons described below. 
As a result, EPA is not providing a framework similar to Appendix A in 
today's proposed rule.\11\ (See section III.C below and VII for more 
information about how EPA developed compliance costs.)
---------------------------------------------------------------------------

    \11\ There is a form of ``cost-cost variance'' for new units at 
existing facilities, comparable to the provision in Phase I for new 
facilities. See further discussion below.
---------------------------------------------------------------------------

    First, the impingement mortality requirements of today's proposed 
rule are economically achievable,\12\ and the low variability in the 
costs of impingement mortality controls at a facility makes such a 
provision unnecessary. Second, a cost-cost variance is not necessary 
for entrainment mortality requirements because the costs of various 
requirements are a factor considered in each site-specific 
determination. Under the national rule, entrainment requirements would 
be established on a facility specific basis, except in the case of new 
units at an existing facility, which are subject to standards based on 
closed-cycle cooling or its equivalent. In the facility-specific 
process proposed today for entrainment mortality, a facility would be 
required to submit facility-specific compliance cost estimates. The 
determination of whether the cost of specific entrainment mortality 
technologies is too high is made by the Director on a case-by-case 
basis and accordingly a cost-cost provision is unnecessary for these 
facilities. However, consistent with the Phase I rule, EPA has included 
a

[[Page 22187]]

provision for new units at existing facilities that the Director may 
establish less stringent alternative requirements for a facility if 
compliance with the Phase I standards would result in compliance costs 
wholly out of proportion to those EPA considered in establishing the 
Phase I requirements or would result in significant adverse impacts on 
local air quality, water resources other than impingement or 
entrainment, or local energy markets.
---------------------------------------------------------------------------

    \12\ The Phase II rule found impingement mortality (plus 
entrainment exclusion on certain waterbodies) was economically 
achievable; EPA has not identified any reason for revising this 
conclusion. See 69 FR 41603.
---------------------------------------------------------------------------

C. New or Revised Analyses

    In addition to collecting new information, EPA has re-evaluated 
some existing data and analyses that underlay its earlier decisions. 
The standards of the 2004 Phase II regulation required impingement 
mortality reduction for all life stages of fish and shellfish of 80 to 
95 percent from the calculation baseline (for all Phase II facilities) 
and entrainment reduction requirements of 60 to 90 percent (for certain 
Phase II facilities). EPA based these performance requirements on a 
suite of technologies and compliance alternatives. For today's 
proposal, EPA has reanalyzed various candidate technologies as the 
basis for EPA's BTA decision. This reanalysis includes, but is not 
limited to, a reanalysis of candidate BTA technologies, their 
effectiveness, their costs, and their application. This section 
highlights some of the results from this reanalysis. See Section VI for 
a thorough discussion of EPA's updated BTA analysis and determination. 
Based on this reanalysis, EPA has reached several conclusions. The 
first is that closed-cycle cooling reduces impingement and entrainment 
mortality to the greatest extent. The second is that screen 
technologies are significantly less effective, particularly in 
comparison with closed-cycle cooling, in reducing entrainment mortality 
than EPA had concluded in 2004. Finally, EPA determined that while none 
of the reviewed technologies cause unacceptable energy reliability 
concerns, particulate emission increases, or adverse economic impacts 
at the national level, the performance and availability of some 
technologies varies widely depending on local factors, and these issues 
could be a significant concern at individual sites.
1. Revised Performance Database
    In its Section 316(b) rule development efforts to date, EPA has 
gathered industry documents and research publications with information 
from studies which evaluated the performance of a range of technologies 
for minimizing impingement or entrainment. As explained in 68 FR 13538-
13539, EPA previously developed a Technology Efficacy Database in an 
effort to document and assess the performance of various technologies 
and operational measures designed to minimize the impacts of cooling 
water withdrawals (see DCN 6-5000 in the docket for the 2004 Phase II 
rule). In support of today's proposal, EPA has updated that performance 
database. In updating the database, EPA's objective was to review the 
methods used to generate data in these studies and to combine relevant 
data across studies in order to produce statistical estimates of the 
overall performance of each of the technologies.
    In developing the updated database, EPA considered data from over 
150 documents. This includes documents previously contained in all 
three phases of EPA's 316(b) rulemaking records as well as new 
documents obtained during development of today's proposal. These 
documents contain information on the operation and/or performance of 
various forms and applications of these technologies, typically at a 
specific facility or in a controlled setting such as a research 
laboratory. The studies presented in these documents were performed by 
owners of facilities with cooling water intake structures, 
organizations that represent utilities and the electric power industry, 
and other research organizations. EPA established two general criteria 
for using data from the documents: (1) The data must be associated with 
technologies for minimizing impingement mortality or entrainment \13\ 
that are currently viable (as recognized by EPA) for use by industries 
with cooling water intake structures that are (or will be) subject to 
Section 316(b) regulation; and (2) the data must represent a 
quantitative measure (e.g., counts, densities, or percentages) that is 
related to the impingement mortality or entrainment of some life form 
of aquatic organisms within cooling water intake structures under the 
given technology.
---------------------------------------------------------------------------

    \13\ There were insufficient numbers of studies specifically 
looking at entrainment mortality or entrainment survival, therefore 
EPA broadened the review to include any measure of entrainment.
---------------------------------------------------------------------------

    For studies meeting the above criteria, EPA populated a new 
database. This performance study database consisted of two primary data 
tables. The first table contains specific information on a particular 
study, such as the document and study IDs, facility name, water body, 
data classification (e.g., impingement mortality, entrainment), 
technology category, and other test conditions when specified (e.g., 
mesh size, intake velocity, flow rate, water temperature, conditions 
when the technology is in place, control conditions). The second table 
contains the reported performance data for a given study. Each row of 
this table contains one or more performance measures for a particular 
species along with other factors when they were specified (e.g., age 
category, dates or seasons of data collection, water temperature, 
velocity, elapsed time to mortality). For one option considered for 
today's proposed rule, EPA used this database in an attempt to revise 
the impingement mortality and entrainment limits developed for the 
Phase II rule. However, as described in section VI, the performance 
data for screens and other intake technologies indicates that those 
technologies were not very effective at minimizing entrainment 
mortality in comparison to closed-cycle cooling. As a result, EPA has 
not included this option in today's proposed rule package.
2. Impingement Mortality and Entrainment Technology Performance 
Estimates
    To evaluate the effectiveness of different control technologies and 
the extent to which the various regulatory options considered for 
today's proposal minimize adverse environmental impacts associated with 
cooling water intake structures, EPA used the data collected in the 
revised performance database to develop impingement mortality and 
entrainment reduction estimates associated with each technology. For 
some technologies, this proposal reflects updated information or a 
different methodology for estimating effectiveness. For impingement 
mortality, EPA focused on 14 studies of 31 species for traveling 
screens with post-Fletcher modifications and with a 48 hour \14\ or 
less holding time, and found the monthly impingement mortality 
corresponding to the 95th percentile was 31 percent mortality. EPA's 
full analysis of impingement mortality limitations may be found in 
Chapter XI of the TDD. EPA found the best performance of entrainment 
exclusion for fine mesh screens was 73 to 82 percent for eggs and 46 to 
52 percent for larvae at 0.5 mm slot sizes. The best performance of 
fine mesh screens for entrainment survival (and not just exclusion) was 
29 to 34 percent, with zero survival of eggs and larvae under certain 
conditions. The next section further discusses the distinction

[[Page 22188]]

between entrainment exclusion and entrainment survival.
---------------------------------------------------------------------------

    \14\ Holding times beyond 48 hours often result in mortality due 
to holding conditions rather than mortality due to impingement.
---------------------------------------------------------------------------

3. Exclusion Technologies
    As discussed in section III.B above, screens and other technologies 
operate using a principle of excluding organisms from entering the 
cooling system. For technologies other than cooling towers, EPA 
generally calculated their efficacy as the mean percent efficacy of the 
available data. Because EPA has sufficient data to evaluate impingement 
mortality, its impingement mortality technology efficacy calculation 
accounts for mortality. However, because EPA has data on entrainment 
exclusion but lacks sufficient entrainment mortality data to calculate 
exclusion technology entrainment mortality efficacy, EPA's calculated 
mean entrainment percent efficacy does not account for mortality. 
Available data on today's proposed technology basis demonstrate that 
entrainment reductions associated with fine mesh technologies vary 
depending on life stage and mesh size. See Section VIII and the TDD for 
additional information on EPA's estimate of entrainment reductions for 
today's proposal.
    In reality, excluding an organism from the cooling water intake 
does not minimize entrainment-related adverse environmental impacts 
unless the excluded organisms survive and ultimately return back to the 
waterbody. In the 2004 Phase II rule, EPA made the assumption that any 
entrainable organism which was entrained died (i.e., 100 percent 
mortality for organisms passing through the facility) and any organism 
not entrained survived. In other words, if a technology reduced 
entrainment by 60 percent, then EPA estimated 40 percent of the 
organisms present in the intake water would die in comparison to 100 
percent in the absence of any entrainment reduction. As explained in 
Section VI, while it has been conjectured that certain species of eggs 
have been shown to survive entrainment under certain conditions, EPA 
has not received any new data for either the most common species or the 
most frequently identified species of concern described in available 
studies and, as such, has not altered its decision that for purposes of 
national rulemaking, entrainment should be presumed to lead to 100 
percent mortality. Today's proposed rule would allow facilities to 
demonstrate, on a site-specific basis, that entrainment mortality of 
one or more species of concern is not 100 percent.
    For today's proposal, EPA analyzed the limited data on the 
survivability of organisms that are ``converted'' from entrained to 
impinged on fine mesh screens. These data show that under most 
operational conditions, many larvae die as a result of the impact and 
impingement on fine mesh screens. In the case of eggs, the data 
indicate that some species may die, but some do survive. The data also 
demonstrate that if the organisms can withstand the initial impingement 
on the fine mesh screen, the majority of entrainable organisms survive 
after passing through a fish return and returning to the source water. 
Finally, the data indicate that survival increases as the body length 
and age of the larvae increases.\15\ EPA seeks additional data on the 
survivability (or mortality) of organisms that are converted from 
entrained to impinged on fine mesh screens.
---------------------------------------------------------------------------

    \15\ EPA found this is a very important distinction when 
reviewing technology efficacy, as some studies do not include the 
smaller, more fragile, and often non-motile stages of larvae. Older 
stages of larvae have started to develop avoidance responses, and 
generally have already started developing scales and skeletal 
structures.
---------------------------------------------------------------------------

4. Application of Requirements Based on Capacity Utilization Rate (CUR) 
and Waterbody Type
    In the 2004 Phase II rule, the type of performance standard 
applicable to a particular facility (i.e., reductions in impingement 
mortality only or impingement mortality and entrainment) depended on 
several factors, including the facility's location (i.e., source 
waterbody), capacity utilization rate (CUR) (as an indicator of the 
rate of use), and the proportion of the source waterbody withdrawn. 
EPA's reanalysis of impingement and entrainment data does not support 
the premise that the difference in the density of organisms between 
marine and fresh waters justifies different standards. More 
specifically, the average density of organisms in fresh waters may be 
less than that found in marine waters, but the actual density of 
aquatic organisms in some specific fresh water systems exceeds that 
found in some marine waters. In other words, there is considerable 
overlap in the range of densities found in marine waters and in fresh 
waters. EPA also believes the different reproduction strategies of 
freshwater versus marine species makes broad characterizations 
regarding the density less valid a rationale for establishing different 
standards for minimizing adverse environmental impact.
    In re-considering the applicability of requirements based on CUR, 
EPA found that even infrequently used facilities may still withdraw 
significant volumes of water when not generating electricity. EPA also 
found that load-following and peaking plants operate at or near 100 
percent capacity (and therefore 100 percent design intake flow) when 
they are operating, and these operations occur frequently during peak 
summer electricity demand, coinciding with some of the most 
biologically sensitive portions of the year.\16\ Accordingly, today's 
proposed requirements are not based on waterbody type or CUR. See 
further discussion in Section VI.
---------------------------------------------------------------------------

    \16\ Some facilities continue to withdraw cooling water even 
when not generating for a variety of reasons: to discourage 
biofouling or mechanical seizures, to promote continued water flow, 
or to maintain a state of readiness. Peaking facilities (those with 
a CUR of less than 15percent, as defined in the 2004 Phase II rule) 
may withdraw relatively small volumes on an annual basis, but if 
they operate during biologically important periods such as spawning 
seasons or migrations, then they may have nearly the same adverse 
impact as a facility that operates year round.
---------------------------------------------------------------------------

IV. Revised Industry Description

    Today's proposed rule applies to all existing electric generating 
and manufacturing facilities, except for certain water going vessels as 
described in section V. EPA has earlier fully described the electricity 
industry in the 2002 Phase II proposed rule (see, for example, 67 FR 
17135) and the manufacturing industries in the 2004 Phase III proposed 
rule (see, for example, 69 FR 68459).\17\ While these general 
descriptions continue to broadly reflect the current state of these 
industries, EPA has revised some of its estimates of numbers of 
facilities, intakes, flows, and other pertinent information. In 
particular, this section describes those facilities with a cooling 
water intake structure having a DIF of greater than 2 MGD, related 
cooling water use in power production and manufacturing activities, and 
an overview of the industry sectors in scope for today's proposed rule. 
See the TDD and EA for today's proposed rule for more detailed 
information including industry profiles.
---------------------------------------------------------------------------

    \17\ EPA also addressed both electric generators and 
manufacturers in the 2000 Phase I proposed rule (see, for example, 
65 FR 49070). The support documents for all three rule phases also 
provide information characterizing the affected industry sectors.
---------------------------------------------------------------------------

A. Water Use in Power Production and Manufacturing

    Water is used for a wide variety of application in the United 
States. The U.S. Geologic Survey (USGS) publishes a comprehensive 
review of water use across industry sectors every 5 years. The 2005 
report indicated that 410 billion gallons per day (BGD) of water are 
withdrawn for various uses. (See

[[Page 22189]]

DCN 10-6872.) Of that amount, approximately 201 BGD is withdrawn by 
electric generators, primarily for non-contact cooling,\18\ plus water 
withdrawals by other industrial sites of 18.2 BGD for a total of 219 
BGD. This total flow represents the universe of flow potentially 
subject to regulation under 316(b), therefore today's proposed rule may 
address over half of the water withdrawals in the entire nation.\19\
---------------------------------------------------------------------------

    \18\ Irrigation was the next highest user of water at 31% of the 
total withdrawn.
    \19\ In the Phase I rule, EPA also presented data indicating 
that the combined 316(b) rules for electric generators and the 
largest manufacturing sectors would address approximately 99% of all 
cooling water withdrawals in the U.S. See 65 FR 49071 and the Phase 
I Economic and Engineering Analyses of the Proposed Sec.  316(b) New 
Facility Rule.
---------------------------------------------------------------------------

    Industrial water use (broadly defined as water used by power plants 
and manufacturers) falls generally into one of four categories: non-
contact cooling water, contact cooling water, process water, and other 
water uses. A more detailed description of each category and how it 
relates to 316(b) is provided below.
1. Non-Contact Cooling Water
    Power plants and manufacturers frequently generate large amounts of 
heat in their industrial processes. Non-contact cooling systems are one 
of the most common techniques used to dissipate this heat. In a non-
contact cooling system, water is pumped through a heat exchanger or 
other equipment where it comes into indirect contact with heated 
materials in the industrial process. The water absorbs heat and is 
subsequently discharged (in a once-through cooling system) or 
recirculated (in a closed-cycle system). In these systems, the cooling 
water does not come into contact with any industrial materials, 
equipment or processes; the cooling water is contained within the 
cooling system for heat absorption and generally requires very little 
treatment (except heat removal) before discharge.
    At power generators, non-contact cooling is by far the largest 
water use. Approximately three quarters of the total annual electricity 
output in the United States results from steam powered turbines. Power 
plants heat water inside a boiler. The water is turned to steam, at 
which point the temperature of the steam can be increased with further 
heating, allowing additional energy to be stored in the steam. The 
steam is then used to spin a turbine, producing electricity. The steam 
must then be condensed and returned to the boiler.\20\ Non-contact 
cooling water is used to extract heat and return the steam to water in 
a condenser. The water can then be pumped back to the boiler for 
heating to repeat the cycle. Consistent with engineering theory, there 
are limits to the maximum efficiency of a thermal plant. Thermal power 
plants are actually not very efficient at converting fuel to 
electricity; only 30 to 60 percent of the fuel is captured as 
electricity, with the higher efficiency units relying on further use of 
the steam for further heating (usually referred to as cogeneration) or 
energy purposes (such as combined cycle power generators or other 
process warming). Depending on the type of generating unit, roughly 
one-third to two-thirds of the total energy generated is lost in the 
form of heat that must be subsequently dissipated.
---------------------------------------------------------------------------

    \20\ The thermodynamic laws governing the Rankine cycle in power 
plants requires a heat source and a heat sink. The difference in 
temperature and pressure is a major factor in maintaining efficiency 
of the thermal engine. Additional reasons for condensing the steam 
include: handling pressure drops in the system, the need to remove 
non-condensable gases before they damage equipment, to allow make-up 
water to be added to the system, and to safely allow pumping of the 
water back to the boiler.
---------------------------------------------------------------------------

    At manufacturers, non-contact cooling is also a significant 
component of water use. Some manufacturers have electric generating 
units which generally operate in the same manner as summarized above. 
In some cases, virtually all of the manufacturing facility's cooling 
water withdraws are for power production. In contrast to power 
generators, some manufacturing facilities also need a reliable source 
of high pressure steam for manufacturing processes. Other manufacturers 
may need to condense steam generated from other processes, or may need 
to extract heat from a raw or processed material (e.g., to reduce the 
temperature of an intermediate petroleum or chemical product before it 
enters a subsequent processing stream). Some facilities engage in 
testing or research, and have cooling needs for these activities.
2. Contact Cooling Water
    Contact cooling water differs from non-contact cooling in that 
contact cooling systems use cooling water in direct contact with the 
hot equipment or heated materials. As a result, contact cooling water 
may intermingle with industrial products or equipment and often will 
take up pollutants other than heat, such as oil and grease or metals. 
Contact cooling water often requires treatment for these pollutants 
before it may be discharged.
    In power plants, cooling water may be used for contact cooling of 
pumping equipment, such as the cooling water pump bearings. Contact 
cooling water is more frequently needed by manufacturing processes, 
such as quench water (e.g., water into which bars of hot metal are 
dipped for rapid cooling or control of the formed metal temperature), 
mechanical pulping, forming and molding processes, food and 
agricultural products, and petrochemical gas quenching.
3. Process Water
    Process water is water that is used directly in an industrial 
process. While steam electric plants do have some process water, 
process water is more typically associated with manufacturers, as the 
primary industrial process at power plants (electricity generation) is 
usually cooled with non-contact cooling water. Examples of process 
water include water used to break down wood pulp in a paper mill, water 
that is used in creating consumer products such as beverages or 
personal care products, water added to facilitate transportation of 
materials within a manufacturing process, water needed as a raw 
material, and water used in numerous chemical separations processes. 
Process water may be used as an ingredient in the intermediate 
products, consumed by the products, lost to evaporation, extracted 
later in the process line for treatment and discharge, or further 
reused.
    EPA has found through site visits, extensive experience with 
manufacturing water use in the development of previous effluent 
guidelines, and a general review of water uses by manufacturing 
processes that a significant amount of reduction, reuse, and recycling 
has already occurred in most manufacturing processes, in part due to 
pretreatment standards and NPDES permit conditions. Beyond these 
reductions, today's proposed rule recognizes that many industrial 
facilities have worked to reduce the volume of process water usage at 
their sites and to increase the reuse of process water for other 
purposes within the facility. A leading facility or an entire industry 
may have evolved to use less process water in its industrial process. 
For example, EPA has found some facilities have undergone plant wide 
energy audits to reduce their energy needs by up to 25 percent, 
providing a roughly 25 percent reduction in cooling water needs. One 
analysis of paper mills estimates that over 39 billion gallons daily of 
water is recycled and not used solely for cooling purposes by a typical 
mill. Further, there has been a 69 percent reduction in

[[Page 22190]]

the average volume of treated effluent at pulp and paper mills (see DCN 
10-6902). In response to effluent guidelines discharge limitations, 
some facilities have reduced their compliance costs by reducing the 
volume of wastewater they must treat. Some effluent limitation 
guidelines have also established explicit requirements for flow 
reduction. In the case of iron and steel facilities, effluent 
limitations require no discharge of process wastewater pollutants (for 
example, see 40 CFR part 420 subpart D Steelmaking). As another 
observed example of the recycling of process water, a facility might 
use non-contact cooling water for condensing steam, but then reuse the 
heated water for washing raw materials instead of discharging the 
water.
    See section V for more information on how water reuse and 
conservation efforts are considered in compliance alternatives for 
today's proposed rule.
4. Other Uses
    Given the diversity of industrial processes across the U.S., there 
are many other industrial uses of water not intended to be addressed by 
today's proposed rule. Emergency water withdrawals, such as fire 
control systems and nuclear safety systems, are not considered as part 
of a facility's design intake flow. Warming water at liquefied natural 
gas terminals, and hydro-electric plant withdrawals for electricity 
generation are not cooling water uses and are not addressed by today's 
proposal. Other water uses might include service water and dilution 
water. Service water is a generic term that often refers to uses other 
than non-contact cooling (i.e., it may include contact cooling), but 
can also include specialty water uses such as makeup water for 
radiation waste systems at nuclear power plants. Examples of dilution 
water are using water to reduce the concentration of a pollutant for 
biological treatment purposes, or to reduce the temperature of an 
effluent.

B. Overview of Electric Generators

    In the Phase I proposal, EPA described its rationale for setting 
the threshold for section 316(b) national requirements at 2 MGD. As 
described in that proposed rule, EPA selected 2 MGD to ensure that 
almost all cooling water withdrawn from waters of the U.S. is covered 
by a national regulation. The Agency recognized that there was 
relatively little information currently available regarding the lower 
bound of withdrawals at which significant levels of impingement and 
entrainment and, therefore, adverse environmental impact, was likely to 
occur. At the time, most case studies available to the agency 
documenting impingement and entrainment from cooling water withdrawals 
focused on facilities withdrawing very large amounts of water (in most 
cases greater than 100 MGD). After soliciting comment and data on 
several different thresholds, the Agency adopted 2 MGD in the final 
rule. 66 FR 65288.
    While the overview of the electric generating facilities in the 
previous Phase II and III proposed and final rules has not changed 
substantially, this section combines those multiple industry profiles 
into one overview. The information below is generally based on data 
from the U.S. Department of Energy's (DOE) ``Annual Electric Generator 
Report'' (Form EIA-860) and ``Annual Electric Power Industry Report'' 
(Form EIA-861), and EPA's Section 316(b) Industry Surveys. According to 
the 2007 EIA database, 38 of the 671 facilities have ceased operation 
since the Survey and 15 facilities will likely do so by the time 
today's proposed rule is promulgated (i.e., 2012). EPA also excluded 20 
electric generators that are already required by state policy to comply 
with standards based on closed-cycle cooling, and thus for regulatory 
analysis purposes are not expected to be affected by the proposed rule. 
In addition, 39 facilities are projected to be baseline closures 
according to Integrated Planning Model analyses (see Section VII of 
this preamble and Chapter 6 of the EA for discussion of IPM 
analysis).\21\ Based on (1) data collected from these Surveys; (2) the 
compliance requirements in today's proposed rule, and (3) the in-scope 
threshold of 2 MGD DIF (see section V for further explanation of the 2 
MGD threshold), EPA has therefore identified 559 Electric Generators 
that are in scope of today's 316(b) Existing Facilities Proposed 
Rule.22 23
---------------------------------------------------------------------------

    \21\ For the purpose of this analysis, a facility is considered 
no longer in operation and retired if it no longer has any steam 
operations.
    \22\ EPA developed the estimates of the number and 
characteristics of facilities expected to be within the scope of 
today's proposed rule, based on the facility sample weights that 
were developed for the suspended 2004 Phase II Final Regulation 
analysis. These weights provide comprehensive estimates for the 
total of expected in-scope facilities based on the full set of 
facilities sampled in the Section 316(b) Industry Surveys. See 
Appendix 3.A: Weighting Concepts of the Economic and Benefits 
Analysis report for further discussion of the sample weights used in 
this analysis.
    \23\ EPA estimates of the characteristics of facilities expected 
to be within the scope of today's proposed rule are also based on 
the facility sample weights that were developed for the suspended 
2004 Phase II Final Regulation analysis.
---------------------------------------------------------------------------

    EPA estimates that the 559 steam electric generators represent 3 
percent of all parent-entities, approximately 11 percent of all 
facilities, and over 45 percent of the electric power sector capacity. 
Based on the 2007 EIA database, EPA estimates that 388 of these in-
scope facilities are owned by utilities and 171 in-scope facilities are 
owned by non-utilities.\24\ The majority of electric generating 
facilities expected to be subject to today's proposed Existing 
Facilities rule, or 285 facilities, are investor-owned utilities, while 
nonutilities make up the second largest category. For a detailed 
discussion of parent-entities, see Chapter 5 and 7 of the EA (DCN 10-
0002).
---------------------------------------------------------------------------

    \24\ Electric utilities engage in the generation, transmission, 
and the distribution of electricity for sale generally in a 
regulated market. Utilities include investor-owned, publicly-owned, 
and cooperative entities.
---------------------------------------------------------------------------

    As reported in Exhibit IV-1, approximately half of the in-scope 
electric generators draw water from a freshwater river (306 facilities 
or 55 percent), followed by lakes or reservoirs (117 facilities or 21 
percent) and estuaries or tidal rivers (83 facilities or 15 percent). 
The exhibit also shows that most of the in-scope facilities (355 
facilities or 63 percent) employ a once-through cooling system.

                              Exhibit IV-1--Number of In-Scope Electric Generators by Waterbody and Cooling-System Type \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Recirculating     Once-through       Combination                          Total \b\
                        Waterbody type                               Number            Number            Number         Other  Number        Number
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary/Tidal River...........................................                 5                69                 8                 1                83
Ocean.........................................................                 0                 9                 0                 0                 9
Lake/Reservoir................................................                36                73                 7                 1               117
Freshwater Stream/River.......................................               102               166                32                 5               306

[[Page 22191]]

 
Great Lake....................................................                 4                37                 2                 0                43
                                                               -----------------------------------------------------------------------------------------
    Total.....................................................               148               355                49                 7               559
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The numbers of facilities are calculated on a sample-weighted basis.
\b\ Individual values may not sum to totals due to independent rounding.

C. Overview of Manufacturers

    EPA obtained information on in-scope Manufacturers presented in the 
tables below from the EPA's Section 316(b) Industry Surveys (the 
Industry Screener Questionnaire (SQ) and the Industry Detailed 
Questionnaire (DQ)). Based on the Survey data and the compliance 
requirements in today's proposed rule, EPA estimates 592 industry 
facilities with greater than 2 MGD DIF would be subject to today's 
proposal; 575 of these facilities are in the 6 primary manufacturing 
industries.\25\
---------------------------------------------------------------------------

    \25\ The remaining 17 facilities have NAICS codes that do not 
fall into any of these six primary manufacturing industries.
---------------------------------------------------------------------------

    Exhibit IV-2 below presents in-scope and industry-wide facility and 
parent entity counts by industry. The largest share of manufacturers, 
or 225 facilities, is in the Pulp and Paper industry, while facilities 
in the Chemicals and Allied Products make up the second largest 
category at 179 facilities.

            Exhibit IV-2--Existing Manufacturers by Industry
------------------------------------------------------------------------
                                                  Number of facilities
                                               -------------------------
                    Sector                                    Number in-
                                                   Sector     scope \b\
                                                   total         \c\
------------------------------------------------------------------------
Aluminum......................................          333           26
Chemicals.....................................        4,433          179
Food..........................................       28,938           37
Paper.........................................          597          225
Petroleum.....................................          352           39
Steel.........................................        1,525           68
                                               -------------------------
    Total.....................................       36,178      \a\ 575
------------------------------------------------------------------------
\a\ In-scope facility counts include baseline closures and exclude an
  estimated additional 17 facilities with NAICS codes that do not fall
  into any of these six primary manufacturing industries.
\b\ Number of in-scope facilities are weighted estimates; see Appendix
  3.A of the EA for information on weights development. Individual
  values may not sum to totals due to independent rounding of sample-
  weighted (non integer) estimates.
\c\ These facility count estimates are based on sample weights that are
  applicable for estimating the number of facilities that would be
  within the scope of today's proposed rule. However, because of missing
  financial data on certain facilities, these weights were not used in
  assessing the economic impact of the rule. Alternative weights, which
  yield modestly different total in-scope facility estimates (e.g., 569
  in-scope facilities in the Primary Manufacturing Industries instead of
  the 575 reported in this table), were used for developing facility
  count estimates in the economic impact analysis.

    Exhibit IV-3 provides the distribution of manufacturing intakes by 
source water body and cooling system type. In total, EPA estimates that 
593 intakes will be within the scope of today's rule. The vast majority 
(453 facilities or 77 percent) withdraw cooling water from freshwater 
streams or rivers, followed by Great Lakes (47 facilities). Two hundred 
eighty-seven (48 percent) manufacturers employ once-through cooling 
systems, 119 (20 percent) use closed-cycle cooling systems, and 124 (21 
percent) use ``combination'' systems. An estimated 192 (32 percent) 
manufacturers have installed one or more cooling towers. In the total 
of 593 facility/intake combinations, EPA does not have information on 
the cooling water system type for 4 facilities/intakes. Note that not 
all manufacturers that have installed a cooling tower are classified as 
using closed-cycle cooling systems, as facilities with multiple cooling 
water systems may be ``combination'' systems that employ both closed-
cycle and once-through cooling. Manufacturers may also list ``helper'' 
cooling towers in their survey responses, which are generally used to 
mitigate discharge temperatures and do not necessarily affect intake 
flows.

                                   Exhibit IV-3--Number of In-Scope Manufacturers by Waterbody and Cooling-System Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Recirculating     Once-through       Combination                        Type unknown        Total \a\
               Waterbody type                    \b\  Number         Number            Number         Other  Number        Number            Number
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estuary/Tidal River.........................                 1                23                16                 0                 0                40
Ocean.......................................                 0                11                 0                 0                 0                11
Lake/Reservoir..............................                 7                13                12                11                 0                42
Freshwater Stream/River.....................               111               215                82                41                 4               453
Great Lake..................................                 0                25                14                 7                 0                47
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................               119               287               124                59                 4               593
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Facility counts include baseline closures and exclude 17 facilities with NAICS codes that do not fall into the six primary manufacturing industries
  (see Chapter 3 of EA for more detail). Individual facilities may be reported more than once in this table if they have multiple intakes while a single
  intake that serves both recirculating and once-through systems is counted once as a combination. Individual values may not sum to totals due to
  independent rounding of sample-weighted (non integer) estimates.
\b\ Four facilities have an unknown CWS type.


[[Page 22192]]

D. Other Existing Facilities

    EPA's data collection efforts largely focused on five industrial 
sectors: Chemicals and allied products (SIC Major Group 28); primary 
metals industries (SIC Major Group 33); paper and allied products (SIC 
Major Group 26); petroleum and coal products (SIC Major Group 29); and 
food and kindred products (SIC Major Group 20).\26\ The first four 
sectors use a significant portion of the cooling water withdrawn among 
all manufacturing industries and were more heavily targeted in EPA's 
industry questionnaire effort, but data were also collected from the 
following industries: Food processing; aircraft engines and engine 
parts; cutlery; sawmills and planing mills; finishers of broad woven 
fabrics of cotton; potash, soda and borate minerals; iron ores; and 
sugarcane and sugar beets. These data from other industries, while not 
a statistically derived sample, confirm that the primary industry 
sectors discussed above account for the vast majority of non-power 
plant cooling water use. The data collected for these other industries 
suggests that the intake structure design and construction at these 
industries were substantially similar to the industries for which EPA 
did collect data, and EPA did not receive any data during the Phase III 
proposed rule comment period that suggests otherwise. EPA's analysis of 
costs and impacts includes these additional existing facilities.
---------------------------------------------------------------------------

    \26\ EPA also identified many other industry sectors that use 
cooling water; a more comprehensive list of industries that use 
cooling water and their NAICS and SIC Codes can be found in section 
A of the Supplementary Information.
---------------------------------------------------------------------------

V. Scope and Applicability of the Proposed Section 316(b) Existing 
Facility Rule

    The proposed rule includes all existing facilities with a design 
intake flow of more than 2 MGD. The proposed rule also clarifies the 
definition and requirements for new units at existing facilities. The 
applicable requirements are summarized in Exhibits V-1 and V-2.

         Exhibit V-1--Applicability by Phase of the 316(b) Rules
------------------------------------------------------------------------
        Facility characteristic                  Applicable rule
------------------------------------------------------------------------
New power generating or manufacturing    Phase I rule.
 facility.
New offshore oil and gas facility......  Phase III rule.
New unit at an existing power            This proposed rule.
 generating or manufacturing facility.
Existing power generating or             This proposed rule.
 manufacturing facility.
Existing offshore oil and gas facility   This proposed rule (Case-by-
 and seafood processing facilities.       case, best professional
                                          judgment).
------------------------------------------------------------------------


    Exhibit V-2--Applicable Requirements of Today's Proposed Rule for
                           Existing Facilities
------------------------------------------------------------------------
        Facility characteristic              Applicable requirements
------------------------------------------------------------------------
Existing facility with a AIF >125 MGD..  Impingement mortality
                                          requirements at 125.94(b) and
                                          Entrainment Characterization
                                          Study requirements at
                                          125.94(c) (categorical rule).
Existing facility with a DIF >2 MGD but  Impingement mortality
 AIF not greater than 125 MGD.            requirements at 125.94(b)
                                          (categorical rule).
New unit with a DIF >2 MGD at an         Impingement and entrainment
 existing facility.                       mortality requirements at
                                          125.94(d) (categorical
                                          standard).
Other existing facility with a DIF of 2  Case-by-case, best professional
 MGD or smaller or that has an intake     judgment.
 structure that withdraws less than 25
 percent of the water for cooling
 purposes.
------------------------------------------------------------------------

    Initially, EPA divided the 316(b) rulemaking into three phases in 
response to litigation and to make the best use of its resources (see 
Section I). However, as EPA's analysis progressed, it became clear that 
cooling water intake structures are operated similarly at most 
industrial facilities (i.e., both power producing and manufacturing 
facilities). From a biological perspective, the effect of intake 
structures on impingement and entrainment does not differ depending on 
whether an intake structure is associated with a power plant or a 
manufacturer. Instead the impingement and entrainment impacts 
associated with intakes of the same type are generally comparable, and 
today's proposed rule addresses these impacts without discriminating 
which facilities are behind the intake structure. Thus, EPA is 
consolidating the universe of potentially regulated facilities from the 
2004 Phase II rule with the existing facilities in the 2006 Phase III 
rule for purposes of today's proposed rule. This consolidation also 
provides a ``one-stop shop'' for information related to today's 
proposed rulemaking, as all existing facilities would be addressed in 
an equitable manner by the same set of technology-based requirements.

A. General Applicability

    This rule would apply to owners and operators of existing 
facilities that meet all of the following criteria:
     The facility is a point source that uses or proposes to 
use cooling water from one or more cooling water intake structures, 
including a cooling water intake structure operated by an independent 
supplier not otherwise subject to 316(b) requirements that withdraws 
water from waters of the United States and provides cooling water to 
the facility by any sort of contract or other arrangement;
     The total design intake flow of the cooling water intake 
structure(s) is greater than 2 MGD; and
     The cooling water intake structure(s) withdraw(s) cooling 
water from waters of the United States and at least twenty-five (25) 
percent of the water withdrawn is used exclusively for cooling purposes 
measured on an average annual basis for each calendar year.
    EPA is proposing to continue to adopt provisions to ensure that the 
rule does not discourage the reuse of cooling water for other uses such 
as process water. The definition of cooling water at 125.93 provides 
that cooling water 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. Therefore, water used for both cooling 
and non-cooling purposes does not count towards the 25

[[Page 22193]]

percent threshold. EPA notes this definition is the same definition 
used for new facilities in the Phase I rule at 125.83. Examples of 
water withdrawn for non-cooling purposes includes water withdrawn for 
warming by liquefied natural gas facilities and water withdrawn for 
public water systems by desalinization facilities. Further, the 
proposed rule at 125.91(c) specifies that obtaining cooling water from 
a public water system or using treated effluent (such as wastewater 
treatment plant ``gray'' water) as cooling water does not constitute 
use of a cooling water intake structure for purposes of this rule.
    Today's proposed rule focuses on those facilities that are 
significant users of cooling water; only those facilities that use more 
than 25% of the water withdrawn for cooling purposes are subject to the 
proposed rule. EPA previously considered a number of approaches for 
clarifying applicability of the rule (66 FR 28854 and 66 FR 65288). EPA 
adopted the 25% threshold in each of the Phase I, II, and III rules, 
and EPA has not received any new data or identified new approaches that 
would provide further clarity to the applicability of the rule. EPA is 
proposing to continue to adopt 25% as the threshold for the percent of 
flow used for cooling purposes to ensure that a large majority of 
cooling water withdrawn from waters of the U.S. is addressed by 
requirements for minimizing adverse environmental impact. Because power 
generating facilities typically use far more than 25 percent of the 
water they withdraw exclusively for cooling purposes, the 25 percent 
threshold will ensure that intake structures accounting for nearly all 
cooling water used by the power sector are addressed by today's 
proposed requirements. While manufacturing facilities often withdraw 
water for more than cooling purposes, the majority of the water is 
withdrawn from a single intake structure.\27\ Once water passes through 
the intake, water can be apportioned to any desired use, including uses 
that are not related to cooling. However, as long as at least 25% of 
the water is used exclusively for cooling purposes, the intake will be 
subject to the requirements of today's rule. EPA estimates that 
approximately 68% of manufacturers and 93% of power-generating 
facilities that meet the other proposed thresholds for the rule use 
more than 25% of intake water for cooling and thus will be addressed by 
today's rule.
---------------------------------------------------------------------------

    \27\ Facilities may also use groundwater wells or municipal 
water for various uses, but the volume of these withdrawals is 
usually much smaller than the volume withdrawn from surface waters.
---------------------------------------------------------------------------

    EPA decided to propose requiring the Director, exercising BPJ, to 
establish BTA impingement and entrainment mortality standards for an 
existing offshore oil and gas facility, a seafood processing vessel, or 
an offshore liquefied natural gas import terminal. Such a facility 
would be subject to permit conditions implementing CWA section 316(b) 
where the facility is a point source that uses a cooling water intake 
structure and has, or is required to have, an NPDES permit. At their 
discretion, permit writers may further determine that an intake 
structure that withdraws less than 25% of the intake flow for cooling 
purposes should be subject to section 316(b) requirements, and set 
appropriate requirements on a case-by-case basis, using best 
professional judgment. Today's proposed rule is not intended to 
constrain permit writers at the Federal, State, or Tribal level, from 
addressing such cooling water intake structures.

B. What is an ``existing facility'' for purposes of the Section 316(b) 
Phase II rule?

    In today's proposed rule, EPA is defining the term ``existing 
facility'' to include any facility that commenced construction before 
January 18, 2002, as provided for in Sec.  122.29(b)(4).\28\ EPA is 
proposing to establish January 17, 2002 as the date for distinguishing 
existing facilities from new facilities because that is the effective 
date of the Phase I new facility rule. Thus, existing facilities 
include all facilities the construction of which commenced on or before 
this date. In addition, EPA is defining the term ``existing facility'' 
in this proposed rule to include modifications and additions to such 
facilities, the construction of which commences after January 17, 2002, 
that do not meet the definition of a new facility at Sec.  125.83, 
which is the definition used to define the scope of the Phase I 
rule.\29\
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    \28\ Construction is commenced if the owner or operator has 
undertaken certain installation and site preparation activities that 
are part of a continuous on-site construction program, and it 
includes entering into certain specified binding contractual 
obligations as one criterion (Sec.  122.29(b)(4)).
    \29\ The Phase I rule also listed examples of facilities that 
would be ``new'' facilities and facilities that would ``not be 
considered a `new facility' '' in two numbered paragraphs.
---------------------------------------------------------------------------

    The preamble to the final Phase I rule discusses this definition at 
66 FR 65256; 65258-65259; 65285-65287, December 18, 2001. EPA's 
definition of an ``existing facility'' in today's proposed regulation 
is intended to ensure that all sources excluded from the definition of 
new facility in the Phase I rule are captured by the definition of 
existing facility in this proposed rule.
    A point source would be subject to Phase I or today's proposed rule 
even if the cooling water intake structure it uses is not located at 
the facility.\30\ In addition, modifications or additions to the 
cooling water intake structure (or even the total replacement of an 
existing cooling water intake structure with a new one) does not 
convert an otherwise unchanged existing facility into a new facility, 
regardless of the purpose of such changes (e.g., to comply with today's 
proposed rule or to increase capacity). Rather, the determination as to 
whether a facility is new or existing focuses on whether it is a green 
field or stand-alone facility and whether there are changes to the 
cooling water intake to accommodate it.
---------------------------------------------------------------------------

    \30\ For example, a facility might purchase its cooling water 
from a nearby facility that owns and operates a cooling water intake 
structure.
---------------------------------------------------------------------------

C. What is ``cooling water'' and what is a ``cooling water intake 
structure?''

    EPA has not revised the definition of cooling water intake 
structure for today's proposed rule. A cooling water intake structure 
is defined as the total physical structure and any associated 
constructed waterways used to withdraw cooling water from waters of the 
United States. Under the definition in today's proposed rule, the 
cooling water intake structure extends from the point at which water is 
withdrawn from the surface water source up to, and including, the 
intake pumps. Today's proposed rule proposes for existing facilities 
the same definition of a ``cooling water intake structure'' that 
applies to new facilities under Phase I. Today's proposal also adopts 
the new facility rule's definition of ``cooling water'' as water used 
for contact or noncontact cooling, including water used for equipment 
cooling, evaporative cooling tower makeup, and dilution of effluent 
heat content. The definition specifies that the intended use of cooling 
water is to absorb waste heat rejected from the processes used or 
auxiliary operations on the facility's premises. The definition also 
indicates that water used in a manufacturing process either before or 
after it is used for cooling is process water and would not be 
considered cooling water for purposes of determining whether 25 percent 
or more of the flow is cooling water. This clarification is necessary 
because cooling water intake structures typically bring water into a 
facility for numerous purposes, including industrial processes; use as 
circulating

[[Page 22194]]

water, service water, or evaporative cooling tower makeup water; 
dilution of effluent heat content; equipment cooling; and air 
conditioning. Note however, that all intake water (including cooling 
and process) is included in the determination as to whether the 2 MGD 
DIF threshold for covered intake structures is met.

D. Would my facility be covered only if it is a Point Source 
Discharger?

    Today's proposed rule would apply only to facilities that are point 
sources (i.e., have an NPDES permit or are required to obtain one). 
This is the same requirement EPA included in the Phase I new facility 
rule at Sec.  125.81(a)(1). Requirements for complying with section 
316(b) will continue to be applied through NPDES permits.
    Based on the Agency's review of potential existing facilities that 
employ cooling water intake structures, the Agency anticipates that 
most existing facilities subject to this proposed rule will control the 
intake structure that supplies them with cooling water, and discharge 
some combination of their cooling water, wastewater, or storm water to 
a water of the United States through a point source regulated by an 
NPDES permit. Under these circumstances, the facility's NPDES permit 
will include the requirements for the cooling water intake structure. 
In the event that an existing facility's only NPDES permit is a general 
permit for storm water discharges, the Agency anticipates that the 
Director would write an individual NPDES permit containing requirements 
for the facility's cooling water intake structure. Alternatively, 
requirements applicable to cooling water intake structures could be 
incorporated into general permits. If requirements are placed into a 
general permit, they must meet the requirements set out at 40 CFR 
122.28.
    As EPA stated in the preamble to the final Phase I rule (66 FR 
65256 (December 18, 2001)), the Agency encourages the Director to 
closely examine scenarios in which a facility withdraws significant 
amounts of cooling water from waters of the United States but is not 
required to obtain an NPDES permit. As appropriate, the Director will 
necessarily apply other legal requirements, where applicable, such as 
section 404 or 401 of the Clean Water Act, the Coastal Zone Management 
Act, the National Environmental Policy Act, the Endangered Species Act, 
or similar State or Tribal authorities to address adverse environmental 
impact caused by cooling water intake structures at those facilities.

E. Would my facility be covered if it withdraws water from waters of 
the U.S.? What if my facility obtains cooling water from an independent 
supplier?

    The requirements in today's proposed rule apply to cooling water 
intake structures that have the design capacity to withdraw amounts of 
water equal to or greater than 2 MGD from ``waters of the United 
States.'' Waters of the United States include the broad range of 
surface waters that meet the regulatory definition at 40 CFR 122.2, 
which includes lakes, ponds, reservoirs, nontidal rivers or streams, 
tidal rivers, estuaries, fjords, oceans, bays, and coves. These 
potential sources of cooling water may be adversely affected by 
impingement and entrainment.
    Some facilities discharge heated water to manmade cooling ponds, 
and then withdraw water from the ponds for cooling purposes. EPA 
recognizes that cooling ponds may, in certain circumstances, constitute 
a closed-cycle cooling system and therefore may already comply with 
some or all of the technology-based requirements in today's proposed 
rule. However, facilities that withdraw cooling water from cooling 
ponds that are waters of the United States and that meet the other 
criteria for coverage (including the requirement that the facility has 
or will be required to obtain an NPDES permit) would be subject to 
today's proposed rule. In some cases water is withdrawn from a water of 
the United States to provide make-up water for a cooling pond. In many 
cases, EPA expects such make-up water withdrawals are commensurate with 
the flows of a closed-cycle cooling tower, and again the facility may 
already comply with requirements to reduce its intake flow under the 
proposed rule. In those cases where the withdrawals of make-up water 
come from a water of the United States, and the facility otherwise 
meets today's criteria for coverage (including a design intake flow of 
2 million gallons per day), the facility would be subject to today's 
proposed rule requirements.
    EPA does not intend this rule to change the regulatory status of 
cooling ponds. Cooling ponds are neither categorically included nor 
categorically excluded from the definition of ``waters of the United 
States'' at 40 CFR 122.2. The determination whether a particular 
cooling pond is, or is not, a water of the United States is to be made 
by the permitting authority on a case-by-case basis. The EPA and the 
U.S. Army Corps of Engineers have jointly issued jurisdictional 
guidance concerning the term ``waters of the United States'' in light 
of the Supreme Court's decision in Solid Waste Agency of Northern Cook 
County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). A 
copy of that guidance was published as an Appendix to an Advanced 
Notice of Proposed Rulemaking on the definition of the phrase ``waters 
of the U.S.,'' see 68 FR 1991 (January 15, 2003), and may be obtained 
at (http://www.epa.gov/owow/wetlands/pdf/ANPRM-FR.pdf). The agencies 
additionally published guidance in 2008 regarding the term ``waters of 
the United States'' in light of both the SWANCC and subsequent Rapanos 
case (Rapanos v. United States, 547 U.S. 715 (2006)).
    The Agency recognizes that some facilities that have or are 
required to have an NPDES permit might not own and operate the intake 
structure that supplies their facility with cooling water. In 
addressing facilities that have or are required to have an NPDES permit 
that do not directly control the intake structure that supplies their 
facility with cooling water, revised Sec.  125.91 provides (similar to 
the new facility rule) that facilities that obtain cooling water from a 
public water system or use treated effluent are not deemed to be using 
a cooling water intake structure for purposes of this proposed rule. 
However, obtaining water from another entity that is withdrawing water 
from a water of the US would be counted as using a cooling water intake 
structure for purposes of determining whether an entity meets the 
threshold requirements of the rule. For example, facilities operated by 
separate entities might be located on the same, adjacent, or nearby 
property(ies); one of these facilities might take in cooling water and 
then transfer it to other facilities prior to discharge of the cooling 
water to a water of the United States. Section 125.91(b) specifies that 
use of a cooling water intake structure includes obtaining cooling 
water by any sort of contract or arrangement with one or more 
independent suppliers of cooling water if the supplier or suppliers 
withdraw water from waters of the United States but that is not itself 
a new or existing facility subject to section 316(b), except if it is a 
public water system.
    As a practical matter, existing facilities are the largest users of 
cooling water, and typically require enough cooling water to warrant 
owning the cooling water intake structures. In some cases, such as at 
nuclear power plants or critical baseload facilities, the need for 
cooling water includes safety and reliability reasons that would likely 
preclude any independent supplier arrangements. Therefore, EPA does not 
expect much application of this

[[Page 22195]]

provision. EPA is nevertheless retaining the provision in order to 
prevent facilities from circumventing the requirements of today's 
proposed rule by creating arrangements to receive cooling water from an 
entity that is not itself subject to today's proposed rule, and is not 
explicitly exempt from today's rule (such as drinking water or 
treatment plant discharges reused as cooling water).

F. What intake flow thresholds result in an existing facility being 
subject to this proposed rule?

    There are two ways in which EPA determines the cooling water flow 
at a facility. The first way is based on the design intake flow (DIF), 
which reflects the maximum intake flow the facility is capable of 
withdrawing. While this normally is limited by the capacity of the 
cooling water intake pumps, other parts of the cooling water intake 
system could impose physical limitations on the maximum intake flow the 
facility is capable of withdrawing. The second way is based on the 
actual intake flow (AIF), which reflects the actual volume of water 
withdrawn by the facility. EPA has defined AIF to be the average water 
withdrawn each year over the preceding 3 years. Both of these 
definitions are used in today's proposed rule.
    In this proposed rule EPA considered requirements based on the 
intake flow at the existing facility. EPA is proposing the rule to 
apply to facilities that have a total design intake capacity of at 
least 2 MGD (see Sec.  125.91).\31\ Above 2 MGD, 99.7% of the total 
water withdrawals by utilities and other industrial sources would 
potentially be covered (if the other criteria for coverage are met) 
while 58% of the manufacturers, 70% of the non-utilities, and 100% of 
the utilities would be covered. EPA also chose the greater than 2 MGD 
threshold to be consistent with the applicability criteria in the Phase 
I rule.\32\ EPA continues to believe that this threshold ensures that 
the largest users of cooling water will be subject to the proposed 
rule.
---------------------------------------------------------------------------

    \31\ The 2004 Phase II rule applied to existing power-generating 
facilities with a design intake flow of 50 mgd or greater. 
Facilities potentially in scope of the Phase III rule had a DIF of 
greater than 2 MGD.
    \32\ See 65 FR 49067/3 for more information.
---------------------------------------------------------------------------

    EPA proposes to continue to use a threshold based on design intake 
flow as opposed to actual intake flow for several reasons. In contrast 
to actual intake flow, design intake flow is a fixed value based on the 
design of the facility's operating system and the capacity of the 
circulating and other water intake pumps. This provides clarity, as the 
design intake flow does not change, except in limited circumstances, 
such as when a facility undergoes major modifications. On the other 
hand, actual flows can vary significantly over sometimes short periods 
of time. For example, a peaking power plant may have an actual intake 
flow close to the design intake flow during times of full energy 
production, but an AIF of zero during periods of standby. Use of design 
intake flow provides clarity as to regulatory status, is indicative of 
the possible magnitude of environmental impact, and would avoid the 
need for monitoring to confirm a facility's status. Also see 69 FR 
41611 for more information about these thresholds.
    Under current NPDES permitting regulations at Sec.  122.21, all 
existing facilities greater than 2 MGD DIF must submit basic 
information describing the facility, source water physical data, source 
water biological characterization data, and cooling water intake system 
data. Under this proposed rule, all facilities greater than 2 MGD DIF 
must submit additional facility-specific information including the 
proposed impingement mortality reduction plan, relevant biological 
survival studies, and operational status of each of the facility's 
units.\33\ Certain facilities withdrawing the largest volumes of water 
for cooling purposes have additional information and study requirements 
such as the Entrainment Characterization Study as described below.
---------------------------------------------------------------------------

    \33\ The proposed rule contains streamlined information 
submission requirements for facilities that already employ closed 
cycle cooling.
---------------------------------------------------------------------------

    EPA is proposing to use actual intake flow (AIF) rather than design 
intake flow (DIF) for purposes of determining which facilities must 
conduct an Entrainment Characterization Study. Environmental impacts, 
particularly entrainment and entrainment mortality, result from actual 
water withdrawals, and not the maximum designed withdrawals. Further, 
using actual flow may encourage some facilities to reduce their flows 
in order to avoid collecting supplemental data and submitting the 
additional entrainment characterization study. Furthermore, any 
facility that has DIF greater than 2 MGD is required to submit basic 
information that will allow the permitting authority to verify its 
determination of whether or not it meets the 125 MGD AIF threshold.
    EPA has selected a threshold of 125 MGD AIF because a threshold of 
125 MGD would capture 90 percent of the actual flows but would only 
establish the Entrainment Characterization Study requirements for 30 
percent of existing facilities. This would significantly reduce 
facility burden by more than two-thirds of the potentially in-scope 
facilities, and would focus permit authorities on the majority of 
cooling water withdrawals by addressing approximately 200 billion 
gallons of daily cooling water withdrawals.
    In today's proposal, EPA seeks to clarify that for some facilities, 
the design intake flow is not necessarily the maximum flow associated 
with the intake pumps. For example, a power plant may have redundant 
circulating pumps, or may have pumps with a name plate rating that 
exceeds the maximum water throughput of the associated piping. EPA 
intends for the design intake flow to reflect the maximum volume of 
water that a plant can physically withdraw from a source waterbody over 
a specific time period. This also means that a plant that has 
permanently taken a pump out of service or has flow limited by piping 
or other physical limitations should be able to consider such 
constraints when reporting its DIF. EPA solicits comment on whether the 
definition of DIF should be revised to make this clarification more 
apparent.

G. Offshore Oil and Gas Facilities, Seafood Processing Vessels or LNG 
Import Terminals BTA Requirements Under This Proposed Rule

    Under today's proposal, existing offshore oil and gas facilities, 
seafood processing facilities and LNG import terminals would be subject 
to 316(b) requirements on a best professional judgment basis. In the 
Phase III rule, EPA studied offshore oil and gas facilities and seafood 
processing facilities \34\ and could not identify any technologies 
(beyond the protective screens already in use) that are technically 
feasible for reducing impingement or entrainment in such existing 
facilities.\35\ As discussed in the Phase III rule, known technologies 
that could further reduce impingement or entrainment would result in 
unacceptable changes in the envelope of existing platforms, drilling 
rigs, mobile offshore drilling units (MODUs), seafood processing 
vessels (SPVs), and similar facilities as the technologies would 
project out from the hull, potentially decrease the seaworthiness, and 
potentially interfere with structural

[[Page 22196]]

components of the hull. EPA also believes that for many of these 
facilities, the cooling water withdrawals are most substantial when the 
facilities are operating far out at sea--and therefore not withdrawing 
from a water of the U.S. The EPA is aware that LNG facilities may 
withdraw hundreds of MGD of seawater for warming (re-gasification). 
However, some existing LNG facilities may still withdraw water where 25 
percent or more of the water is used for cooling purposes. As discussed 
in section V, EPA has not identified a uniformly applicable and 
available technology for minimizing impingement and entrainment (I&E) 
mortality at these facilities. However, technologies may be available 
for some existing LNG facilities. LNG facilities that withdraw any 
volume of water for cooling purposes would be subject to case-by-case, 
best professional judgment BTA determinations.
---------------------------------------------------------------------------

    \34\ EPA studied naval vessels and cruise ships as part of its 
development of a general NPDES permit for discharges from ocean-
going vessels. (See  http://cfpub.epa.gov/npdes/home.cfm?program_id=350 for more information.) EPA studied seafood processing vessels 
and oil and gas exploration facilities in the 316(b) Phase III rule.
    \35\ As discussed in today's preamble, requirements for new 
offshore facilities set forth in the Phase III rule remain in 
effect.
---------------------------------------------------------------------------

    EPA has not identified any new data or approaches that would result 
in a different determination. Therefore, today's rule would continue to 
require that the BTA for existing offshore oil and gas extraction 
facilities and seafood processing facilities is established by NPDES 
permit directors on a case-by-case basis using best professional 
judgment. EPA solicits comment and data on the appropriateness of 
national categorical standards for these facilities.

H. What is a ``new unit'' and how are new units addressed under this 
proposed rule?

    The Phase I rule did not distinguish between new stand-alone 
facilities and new units where the units are built on a site where a 
source is already located and does not totally replace the existing 
source. Because EPA is not changing the new facility rule definitions, 
and is only proposing clarifying revisions to the existing facility 
rule, this proposed provision is not intended to otherwise reopen the 
Phase I rule. Today's proposed rule establishes requirements for new 
units added to an existing facility that are not a ``new facility'' as 
defined at Sec.  125.83. Today's proposal seeks to clarify the 
definitions of ``new'' versus ``existing'' by first noting that, for 
purposes of section 316(b), a facility cannot be defined as a new 
facility and an existing facility at the same time. In this rule, while 
EPA will continue to treat replacement and new units for the same 
industrial purpose as existing facilities, EPA intends to have 
different requirements for the addition of new units. A replacement 
unit or repowered unit, as distinct from constructing an additional 
unit, would not be treated as a new unit. The requirements for new 
units are modeled after the requirements for a new facility in the 
Phase I rule.
    EPA has adopted this approach for the following reasons. As new 
units are built at existing facilities to provide additional capacity, 
facilities have the ideal opportunity to design and construct the new 
units without many of the additional expenses associated with 
retrofitting an existing unit to closed-cycle. The incremental downtime 
that can be associated with retrofitting to closed-cycle cooling is 
avoided altogether at a new unit. In addition, when new units are 
added, the condensers can be configured for closed-cycle, reducing 
energy requirements, and high efficiency cooling towers can be designed 
as part of the new unit, allowing for installation of smaller cooling 
towers. Thus, the capital costs for closed cycle cooling at new units 
are lower than the capital costs for once-through cooling. These 
advantages may not always be available when retrofitting cooling towers 
at an existing unit.
    In consideration of the fact that additional unit construction 
decisions rest largely within the control of the individual facility, 
EPA decided that subjecting new units to the same national BTA 
requirements as those applicable to new facilities is warranted.

VI. BTA Consideration

    In response to the Supreme Court's decision in Entergy Corp. et al. 
v. EPA in April 2009, and the Second Circuit decision in Riverkeeper 
II, EPA has reevaluated the requirements for existing facilities under 
section 316(b). As discussed in Section III, for the BTA determinations 
proposed below, EPA collected additional data and information and 
updated the technology efficacy and costs analyses prepared for the 
earlier rulemaking efforts. These data and analyses serve to update the 
rulemaking record and allow EPA to apply greater technical rigor to 
EPA's analysis of BTA. As a result, EPA has decided not to re-propose 
requirements similar to those of the final Phase II rule, but would 
adopt, for the reasons explained in this preamble, a new framework. In 
addition, as previously noted, EPA decided to address all existing 
facilities subject to 316(b) in one rule (i.e., Phase II and Phase 
III).

A. EPA's Approach to BTA

    Section 316(b) of the CWA requires EPA to establish standards for 
cooling water intake structures that reflect the ``best technology 
available for minimizing adverse environmental impact.'' The statute is 
silent with respect to the factors that EPA should consider in 
determining BTA but courts have held that, given section 316(b)'s 
reference to sections 301 and 306 of the Act, EPA may look to the 
factors considered in those sections in establishing those standards 
for section 316(b) standard setting. The Supreme Court noted that, 
given the absence of any factors language in Section 316(b), EPA has 
more discretion in its standard setting under section 316(b) than under 
the effluent guidelines provisions. EPA has broad discretion in 
determining what is the ``best'' available technology for minimizing 
adverse environmental impact. EPA is not bound to evaluate the factors 
it considers in standard setting in precisely the same way it considers 
them in establishing effluent limitations guidelines under section 304 
of the Clean Water Act. Thus, the U.S. Supreme Court has explained 
that, under section 316(b), ``best'' technology may reflect a 
consideration of a number of factors and that ``best'' does not 
necessarily mean the technology that achieves the greatest reduction in 
environmental harm that the regulated universe can afford. Rather, the 
``best'' (or ``most advantageous'' technology in the court's words) may 
represent a technology that most efficiently produces the reductions in 
harm.
    EPA has interpreted section 316(b) to require the Agency to 
establish a standard based on the best technology available that will 
minimize impingement and entrainment--the two main adverse effects of 
cooling water intake structures. In EPA's view, there are several 
important considerations underpinning its decision. First, its BTA 
determination should be consistent with,and reflective of, the goals of 
Section 101 of the CWA: ``to restore and maintain the physical, 
chemical, and biological integrity of the Nation's waters,'' with an 
interim goal of protecting water quality so as to provide for the 
protection and propagation of fish, shellfish, and wildlife and provide 
for recreation in and on the water.
    Second, because the Supreme Court has concluded that EPA may 
permissibly consider costs and benefits in its BTA determination and 
E.O. 13563 directs EPA only to propose regulations based on a reasoned 
determination that the benefits justify the costs, EPA has taken costs 
and benefits into account in this proposal. EPA has concluded that the 
benefits of the proposed option justify its costs. See section VI. E 
below.
    Both Riverkeeper decisions recognize that EPA may consider a number 
of factors in establishing section 316(b) standards. In the Phase I 
Riverkeeper case, the court explained that the cross

[[Page 22197]]

reference in section 316(b) to sections 301 and 306 is an 
``invitation'' to look to those statutory provisions for guidance 
concerning the factors EPA should consider in determining BTA. In the 
Phase II decision, the court stated that the interpretation of section 
316(b) should be ``informed'' by these other two provisions. EPA may 
consider the factors involved in establishing effluent discharge 
limitations when regulating intake structures. The factors specifically 
delineated in CWA sections 301 and 306 that EPA may consider include: 
cost of the technology, taking into account the age of the equipment 
and facilities, process employed, engineering aspects associated with a 
particular technology, process changes and non-water quality 
environmental impact (including energy requirements).
    In selecting the ``best'' technology, EPA looked at a number of 
factors. Thus, EPA first considered the availability and feasibility of 
various technologies, their costs including potential costs to 
facilities as well as households, and economic impacts of different 
technologies. EPA reviewed the efficacy of these technologies in 
reducing impingement and entrainment mortality, including cost-
effectiveness relationships. EPA also considered additional factors set 
out in 304(b) of the Clean Water Act, including location, age, size, 
and type of facility. EPA next considered the non-water quality effects 
of different technologies on energy production and availability, 
electricity reliability, and potential adverse environmental effects 
that may arise from the use of the different controls evaluated.
    EPA has also considered the costs and the benefits of the different 
technologies it evaluated for BTA. Consideration of benefits in 
particular is complicated by the absence of well-developed tools or 
data to fully express the ecological benefits in monetized terms. EPA 
has, however, used the best currently available science to monetize the 
benefits of the various options in four major categories: Recreational 
fishing, commercial fishing, nonuse benefits, and benefits to 
threatened and endangered species (see Exhibit VIII-10). EPA believes 
that the benefits estimated for the first two categories are fairly 
complete, while the benefits estimated for the latter two categories 
are incomplete for a number of reasons. For example, the non-use 
benefits consider only the northeast and middle Atlantic states. EPA 
will continue to refine its tools in order to develop a more complete 
analysis concerning benefits during the rulemaking proceeding.
    As a result of this thorough evaluation, EPA is proposing the use 
of modified traveling screens with a fish handling and return system or 
reduced intake velocity as BTA for impingement mortality. EPA's record 
shows modified traveling screens are available for all facilities, 
whereas reduced intake velocity may not be available at all locations. 
For entrainment, on the other hand, EPA could identify no single 
technology that represented BTA for all facilities for the reasons 
explained in detail below. Instead, as the national BTA entrainment 
requirement for existing facilities, EPA is proposing to adopt 
regulations that establish a process for the permitting authority to 
determine entrainment BTA controls on a site-specific basis following 
the consideration of several factors. In addition to the general 
considerations discussed above, EPA has identified the following 
specific factors as the key elements in its decision not to prescribe a 
single technology as the basis for a national BTA determination. These 
factors are local energy reliability, air emissions permits, land 
availability, and remaining useful plant life. The rest of this chapter 
describes each of these considerations in detail.

B. Technologies Considered to Minimize Impingement and Entrainment

    As described in Section IV, power plants and manufacturers withdraw 
large volumes of cooling water on a daily basis. The majority of 
environmental impacts associated with intake structures are caused by 
water withdrawals that ultimately result in the loss of aquatic 
organisms. These losses may be due to impingement, entrainment, or 
both. Impingement occurs when organisms are trapped against the outer 
part of a screening device of an intake structure.\36\ The force of the 
intake water traps the organisms against the screen and they are unable 
to escape. Not all organisms contained in the incoming water are 
impinged, however. Some may pass through the screening system and the 
intake structure and travel through the entire cooling system including 
the pumps, condenser tubes, and discharge pipes. This is referred to as 
entrainment. Various factors lead to the susceptibility of an organism 
to impingement or entrainment. For more detailed discussion of 
impingement and entrainment and their resulting impact, see 67 FR 
17136-17140 and the EEBA.
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    \36\ Typically, cooling water intake structures use various 
screening devices to prevent large objects (e.g., trash, logs) from 
being drawn in with the cooling water and ultimately clogging or 
damaging the cooling water system.
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    As described in Section III.D, reductions in impingement or 
entrainment do not necessarily mean reductions in mortality. For 
purposes of this proposal, EPA has developed the following definitions 
for impingement and entrainment and mortality:
     Impingement: 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.
     Impingement Mortality: The death of fish or shellfish due 
to impingement (as defined above). Note impingement mortality need not 
occur immediately; impingement may cause harm to the organism, which 
results in mortality several hours after the impingement event. For 
purposes of this proposed rule, impingement mortality is limited to 
those organisms collected or retained by \3/8\ inch sieve.
     Entrainment: 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 system.
     Entrainment Mortality: The death of fish or shellfish due 
to entrainment. This also includes the death of those fish and 
shellfish due to fine mesh screens or other technologies used to 
exclude the organisms from entrainment. For purposes of this proposed 
rule, entrainment mortality is limited to those organisms passing 
through a \3/8\-inch sieve.
    Based on available information, as described in section III.D, EPA 
is assuming for purposes of this rule that all entrained organisms are 
a loss, i.e., no entrained organisms survive. Therefore, in the absence 
of entrainment control, entrainment is assumed to lead to entrainment 
mortality. Also see Chapter A7 of the Phase II Regional Studies 
Document (DCN 6-0003; EPA-HQ-OW-2002-0049-1490). Entrainable organisms 
generally consist of eggs and early life stage larvae. Early larvae 
generally do not have skeletal structures, have not yet developed 
scales, and in many cases are incapable of swimming for several days 
post hatching. However, for impingement, mortality occurs less than 
100% of the time. Impingeable organisms are generally larger juvenile 
or adult fish, with fully formed scales and skeletal structures, and 
well developed survival traits such as avoidance responses. EPA's data 
demonstrate that, under the proper conditions, many impinged organisms 
survive.
    In addition to these definitions it is helpful to further 
characterize

[[Page 22198]]

impingement and entrainment as those terms are used in the literature 
and in studies conducted by power plants. Historically, traveling 
screens deployed by power plants utilized a \3/8\-inch mesh size. For 
this reason, most studies and reports referring to impingement are in 
fact referring to those organisms impinged on a \3/8\-inch mesh screen. 
Impingement can also refer to any organism incapable of swimming away 
from the intake structure due to the water velocity at the intake. 
Similarly, entrainable organisms are those organisms fitting through a 
mesh of less than or equal to \3/8\ of an inch. This also means the 
majority of entrainable organisms are comprised of eggs, larvae, and 
juveniles. More recent studies, particularly those that evaluate mesh 
sizes smaller than \3/8\ of an inch, continue to refer to impingement 
as any organism caught on the screen. This can cause some confusion, as 
many organisms that would have been entrained with a \3/8\-inch mesh 
instead become impinged by the finer mesh. These are referred to as 
``impinged entrainables'' or ``converts.'' EPA has also found that most 
studies of entrainment are biased towards the larger (older) larvae 
with higher survival rates and do not analyze survival of smaller 
larvae. This corresponds to larvae body lengths sufficient to have 
begun scale and bone development, and generally reflects the more 
motile early life stages. EPA found these study findings cannot be 
applied to non-motile life stages, which are incapable of avoidance 
responses. As discussed in Section III.C, it is also important to note 
that the prevention of entrainment by some exclusion technologies may 
result in very high entrainment reductions, but these organisms do not 
necessarily survive interactions with the exclusion technology. 
Therefore, while entrainment refers specifically to passage through the 
cooling water intake system, entrainment mortality also includes those 
smaller organisms killed by exclusion from the cooling water intake 
system. Today's rule proposes to use the \3/8\-inch mesh size as part 
of the definition of impingement and entrainment mortality as a means 
of clearly differentiating those organisms that may be susceptible to 
impingement or entrainment, and thereby avoiding any confusion over the 
status of ``impinged entrainables'' or ``converts.''
    Generally, there are two basic approaches to reduce impingement and 
entrainment (I&E) mortality. The first approach is flow reduction, 
where the facility installs technology or operates in a manner to 
reduce or eliminate the quantity of water being withdrawn. Reduced 
volumes of cooling water produce a corresponding reduction in I&E, and 
therefore reduced I&E mortality. The second way to reduce I&E is to 
install technologies or operate in a manner that either (a) gently 
excludes organisms or (b) collects and returns organisms. Under the 
first approach, technologies or practices are used to divert those 
organisms that would have been subject to I&E. The second approach is 
to install collection and return technologies; organisms not diverted 
are collected and returned back to the source water.
    Though not available to all facilities, a third approach to 
reducing impingement and entrainment is relocating the facility's 
intake to a less biologically rich area in a water body, usually 
further from shore and/or at greater depths, or varying the timing of 
withdrawals by time of day, season, etc., to target withdrawals to 
times when organism densities are lower. This approach can be effective 
at entrainment reduction, but is not generally available to inland 
facilities.
    The section below further describes flow reduction and exclusion 
technologies.
1. Flow Reduction
    Flow reduction is commonly used to reduce impingement and 
entrainment. For purposes of rulemaking, EPA assumes that entrainment 
and impingement (and associated mortality) at a particular site are 
proportional to source water intake volume.\37\ Thus, if a facility 
reduces its intake flow, it similarly reduces the amount of organisms 
subject to impingement and entrainment. Some common flow reduction 
technologies include: Variable frequency drives, variable speed pumps, 
seasonal operation or seasonal flow reductions, unit retirements, use 
of alternate cooling water sources, water reuse, and closed-cycle 
cooling systems. For additional detailed information on these 
technologies as well as others, see the TDD, ``California's Coastal 
Power Plants: Alternative Cooling System Analysis'' (DCN 10-6964), and 
EPRI's ``Fish Protection at Cooling Water Intake Structures: A 
Technical Reference Manual'' (DCN 10-6813).
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    \37\ Impingement rates are related to intake flow, intake 
velocity, and the swimming ability of the fish subject to 
impingement. Entrainment is generally considered to be proportional 
to flow and therefore reduced on a 1-to-1 basis via flow reductions, 
as EPA assumes for purposes of national rulemaking that entrainable 
organisms are uniformly distributed throughout the source water. EPA 
has consistently applied this assumption throughout the 316(b) 
rulemaking process (see, e.g., 66 FR 65276 for a discussion of 
proportional flow requirements in the Phase I rule or 69 FR 41599) 
and continues to believe that it is broadly applicable on a national 
scale and is an appropriate assumption for a national rulemaking. 
EPA recognizes that this assumption is not necessarily true on a 
site specific basis and that relocating or varying the time pattern 
of withdrawals may be effective strategies to reduce I&E in some 
cases.
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a. Variable Frequency Drives and Variable Speed Pumps
    A facility with variable speed drives or pumps operating at their 
design maximum can withdraw the same volume of water as a conventional 
circulating water pump. However, unlike a conventional circulating 
water pump, variable speed drives and pumps allow a facility to reduce 
the volume of water being withdrawn for certain time periods. The pump 
speed can be adjusted to reduce water withdrawals when cooling water 
needs are lower, such as when ambient water temperatures are colder 
(and therefore capable of dissipating more heat) or when fewer 
generating units are operating. In site visits, EPA found that variable 
speed drives and pumps were typically used at units operating below 
capacity, such as load following units. For this reason most base load 
generating units and continuously operated manufacturing processes 
would obtain minimal reductions in flow as a result of these 
technologies. EPA estimates that facilities with intermittent water 
withdrawals could achieve a 5 to 10 percent reduction in flow.\38\ EPA 
is further aware that some facilities need to withdraw water for 
cooling even while the facility is not in production, such as 
facilities on standby status, or nuclear facilities where the heat 
energy generated by fission must still be dissipated while the facility 
is out of service.
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    \38\ Withdrawals of colder water could allow facilities to 
reduce their intake using variable speed drives and pumps, but EPA 
does not have data on the efficacy or availability of this approach.
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b. Seasonal Flow Reductions
    Seasonal flow reduction refers to the reduction or elimination of a 
quantity of water being withdrawn during certain biologically important 
time periods. Most facilities that practice seasonal flow reductions do 
so in order to reduce entrainment because peak entrainment events are 
often seasonal, typically occurring during local spawning season, while 
impingement is more sporadic. For example, clupeids species experience 
impingement episodes sporadically all throughout the winter and spring. 
Largemouth bass, on the other hand, may spawn in the late-spring, which 
would thus be a season of

[[Page 22199]]

potentially high entrainment for this species. During this specific 
peak entrainment time period, a facility could operate less (or perhaps 
not at all) thereby reducing or eliminating the volume of cooling water 
withdrawn. This may be accomplished through a combination of variable 
speed pumps or shutting down some portion of the pumping system. 
Seasonal flow reduction may also consist of operating a once-through 
cooling system during part of the year and switching to closed-cycle 
during peak entrainment season. Facilities may also choose to schedule 
periodic maintenance to occur during these time periods; these 
maintenance activities often require the facility to reduce or cease 
operations and can be timed to coincide with the most biologically 
productive periods. By identifying species of concern at facilities 
visited by EPA, the Agency has identified some sites where entrainment 
is significant all year long, and other sites where peak entrainment 
occurs in as few as three to four months of the year. In addition, not 
all power generating facilities in a local area could stop operating at 
the same time without interrupting local electricity reliability. 
Therefore, not all facilities can utilize seasonal flow reduction 
technologies.
c. Unit Retirements
    Some power plants have retired units completely or have essentially 
ceased all operations but have yet to be formally retired or 
decommissioned. Reasons for their inactivity vary,\39\ but the end 
result is the facility eliminates the need for cooling water 
withdrawals for these units. Similarly, manufacturers may retire 
processing units as market demand changes, process lines are moved to 
other sites, or production technologies change. Unit closures provide 
clear reductions in flow, but the demand for electricity (or other 
products) may dictate that production be increased at the facility in 
question or another facility altogether; there is usually no guarantee 
that the intake flow will be permanently retired. EPA expects flow 
reductions due to unit closures could be reasonably included as part of 
a facility's I&E mortality reductions for a period of up to 10 years.
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    \39\ Note that some generating units are retired for market-
driven reasons (i.e., the unit is no longer considered sufficiently 
profitable to operate). They may also be mothballed, placed on cold 
storage, or maintained in various other states of operational 
readiness.
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d. Alternate Sources of Cooling Water
    While not reducing the overall usage of water at a facility, using 
an alternate source of cooling water may have the same effect in 
reducing impingement and entrainment, as new or additional withdrawals 
from surface waters may be reduced. An example is using ``gray'' water 
as a source of cooling water; a facility reaches an agreement with a 
nearby wastewater treatment plant to accept the WWTP's effluent as a 
source of cooling water.\40\ Such alternative sources are limited by 
available capacity, consistency of flow, and increasing competition for 
these sources of water, and may be more challenging to find for 
existing facilities than for new facilities that are not yet fixed in 
location.
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    \40\ See, for example, EPA's site visit report for PSEG's Linden 
Generating Station (DCN 10-6557), which has a capacity of 1230 MW, 
35% CUR, and uses 7-8 mgd of gray water as makeup water for its 
cooling towers.
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e. Water Reuse
    Typically associated with manufacturing facilities, water reuse 
(defined as using water for multiple processes) can reduce the volume 
of water needed for cooling, process, or other uses. For example, a 
facility might withdraw water for non-contact cooling water and then 
re-use the heated effluent as part of an industrial process. In effect, 
the facility has eliminated the need to withdraw additional water for 
the latter process. EPA has observed significant water reuse at 
manufacturing facilities, but has not developed national level data for 
such reuse due to the range of different manufacturing sectors and the 
significant variability in manufacturing processes (during site visits, 
it was observed that complex facilities have found it difficult to 
assess their specific water reuse). See Section IV for further 
discussion on water usage in specific industrial sectors.
f. Closed-cycle Cooling Towers
    Closed-cycle cooling systems allow a facility to transfer its waste 
heat to the environment using significantly smaller quantities of (or 
in some cases no) water. There are two main types of closed-cycle 
cooling systems: Wet cooling and dry cooling. Each of these is 
described below.
Wet Cooling Tower Systems
    In a wet cooling system, cooling water that has absorbed waste 
heat, transfers that heat through evaporation of some of the heated 
water into the surrounding air and recirculates the cooling water to 
continue the cooling process.\41\ This process enables a facility to 
re-use the remaining water, thereby reducing the quantity of water that 
must be withdrawn from a water body. Because the heat is transferred 
through evaporation, while the amount of water withdrawn from the water 
source is greatly reduced, it is not eliminated completely because 
make-up water is required to replace that lost through evaporation and 
blowdown. There are two main types of wet cooling systems: Natural 
draft and mechanical. While wet cooling towers reduce withdrawals 
relative to once-through systems, they may increase the consumptive use 
of water since they tend to rely on evaporation (which is not returned 
to the water body) for heat dissipation. When once-through cooling is 
used and withdrawals are a significant portion of the waterbody, the 
return of heated water may contribute to greater evaporation from the 
water body. However, EPA does not have data on the relative magnitude 
of these effects. The relative loss of water through evaporation for 
closed cycle and once-through systems is site specific, depending on 
the exact design of the systems.
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    \41\ In addition, a smaller portion of the heat is also removed 
through direct contact between the warm water and the cooler 
surroundings.
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    A natural draft cooling tower is tall \42\ and has a hyperbolic 
shape. The height of these towers creates a temperature differential 
between the top and bottom of the tower, creating a natural chimney 
effect that facilitates heat transfer as heated water contacts rising 
air. In contrast, mechanical cooling towers rely on motorized fans to 
draw air through the tower and into contact with the heated water. 
These towers are likely to be much shorter units than natural draft 
cooling towers,\43\ and due to their modular construction can be built 
in multiples, but they may require more land area for the same amount 
of cooling. Both types of towers require electricity for pumps, while 
mechanical draft towers also require electricity to operate the fans; 
both electricity needs serve to reduce a facility's net generating 
output. Thus the monetary and environmental costs of making up this 
reduction in energy efficiency need to be considered. These 
environmental costs include human health and welfare effects from 
increased air emissions, including the global climate change effects of 
increased greenhouse gas output at fossil-fueled plants. Both natural 
draft and mechanical cooling towers can operate in freshwater or 
saltwater environments. Saltwater applications typically require more 
make-up water than freshwater

[[Page 22200]]

applications, making them less efficient in reducing water 
withdrawals.\44\ Optimized cooling towers may achieve flow reductions 
of 97.5 percent or better and 94.9 percent or better for freshwater and 
saltwater sources, respectively.
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    \42\ Natural draft towers can be as high as 500 feet or more.
    \43\ Mechanical draft towers typically range from 30 to 75 feet 
in height.
    \44\ Modular cooling tower units provide an additional cooling 
tower alternative. Modular cooling towers resemble mechanical 
cooling towers, but are portable, typically rented for short-term 
periods and quickly assembled.
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Dry Cooling Tower Systems
    Dry cooling systems virtually eliminate the need for cooling water 
withdrawals.\45\ Unlike wet cooling systems, in dry cooling systems, 
waste heat is transferred completely through convection and radiation, 
rather than evaporation. Direct dry cooling is much like a car 
radiator; turbine exhaust steam passes through tubes or fins and the 
condensate is returned for reuse in the turbine. The system is 
completely closed to the atmosphere and there is no contact between the 
outside air and the steam or the resulting condensate. Due to the heavy 
reliance of dry cooling on ambient air temperatures and the lower 
efficiency of heat transfer through convection and radiation, dry 
cooling towers are much larger and therefore more expensive \46\ than 
wet cooling towers for a given cooling load. Dry cooling towers have 
been built in areas where limited water supplies exist for either once-
through cooling or wet cooling make-up water, such as the arid 
southwestern U.S. Dry cooling is not demonstrated and available for 
nuclear facilities, due to the backup cooling systems and related 
safety needs required at a nuclear facility.
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    \45\ Dry cooling systems do blow down some of the circulating 
water within the cooling system to prevent the buildup of materials 
within the condenser. However, the volume of makeup water is 
extremely low--a dry cooling system typically reduces intake flows 
by 98-99 percent over a comparable once-through cooling system.
    \46\ The construction and capital costs for dry cooling towers 
have been reported as five to 10 times as expensive as wet cooling 
towers, and the parasitic load for dry cooling is higher than for 
wet cooling. See DCN 10-6679.
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Hybrid Cooling Tower Systems
    In certain applications, a facility may choose a hybrid cooling 
tower design that incorporates elements of both wet and dry cooling. 
Typically, the base of the tower functions as a wet cooling tower and 
the upper portion as a dry tower; the most common reason for this 
design is to reduce the visible plume emitted from the tower, which is 
accomplished by recapturing some of the water vapor evaporated in the 
wet portion of the tower. This design is also usually much shorter than 
natural draft wet towers, which can also offer plume abatement 
controls.
2. Exclusion Technologies To Minimize Impingement and/or Entrainment
    Over the last several decades, in addition to flow reduction and 
closed-cycle cooling, numerous technologies have been developed in an 
effort to minimize impingement and entrainment mortality associated 
with cooling water intake systems. The following summarizes the most 
widely used technologies as well as the most effective and best 
performing technologies. For additional detailed information on these 
technologies as well as others, see the TDD, CA Report, and EPRI 
report.
a. Screens
i. Traveling Screens
    Traveling screens are a technology in place at virtually all 
cooling water intake structures. These screens were originally designed 
to prevent debris from entering the cooling water system, but also 
prevent some fish and shellfish from entering the cooling water system. 
Traveling screens have been installed in numerous environmental 
conditions: Salt water, brackish water, fresh water, and icy water. 
Based on the technical survey, EPA found 93 percent of electric 
generators and 73 percent of manufacturers employ traveling screens or 
other intake screens. There are many types of traveling screens (e.g., 
through flow, dual flow, center flow). The most common design in the 
U.S. is the through flow system. The screens are installed behind bar 
racks (trash racks) but in front of the water circulation pumps. The 
screens rotate up and out of the water where debris (including impinged 
organisms) is removed from the screen surface by a high pressure spray 
wash. Screen wash cycles are triggered manually or by a certain level 
of head loss across the screen (indicating clogging). By definition, 
this technology works by collecting or ``impinging'' fish and shellfish 
on the screen. Traveling screens are ideally used with a fish handling 
and return system, discussed further in Section VI.B.3 below.
ii. Cylindrical Wedgewire Screens
    Cylindrical wedgewire screens, also called ``V'' screens or profile 
screens, unlike traveling screens, are a passive intake system. 
Wedgewire screens consist of a v-shaped, cross section wire on a 
framing system. Slot sizes for conventional traveling screens typically 
refer to a square opening (\3/8\'' x \3/8\'') that is punched or woven 
into the screen face. Wedgewire screens are constructed differently, 
however, with the slot size referring to the maximum distance between 
longitudinally adjacent wires. These screens are designed to have a low 
through-slot velocity (less than 0.5 ft/sec or 0.15 m/sec) and 
typically have smaller slot sizes than a coarse mesh traveling screen. 
The entire wedgewire structure is submerged in the source waterbody.
    When appropriate conditions are met, these screens exploit physical 
and hydraulic exclusion mechanisms to achieve consistently high 
impingement reductions (and as a result, impingement mortality 
reductions). Wedgewire screens require an ambient current crossflow to 
maximize the sweeping velocity provided by the waterbody. The screen 
orientation and cross current flow carries organisms away from the 
screen allowing them to avoid or escape the intake current. Lower 
intake velocities also allow fish to escape from the screen face. 
Entrainment reductions can potentially be observed when the screen slot 
size is small enough and intake velocity is low enough to exclude egg 
and larval life stages.\47\ There is also limited evidence suggesting 
that extremely low intake velocities can allow some egg and larval life 
stages to avoid the intake due to hydrodynamic influences of the cross 
current. Therefore performance is largely dictated by local conditions 
that are further dependent on the source waterbody's biological 
composition. Costs of wedgewire screens also increases significantly as 
slot size and design intake velocity decrease. Wedgewire screens may 
also employ cleaning and de-icing systems such as air-burst sparging to 
aid in maintaining open intake structures and low intake velocities.
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    \47\ Note that this is entrainment exclusion and not necessarily 
related to the survival of entrainable organisms. See Section 
III.B.2 for more detail.
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    According to data from the industry questionnaire, EPA's site 
visits, and industry documents, dozens of facilities across the U.S. 
employ cylindrical wedgewire screens. However, wedgewire screens are 
not feasible for facilities with limited access to source water, such 
as shallow water or limited shoreline frontage. Wedgewire screens may 
also not be feasible where the size and number of wedgewire screens 
would interfere with navigational traffic. As described above, 
locations also need to have an adequate source water sweeping velocity. 
Most of the performance data for wedgewire screens is based on coarse 
mesh slot sizes with an intake velocity of 0.5 feet per second. As it 
is extremely difficult to measure

[[Page 22201]]

impingement and entrainment reductions in the field, most performance 
data is based on barge studies and lab studies. EPA does not have data 
on the performance of fine mesh wedgewire screens on entrainment 
survival; therefore EPA has only considered wedgewire screens for 
impingement mortality. For additional discussion of the specific design 
and operation of cylindrical wedgewire screens, see the TDD. The 
following section discusses the importance of mesh size to impingement 
and entrainment mortality reductions.
iii. Screen Mesh Size Considerations
Coarse Mesh
    Coarse mesh traveling screens are the typical traveling screen 
fitted on the majority of cooling water intakes. A large number of 
facilities have intake screens with \3/8\-inch (9.5 mm) mesh panels. 
This size mesh is common because, as a general rule of thumb, the 
maximum screen slot size is never larger than one half of the condenser 
tube diameter (the condenser tubing is the narrowest point in the 
cooling water system and, as such, is most susceptible to clogging from 
debris), and this tubing is typically \3/4\ or \7/8\ inches in 
diameter. Mesh of \3/8\-inch (roughly 9.5 mm) does not prevent 
entrainment and in the absence of any other precautions can lead to 
high mortality of impinged fish. Coarse mesh traveling screens have 
been in use by both power plants and manufacturers for more than 75 
years and represent the baseline technology. Similarly, the majority of 
successful wedgewire installations are coarse mesh.
Fine Mesh
    Fine mesh traveling and wedgewire screens are similar to coarse 
mesh screens, with the only difference being the size of the screen 
mesh. The mesh size of fine mesh screens varies, depending on the 
organisms to be protected, but typically range from 0.5 to 5 mm. 
Typically, facilities have incorporated fine mesh in an effort to 
reduce entrainment. Data in the record demonstrate that entrainment 
typically decreases as mesh size decreases. However, slot sizes larger 
than 2 mm do not prevent eggs from passing through the screen. Fine 
mesh traveling screens have been in use in this industry since the 
1980s. EPA estimates as many as 17 percent of existing intakes could 
not be expanded in size to accommodate a 2 mm mesh, and as many as 55 
percent of existing intakes could not accommodate a 0.5 mm slot size 
under conditions of low intake velocities. For these reasons, fine mesh 
screens are demonstrated for some locations, but are not the best 
performing technologies, and are not available technologies for the 
industry as a whole. See Chapter 6 of the TDD for more details.
b. Barrier Nets
    Barrier nets are nets that fully encircle the intake area of water 
withdrawal, from the bottom of the water column to the surface and that 
prevent fish and shellfish from coming in contact with the intake 
structure and screens. According to data from the industry 
questionnaire (as of the year 2000), at least a half dozen facilities 
employ a barrier net. Typically, barrier nets have large mesh sizes 
(e.g., \1/2\-inch or 12.7 mm) \48\ and are designed to prevent 
impingement. Due to the large mesh size, they offer no reduction in 
entrainment. They are often deployed seasonally, wherever seasonal 
migrations create high impingement events or to avoid harsh winter 
conditions which jeopardize integrity of the net. Barrier nets also 
prevent impingement of shellfish on the intake traveling screen. 
Shellfish such as crustaceans may pose a unique issue for traveling 
screens because the shellfish are not impinged, but rather they may 
grab hold of the traveling screen surface and are not removed from the 
traveling screen by pressure wash sprays. Barrier nets have been shown 
to be particularly helpful in this regard. For this reason, the costs 
of options considered today include the costs of barrier nets to 
minimize impingement mortality of shellfish.
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    \48\ Barrier net mesh sizes vary, depending on the 
configuration, level of debris loading, species to be protected, and 
other factors.
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c. Aquatic Filter Barriers
    Aquatic Filter Barriers (AFBs), such as the Gunderboom Marine Life 
Exclusion System (MLES) or simply ``Gunderboom,'' are similar to 
barrier nets in that they extend throughout the area of water 
withdrawal from the bottom of the water column to the surface. However, 
AFBs consist of water permeable fabric panels with small pores (< 20 
microns). AFBs reduce both impingement mortality and entrainment 
because they present a physical barrier to all life stages. The surface 
area of an AFB is quite large compared to a traveling screen, allowing 
for extremely low water velocities. The low velocity allows non-motile 
organisms to drift away. EPA is aware of one power plant that used an 
AFB, but notes that this facility recently ceased operations.\49\ EPA 
has updated performance data for AFB for small flow intakes, but does 
not have enough data to evaluate the technology at large intakes and in 
all waterbodies.
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    \49\ This facility ceased operations for reasons other than 
impingement and entrainment related to cooling water intake.
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3. Collection and Return
    Conventional traveling screens were not designed with the intention 
of protecting fish and aquatic organisms that become entrapped against 
them. Marine life may become impinged against the screens from high 
intake velocities that prevent their escape. Prolonged contact with the 
screens may suffocate insufficiently strong species or certain 
susceptible life stages of fish. Exposure to high pressure sprays and 
other screening debris may cause significant injuries that result in 
latent mortality, or increase the susceptibility to predation or re-
impingement. Organisms that do survive initial impingement and removal 
are not typically provided with a specifically-designed mechanism to 
return them to the water body and are handled in the same fashion as 
other screening debris. Other objects collected on the screen are 
typically removed with a high-pressure spray and deposited in a 
dumpster or debris return trough for disposal. Screens are rotated 
periodically based on a set time interval or when the pressure 
differential between the upstream and downstream faces exceeds a set 
value. Conventional traveling screen systems have been modified to 
reduce impingement-related mortalities with collection and return 
systems. In simplest form, this is comprised of a return flume or 
trough with sufficient water volume and flow to enable impinged 
organisms to return to the source water. Return systems should be 
designed to avoid predation and latent mortality while organisms are in 
the flume, positioned at an appropriate water depth for high survival 
of the organisms, located at an appropriate elevation to avoid large 
drops of the organisms back to the surface water, and sited to avoid 
repeated impingement of the organisms by the intake structure.
    Following the 1972 Clean Water Act's requirement to require 
technology-based solutions to minimize adverse environmental impacts, 
some conventional coarse mesh traveling screen systems were modified to 
reduce impingement mortality by removing fish trapped against the 
screen and returning them to the receiving water with as few injuries 
as possible. The first modified

[[Page 22202]]

screens, also known as ``Ristroph'' screens, feature capture and 
release modifications. In the simplest sense, these screens are fitted 
with troughs (also referred to as buckets) containing water that catch 
the organisms as they rise out of the water and are sprayed off of the 
screen. The return component consists of a gentle mechanism to remove 
impinged fish from the collection buckets, such as a low-pressure 
spray. The buckets empty into a collection trough that returns fish to 
a suitable area in the source water body. These modified screens have 
shown significant improvements in reducing impingement mortality 
compared with unmodified screen systems.
    Data from early applications of the ``Ristroph'' screen design 
showed that while initial survival rates might be high at some 
installations, latent mortality rates were higher than anticipated, 
indicating significant injuries could be sustained during the 
impingement and return process that were not immediately fatal. Based 
on a study conducted by Ian Fletcher in the 1990s (see DCN 5-4387), 
industry identified several additional critical screen modifications to 
address latent mortality. These include redesign of the collection 
buckets to minimize turbulence, addition of a fish guard rail/barrier 
to prevent fish from escaping the collection bucket, replacement of 
screen panel materials with ``fish friendly'' smooth woven mesh, and a 
low pressure wash to remove fish prior to any high pressure spray to 
remove debris on the ascending side. The Fletcher analysis also 
identified that longer impingement duration, insufficient water 
retention in the buckets, and exposure to the air and temperature 
extremes could negatively impact fish survival. Finally, these findings 
indicate that modified Ristroph screens must be continually rotated 
instead of the periodic rotation schedule common with conventional 
screen systems. Performance data for modified traveling screens with 
fish return systems show low levels of impingement mortality across a 
wide variety of water body types and fish species. Therefore, EPA has 
concluded modified traveling screens with a fish return system is a 
candidate best performing technology for impingement mortality.
    For additional and more detailed discussion of the specific design 
and operation of these screen modifications, see the TDD.
4. Intake Location and Velocity Caps
    Currently, the most common intake location for a cooling water 
intake structure is along a shoreline. In some types of waterbodies, 
shoreline locations are thought to have the potential for greater 
environmental impact because the water is withdrawn from the most 
biologically productive areas especially with regards to earlier life 
stages. Some facilities employ an offshore intake to withdraw water 
from less biologically productive areas to reduce entrainment relative 
to intakes located in more productive shoreline areas, though 
impingement (and therefore impingement mortality) reductions have also 
been observed. Obviously, reduction in impingement mortality and 
entrainment depend on intake location at a particular site, but the 
greatest potential for reductions is found with far offshore locations 
at distances of several hundred feet, something not possible on many 
rivers and streams. Both depth and the offshore location must be 
evaluated to determine if fish densities and species distribution at 
the offshore location are substantially different than those near the 
shoreline. Two areas where far offshore locations are commonly used 
today include the oceans and Great Lakes.
    EPA found most offshore intakes are fitted with a velocity cap. 
Velocity caps are a physical structure rising vertically from the sea 
bottom and placed over top of the intake pipe. Intake water is 
withdrawn through openings in the velocity cap in a manner which 
converts the direction of flow from vertical to horizontal. The 
horizontal flow provides a physiological trigger in fish to induce an 
avoidance response thereby reducing impingement mortality. The velocity 
cap further serves to limit the zone of influence of the intake to the 
depth level at which the velocity cap is situated, thus affecting only 
the life stages that live at that depth. Furthermore, the velocity at 
an offshore intake is lower than the velocity of an equivalent sized 
intake at the shoreline due to differences in pressure, resulting in a 
lower intake velocity at the velocity cap than at a shoreline intake. 
Velocity caps are also usually equipped with supports and bar spacing 
selected to prevent larger aquatic organisms (e.g., turtles or marine 
mammals) from entering the intake pipe. Because velocity caps operate 
under the principle that the organisms can escape the current, velocity 
caps do not offer entrainment reductions over and above those achieved 
by being located offshore. Reductions in entrainment observed with 
velocity caps occur due to the difference in organism densities in far 
offshore deep water compared to a surface intake at the shoreline.
    For additional and more detailed discussion of the specific design 
and operation of offshore intake locations and velocity caps, see the 
TDD.
5. Reduced Intake Velocity
    Impingement mortality can be greatly reduced by reducing the 
through-screen velocity in any screen. Reducing the rate of flow of 
cooling water through the screen (through-screen velocity) to 0.5 ft/
sec or less reduces impingement of most fish because it allows them to 
escape the intake current. (See 66 FR 65274 and DCN 2-028A, EPRI's 
``Technical Evaluation of the Utility of Intake Approach Velocity as an 
Indicator of Potential Adverse Environmental Impact Under Clean Water 
Act 316(b).'') Limited lab studies indicate that entrainment also may 
decrease as through-screen velocity decreases and that through-screen 
velocity may have an effect on entrainment survival rates, although 
such data is extremely variable by species (see DCN 10-6802 and DCN10-
6803). As a result, some Phase II facilities have designed and operate 
their modified traveling screens or wedgewire screens so as not to 
exceed a through-screen velocity of 0.5 ft/sec. In addition, for the 
reasons described in Section VI.B.2, aquatic filter barriers and 
velocity caps \50\ are likely to have velocities of 0.5 ft/sec or less. 
Swim speed studies demonstrate that for most facilities, an intake 
velocity of 0.5 feet per second or less results in 90 percent or better 
reductions in impingement mortality for most species. (EPA notes that 
preliminary results from recent studies of fine mesh screens suggest 
that at even lower intake velocities such as 0.25 feet per second, 
there may be some hydrodynamic influences that reduce entrainment 
mortality even more, because flow dynamics are nonlinear. It is unclear 
whether such observations hold true when cooling water withdrawals 
(water volumes) are large.) Therefore, EPA has concluded reduced intake 
velocity is a candidate best performing technology for impingement 
mortality.
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    \50\ Velocity as measured at the velocity cap opening.
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C. Technology Basis for Today's Proposed Regulation

    As described in the previous section, EPA examined the full range 
of technologies that reduce impingement and/or entrainment, and 
evaluated these technologies based on their efficacy in reducing 
impingement and entrainment, availability, and cost. Based on an 
assessment of these factors, EPA has

[[Page 22203]]

identified three best performing technologies for further analysis as 
the basis for today's proposed rule: Modified traveling screens with a 
fish return (for fish impingement), barrier nets (for shellfish 
impingement on tidal waters), and mechanical draft wet cooling towers 
(for impingement and entrainment at new units). Although EPA has 
identified velocity reduction to 0.5 feet per second or less as a 
candidate best performing technology for impingement mortality, EPA is 
not proposing reduced intake velocity as BTA because it is not 
available at all facilities, but is allowing facilities to comply with 
intake velocity of 0.5 feet per second or less where available.
    EPA has concluded that modified traveling screens, such as Ristroph 
screens and equivalent modified traveling screens are a best performing 
technology for impingement mortality. These screens use coarse size 
mesh with collection buckets designed to minimize turbulence, a fish 
guard rail/barrier to prevent fish from escaping the collection bucket, 
``fish friendly'' smooth woven mesh, and a low pressure wash to remove 
fish prior to any high pressure spray to remove debris on the ascending 
side. The fish removal spray must be of lower pressure and the fish 
return must be fish friendly and provide sufficient water and minimize 
turbulence. Modified traveling screens must generally be continually 
rotated to obtain the highest reductions in impingement mortality. As 
discussed in Section III, traveling screens with post-Fletcher 
modifications achieve a monthly impingement mortality of 31 percent 
mortality (performance corresponding to the 95th percentile of the beta 
distribution) under conditions of 48 hour or less holding times. The 
use of the 95th percentile is consistent with the convention EPA has 
used for monthly average limitations in the effluent guidelines program 
(i.e., for pollutant discharges). In developing the monthly average 
standard proposed for this rule, EPA has taken into account the 
reasonable anticipated variability in impingement mortality that may 
occur at a well-operated facility. Variability occurs due to changes in 
seasons, differing intake locations, higher mortality of certain 
species, and speciation found in different water bodies.
    In contrast to the monthly average, which is adjusted to reflect 
month-to-month variability in performance of the technology, EPA has 
not included an upward adjustment of the annual average \51\ standard 
to account for year-to-year variability. The annual average standard 
requires that impingement mortality not exceed 12 percent, calculated 
as the average of monthly impingement mortality for 12 consecutive 
months as determined by the Director. The 12 percent value corresponds 
to the long-term average performance of the technology that EPA has 
identified as BTA, based on available data from eight episodes of 
sampling collected on three different waterbody types over all seasons 
(see Chapter 11 of the TDD for more information). EPA expects 
facilities to track their compliance with the annual average standard 
on an ongoing basis, and to proactively modify their technology or 
operations when any individual monthly average suggests that they may 
be in danger of exceeding the annual average standard in the future. 
EPA recognizes that some variability in the annual average is 
inevitable, and thus the only way to consistently achieve the 12 
percent annual standard is to target a better level of performance as 
the long-term average performance. While EPA's data show a long-term 
average performance of 12 percent impingement mortality for the BTA 
technology, EPA believes that by continuously monitoring and adaptively 
adjusting the operation of the technology, facilities can achieve a 
better long-term performance than is documented in the data, and thus 
consistently meet the annual average.
---------------------------------------------------------------------------

    \51\ The annual average should not be confused with a rolling 
average of the preceding 12 months; EPA has specified in the rule 
language at Sec.  125.96 that the annual average means 12 
consecutive months as specified by the Director. EPA expects that 
compliance with the annual average standard would be determined once 
each calendar year.
---------------------------------------------------------------------------

    EPA also considered applying a confidence or tolerance limit to the 
long-term average in deriving the annual average standard. EPA rejected 
this approach because EPA believes that facilities can achieve better 
long-term performance than documented in the data by maintaining tight 
control on their technology and operations and adaptively managing the 
technology to achieve the best possible performance. While EPA has not 
included any additional costs for this adaptive management, EPA 
believes that such adaptive management should be part of the routine 
maintenance and operation of the technology and additional costs should 
not be necessary.
    EPA has occasionally used annual limits in the effluent guidelines 
program (most recently for the pulp and paper industry category (40 CFR 
430, promulgated in 1998) and has previously not included a variability 
factor for annual limits. Thus, EPA's proposed approach to calculating 
the annual standard for mortality impingement is consistent with past 
practice. EPA requests comment on its proposed approach for calculating 
and implementing the annual standard.
    This technology does not minimize adverse environmental impacts 
associated with entrainment, and does not specifically address 
impingement mortality of shellfish.
    EPA selected the seasonal deployment of barrier nets on estuaries 
and oceans as the best performing technology for minimizing the 
impingement mortality of shellfish (crustaceans) because no other 
technology has been identified that is available, demonstrated, and 
feasible. EPA did not select wedgewire screens as a candidate 
technology for impingement mortality because wedgewire screens are not 
available and feasible for all existing facilities. Wedgewire screen 
performance requires an adequate crossflow of the source water that is 
not present in all waterbodies. Wedgewire screens also require a 
minimum water depth in order to fully submerge the screens; the 
requisite depth and space to submerge the screens is not available at 
all locations, and further may pose an obstacle to navigation. However, 
where passive screens such as cylindrical wedgewire screens are 
feasible, data in the record shows they would perform equally as well 
or better than seasonal deployment of barrier nets. EPA has included a 
provision in the proposed regulation that specifies that passive 
screens meet the IM requirement for shellfish.
    One technology for reducing impingement mortality as well as 
reducing entrainment mortality is wet cooling towers. Mechanical 
cooling towers achieve flow reductions of 97.5 percent for freshwater 
and 94.9 percent for saltwater sources by operating the towers at a 
minimum of 3.0 and 1.5 cycles of concentration, respectively. Based on 
the high levels (greater than 95 percent on average) of flow reduction 
obtained by optimized cooling tower operation, EPA has identified wet 
cooling towers as a candidate best performing technology for both 
impingement mortality and entrainment mortality for new units at 
existing facilities. As discussed further below, EPA is not proposing 
cooling towers as BTA for existing facilities (other than new units) 
because it is not available on a national basis. As described in 
Section VI.B, other technologies are demonstrated, but are not the best 
performing technologies and/or are not

[[Page 22204]]

available technologies for the industry as a whole.
    Although, EPA's record shows numerous instances of existing 
facility retrofits to closed-cycle, EPA has not identified it as BTA 
for the reasons discussed below. EPA has also not identified any other 
available and demonstrated candidate technology for entrainment 
mortality that is available on a national basis; see Section VI.B and 
the TDD for other entrainment technologies that may be available on a 
site-specific basis. EPA did not select the other flow reduction 
technologies such as variable speed drives and seasonal flow reductions 
as the technology basis for entrainment mortality because these 
technologies are not feasible for all facilities. Further, EPA has not 
identified a basis for subcategorizing existing facilities for where 
these flow reduction technologies are feasible, because their seasonal 
operation depends on the site-specific biology of the facility. EPA did 
not select relocation of a shoreline intake to far offshore as a 
technology basis because this technology is not feasible for all 
facilities. Even if EPA subcategorized by water body type (i.e., intake 
location), the performance of wet cooling towers for entrainment 
mortality is at least three times that of a far offshore intake. 
Therefore relocation of the intake is not the best performing 
technology for minimizing entrainment mortality.

D. Options Considered for Today's Proposed Regulation

    After careful consideration of the technologies available as 
described in Section VI.C, EPA developed four primary options based on 
these technologies for today's proposed rule. Three of the options 
would require the same impingement mortality standards, but would vary 
the approach to entrainment mortality controls. The fourth option would 
allow both impingement and entrainment mortality controls to be 
established on a site-specific BPJ basis for facilities with a DIF less 
than 50 MGD. The options are described briefly below, followed by a 
discussion of EPA's evaluation of each option as BTA.
1. Option 1--Uniform Impingement Mortality Controls at All Existing 
Facilities; Site-Specific Entrainment Controls for Existing Facilities 
(Other Than New Units) That Withdraw Over 2 MGD DIF; Uniform 
Entrainment Controls for All New Units at Existing Facilities
    Under this option, all existing facilities withdrawing more than 2 
MGD would be required to meet either the design or the performance 
standard for impingement mortality. Entrainment controls would be 
established by the permitting authority on a case-by-case basis taking 
into account those factors at a particular facility that are specified 
in today's proposal and the information required by the existing permit 
regulations at Sec.  122.21(r)(1)-(8) for all facilities with at least 
2 MGD DIF. In addition, under EPA's CWA sections 301, 308, 316(b), and 
402 authority, in the case of facilities withdrawing greater than 125 
MDG AIF (actual intake flow), the site-specific determination of BTA 
would be based on a submission of certain other required information. 
The proposal would amend the permit application requirements at Sec.  
122.21(r)(9)-(11) to require the facility to prepare an Entrainment 
Characterization Study that would fully characterize the amount of 
entrainment at the facility. (See below for more details about the 
study). In addition, under the proposal, the facility would provide 
detailed information on the other factors relevant to the Director's 
site-specific BTA determination. These would include information 
concerning the technologies available for control of such entrainment, 
the costs of controls, the non-water quality impacts of such controls, 
and both the monetized and non-monetized benefits of such controls. The 
CWA requires, and EPA encourages, the public to have a role in the 
permitting process; therefore EPA has also included meaningful public 
opportunity for participation in the site-specific decision making to 
help ensure the soundness of both the information and subsequent 
determinations.
a. Impingement Mortality Controls
    As described earlier in this section, traveling screens have 
undergone a number of technological improvements over the years and 
modern screens have proven to be highly effective in promoting the 
survival of impinged organisms. The proposed rule requires the use of 
state-of-the-art screens with fish buckets, a low pressure spray wash, 
a dedicated fish return line, etc., but is not specifying any 
particular screen configuration, mesh size or screen operations, so 
long as facilities can consistently meet the numeric impingement 
mortality limits (impingement mortality also includes a design standard 
for shellfish). EPA is also not specifying additional design or 
operational criteria to promote development of improved technologies, 
and to allow facilities to use variations such as dual flow traveling 
screens and drum screens.
    EPA did not select intake velocity as the sole technology basis for 
impingement mortality controls because, although the performance of 0.5 
feet per second intake velocity is slightly better than the selected 
technology, the intake velocity is not available or feasible for all 
existing facilities (see Chapter 6 of the TDD). However, EPA has long 
recognized the relationship between impingement and intake velocity. 
EPA conducted an analysis of fish swim speeds in the Phase I rule (see 
66 FR 65274) and concluded that a design through-screen velocity of 0.5 
feet per second would be protective of 96% of motile organisms. As a 
result, a facility may chose to comply with the impingement mortality 
standards in today's proposed rule by instead demonstrating that the 
through-screen design velocity does not exceed 0.5 feet per second, or 
by demonstrating that the actual average intake velocity does not 
exceed 0.5 feet per second.
    While the data shows the majority of healthy motile organisms would 
be protected by a maximum intake velocity of 0.5 feet per second, some 
species would not be adequately protected. Some facilities employ 
traveling screens, but do not have fish friendly modifications such as 
a fish handling and return system. EPA is concerned that some 
facilities would comply with the impingement mortality requirements by 
the intake velocity compliance alternative, and would continue to 
operate unmodified traveling screens. This is particularly a concern 
where the traveling screens are located in a forebay, potentially 
resulting in entrapment of any impinged organisms. Therefore, EPA is 
considering a provision that would require facilities to either 
demonstrate that the species of concern are adequately protected by the 
maximum intake velocity requirements, or to employ specific fish 
friendly protective measures including, at a minimum, a fish handling 
and return system. EPA solicits comment and data on such a provision.
    EPA did not select wedgewire screens as the technology basis for 
impingement mortality controls because wedgewire screens are not 
available and feasible for all existing facilities. EPA also did not 
need to include wedgewire screens as a compliance alternative because 
wedgewire screens designed with an intake velocity of 0.5 feet per 
second can demonstrate compliance with the impingement mortality limits 
based on the intake velocity as just described. EPA did not select flow 
reduction by retrofit to closed-cycle cooling as the technology basis 
for impingement mortality because closed-cycle cooling

[[Page 22205]]

costs more than 10 times that of modified traveling screens with a fish 
return system. In other words, modified traveling screens with a fish 
return system and closed-cycle cooling are comparable in impingement 
mortality performance, but modified traveling screens with a fish 
return system is more cost-effective than flow reduction at preventing 
impingement mortality. EPA is not including wet cooling towers as a 
compliance alternative (e.g., a pre-approved technology) because EPA's 
data shows existing facilities that retrofit to a closed-cycle cooling 
system have an intake velocity of less than 0.5 feet per second. As a 
practical matter, make-up water withdrawals are made at such low 
velocities that facilities with closed-cycle can demonstrate compliance 
with the alternative reduced intake velocity to meet the impingement 
mortality limits. For estuaries and oceans, EPA is proposing seasonal 
deployment of barrier nets on estuaries as the technology basis for 
minimizing the impingement mortality of shellfish (crustaceans) because 
no other technology has been identified that is available, 
demonstrated, and feasible. As noted previously, use of wedgewire 
screens (along with the limitations on intake velocity) obviates the 
need for barrier nets.
b. Entrainment Controls
    The proposal would require consideration of site-specific 
entrainment controls for each facility above 2 MGD DIF. EPA considered 
proposing no further controls to address entrainment mortality, and to 
rely instead only on the BTA impingement mortality controls, which 
would achieve up to a 31 percent reduction in total AEI. EPA has not 
selected this option as the basis for national BTA because EPA believes 
that some facilities may be able to do more to control entrainment and 
that requiring a structured site-specific analysis of candidate BTA 
technologies for entrainment control will allow the Director to 
determine where it is appropriate to require such controls. However, 
one outcome of the site specific analysis may be that the Director 
would determine that no other technologies beyond impingement control 
meet the criteria for selection as BTA, because no other technologies 
are feasible and/or their benefits do not justify their costs. EPA 
requests comment on the option of basing national BTA on impingement 
controls only and dropping the specific requirement for a structured 
site-specific analysis of entrainment BTA options, as discussed below.
    In the case of site-specific entrainment controls for facilities 
withdrawing greater than 125 MGD AIF, EPA's proposal would, in 
addition, require these facilities to develop and submit an entrainment 
characterization study for use by the Director in establishing site-
specific BTA. See Section V.F for more on development of the 125 MGD 
threshold. (Facilities under the 125 MGD AIF threshold must still 
provide certain water body and water population information under the 
current permit applications requirements at Sec.  122.21(r)). An early 
step in conducting the entrainment characterization study is the 
preparation of an entrainment mortality data collection plan, which 
must be submitted to the Director for review and comment before 
implementation. The entrainment mortality data collection plan would 
include, at a minimum, the specific entrainment monitoring methods, 
taxonomic identification, latent mortality identification, 
documentation of all methods, and quality assurance/quality control 
procedures for sampling and data analysis appropriate for a 
quantitative survey. EPA would also require peer review of the 
entrainment mortality data collection plan. Peer reviewers would be 
selected in consultation with the Director who may consult with EPA and 
federal, State, and Tribal fish and wildlife management agencies with 
responsibility for fish and wildlife potentially affected by the 
cooling water intake structure(s).
    The Entrainment Characterization Study would include information 
already collected to meet current Sec.  122.21(r)(4) requirements. In 
addition, under the new permit application requirements proposed for 
Sec.  122.21(r)(5)-(12), the facility would submit certain additional 
site-specific information. This would include an engineering study of 
the technical feasibility and incremental costs of candidate 
entrainment mortality control technologies. The facility would also 
study, evaluate, and document: the technical feasibility of 
technologies at a minimum including closed-cycle cooling and fine mesh 
screens with a mesh size of 2 mm or smaller; engineering cost estimates 
of all technologies considered; any outages, downtime, or other impacts 
to revenue along with a discussion of all reasonable attempts to 
mitigate these cost factors; and a discussion of the magnitude of water 
quality and other benefits, both monetized and non-monetized, of the 
candidate entrainment mortality reduction technologies evaluated. 
Finally, the information must include a discussion of the changes in 
non-water quality factors attributed to technologies and/or operational 
measures considered, including but not limited to increases and 
decreases in the following: energy consumption; thermal discharges; air 
pollutant emissions including particulates and associated human health 
and global climate change impacts; water consumption; noise; safety 
(e.g., visibility of cooling tower plumes, icing); grid reliability, 
and facility reliability. See Section IX for a thorough discussion of 
these study requirements.
    Under this option, it is EPA's expectation that the Director would 
review the candidate technologies for entrainment mortality control 
that at a minimum includes closed-cycle cooling and fine mesh screens. 
In the decision about what additional entrainment controls (if any) to 
require, the Director would consider all of the facility-specific 
factors described above. At a minimum, the Director must provide a 
discussion explaining how issues concerning local energy reliability, 
air emissions or land availability insofar as they relate to the 
feasibility of adoption of a particular entrainment technology, 
remaining useful plant life, and the relationship of social benefits to 
social costs were addressed in the site-specific determination. Under 
the proposal, the Director must issue a written explanation for the 
basis of the BTA determination for each facility. EPA also expects the 
written explanation would provide a review of the social costs (and not 
just the facility costs (see chapter 11 of the EA) of the various 
technologies; a review of the potential reductions in entrainment and 
entrainment mortality; and a review and analysis of monetized and non-
monetized benefits).
    Under Option 1, new units at an existing facility that withdraws 
more than 2 MGD would have requirements similar to the requirements of 
a new facility in Phase I. Under this option, new units would be 
required to reduce flow commensurate with closed-cycle cooling for the 
new unit. Under the proposal, as with Track II of the Phase I rule, a 
facility could demonstrate compliance with entrainment control 
requirements by establishing reductions in entrainment mortality for 
the new unit that are 90 percent of the reductions that would be 
achieved by closed-cycle cooling.

[[Page 22206]]

2. Option 2--Impingement Mortality Controls at All Existing Facilities 
That Withdraw Over 2 MGD DIF; Require Flow Reduction Commensurate With 
Closed-Cycle Cooling by Facilities Greater Than 125 MGD DIF and at New 
Units at Existing Facilities
    Under Option 2, all in-scope existing facilities would be required 
to achieve the numeric impingement mortality limits described in Option 
1 above. In addition, this option would require flow reduction 
commensurate with closed-cycle cooling by facilities greater than 125 
MGD DIF and at new units. Option 2 explores using the facility size, in 
terms of design intake flow (DIF), as a factor for establishing 
different BTA for different subcategories. EPA's analysis shows that a 
DIF of 125 MGD would be an appropriate threshold for this purpose; see 
Section V. For all facilities that withdraw over 2 MGD but less than or 
equal to 125 MGD DIF, entrainment controls would be determined by the 
permitting authority on a case-by-case basis taking into account the 
factors at a particular facility. Facilities greater than 125 MGD DIF 
would not submit Entrainment Characterization Studies (because under 
this option this rule would have already determined that closed cycle 
is BTA for that facility), but all facilities would still submit Sec.  
122(r)(2)-(r)(7) to the Director to inform the BTA determination as 
described in Option 1. Requirements for new units at an existing 
facility would be the same as described in Option 1.
    EPA also considered a variation of this option that uses 125 MGD 
Actual Intake Flow (AIF) rather than 125 MGD Design Intake Flow (DIF) 
as the threshold. Setting the threshold at 125 MGD AIF would allow a 
Permit Director to treat differently those facilities that are above 
125 MGD on a DIF basis but below 125 MGD on an AIF basis relative to 
today's Option 2. EPA traded off introducing more flexibility at those 
facilities for simplicity of implementation (DIF is static), but 
solicits comment on both the threshold and the flow basis for this 
option.
    The technology basis for entrainment mortality controls for 
facilities greater than 125 MGD DIF under this option would be wet 
cooling towers as described in Section VI.B. The record shows optimized 
wet cooling towers achieve flow reductions of 97.5 percent and 94.9 
percent for freshwater and saltwater sources, respectively. Optimized 
operation of wet cooling towers would be demonstrated through flow 
monitoring and conductivity measurements. Alternatively, this option 
would allow facilities to demonstrate flow reductions commensurate with 
closed-cycle cooling based on optimized wet cooling towers.
    As part of this option, EPA would provide flexibility to the 
Director to establish compliance timelines for each existing facility 
to mitigate grid reliability and local electricity reliability. Under 
this option, most existing facilities would have no more than 10 years 
to complete the retrofit to closed-cycle cooling. Under this option the 
Director would determine when and if any such schedule for compliance 
is necessary, and if the facility is implementing closed-cycle as soon 
as possible. This provision would give the Director the discretion to 
provide nuclear facilities with no more than 15 years to complete the 
retrofit, because all nuclear facilities are baseload generating units 
and the additional flexibility in timelines would further mitigate 
energy reliability, and because the retrofits at these types of 
facilities in particular involve additional complexities and safety 
issues. The Director would have the discretion to provide manufacturing 
facilities with no more than 15 years to complete the retrofit due to 
the complexity of manufacturing facilities, multiple process units and 
product lines, and to allow consideration of production schedules in 
setting such a timeline.
3. Option 3--Establish Impingement Mortality Controls at All Existing 
Facilities That Withdraw Over 2 MGD DIF; Require Flow Reduction 
Commensurate With Closed-Cycle Cooling at All Existing Facilities Over 
2 MGD DIF
    Under this option, all in-scope existing facilities would be 
required to achieve numeric impingement mortality limits as described 
in Option 1 above. In addition, this option would require flow 
reduction commensurate with closed-cycle cooling by all facilities 
(including new units at existing facilities) as described in Option 2. 
This option would similarly authorize the Director to establish 
compliance timelines for each existing facility to mitigate grid 
reliability and local electricity reliability as described in Option 2 
above. Requirements for new units at an existing facility would be the 
same as described in Option 1.
4. Option 4--Uniform Impingement Mortality Controls at Existing 
Facilities With Design Intake Flow of 50 MGD or More; BPJ Permits for 
Existing Facilities With Design Intake Flow Between 2 MGD and 50 MGD 
DIF; Uniform Entrainment Controls for All New Units at Existing 
Facilities
    Under Option 4, only in-scope existing facilities with a design 
intake flow of 50 MGD or more would be required to comply with uniform 
national impingement regulatory requirements as described in Option 1 
above. In-scope facilities with a design intake flow less than 50 MGD 
would not be subject to the national impingement requirements in 
today's proposed rule but would continue to have their 316(b) permit 
requirements established on a case-by-case, best professional judgment 
basis. In the case of an existing facility below 50 MGD that adds a new 
unit, the flow associated with the new unit would be subject to the 
uniform entrainment requirements based on closed cycle cooling. 
Finally, all existing facilities withdrawing in excess of 2 MGD of 
design intake flow would be subject to entrainment controls established 
on a site-specific basis.
    EPA considered additional thresholds, subcategories, and other 
factors to explore other options; see Chapter 7 of the TDD for more 
information. In particular, EPA considered an approach that required 
impingement mortality controls only, but is not proposing such an 
approach because it would only address one-third of the mortality due 
to impingement and entrainment on a nationwide basis and EPA believes 
there is value in the structured site-specific entrainment BTA 
determination required in Option 1. As discussed in Section VI.E, EPA 
is aware of technologies that can further reduce entrainment mortality 
for some facilities. EPA also considered an approach that would 
establish both impingement and entrainment mortality requirements on a 
case-by-case basis taking into account the factors at a particular 
facility, but is not proposing such an approach because there are low-
cost technologies for impingement mortality that are available, 
feasible, and demonstrated for facilities on a national basis. EPA 
requests comment on these and the other approaches discussed in Chapter 
7.

E. Option Selection

    EPA is proposing Option 1 as best technology available for 
minimizing adverse environmental impact under section 316(b) of the 
CWA. As previously explained, in evaluating

[[Page 22207]]

technologies that reduce impingement or entrainment mortality as the 
possible basis for section 316(b) requirements, EPA assessed a number 
of different technologies. Based on this technology assessment, EPA 
concluded that closed-cycle cooling reduces impingement and entrainment 
mortality to the greatest extent.
    But EPA has determined that closed cycle cooling is not the ``best 
technology available'' for this proposal. After considering all of the 
relevant factors, EPA proposes that it should not establish a uniform 
BTA entrainment standard based on closed-cycle cooling for existing 
facilities other than for new units. Instead, for existing facilities 
other than new units, EPA is proposing that the permitting authority 
should establish BTA entrainment mortality controls on a site-specific 
basis. Site-specific proceedings are the appropriate forum for weighing 
all relevant considerations in establishing BTA entrainment mortality 
controls as discussed in section F below.
    EPA proposes to reject closed-cycle cooling as the basis for 
national entrainment controls and choose an option under which the 
permitting authority would establish entrainment controls on a site-
specific basis after considering specified factors. EPA concluded that 
closed-cycle is not the best technology available for minimizing 
adverse environmental impact on a national basis. The record shows that 
closed-cycle cooling is not practically feasible in a number of 
circumstances. While EPA cannot identify with precision the extent of 
these limitations on installation on closed-cycle on a nation-wide 
basis, EPA knows that the circumstances are not isolated or 
insignificant. In light of this, EPA decided that it should not 
establish closed-cycle cooling as the presumptive BTA entrainment 
control. Instead, entrainment controls should be determined in a site-
specific setting where the opportunity for local community input in 
decision-making process will be maximized.
    Four factors, in particular, led EPA, for this proposal, to reject 
a uniform standard based on closed-cycle cooling and illustrate why 
site-specific standard setting is the proper approach here. These 
factors are energy reliability, air emissions permits, land 
availability, and remaining useful plant life. Further explanation is 
provided below as to why these factors support establishing BTA 
entrainment mortality control on a site-specific basis as discussed in 
section F below.
    As noted, the Supreme Court in its Entergy decision determined that 
EPA may permissibly consider the benefits, both quantitative and 
qualitative, derived from reductions in the adverse environmental 
impacts associated with cooling water intake structures and the costs 
of achieving them and determine the extent of reductions warranted 
under the circumstances. Further, E.O. 13563 directs agencies, to the 
extent permitted by law, to propose or adopt a regulation only upon a 
reasoned determination that its benefits justify its costs (recognizing 
that some benefits and costs are difficult to quantify). E.O. 13563, 
Sec. 1(b)(1).
    Pursuant to the principles spelled out in the Executive Order, EPA 
has assessed costs and benefits for its proposed regulatory option and 
has reasonably determined that the benefits of its proposed rule 
justify the costs. EPA has analyzed the social cost of this rule to be 
$384 million annually. New unit requirements would cost $15 million per 
year. As will be described in more detail below, there are significant 
benefits associated with the proposed rule. These benefits include the 
annual reduction in impingement of 615 million age-one equivalents. In 
addition, there are important other benefits that EPA was not able to 
fully quantify such as reductions in impingement and entrainment at new 
units, impacts to many shellfish species, and non-use values associated 
with the vast majority of fish and shellfish. The rule would also 
require establishing site-specific entrainment control through a 
process in which specific environmental conditions and the localized 
benefits of entrainment reductions will be assessed along with the 
costs of controls. The information generated in the required studies 
would enhance the transparency of decision-making, and the opportunity 
for meaningful public participation and ensure decision-making based on 
the best available data. Overall, these requirements will foster 
protection and restoration of healthy aquatic ecosystems that have 
important commercial, recreational, aesthetic and cultural values to 
their surrounding communities. Many of the benefits that would result 
from the rule are not quantified, and as a result the Agency's 
quantitative benefits analysis underestimates the totality of the 
rule's benefits. Based on the record, EPA has determined that the 
proposed impingement and entrainment mortality controls will result in 
benefits that justify the costs of the rule.
    EPA would also note that its valuation of the benefits is not yet 
complete. For example, EPA's analysis does not fully quantify or 
monetize certain potentially important categories of benefits, such as 
existence values for threatened and endangered species, secondary and 
tertiary ecosystem impacts, benthic community impacts, shellfish 
impacts and the impacts arising from reductions in thermal discharges 
that would be associated with closed cycle. Changes in fish assemblages 
due to impingement, entrainment and thermal effects are also not fully 
valued. These categories of benefits that are not fully valued are 
often referred to as non-use benefits: those benefits people derive 
absent a use or activity, such as fishing; the value one places on 
knowing that an aquatic ecosystem is healthy is a non-use value. Non-
use benefits could be more completely evaluated than they have been to 
date. EPA intends to characterize these benefits more fully through the 
use of a stated preference survey of the general population and will 
consider the results of this survey analysis in development of the 
final rule. Although not discussed in this preamble, EPA also conducted 
an alternative benefits analysis that is suggestive of the potential 
for a more complete analysis to result in monetary benefits that are 
much more in line with social costs (see chapter 9 of the EEBA). These 
factors all lend further support to EPA's conclusion that benefits 
associated with the proposal justify its costs.
    EPA is proposing that the permitting authority would consider 
social costs and benefits on a site specific basis in establishing 
entrainment mortality controls. This approach is consistent with the 
direction of E.O. 13563 and supported by several considerations.
    On the basis of currently available information, a national 
evaluation of benefits no matter how accurate would necessarily fail to 
account for the variations in benefits from location to location. A 
national assessment would tend to mask variations in benefits and costs 
from different geographical locations for different water bodies. Thus 
for example, some fish species at coastal facilities have biological 
spawning attributes that differ from those at other locations. The 
proportion of the receiving water withdrawn for cooling may also vary 
among sites. The values that communities place on their resources may 
vary from site to site. As a consequence, for example, one ecological 
environment may experience large masses of hardier eggs subject to 
potential entrainment while another will have fewer but less hardy eggs 
susceptible to entrainment. The resulting differences in the value of 
reduced entrainment--which may be dramatic for some sites--necessarily 
disappear in a national aggregation of

[[Page 22208]]

results. The Agency has decided this masking of variation in benefits 
supports a requirement to consider the localized benefits of 
entrainment control technologies in the site-specific process to 
establish entrainment mortality controls.
    Today's proposed rule establishes requirements based on closed-
cycle cooling for new units added to an existing facility that are not 
a ``new facility'' as defined at Sec.  125.83. The requirements for new 
units are essentially the same as the requirements for a new facility 
in the Phase I rule.
    EPA also considered a variation of Option 1 that would exclude 
existing facilities (except existing facilities that add a new unit) 
with a design intake flow under 50 MGD from the national impingement 
mortality requirements of today's proposal (Option 4). These smaller 
facilities would continue to be permitted on a case-by-case, best 
professional judgment basis for both impingement and entrainment 
controls. Under this option, 98.9 percent of the monetized benefits of 
Option 1 are realized. In addition, almost all small businesses would 
be excluded from the impingement requirement of the national rule, 
thereby reducing impacts of the national rule to small businesses. The 
cost of Option 4 would result in savings of $57 million over Option 1.
    EPA rejected Option 4 for the proposal as BTA because EPA found 
that Option 1 is available, feasible, and demonstrated for all in-scope 
facilities on a national basis. Moreover, EPA analysis showed that 
economically Option 1 does not have a significant impact on a 
substantial number of small entities, including those that would be 
exempted from the national impingement mortality controls under Option 
4. Of the 13 full-facility closures discussed below in Section VII, 
none are predicted to be small businesses. Additionally, the analysis 
performed under the Regulatory Flexibility Analysis showed that under 
Option 1, five to six small entities would incur costs exceeding 1 
percent of revenue and 3 small entities would incur costs exceeding 3 
percent of revenue. As percentages of the estimated total of small in-
scope entities (56-96 small in-scope entities, see above), these small 
entities represent 5-13 percent of small in-scope entities at the 1 
percent of revenue threshold, and 3-5 percent of small in-scope 
entities at the 3 percent of revenue threshold.
    Option 4 is similar to the final determination with respect to the 
Phase III rule, which relied on BPJ to determine impingement and 
entrainment BTA for all facilities with DIF less than 50 MGD. Unlike 
the Phase III determination, Option 4 would not rely on BPJ for new 
units at existing facilities or manufacturing facilities with DIF 
greater than 50 MGD. This is consistent with the recommendations of the 
Small Business Advocacy Review Panel for the Phase III rule, which 
noted that an applicability threshold in the range of 20 to 50 MGD 
would remove a significant number of Phase III facilities, but only a 
small percent of flow, from coverage under national requirements, and 
recommended that EPA analyze a range of potential thresholds, 
particularly those between 20 and 50 MGD. EPA is also aware of concerns 
that even though Option 1 by itself does not have a significant adverse 
impact on a substantial number of small entities, many of the small 
entities affected by the rule, particularly those in the electric power 
sector, are subject to cumulative impacts from a number of other major 
regulations that will likely have to be implemented in the same time 
frame as this rule. For the final rule, EPA will also evaluate the 
relative costs and benefits of Option 4, once it has more complete 
benefits information, including results from its WTP Survey on impacts 
to fish populations. EPA solicits comment on Option 4 and the impacts, 
including the cumulative impacts of today's proposal on small entities 
generally. EPA also requests comment on whether, if Option 4 were 
adopted for the final rule, it should include uniform national 
requirements for new units at existing facilities with DIF less than 50 
MGD based on closed-cycle cooling.

F. Four Factors Support EPA's Decision To Establish Site-Specific BTA 
Entrainment Controls for Existing Facilities

    The four key factors that support determining entrainment mortality 
controls on a site-specific basis (except with respect to new units) 
and rejecting Options 2 and 3 are energy reliability, increased air 
emissions, land availability, and remaining useful life. First, EPA 
recognized that there may be potential adverse consequences to the 
reliability of energy delivery on the local level from the installation 
of cooling towers. Second, EPA also is aware that increased air 
emissions may be associated with increased combustion of fossil fuel as 
the result of installation of closed cycle cooling, and additional PM 
formulation associated with plume drift (even with plume abatement 
technology). These increased air emissions have human health, welfare, 
and global climate change impacts which must be considered. 
Furthermore, it may be difficult or impossible to obtain air permits 
for cooling towers at existing facilities located in nonattainment 
areas or attainment areas with maintenance plans. Third, EPA has 
identified land availability concerns that might limit the feasibility 
of the installation of cooling towers on a site-specific basis. 
Finally, EPA concluded that there are circumstances in which 
construction and installation of cooling towers might not be warranted 
given the remaining useful life of a particular facility. How all of 
these factors support the Agency's conclusion that site-specific, not 
national, entrainment controls for most existing facilities except 
those installing new units is discussed in detail below.
1. Energy Reliability Should Be Considered on a Localized Basis
    During EPA's site visits, several urban areas were identified where 
the existing transmission system would not be able to transfer 
sufficient electricity during periods of extended downtime. This 
limitation to reliability occurs even when a surplus of electricity can 
be generated within the same NERC region. For example, EPA identified 
localized circumstances in Los Angeles and Chicago where an extended 
outage of one or more generating units could not be readily replaced by 
excess capacity in nearby areas. Currently available models are not 
able to predict localized impacts, and instead are limited to measures 
of reserve capacity in broader geographic regions. This uncertainty 
about the extent and likelihood of local reliability impacts is an 
important consideration in the decision to propose requiring site-
specific development of section 316(b) entrainment requirements.
    One approach EPA could have adopted in today's proposed rule would 
have been to establish a uniform entrainment requirement and then to 
address these local reliability concerns by providing permitting 
authorities the flexibility to establish extended compliance timelines 
(i.e., 10 to 15 years) (see Option 2). This would have allowed 
facilities to develop more workable construction schedules with their 
permit writers and coordinate with NERC to schedule installation down 
times accounting for generating supply reliability needs. This approach 
would have been consistent with EPA's assessment that, at the national 
level (rather than local level), closed-cycle cooling would not pose 
material energy reliability consequences; see EA for more information. 
EPA was concerned that such a flexible approach, however, would not 
resolve all local reliability

[[Page 22209]]

concerns, because currently available information is not adequate to 
establish either the extent or significance of possible electric 
reliability concerns.
    These same concerns would not apply in the case of the installation 
of new units because of the smaller nature of such projects and the 
availability of options like seasonal operation and portable cooling 
towers to address the flow reduction requirements. Since the unit is 
not yet online, the potential for local energy reliability to be 
compromised is minimal; also, local energy reliability is likely 
improved with the addition of the new unit, even if older units are 
later retired.
2. Increased Air Emissions Could Be a Factor on a Local Basis
    As previously discussed, closed-cycle cooling would result in 
increased air emissions of various pollutants, including particulates, 
sulfur dioxide, nitrogen oxides, mercury, and greenhouse gases, among 
others.\52\ As a result of the installation of closed-cycle cooling 
structures, fossil-fueled facilities would need to burn additional fuel 
(thereby emitting additional PM, CO2, SO2, 
NOX, and Hg). There are two reasons for this: (1) To 
compensate for energy required to operate cooling towers, and (2) 
slightly lower generating efficiency attributed to higher turbine 
backpressure. In contrast to retrofits, new units can have their 
cooling water intake systems optimized for cooling towers, reducing the 
size of the cooling towers, increasing their efficiency, and reducing 
energy requirements (see Section VI.E).
---------------------------------------------------------------------------

    \52\ EPA recognizes that retrofitting closed cycle cooling could 
be combined with other energy efficiency or pollution control 
technologies with the net effect of reducing air emissions; however, 
facilities could (and may well have to under other rules) install 
such technologies anyway, without converting to closed cycle cooling 
as well. Comparing closed-cycle cooling to once-through cooling with 
all other technologies held constant, there is an energy penalty 
that would lead to greater air emissions.
---------------------------------------------------------------------------

    The impact of the increased emissions varies based on the local 
circumstances. The increased emissions may consist of cooling tower 
emissions, stack emissions from increased fuel usage, and plumes of 
water vapor. EPA's analysis suggests that the most significant impacts 
will be specifically for PM2.5, which, in addition to 
increased mortality and morbidity, may result in a facility having 
difficulty in obtaining air permits in those localities in non-
attainment for PM2.5 because of the need to identify offsets 
to its emissions. EPA notes that while there is the potential for 
increases in PM (e.g., salt drift) in the vicinity of any wet cooling 
tower, there are plume abatement and drift eliminator technologies that 
may address this concern (and EPA has included costs for such 
technologies in its analysis of Options 2 and 3). However, emissions 
may not be eliminated entirely. EPA expects most effects of PM from 
cooling tower emissions would be so localized as to be wholly on the 
facility's property. (See DCN 10-6954.) EPA recognizes this is separate 
from PM emissions from the stack as a result of increased fuel usage. 
In addition, plumes of water vapor from the cooling tower may cause 
safety issues due to icing of nearby roadways, and visibility 
constraints for facilities located near an airport. EPA's review of 
emissions data from E-GRID (year 2005) suggests that impacts from other 
pollutants will be less significant, but on a localized basis these 
could still be significant. They include human health, welfare, and 
global climate change impacts associated with a variety of pollutant 
that are emitted from fossil fuel combustion generally. EPA is not able 
to quantify the frequency with which facilities may experience these 
local impacts, and therefore EPA believes a site-specific assessment 
must be conducted to fully address such local impacts.
    EPA believes that emissions are less of a concern at new units. The 
condensers can be optimized for closed-cycle, reducing energy 
requirements, and high efficiency cooling towers can be incorporated 
into the design of the new unit, potentially allowing for installation 
of smaller cooling towers. Turbine backpressure and the associated 
energy penalty can be eliminated in a new unit. However, new units will 
still have a parasitic energy penalty. Therefore energy penalties and 
air emissions for tower operations can be minimized but not eliminated. 
The effects of requiring closed cycle cooling at new units of existing 
facilities is similar to the effects of this requirement at new 
facilities and would not pose an unacceptable impact. See the TDD for 
more information.
3. Land Availability Could Be A Factor on a Localized Basis
    While EPA's record indicated that the majority of facilities have 
adequate available land for placement of cooling towers,\53\ some 
facilities do have feasibility constraints. Based on site visits, EPA 
has found that several facilities have been able to engineer solutions 
when faced with limited available land. EPA attempted to determine a 
threshold of land (for example, one option explored a threshold of 
approximately 160 acres per GW) below which a facility could not 
feasibly install cooling towers. While EPA originally estimated as many 
as 23 percent of facilities would not have enough space,\54\ EPA found 
some facilities with a small parcel of land were still able to install 
closed-cycle cooling by engineering creative solutions. On the other 
hand, EPA found that some facilities with large acreage still could not 
feasibly install cooling towers due to local zoning or other local 
concerns. In conjunction with setback distances to mitigate noise and 
plume abatement (based on GPS mapping of residential areas), EPA 
estimates as many as 25 percent of facilities may have one or more 
constraints on available space that would limit retrofit of cooling 
towers for the entire facility or would result in increased compliance 
costs. At this time, EPA lacks adequate data to better analyze how land 
constraints can be accommodated at existing facilities.
---------------------------------------------------------------------------

    \53\ In the case of fossil fuel plants, scrubber controls may 
also be newly required to comply with air rules and standards.
    \54\ EPRI reported at least 6 percent of sites evaluated were 
deemed ``infeasible'' on the basis that no space was available on 
which to locate a cooling tower. (DCN 10-6951) While EPA does not 
have access to the facility level data, and is therefore unable to 
confirm the infeasibility analysis, EPRI's report supports EPA's 
assertion that there is significant uncertainty around space 
constraints for facilities to install closed-cycle cooling.
---------------------------------------------------------------------------

    In contrast, for new units, because the amount of space dedicated 
to closed-cycle would be limited to the new unit rather than the entire 
facility, space constraints would be much less of an issue. New units 
also pose the opportunity to properly design an optimized closed-cycle 
cooling system for the new unit. Retrofitting an existing facility 
would require a facility to identify (or possibly obtain) enough acres 
to accommodate the cooling towers and their tie-in. By not uniformly 
requiring facilities to retrofit to closed-cycle, EPA has determined 
that more land is available for new unit construction, especially in 
light of compact design and more efficient use of limited resources. 
Furthermore, new units and their corresponding cooling system can be 
built in stages rather than as a facility-wide retrofit.
    While EPA has concluded that space constraints would not foreclose 
the installation of closed cycle cooling for new units at existing 
facilities, EPA has concerns about whether, on a national basis, 
physical geography would constrain the full retrofit of closed-cycle 
cooling to existing facilities. Under the

[[Page 22210]]

circumstances, EPA decided not to propose uniform entrainment standards 
for all existing facilities based on closed-cycle cooling. Instead, EPA 
has determined that it should establish a process for site-specific 
determination of entrainment controls. Site-specific proceedings would 
provide the opportunity to address these issues, along with the other 
factors discussed in this preamble in determining which additional 
entrainment mortality controls, if any, are appropriate.
4. Remaining Useful Plant Life Could Be a Factor on a Facility Basis
    Many facilities are nearing the end of their useful life. 
Considering the long lead time to plan, design, and construct closed-
cycle cooling systems such as wet cooling towers, EPA proposes that the 
permit authority should be given the latitude to consider the remaining 
useful plant life in establishing entrainment mortality standards for 
that facility. The remaining useful plant life along with other site-
specific information, would affect the evaluation of the benefits (non-
monetized and monetized) of closed-cycle at a particular facility. For 
example, closed-cycle at a facility that is going to shut down in 3 
years would not result in the benefits that a facility that would 
continue to operate for 20 years. Because of this factor, EPA proposes 
that requiring closed-cycle cooling should be evaluated on a facility-
specific basis, arguing against a uniform national entrainment 
mortality standard.
    This is obviously not an issue for new units. A new unit has its 
full useful life before it and thus would experience the maximum 
possible entrainment mortality reductions throughout that useful life. 
Considering this factor, EPA is proposing that new units be treated the 
same as new facilities. EPA believes this factor, along with the other 
factors discussed above, indicates that it is reasonable to require new 
units to meet entrainment mortality requirements based on closed-cycle 
cooling.

G. The Process for Establishing Site-Specific BTA Entrainment Controls

    EPA believes that the factors discussed above support establishment 
of BTA entrainment requirements on a site-specific basis and counsels 
against establishing a national rule based on a single BTA technology 
for entrainment controls. In addition, there are other factors that 
also support site-specific decision-making. Thus, as noted, for 
example, a national weighing of cost and benefits tends to mask 
important local differences and argues for site-specific evaluations.
    As a result, EPA proposes that closed-cycle cooling for all 
existing units is not BTA on a national basis, except for new units at 
existing facilities.
    EPA has decided to propose Option 1 as the basis for national 
performance standards that represent the ``best technology available'' 
for cooling water intake structures at existing facilities. EPA 
proposes that a uniform national impingement standard coupled with 
entrainment controls determined on a site-specific basis represents the 
best technology available for minimizing the adverse environmental 
impacts associated with intake structures. EPA's proposed decision to 
reject a single uniform national entrainment standard is based on 
closed-cycle cooling not being the ``best technology available'' on a 
national basis and not warranted under the circumstances. This proposed 
decision flowed from EPA's consideration of the factors described above 
and its conclusion that determination of BTA for entrainment through a 
process that allowed full and site-specific assessment of these factors 
with respect to candidate entrainment controls including closed-cycle 
cooling represented the most appropriate course here.

H. Implementation

    EPA's proposal would require a site-specific determination of BTA. 
In that process, the permit writer would have access to all the 
information necessary for an informed decision about which additional 
technology to reduce entrainment mortality, if any, is BTA, including a 
full consideration of whether the benefits justify the costs.
    The adoption of the proposed Option 1 approach of site-specific BTA 
entrainment decisions will result in one of two outcomes at any 
facility: BTA is an entrainment mortality technology beyond what the 
facility has already installed (this may include closed cycle cooling 
or other technologies, see Section VI.B and C), or BTA requires no 
additional controls for entrainment mortality. Thus, EPA expects that, 
under the proposed approach, there will be additional entrainment 
controls for some facilities and none for others.
    EPA notes that in a number of areas of the country (California, 
Delaware, New York and New England; see, e.g., DCNs 10-6963 and 10-
6841, as well as EPA Region I's Brayton Point), permitting authorities 
have already required or are considering requiring existing facilities 
to install closed-cycle cooling operations. EPA supports those state 
efforts and determinations and thinks that similar decisions would be 
able to be made under this proposed rule.
    The proposal would require that the facility's permit application 
must include the following information: The facility would submit an 
engineering study of the technical feasibility and incremental costs of 
candidate entrainment mortality control technologies. The facility 
would also study, evaluate, and document: the technical feasibility of 
technologies at a minimum including closed-cycle cooling and fine mesh 
screens with a mesh size of 2 mm or smaller; engineering cost estimates 
of all technologies considered; any outages, downtime, or other impacts 
to revenue along with a discussion of all reasonable attempts to 
mitigate these cost factors; and a detailed discussion of the magnitude 
of water quality benefits, both monetized and non-monetized, of the 
candidate entrainment mortality reduction technologies evaluated. 
Finally, the study must include a detailed discussion of the changes in 
non-water quality factors attributed to technologies and/or operational 
measures considered, including but not limited to increases and 
decreases in the following: energy consumption; thermal discharges; air 
pollutant emissions including particulates and their health and 
environmental impacts; noise; safety (e.g., visibility of cooling tower 
plumes, icing); grid reliability, and facility reliability. See Section 
IX for a thorough discussion of these study requirements.
    Certain facilities would submit an Entrainment Characterization 
Study including an entrainment mortality data collection plan that 
would indicate, at a minimum, the specific entrainment monitoring 
methods, taxonomic identification, latent mortality identification, 
documentation of all methods, and quality assurance/quality control 
procedures for sampling and data analysis appropriate for a 
quantitative survey. EPA would also require peer review of the 
entrainment mortality data collection plan. Peer reviewers would be 
selected in consultation with the Director who may consult with EPA and 
Federal, State, and Tribal fish and wildlife management agencies with 
responsibility for fish and wildlife potentially affected by the 
cooling water intake structure(s). Further, facilities with greater 
than 125 MGD AIF must complete an Entrainment Characterization Study 
(ECS). The ECS could include information already collected to meet 
current Sec.  122.21(r)(2)-(r)(4) requirements. With the

[[Page 22211]]

information in this study, the permit writer will know more about 
potential entrainment mortality reductions. Data from the ECS would 
also corroborate any through-plant entrainment survival study results 
from Performance Studies conducted in 122.21(r)(7). Data collected as 
part of the ECS would support the Benefits Valuation Study in 
122.21(r)(11) by parsing entrainment mortality, for example, by 
recreational/commercial species and those species that are strictly 
forage species,\55\ by species most susceptible to thermal effects 
(including thermal barriers), and by species of particular local or 
regional concern and threatened and endangered species. EPA's benefits 
estimate were based on an extrapolation of available I&E mortality 
studies; the specific entrainment characterization study conducted by a 
facility may lead to a different estimate of I&E mortality for that 
facility than its portion of EPA's regional estimate in the analysis in 
Section VIII.
---------------------------------------------------------------------------

    \55\ Distinctions between predator and prey cannot be made on 
the basis of species alone; the young of some recreational and 
commercial species function as forage fish.
---------------------------------------------------------------------------

    The purpose of the ECS is to better understand, and thus help 
minimize, the impact of entrainment on species of concern. More 
specifically, the ECS should identify species of concern that may be 
entrained, and estimate their baseline mortality rates given current 
entrainment controls. Moreover, the ECS should include as much 
information as practical about the aquatic ecosystem effects of 
entrainment mortality of species of concern. An understanding of the 
potential ecosystem consequences of entrainment mortality for species 
of concern will help inform decisions about permit requirements for 
additional technologies and management practices. EPA will endeavor to 
identify high quality examples of ECSs as they are completed, and post 
them to the web site for this rule as a resource for ECS preparation.
    Following the permit writer's review of this information, the 
permit writer must determine what BTA entrainment standard to propose 
and explain in writing the basis for the proposal. The written 
explanation and the draft permit would then be available for comment 
from the interested public under the Permitting Authority's normal 
permitting process. Therefore, EPA's proposed BTA standard would 
establish uniform requirements for impingement mortality and a process 
in which BTA entrainment controls would be determined on a site-
specific basis.

I. EPA's Costing of the Preferred Option

    For the purposes of this proposal, EPA has prepared an economic 
analysis according to Executive Order 12866. For the preferred option, 
this analysis incorporates the full costs and partially monetized 
benefits of impingement controls, including the costs of conducting the 
entrainment characterization studies. There may be additional costs and 
benefits associated with reductions in entrainment mortality that 
result from the Director's BTA entrainment determinations. Because this 
process will play out over the next 10 to 15 years as Directors 
consider waterbody-specific data, local impacts, and public comment, 
and weigh costs and benefits of further entrainment reductions, air 
quality impacts, grid reliability, and land availability, estimates of 
the costs of these site-specific determinations would be highly 
speculative.
    For illustrative purposes, EPA analyzed two hypothetical outcomes 
for site-specific BTA determinations under Option 1. EPA analyzed the 
cost of closed-cycle at the 76 largest fossil fuel plants withdrawing 
from tidal waters and arrived at an annual compliance cost for these 
facilities of $762 million. EPA also analyzed a variant on the above 
scenario. EPA estimates this second scenario would involve 46 
facilities at an annual compliance cost of $480 million, assuming only 
baseload and load following facilities would retrofit to closed-cycle 
cooling.
    These hypothetical scenarios illustrate the site-specific costs if 
a significant number of facilities install and operate a closed-cycle 
cooling system. These scenarios assume facilities would install only 
closed-cycle cooling and operate it year-round. This may represent an 
upper-bound cost for those facilities. EPA also assumed that cooling 
towers will be installed at fossil fuel plants within 10 years. EPA is 
aware that there are other possible scenarios for projecting which 
facilities might be required to install closed-cycle cooling or other 
entrainment mortality technologies as a result of individual BTA 
determinations. Some of these would show lower or higher costs than 
those presented here. EPA requests comment on other scenarios that 
might better capture the range of costs that result from the structured 
analysis of entrainment mortality BTA required by today's proposed 
rule.

J. Consideration of Cost/Benefit on a Site-Specific Basis

    In establishing performance standards for entrainment controls, as 
the Supreme Court in Entergy made clear, one factor that EPA may 
consider is the costs and benefits associated with various control 
options. That is, in setting standards, EPA may consider the benefits 
derived from reductions in the adverse environmental impacts associated 
with cooling water intake structures and the costs of achieving the 
reductions. As previously explained, EPA has determined that the 
benefits of the proposed rule justify its costs. In addition, EPA has 
explained why consideration of costs and benefits is also appropriate 
in the site-specific permit setting when establishing entrainment 
controls.
    In the site-specific proceeding, the permit writer would be 
required to consider, among other factors, quantified and qualitative 
social benefits and social costs of available entrainment controls, 
including ecological benefits and benefits to any threatened or 
endangered species. The permit writer would be able to reject otherwise 
available entrainment controls if the costs of the controls are not 
justified by their associated benefits (taking into account both 
quantified and non-quantified benefits) as well as the other factors 
discussed in the proposed rule.
    In making the site-specific entrainment BTA determination, the 
proposal would require that the Director consider the information 
required under Sec.  122.21(r) to be submitted with the section 316(b) 
permit application. Further, in the case of the larger cooling water 
intake structures (125 MGD AIF or greater), the proposed rule would 
require submission of additional information including, among other 
things, studies on entrainment at the facility, the costs and 
feasibility of control options, and information on the monetized and 
non-monetized benefits of entrainment controls. In evaluating benefits, 
the Director should not ignore benefits that cannot be monetized and 
consider only the I&E reductions that can be counted. The assessment of 
benefits must take into account all benefits, including categories such 
as recreational, commercial and other use benefits, benefits associated 
with reduced thermal discharges, reduced losses to threatened and 
endangered species, altered food webs, nutrient cycling effects, and 
other nonuse benefits. Merely because there is no price tag on those 
benefits does not mean that they are not valuable.
    Under the proposal, the Director must explain the basis for 
rejecting an available technology not selected for entrainment control 
in light of the submissions, with a consideration of the

[[Page 22212]]

same four factors that argued against a uniform requirement for closed-
cycle cooling. EPA expects that the Director's decision about BTA 
controls will also reflect consideration of the costs and benefits 
(monetized and non-monetized) of the various control technologies 
considered for the facilities.
    As noted, the permit writer may reject an otherwise available 
entrainment technology as BTA (or not require any BTA controls) if the 
costs of the controls are not justified by the benefits. EPA decided to 
adopt this approach in determining site-specific entrainment controls 
because it is permissible under Entergy and consistent with the more 
than 30-year history of section 316(b) permitting decisions as well as 
E.O. 13563.
    This history illustrates the role that cost/benefit considerations 
have played. As early as 1977, EPA issued a permitting decision and a 
General Counsel opinion that explained that, while Section 316(b) does 
not require a formal cost-benefit analysis, the relationship of costs 
and benefits may be considered in 316(b) decision-making. In re Pub. 
Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1977 WL 
22370 (June 10, 1977), remanded on other grounds, 572 F.2d 872 (1st 
Cir. 1978); accord In re Central Hudson Gas & Elec. Corp., Op. EPA Gen. 
Counsel, NPDES No. 63, 1977 WL 28250, at *8 (July 29, 1977). In the 
more than 30 years since then, EPA and state permitting authorities 
have considered the relationship between costs and benefits to some 
extent in making individual permitting decisions. See, e.g., In re Pub. 
Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1978 WL 
21140 (E.P.A. Aug. 4, 1978), aff'd, Seacoast Anti-Pollution League v. 
Costle, 597 F.3d 306, 311 (1st Cir. 1979).
    Because E.O. 13563 directs agencies to propose and adopt rules only 
upon a reasoned determination that the benefits justify the costs, EPA 
is proposing to apply this same standard in BTA entrainment 
determinations. This approach is consistent with the framework EPA has 
traditionally followed and would allow for a full assessment in permit 
decisions of both qualitative and quantitative benefits and costs. As 
designed, EPA's proposed requirement for the establishment of site-
specific BTA entrainment requirements strikes an appropriate balance 
between environmental improvements and costs, allowing the permitting 
authority to consider all of the relevant factors on a site-specific 
basis and determine BTA on the basis of those factors.
    After considering all of the factors relevant to a particular site, 
the Director must establish appropriate entrainment controls at those 
facilities. The Director must review available control technology and 
may reject otherwise available entrainment controls as BTA if the 
social costs of the controls are not justified by their social benefits 
(taking into account both quantified and non-quantified benefits) or if 
there are other adverse factors that cannot be mitigated that the 
Director deems unacceptable. As designed, EPA's proposed requirement 
for the establishment of site-specific BTA entrainment requirements 
strikes an appropriate balance between environmental improvements and 
costs by electively requiring closed-cycle cooling or other entrainment 
technologies at some facilities, without requiring the same 
technologies at all facilities.

VII. Economic Impact of the Proposed Rule

    This section summarizes EPA's analysis of the social cost and 
economic impact for the following regulatory options: Option 1: 
Impingement mortality (IM) limitations based on modified traveling 
screens for all facilities with flow greater than 2 million gallons per 
day (MGD), closed cycle cooling or its equivalent for new units, and a 
site-specific determination of entrainment BTA for all other 
facilities: Option 2: Intake flow commensurate with closed-cycle 
cooling for facilities that have a design intake flow of greater than 
125 MGD and IM limitations based on modified traveling screens for all 
facilities with flow greater than 2 MGD; Option 3: Intake flow 
commensurate with closed-cycle cooling for all facilities and IM 
limitations based on modified traveling screens, for all facilities 
with flow greater than 2 MGD; and Option 4: Impingement mortality (IM) 
limitations based on modified traveling screens for all facilities with 
flow greater than 50 million gallons per day (MGD), closed cycle 
cooling or its equivalent for new units, and a site-specific 
determination of entrainment BTA for all other facilities and of 
impingements mortality controls for facilities with flow less than or 
equal to 50 MGD. These options are described more fully in Section 
VI.C.
    The first part of this section provides an overall summary of the 
costs of the regulatory options to complying facilities and federal and 
state governments. This discussion is followed by a review of the 
method for developing compliance cost estimates. The third part 
provides an estimate of the total social costs of the regulatory 
options. The final part reviews the economic impact of the regulatory 
options.

A. Overview of Costs to Complying Facilities and Federal and State 
Governments

    For estimating the total cost and economic impact of the regulatory 
options presented in this preamble, EPA estimated costs associated with 
the following cost components: Initial fixed and capital costs, annual 
operating and maintenance costs, downtime costs, recordkeeping, 
monitoring, studies, and reporting costs. The cost estimates reflect 
the incremental costs attributed only to today's proposal. For example, 
facilities with closed-cycle recirculating systems would likely already 
meet all of the proposed performance standards, and therefore most 
facilities with closed-cycle cooling would not incur costs to retrofit 
new technologies (though such facilities would still incur some 
components of permitting costs). EPA assumes, based on its technical 
survey data that most closed-cycle cooling systems operate with an 
intake velocity of less than 0.5 fps, and so would comply with the 
impingement BTA requirements. However, EPA recognizes a facility with 
closed-cycle cooling may incur additional costs to meet the proposed 
performance standards; some facilities with closed-cycle cooling were 
assumed to incur costs of modified screens with a fish handling and 
return system. Because EPA assumes the fish handling and return system 
would meet the requirements to eliminate entrapment, EPA has not 
included further costs for entrapment.
    For the economic analyses, EPA distinguished between the two 
industry groups covered by the standards for existing facilities as 
follows:

    Manufacturing and Other Industries (``Manufacturers'')--
facilities in the paper, aluminum, steel, chemicals, petroleum, food 
and kindred products, and other industries. In addition to engaging 
in production activities, some of these facilities also generate 
electricity for their own use and occasionally for sale. Electric 
power producers (``Electric Generators'')--facilities owned by 
investor-owned utilities, municipalities, States, Federal 
authorities, cooperatives, and nonutilities, whose primary business 
is electric power generation or related electric power services.

    Costs to complying Electric Generators and Manufacturers include 
technology costs, cost of installation downtime, and costs of 
administrative activities; in addition, electric generating facilities 
are expected to incur certain energy penalty costs (see

[[Page 22213]]

Chapter 3 of the EBA report for a discussion of costs to complying 
facilities and of implementation costs to federal, State, and local 
governments). Manufacturing facilities may also need additional 
electricity to run certain technologies, but if they do not produce 
this electricity themselves, these additional energy requirements are 
included in operating costs, rather than accounted for separately as an 
energy penalty. Electric Generators incurring these costs include 
facilities owned by private firms, governments, and electric co-
operatives. Manufacturers incurring these costs include facilities 
owned by private firms only. The administrative costs to federal, 
State, and local governments include the costs of rule implementation--
e.g., permits, monitoring, and working with in-scope facilities to 
achieve compliance. Costs are initially developed on a pre-tax, as 
incurred, basis. These costs underlie the analysis of the social costs 
of the regulatory options and are also used in assessing the impact of 
compliance requirements on in-scope facilities and the affected 
industrial categories. In the analysis of facility impacts, costs are 
accounted for on an after-tax basis.

B. Development of Compliance Costs

    This section describes the data and methods used to estimate 
compliance costs of the options considered and the costs of today's 
proposed rule. Costs were developed for technology controls to address 
impingement mortality separately from controls for entrainment 
mortality, as the requirements of the various rule options considered 
would lead to different technologies being used by each facility to 
comply. Some of the options considered would impose different 
compliance timelines for impingement mortality and entrainment 
mortality technologies. As a result, different methodologies were used 
and each is briefly described below. More detailed information on these 
methodologies, as well as costs of other technologies and regulatory 
approaches, are available in the TDD.
1. Combined Facility-Specific and Model-Facility Approach
    EPA develops national level costs estimates for facilities within 
scope of the various regulatory options. In general, facility-specific 
data can be used to determine what requirements apply to a given 
facility or whether that facility would already meet the requirements 
set forth in the proposed rule. This approach requires facility-
specific technical data for all of the approximately 1,200 existing 
facilities in scope. An alternative approach is to develop a series of 
model facilities that exhibit the typical characteristics of the 
affected facilities and calculate costs for each model facility; EPA 
would then determine how many of each model facility would be needed to 
accurately represent the full universe of affected facilities.
    EPA has estimated costs for potentially regulated facilities using 
a combination of the facility-specific and model facility approaches. 
The facility-specific approach used in this effort involved calculating 
compliance costs for 891 individual facilities for which EPA had 
detailed technical data from its various industry questionnaires 
regarding the intake design and technology. Specifically, these are the 
in-scope facilities that completed the detailed technical 
questionnaire. Where facilities reported data for separate cooling 
water intake structures (CWISs), compliance costs may have been derived 
for each intake and these intake costs were summed together to obtain 
total costs for each facility. These facilities became model facilities 
and each facility's costs were then multiplied by a weighting factor 
(derived from a statistical analysis of the industry questionnaire) 
specific to each facility to obtain industry-wide costs for the 
national economic impacts analyses. The weighting factors are similar 
to ones derived during the development of the 2004 Phase II Rule for 
extrapolating the impacts of DQ facilities to all in-scope facilities.
2. Updates to the Survey Data
    In the 2004 Phase II rule, EPA developed facility-specific cost 
estimates for all facilities and published those costs in Appendix A 
(69 FR 41669). Since the initial implementation of the 2004 Phase II 
rule, EPA identified several concerns with using only the facility-
specific costing approach, as well as the use of those costs in 
Appendix A. Since 2004, EPA has collected data from industry and other 
groups as described in section III. These data generally reflect 
changes to actual intake flow, design intake flow, intake velocity, 
technology in place, and operational status. EPA developed a new master 
database including this new data to supplement the data from the 
detailed technical questionnaire. Although it has been approximately 10 
years since the detailed technical questionnaire was initially 
collected, EPA has conducted over 50 site visits, reviewed current 
permits, and conducted literature reviews including comparisons to data 
collected by EPRI, EIA, and EEI. Based on that review EPA has concluded 
the master database is representative and appropriate for most 
facilities.\56\ The following section describes how EPA used this new 
database to estimate compliance costs.
---------------------------------------------------------------------------

    \56\ EPA notes that, while it has not collected updated 
technical information for every facility, it has updated financial 
data, as discussed later in this section.
---------------------------------------------------------------------------

3. Tools for Developing Compliance Costs
    During the 2004 Phase II rule, EPA began developing a spreadsheet 
based tool that would provide facilities and permit authorities with a 
simple and transparent method for calculating facility-specific 
compliance costs. EPA refined the tool in developing the Phase III 
regulations. EPA has since made further refinements to the cost tool, 
which was used to calculate the compliance costs for impingement 
mortality for today's proposed rule. The cost tool employs a decision 
tree (see the TDD for a graphical presentation of the decision tree) to 
determine a compliance response for each model facility and assigns a 
technology ``module'' that represents a retrofit to a given technology. 
Cost estimates are derived through a series of computations that apply 
facility-specific data (such as DIF, width of intake screens, etc.) to 
the selected technology module. Cost tool outputs include capital 
costs, incremental operation and maintenance (O&M) costs, and 
installation downtime (in weeks).
    To calculate the compliance costs of retrofitting to closed-cycle 
cooling for controlling entrainment mortality, EPA utilized a second 
tool based on a cost-estimating spreadsheet developed by the Electric 
Power Research Institute (EPRI). EPRI's first draft methodology 
presented three different levels of capital cost (Easy, Average, 
Difficult) based on the relative difficulty of the retrofit project. 
For electric generators, EPA used costs for the Average level of 
difficulty, as it was developed across a broad spectrum of facilities 
and is the most appropriate for estimating national level costs.\57\ 
For manufacturers, EPA used the Difficult level of retrofit costs. This 
reflects the more complex water systems and generally more frequent 
technical challenges to retrofitting closed-cycle cooling at a 
manufacturing facility. While some manufacturers only withdraw cooling 
water for power or steam generation, many manufacturers have multiple 
units or processes that utilize cooling water. In site visits, EPA 
found the largest manufacturing facilities would require multiple 
retrofits, and accordingly believes the

[[Page 22214]]

Difficult level of retrofit costs is more representative for purposes 
of estimating national level costs. Additionally, EPA's tool includes 
additional modifications to EPRI's methodology, such as increased 
compliance costs for approximately 25 percent of facilities to reflect 
the additional expense of noise control or plume \58\ abatement, and 
using only the cooling water flow rate for non-contact cooling water 
flow \59\ for purposes of estimating costs for closed-cycle cooling. 
EPA has included the spreadsheet tools in the docket for the proposed 
rule to assist both facilities and permit authorities in estimating 
compliance costs. (See DCNs 10-6655 and DCN 10-6930).
---------------------------------------------------------------------------

    \57\ For purposes of energy reliability estimates, EPA used the 
Difficult level for electric generators.
    \58\ The EPRI tool includes drift abatement technologies in its 
cost assumptions, so no additional costs were included for drift 
eliminators.
    \59\ As described in the TDD, EPA only used non-contact cooling 
water flows in determining the proper size for wet cooling towers, 
the technology that forms the technical basis for entrainment 
mortality. Cooling towers are not widely used for contact cooling or 
process water, so these flows were excluded. For electric 
generators, the vast majority of flow is non-contact cooling, but 
manufacturers are more varied in their water usage.
---------------------------------------------------------------------------

4. Which technologies form the basis for compliance cost estimates?
    EPA identified two broad classes of control technologies that may 
be used singularly or in combination to comply with the proposed rule. 
These classes of control technologies are: (1) Technologies that 
address impingement mortality (IM) and (2) technologies that address 
entrainment mortality (EM). See Section VI for further details. Under 
the various options considered, a facility may be subject to one or 
both requirements, depending on their configuration, technologies in 
use, or other site-specific factors.
    For the impingement mortality requirements, EPA analyzed data from 
a wide variety of technologies and facilities and concluded that 
modified Ristroph (or equivalent) coarse mesh traveling screens are the 
most appropriate basis for determining the compliance costs.\60\ As 
discussed in Section VI of the preamble, a facility may also comply 
with impingement mortality requirements by meeting a maximum intake 
velocity limit. Based on facility-specific data, EPA made a preliminary 
assessment of which model facilities would not currently meet 
impingement mortality requirements through either approach, and 
assigned technology costs based on the installation of modified 
traveling screens with a fish handling and return system. This assigned 
technology is assumed to meet the BTA standard (see Sec.  125.94(b)). 
However, some facilities might still incur costs for restructuring 
their intakes to avoid entrapment.\61\ EPA solicits comment and data on 
the costs of this requirement.
---------------------------------------------------------------------------

    \60\ Note that this does not preclude the use of other 
technologies; EPA simply used the available performance data in 
deriving the performance requirements and excluded technologies that 
were either inconsistent performers or did not offer sufficient data 
for analysis in a national categorical regulation. EPA's research 
has shown that other technologies may also be capable of meeting the 
proposed requirements, but EPA did not opt to identify these 
technologies as the technology basis for today's proposal.
    \61\ Facilities incurring costs for impingement mortality are 
assumed to meet the requirement for entrapment. Because EPA does not 
know how many facilities that already comply with impingement 
mortality requirements would incur additional costs to avoid 
entrapment, EPA conducted a sensitivity analysis of the additional 
costs; see Chapter 12 of the TDD.
---------------------------------------------------------------------------

    For facilities subject to entrainment mortality requirements, EPA 
selected wet cooling towers as the technology basis for determining the 
compliance costs. In some cases, costs reflect installation of multiple 
technologies, as impingement mortality and entrainment mortality 
requirements were applied separately to each facility. EPA also 
evaluated other technologies for reducing entrainment mortality, such 
as seasonal operation of cooling towers, partial towers, variable speed 
pumps, and fine mesh screens. The performance of these technologies is 
further described in section VI; a detailed discussion of how the costs 
were developed may be found in the TDD.
5. How is facility downtime assessed?
    Downtime is the amount of time that a facility may need to shut 
down due to the installation of a compliance technology. Downtime 
estimates primarily assume that the facility would need to completely 
shut down operations to retrofit an intake, such as relocating an 
intake, connecting wet cooling towers into the facility, or reinforcing 
condenser housings. Downtime estimates are provided as incremental 
outages, taking into account the periodic outages all facilities 
already incur as part of preventative maintenance or routinely 
scheduled outages. For example, nuclear facilities have refueling 
outages approximately every 18 months lasting approximately 40 
days.\62\ The entrainment control implementation periods, 10 years for 
fossil fuel plants and 15 years for nuclear plants, in Options 2 and 3 
would provide facilities with an opportunity to schedule the retrofit 
when other major upgrades are being done, reducing downtime.
---------------------------------------------------------------------------

    \62\ Nuclear Energy Institute (NEI) reported average length of 
outage from 2003 to 2009.
---------------------------------------------------------------------------

    For most facilities subject to impingement mortality, no downtime 
was assigned. Facilities that are replacing or rehabilitating existing 
traveling screens typically do so one intake bay at a time without 
affecting the overall operations. EPA has also found that facilities 
that need to scrub screens do so during other routinely scheduled 
outages. For some compliance technologies such as relocating an intake, 
or expanding an existing intake to lower the intake velocity, several 
weeks of downtime are incurred, as these are more invasive tasks.
    For facilities subject to entrainment mortality controls, EPA 
reviewed historical retrofit data and site visits conducted since 2004, 
and has largely retained its assumptions for downtime from the Phase II 
and Phase III rules. On average, EPA assumes the net construction 
downtime for a cooling tower retrofit for non-nuclear electric 
generators is 4 weeks. This total downtime allows for the tie-in of the 
cooling tower to the existing cooling water system. The refueling 
outage downtime, the safety-sensitive nature of nuclear facility 
retrofits, and other data in EPA's record supports 28 weeks as the net 
construction downtime for nuclear facilities. Downtime for 
manufacturing facilities that use cooling water for power and steam 
generation was converted into the incremental cost for purchase of 
those utilities during the outage. For individual process units other 
than power or steam generation units at a manufacturing facility (i.e. 
cooling water use for purposes other than power production), on average 
the downtime was assumed to be zero. In EPA's extensive experience with 
manufacturers while developing effluent guidelines, EPA found 
manufacturers are generally able to shut down individual intakes for 
specific process lines, use inventory approaches such as temporary 
increases of intermediate products, and develop other workarounds 
without interrupting the production of the entire facility. EPA 
requests comment from those manufacturing facilities that have made 
modifications to their cooling water systems on their experiences with 
facility downtime. See below for further discussion of how installation 
downtime in weeks is included in the estimated national costs.
6. How is the energy penalty assessed?
    The term ``energy penalty'' in relation to a conversion to closed-
cycle cooling has two components: One is the extra

[[Page 22215]]

power required to operate fans at a mechanical draft cooling tower, as 
well as additional pumping requirements (often referred to as the 
parasitic energy penalty), and the other is the lost power output due 
to the reduction in steam turbine efficiency because of an increase in 
cooling water temperature (often referred to as the turbine efficiency 
penalty or turbine backpressure penalty). Energy penalty costs only 
apply to facilities retrofitting a cooling tower; facilities installing 
a new impingement mortality technology will generally see little or no 
measureable change in energy usage. EPA's national level costs include 
the costs for both components. The parasitic energy penalty was 
included as a separate component in the O&M costs and was assessed for 
all facilities. The turbine efficiency penalty was typically expressed 
as a percentage of power output; EPA estimates the turbine efficiency 
energy penalty for nuclear and non-nuclear power generation would be 
2.5% and 1.5%, respectively (see the TDD). For most manufacturers, the 
energy penalty for turbine efficiency loss for non-nuclear power plants 
(i.e., 1.5%) was assumed. This may overstate costs where cooling water 
is used by a manufacturing facility for purposes other than power 
production.
7. How did EPA assess facility-level costs for the national economic 
impacts and energy reliability analyses?
    To assess the national economic impacts, EPA conducted a modeling 
analysis using IPM (Integrated Planning Model). This model is widely 
used by EPA for analysis of rules and policies affecting electric 
generating facilities. This analysis is used to assess economic 
impacts, increases in household electricity bills, and changes in 
electricity reliability. In contrast to the model facility costing 
approach, the IPM model requires a facility-level cost for each 
facility. Model facility costs were converted to a per MGD DIF basis, 
and then averaged to derive cost equations using DIF as the independent 
variable. This cost equation thus provides average costs that can be 
applied to any facility by simply scaling to that facility's DIF. EPA 
also used a conservative compliance scenario in order to develop a 
bounding ``worst case'' impact analysis by assuming all facilities 
would be subject to Entrainment Mortality reductions based on closed-
cycle cooling towers. In the worst case scenario EPA conducted the IPM 
analysis using the Difficult level cost for all facilities, thereby 
generating an upper bound of total costs and conservative predictions 
of the economic impacts. See the EBA for more information. In 
conducting its analysis, EPA found the equations used to derive the 
cost module estimates produced substantially higher costs per MGD rates 
at lower flow levels. To reflect the higher per unit costs of retrofits 
at lower DIF (i.e. smaller) facilities, EPA derived separate model 
facility cost equations for facilities with DIF <10 MGD and those with 
DIF >= 10 MGD. (See the TDD).
8. How did EPA assess costs for new units?
    This section describes the data and methods used to estimate 
compliance costs for new units at existing electric generators and 
manufacturers. Compliance costs for new units at existing electric 
generators are calculated using a similar methodology to the compliance 
cost estimates for existing facilities. EPA is not able to predict 
which facilities will construct new units, however the national 
projections of increased capacity (i.e. additional megawatts capacity 
to be constructed each year) can be converted to a number of new units 
of a specified size; EPA then applied the cost equations to these 
projected new units. Based on site visits, EPA has found that industry 
trends towards water conservation and reuse in addition to the 
operational flexibility at existing manufacturers would result in no 
additional compliance costs for achieving flow commensurate with 
closed-cycle cooling at new units. EPA solicits comment on this 
assumption.
a. New Units at Existing Electric Generators
    Power generation units that meet the definition of a ``new unit'' 
will be required to meet entrainment reduction based on closed-cycle 
cooling or an equivalent reduction in entrainment mortality for the 
cooling water component of the intake flow based on the average intake 
flow (AIF). Estimates for compliance costs for new units are based on 
the net difference in costs between what cooling system technologies 
would have been built under the current regulatory structure and what 
will be built given the change in requirements imposed by the proposed 
regulation. Compliance costs are derived using estimates of the new 
generating capacity that will be subject to these requirements.
    Generally speaking, EPA has identified a number of differences in 
costs between a closed-cycle cooling retrofit at an existing facility 
compared to installing closed-cycle cooling at a new unit:
     New units can incorporate closed-cycle cooling in a more 
cost effective manner.
     The duration of new unit construction is sufficiently long 
enough that there would be, in nearly all circumstances, no net 
increase in ``construction downtime.''
     For power generation systems, the design of boilers, steam 
turbines and condensers ``from scratch'' allows for the optimization of 
the system design and cooling water flow volume to minimize the heat 
rate penalty. Flow is reduced over a comparable once-through cooling 
system, which reduces closed-cycle cooling system costs.
     Because major components of the once-through intake and 
cooling system must be constructed from scratch, the capital costs of 
closed-cycle cooling for new units are lower than the capital costs of 
once-through cooling.\63\
---------------------------------------------------------------------------

    \63\ See DCN 10-6650 and DCN 10-6651.
---------------------------------------------------------------------------

     There will be an increase in the parasitic energy 
requirements associated with fan operation in the closed-cycle cooling 
towers.
     While parasitic energy requirements for pumping head will 
increase as well, it may be offset, at least in part, by reductions in 
pumping flow associated with optimization. Any capacity losses due to 
parasitic energy penalty can be accounted for in the new unit design.
     New construction allows the use of an optimized cooling 
system design that can minimize any system efficiency losses associated 
with conversion to closed-cycle.
Estimation of New Capacity Subject to the Rule
    New generating units will be constructed at either ``greenfield'' 
facilities subject to the Phase I regulation or at existing facilities 
where they may be subject to the new unit requirements for entrainment 
reduction.\64\ New generating capacity at existing facilities can occur 
in three ways: (1) From new units added to an existing facility; (2) 
repowering, replacement and major upgrades of existing units; and (3) 
minor increases in system efficiency and output. Repowered, replaced, 
and upgraded units are not considered new units under today's proposed 
rule and would not be subject to requirements for entrainment 
reduction. While a small portion of this new capacity may result from 
minor increases in plant efficiency and output, this analysis assumes 
all

[[Page 22216]]

new capacity will occur be associated with new units.
---------------------------------------------------------------------------

    \64\ This discussion will focus only on new units at existing 
facilities; for a discussion of the Phase I rule, see 66 FR 65256.
---------------------------------------------------------------------------

    New power generation capacity estimates by fuel/plant type were 
derived from IPM modeling. For the new unit costs analysis EPA focused 
on coal and combined cycle, since these comprised the majority of 
increased capacity that utilize a steam cycle and are most likely to be 
constructed at existing generation facilities. In the Phase I rule 
analysis, EPA determined that 76% of new coal and 88% of new combined 
cycle capacity would be constructed at new ``greenfield'' facilities 
and would be subject to Phase I requirements while the remainder (24% 
of coal and 12% of combined cycle) would occur at existing facilities 
and be subject to existing facility regulations. EPA has selected a 
conservative value of 30% reflecting both coal and combined cycle to 
serve as an estimate for the portion of new capacity that would be 
constructed at existing facilities.
    At existing nuclear facilities, only new capacity associated the 
construction of new generating units would be subject to the new unit 
requirements. Considering their size and heat discharge as well as 
recent trends in industry, it is assumed that any new nuclear units 
will utilize closed-cycle cooling \65\ and so the capacity for these 
nuclear facilities is not included in the costs of requirements for new 
units. Exhibit VII-1 presents a summary of new capacity estimates for 
all fuel types.
---------------------------------------------------------------------------

    \65\ Less than half of the current U.S. nuclear plants still use 
once through cooling.

                                      Exhibit VII-1--Estimated New Capacity
----------------------------------------------------------------------------------------------------------------
                                                      New capacity  (MW) \a\       New capacity incurring costs
                                                 --------------------------------         under this rule
                    Fuel type                                                    -------------------------------
                                                      Annual       24 Year total      Annual
                                                      average                         average      24 Year total
----------------------------------------------------------------------------------------------------------------
Coal............................................           3,573          85,744           1,072          25,723
Combined Cycle..................................           1,491          35,795             447          10,739
----------------------------------------------------------------------------------------------------------------
\a\ Includes capacity subject to both Phase I and existing facility requirements.

Baseline Compliance
    Baseline compliance reflects the scenario whereby new units will 
use once-through cooling or closed-cycle cooling. About 32% of existing 
facility steam generating capacity already employs closed-cycle and 
another 11% employ combination cooling systems. EPA assumes that at 
existing plants where closed-cycle cooling is already employed for at 
least part of the generating capacity that closed-cycle would be used 
for any new capacity, regardless of the requirements of today's 
proposed rule. Therefore at least 43% of new capacity is projected to 
be compliant in the baseline (i.e., they will already meet the 
entrainment mortality requirements of the proposed rule for new units). 
For example, a number of regulatory authorities have adopted or pursued 
closed-cycle cooling requirements for some or all existing facilities 
(e.g., New York, California, Delaware). EPA expects this to be 
particularly true where the new unit would result in a substantial 
increase in the volume of once-through cooling water withdrawn above 
what is currently permitted. Thus, approximately 50% of new fossil 
units at existing facilities in the baseline scenario would already be 
compliant with the proposed rule. EPA requests comment on this 
assumption.
Repowering Versus New Units
    The increased capacity at existing fossil fuel facilities is 
divided into two types of projects. The first is new unit(s) added 
adjacent to the existing generating units which would require a new 
intake or the existing intake to be substantially modified in order to 
supply the needed additional volume of cooling water. The second is a 
repowered unit which replaces an existing generating unit(s) and is 
assumed to be sized such that the existing once-through cooling water 
intake volume will provide sufficient flow to meet heat discharge 
requirements. Based on 2007 IPM projections (since more recent 
projections do not include this distinction) approximately 85% of 
projected total new combined cycle capacity was estimated to be 
repowered oil and gas units. The estimate for repowered coal capacity 
was very small (less than 1%). However, since there are significant 
economic advantages to repowering, EPA believes this to be an 
underestimate and selected a more conservative value of 10%. Exhibit 
VII-2 presents the capacity values assumed to be compliant in the 
baseline or that require costs associated with closed-cycle cooling for 
new added units versus repowering.

                  Exhibit VII-2--New Capacity Subject to New Unit Requirement by Cost Category
----------------------------------------------------------------------------------------------------------------
                                                                        Capacity subject to new unit compliance
                                                                                      costs (MW)
                Fuel type                                            -------------------------------------------
                                                                         Annual average         24 Year total
----------------------------------------------------------------------------------------------------------------
Coal....................................  Baseline is Compliant.....                   536                12,862
                                          New Added Unit............                   482                11,575
Combined Cycle..........................  Baseline is Compliant.....                   224                 5,369
                                          New Added Unit............                    34                   805
----------------------------------------------------------------------------------------------------------------


[[Page 22217]]

Compliance Cost Estimation
    Compliance costs reflect compliance with the proposed requirements 
for closed-cycle for the new unit; these costs do not represent costs 
to retrofit the entire facility to closed-cycle. Compliance costs for 
new units are derived from EPA's estimates for retrofitting a closed-
cycle cooling system at existing facilities where the costs are 
expressed on a per MGD basis. For new units, the cost equations are 
converted to a cost per MW capacity. The cooling water flow estimates 
are based on plant fuel efficiency values of 42% for coal (the average 
of values for super-critical and ultra-critical steam), 57% for 
combined cycle, and 33.5% for nuclear. [DCN 10-2827]. Cost components 
were broken out as follows.
Capital Costs
    EPA has found that for new units, the total estimated capital costs 
for a closed-cycle cooling system is slightly less than the capital 
costs of a once-through cooling system (when including costs for a new 
intake structure). Therefore, a conservative estimate of the 
incremental compliance capital costs are $0 for new units.
O&M Costs
    Fixed and variable O&M costs are adjusted by deducting the O&M 
costs for traveling screens assumed in the baseline once-through 
system. Energy costs are also adjusted downward to account for reduced 
pumping volume passing through the intake structure and adjusted up to 
account for the increase in pumping head through the cooling tower.
Downtime
    Each of the new units will involve extensive construction 
activities that would result in a prolonged construction downtime 
regardless of the cooling system requirements. Thus, no downtime costs 
are assessed for new unit compliance.
Energy Penalty
    The energy penalty consists of parasitic load and heat rate 
penalties. Both types of installation--new and retrofit--face parasitic 
load associated with fans and pumps, but only retrofits would face a 
heat rate penalty, which is the largest portion of a retrofit energy 
penalty. Energy penalty costs associated with net changes in parasitic 
energy requirements between once-through and closed-cycle cooling are 
included in the O&M cost estimates.
b. New Units at Existing Manufacturers
    Similar to new units at existing electric generators, manufacturing 
``units'' that meet the definition of a ``new unit'' will be required 
to meet entrainment reduction requirements. These requirements will 
require closed-cycle cooling or an equivalent reduction in entrainment 
for the cooling water component of the intake flow based on the average 
intake flow (AIF). Estimates for compliance costs for new units are 
based on the net difference in costs between what would have been built 
under the current regulatory structure (baseline) and what will be 
built given the change in requirements imposed by the proposed 
regulation. Thus, baseline manufacturing unit process design and 
cooling water technology would be based on the response to the 
permitting authorities application of existing requirements including 
316(b), applicable industrial water use and discharge standards (e.g., 
categorical standards), and BPJ.
    As discussed in section IV of the preamble, it has become standard 
practice for industries to adopt water use reduction and reuse 
practices wherever practical. A new unit provides the opportunity to 
employ such measures to the fullest extent. Thus, the baseline cooling 
AIF for ``new units'' at manufacturers should, in most cases, be much 
smaller than the AIF for a comparable existing unit. This is especially 
true for new units that perform a similar function or produce a similar 
product to existing units since economic factors such as the need to 
increase process efficiencies are often driving factors in the decision 
to construct a new unit. EPA recognizes that while this appears to be a 
general trend, it may not always be true on a site-specific basis.
    For manufacturing process units that are newly constructed, many of 
the same cost-related factors listed above for power generators apply 
but additional factors may include:
     A much greater proportion of intake flow is used for 
process water and other non-cooling purposes which greatly increases 
the opportunity to design and incorporate cooling water reuse 
strategies within the unit.
     Where the new unit comprises only a portion of the plant, 
cooling water reduction may be accomplished through reuse elsewhere 
within the plant. The proposed rule provides credit for such flow 
reductions.
     The modular nature of closed-cycle cooling allows for the 
limited application of closed-cycle cooling only to the portion of 
cooling flow necessary to meet any additional reductions not accounted 
for by any other reuse or reduction strategies employed. Additionally, 
new units can utilize cooling system designs specifically tailored to 
process requirements. The modular nature of closed-cycle cooling and 
the flexibility inherent in the process system allows for more optimal 
placement of cooling tower units, thus minimizing piping costs.
     Flow reductions associated with the use of variable speed 
pumps can result in benefits associated with both reduced flow and 
pumping energy costs.
    For power generation facilities and generating units that use once-
through cooling, the majority of the intake flow is used for non-
contact cooling purposes. Process water typically constitutes a few 
percent or less of the total. A review of the responses to the detailed 
technical survey showed that the median and average values for the 
percent of design intake flow used for cooling purposes reported for 
each separate cooling water intake at power generation facilities were 
100% and 85% respectively. In contrast, most industrial manufacturing 
operations utilize a substantial portion of intake water for non-
cooling purpose and the same median and average values for 
manufacturing facilities were 50% and 52%, respectively. In addition, 
this cooling flow component data includes contact cooling water, as 
discussed in section IV.A (i.e., flow reduction is only required for 
non-contact cooling water flows), thus decreasing the proportion. 
Therefore, a ``typical'' manufacturing unit may use less than 50% of 
AIF for cooling purposes of the type that may be subject to the ``new 
unit'' requirements. In many cases, this ``typical'' facility may be 
able to reuse 100% of the cooling water in place of the process 
component. Thus, the ``typical'' manufacturing facility may be capable 
of designing a ``new'' process that could meet the ``new unit'' 
requirements through water reuse alone. EPA has observed significant 
innovation and water reuse during site visits to manufacturing 
facilities, and notes extensive industry trends towards internal water 
and energy audits.
    Since this 50% value is the median of all reported manufacturing 
cooling water intake systems, at least half of manufacturing cooling 
water systems may have the potential to meet the ``new unit'' 
requirements simply by reusing non-contact water as process water. For 
the remainder, modifications to the process that reduce cooling water 
use such as use of variable speed pumps may provide additional 
reduction. For some, there may be a need to install

[[Page 22218]]

cooling towers for the cooling flow component that cannot be reused. 
EPA assumes, however, that this, however, will in most instances be a 
small portion of the total intake flow. Also, if the new unit comprises 
only a portion of the entire manufacturing facility, there may be other 
process units and plant operations nearby that could reuse the cooling 
water (or supply reusable water) in order to meet the flow reduction 
requirements. The proposed rule encourages facilities to incorporate 
flexible water use arrangements, including a provision where cooling 
water that is reused elsewhere in the facility is not considered 
cooling water; as a result, facilities will have an incentive to reuse 
water and avoid being subject to 316(b) requirements.
    For new units that would require an increase in intake flow, EPA 
has found that the capital costs of the new intake and screen 
technology which requires deeper pump and intake wells to accommodate 
source water depth variations will be comparable to the capital costs 
for closed-cycle technology. In these cases, closed-cycle may have 
slightly higher O&M costs for pump and fan energy but these costs may 
be offset by other cost savings such as reductions in water treatment 
costs.
    The definition of new manufacturing units limits the applicability 
of closed-cycle requirements to new units. As such, it is assumed that 
the construction activities would involve substantial downtime periods 
that would be of similar or more likely greater duration than required 
for construction and tie-in activities associated with the closed-cycle 
cooling technology. EPA concludes that only a small portion of new 
units will need to meet new unit flow reduction requirements through 
the use of closed-cycle cooling and the associated net costs will be 
minimal. EPA requests comment on these costing assumptions.

C. Social Cost of the Regulatory Options

    EPA calculated the social cost of the four regulatory options for 
existing Manufacturers and Electric Generators using two social 
discount rate values: 3 percent and 7 percent. For the analysis of 
social costs, EPA discounted all costs to the beginning of 2012, the 
date at which this proposal would become effective under the regulation 
development schedule. EPA assumed that all facilities subject to the 
regulation would achieve compliance between 2013 and 2027, inclusive, 
depending on the compliance schedules associated with the four 
regulatory options considered in the proposed rule for specific 
categories of facilities. EPA performed the social cost analysis over a 
50-year period to reflect: The last year in which individual facilities 
are expected to achieve compliance (2027) under any of the regulatory 
options considered for this analysis, the technology life of the 
longest-lived compliance technology installed at any facility (30 
years), and a period of 5 years after the last year of compliance 
technology operation during which benefits continue to accrue. Under 
this framework, the last year for which costs were tallied in the 
analysis is 2056, with benefits continuing on a diminishing basis 
through 2061. Because the analysis period extends beyond the useful 
life of compliance equipment assumed to be installed at facilities that 
achieve compliance before 2017, the social cost analysis accounts for 
re-installation of IM compliance technologies after the end of their 
initial useful life periods; however, EPA does not expect in-scope 
facilities to completely re-build cooling towers (components such as 
piping and the concrete basin can be reused) and EPA expects other 
technology replacement costs (such as pumps and fill material) are 
accounted for as part of the ongoing O&M expenses for cooling towers. 
Costs incurred by governments for administering the regulation were 
analyzed over the same time frame. This analysis accounts for 
technology costs associated with new units starting in the first year 
after promulgation, i.e., 2013 (for more information on new units see 
Chapter 3: Development of Costs for Regulatory Options of the EBA 
report).
    At a 3 percent discount rate, EPA estimates annualized costs of 
compliance of $384 million under Option 1, $4,463 million under Option 
2, $4,631 million under Option 3, and $327 million under Option 4. At a 
7 percent discount rate, these costs are $459 million, $4,699 million, 
$4,862 million, and $383 million, respectively. The largest component 
of social cost is the pre-tax cost of regulatory compliance incurred by 
complying facilities. These costs include one-time technology costs of 
complying with the rule, one-time costs of installation downtime, 
annual fixed and variable operating and maintenance (O&M) costs, the 
value of electricity requirements for operating compliance technology, 
and permitting costs (initial permit costs, annual monitoring costs, 
and permit reissuance costs). In addition, all Electric Generators are 
expected to become subject to I&E mortality requirements at the 125 MGD 
threshold under Option 2. Social cost also includes implementation 
costs incurred by Federal and State governments. EPA's social cost 
estimates exclude the cost to facilities estimated to be baseline 
closures. As further described in the EBA document, in the case of 
Electric Generators, the baseline closure generating units were 
identified in Energy Information Administration reports or in the 
baseline IPM analyses, as having closed or projected to close 
independent of the requirements of the existing facilities rule. For 
Manufacturers, EPA's analyses indicated that these facilities are in 
sufficiently weak financial condition before outlays for this 
regulation, that the facilities are likely to close, again, independent 
of the requirements of the existing facilities rule. Because these 
facilities are not expected to comply with the existing facilities 
rule, EPA did not include the costs that would otherwise be assigned to 
these facilities in the analysis of social cost. Consistent with this 
treatment of costs, EPA also did not include benefits from these 
facilities in the tally of benefits to society for the analysis of 
social costs and benefits of the existing facilities rule.
    Exhibit VII-3 presents the social cost of the proposed options, by 
type of cost, using 3 percent and 7 percent discount rates.

                                      Exhibit VII-3--Annualized Social Cost
                                            [In millions, 2009 $] \a\
----------------------------------------------------------------------------------------------------------------
                                              Option 1          Option 2          Option 3          Option 4
----------------------------------------------------------------------------------------------------------------
3% Discount Rate:
Direct Compliance Cost:
    Manufacturers.......................            $61.31           $141.69           $172.92            $33.99
    Electric Generators.................            318.77          4,319.59          4,457.79            289.77
                                         -----------------------------------------------------------------------
    Total Direct Compliance Cost........            380.08          4,461.28          4,630.71            323.77

[[Page 22219]]

 
State and Federal Administrative Cost...              3.71              1.62              0.92              2.79
                                         -----------------------------------------------------------------------
    Total Social Cost...................            383.80          4,462.90          4,631.62            326.55
7% Discount Rate:
Direct Compliance Cost:
    Manufacturers.......................             68.90            133.60            157.49             39.04
    Electric Generators.................            385.68          4,564.02          4,703.65            340.80
                                         -----------------------------------------------------------------------
    Total Direct Compliance Cost........            454.58          4,697.62          4,861.14            379.84
State and Federal Administrative Cost...              4.23              1.72              0.91              3.26
                                         -----------------------------------------------------------------------
    Total Social Cost...................            458.81          4,699.35          4,862.05            383.10
----------------------------------------------------------------------------------------------------------------
\a\ These social cost estimates do not include costs associated with installation of cooling tower technology at
  new generating units subject to today's rule. They also do not include costs associated with complying with
  site-specific BTA determinations under Options 1, 2, and 4. Section VI.I discusses costs for complying with
  site-specific BTA determinations.

    As shown in Exhibit VII-3, compliance cost in the Electric 
Generators segment accounts for the majority of total social cost and 
direct compliance cost under all four options. On a per regulated 
facility basis and at a 3 percent discount rate, annualized pre-tax 
costs in the Electric Generators segment amount to $0.57 million under 
Option 1, $7.73 million under Option 2, $7.97 million under Option 3, 
and $0.52 million under Option 4.\66\ For Manufacturers, the average 
cost per regulated facility at a 3 percent discount rate is $0.12 
million under Option 1, $0.27 million under Option 2, $0.33 million 
under Option 3, and $0.07 million under Option 4.\67\ EPA's analysis 
found a similar profile of per facility costs by industry segment for 
the 7 percent discount rate case (see EBA Chapter 11 for additional 
detail). While all four options require some form of control technology 
at all facilities with design intake flows of two MGD or greater, 
Option 2 and Option 3 require more costly technologies, which raises 
the per-facility cost of compliance in these options.
---------------------------------------------------------------------------

    \66\ Calculated using the total of 559 in-scope Electric 
Generators based on technical facility weights.
    \67\ Calculated using the total of 518 in-scope Manufacturers 
based on technical facility weights.
---------------------------------------------------------------------------

    EPA's estimate of federal and State government costs for 
administering this proposal is comparatively minor in relation to the 
estimated direct cost of regulatory compliance. EPA estimates 
government annual administrative costs under 3 and 7 percent discount 
rates, respectively, of approximately $3.71 million and $4.23 million 
(Option 1), $1.62 million and $1.72 million (Option 2), $0.92 million 
and $0.91 million (Option 3), and $2.79 million and $3.26 million 
(Option 4).
    EPA also estimated the costs for installation of closed cycle 
cooling system technology at New Generating Units, as required by 
today's rule. These costs are based on the estimates of occurrence of 
new unit construction that would be subject to the New Units 
requirement, and the incurrence of costs as described above in the 
section titled ``How Did EPA Assess Costs for New Units?''
    The social costs of adding closed cycle cooling system capability 
at newly constructed units at existing facilities are not included in 
the total social cost tallies presented above. EPA did not include 
these costs in the tallies presented above because EPA did not estimate 
benefits from installation of closed cycle cooling systems at these 
units (their location is unknown). As a result, comparisons of social 
cost, which would include these costs, with benefits, which would not 
include the I&E mortality reductions from installing those closed cycle 
cooling systems, would be inconsistent. The costs for adding closed 
cycle cooling system capability at newly constructed units are the same 
across all four of the regulatory options presented in today's proposed 
rule, because the technology performance requirements for existing 
units at existing facilities, which vary by regulatory option, do not 
apply to these newly constructed generating units. On an annualized 
cost base, these amount to $14.7 million at a 3 percent discount rate, 
and $10.9 million at a 7 percent discount rate.

D. Economic Impact

    EPA assessed the economic impact of the regulatory options in 
different ways depending on the affected segment, Manufacturers or 
Electric Generators:
    For Manufacturers, EPA assessed the impact of compliance costs on 
business viability at the level of the affected facility (facility-
level analysis), including assessment of the potential for facility 
closures and of the potential for affected facilities to incur 
financial stress short of closure. For manufacturers, EPA also assessed 
the impact of compliance requirements on the entities that own in-scope 
facilities (firm-level analysis), based on the level of compliance 
costs incurred by the total of in-scope facilities owned by a firm in 
relation to the revenue of the firm.
    For Electric Generators, EPA assessed economic impact in three 
ways: (1) An assessment of the impact of compliance costs on first, 
complying facilities and second, the entities that own those 
facilities, based on comparison of compliance costs to facility and 
firm revenue, (2) an assessment of potential electricity price effects 
on residential and other electricity consumers, and (3) an assessment 
of the impact of the proposed regulatory options within the context of 
the electricity markets in which affected facilities operate.
    These analyses are based on the facilities included in EPA's 
previous 316(b) surveys of electric generators and those manufacturing 
industries whose operations are most reliant on cooling water and that 
are expected to be most affected by this proposal. For each regulatory 
option, only those facilities that would be subject to national 
standards, based on their DIF, are included in the analyses.
    The following sections summarize the methods and findings for 
manufacturers and electric power generators for these analyses.
a. Manufacturers
    This section presents EPA's estimated economic impacts on 
Manufacturers for the three regulatory options. The

[[Page 22220]]

economic impact analyses for Manufacturers assess how facilities, and 
the firms that own them, are expected to be affected financially by the 
regulatory options. The facility impact analysis starts with compliance 
cost estimates from the EPA engineering analysis (see section VII.B) 
and then calculates how these compliance costs would affect the 
financial performance and condition of the sample facilities and owning 
firms.
    Measures of economic impact include facility closures and 
associated losses in revenue and employment, financial stress short of 
closure (``moderate impacts''), and firm-level impacts.\68\
---------------------------------------------------------------------------

    \68\ For the analysis of three regulatory options presented in 
this document, neither employment loss nor output loss were in fact 
relevant because none of these options resulted in regulatory 
closures.
---------------------------------------------------------------------------

    In conducting the facility impact analysis, EPA first eliminated 
from the analysis those facilities that the Agency estimated to be at 
substantial risk of financial failure regardless of any additional 
financial burden that might result from the regulatory options under 
consideration (baseline closure facilities). Second, for the remaining 
facilities, EPA evaluated how compliance costs would likely affect 
facility financial performance and condition. EPA identified a facility 
as a regulatory closure if it would have operated under baseline 
conditions but would fall below an acceptable financial performance 
level under the new regulatory requirements.
    EPA's analysis of regulatory closures is based on the estimated 
change in facility After-Tax Cash Flow (cash flow) as a result of the 
regulation and specifically examines whether the change in cash flow 
would be sufficient to cause the facility's going concern business 
value to become negative. EPA calculated business value using a 
discounted cash flow framework in which cash flow is discounted at an 
estimated cost of capital to calculate the going concern value of the 
facility. The specific definition of cash flow used in these analyses 
is after-tax free cash flow available to all capital--equity and debt--
including an allowance for ongoing capital expenditures required by the 
business. Correspondingly, the cost of capital reflects the combined 
cost, after-tax, of equity and debt capital. For its analysis of 
economic/financial impacts on the Manufacturers industry segment, EPA 
used 7 percent as a real, after-tax cost of capital. Use of the 7 
percent discount rate is consistent with guidance from the Office of 
Management and Budget on the opportunity cost of capital to society.
    In these analyses, EPA first calculated the baseline going concern 
value of the facility using its baseline cash flow--i.e., facility cash 
flow before compliance-related outlays--and used this value to 
determine whether a given facility is a baseline closure (for details 
see Chapter 4 of the EBA report). If EPA found the facility's estimated 
going concern value to be negative, then the facility was judged a 
baseline closure--i.e., likely to fail financially, independent of 
incurrence of compliance costs--and removed the facility from further 
consideration in the impact and other economic analyses.
    As the second step in the facility impact analysis, EPA adjusted 
the baseline cash flow to reflect the expected financial effects of 
compliance technology installation and operation. Based on an 
assessment of cost pass-through potential in the affected industries 
(see Chapter 5 and Appendix 4.A of the EBA), EPA assumed that none of 
the facility's compliance costs could be passed on to its customers as 
price and revenue increases--i.e., all compliance costs must be 
absorbed within the facility's cash flow. EPA then recalculated the 
facility's business value using the adjusted post-compliance cash flow. 
If this analysis found that the facility's business value would become 
negative as a result of meeting compliance requirements, then EPA 
judged the facility to be a regulatory closure.
    EPA also identified facilities that would likely incur moderate 
financial impacts, but that are not expected to close, as a result of 
the rule. EPA established thresholds for two measures of financial 
performance and condition--interest coverage ratio and pre-tax return 
on assets--and compared the facilities' performance before and after 
compliance under each regulatory option with these thresholds. EPA 
attributed incremental moderate impacts to the rule if both financial 
ratios exceeded threshold values in the baseline (i.e., there were no 
moderate impacts in the baseline), but at least one financial ratio 
fell below the threshold value in the post-compliance case.
i. Baseline Closure Analysis
    Exhibit VII-4 presents projected baseline closures for the 
estimated facilities in the Primary Manufacturing Industries and 
additional known facilities in Other Industries.\69\ From the analysis 
as outlined above, EPA determined that 73 facilities (or 13 percent) of 
the estimated 569 regulated facilities in the six Primary Manufacturing 
Industries are baseline closures. The highest percentages of baseline 
closures occur in the Steel industry sector (32 percent). An additional 
three facilities (or 30 percent) of the 10 known facilities in Other 
Industries are projected to be baseline closures. These facilities were 
excluded from the post-compliance analysis of regulatory impacts, 
leaving 504 facilities for the assessment of compliance impacts.
---------------------------------------------------------------------------

    \69\ The estimated number of Manufacturers facilities considered 
in the impact analysis (579) differs from the number reported in the 
broader analyses (592). EPA determined that the survey responses of 
14 sample facilities lacked certain financial data needed for the 
facility impact analysis while containing sufficient data to support 
estimates of facility counts and compliance costs. EPA therefore 
retained these sample facilities (37 sample weighted facilities) in 
the broader analyses but excluded them from the impact analysis. 
When these sample facilities were excluded from the impact analysis, 
the sample weights for the remaining facilities within the affected 
sample frames were adjusted upwards to account for their removal 
(the revised weights are referred to as the economic analysis 
weights). The difference in the reported facility totals in the 
impact and social cost analyses reflects the removal of these 14 
facilities and the use of adjusted sample weights, which due to 
rounding error results in a difference of 13 between the facilities 
in the impact analysis and those in the other analyses.

                          Exhibit VII-4--Summary of Baseline Closures for Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                                Number of       Percentage of
                 Sector                    Total number of      baseline          baseline        Operating in
                                           facilities \a\       closures          closures          baseline
----------------------------------------------------------------------------------------------------------------
Paper...................................               230                32                14               198
Chemicals...............................               171                 4                 3               167
Petroleum...............................                36                 5                15                30
Steel...................................                68                22                32                46
Aluminum................................                27                 3                12                24
Food and Kindred Products...............                37                 6                17                31
Total Facilities in Primary                            569                73                13               497
 Manufacturing Industries...............

[[Page 22221]]

 
Additional known facilities in Other                    10                 3                30                 7
 Industries.............................
                                         -----------------------------------------------------------------------
    Total Manufacturers Facilities......               579                76                13               504
----------------------------------------------------------------------------------------------------------------
\a\ Economic Analysis Weights were used to determine facility counts. See preceding footnote.

ii. Number of Facilities Subject to National Standards
    EPA estimates that all of these 504 Manufacturers facilities--497 
facilities in the Primary Manufacturing Industries and 7 facilities in 
the Other Industries--are subject to the requirements under the four 
regulatory options, although the technology response anticipated at 
individual facilities differs under each option. Under Option 1, all 
504 facilities passing the baseline closure test would be required to 
meet IM standards and EPA estimates that 370 will need to install new 
technology in order to do so. Under Option 2, 57 facilities with DIF 
exceeding 125 MGD would be required to meet I&E mortality standards, 
and EPA estimates that all of these facilities would need to retrofit 
closed-cycle cooling. The remaining 448 facilities would be subject 
only to IM standards, and EPA estimates that 366 would need to install 
new technology to meet these requirements. Under Option 3, all 504 
facilities would be required to meet I&E mortality standards, and in 
this case EPA estimates that 426 facilities would need to install a 
cooling tower to meet these requirements. In addition, EPA estimates 
that 181 facilities would need to install additional IM technology to 
meet Option 3's regulatory requirements. Under Option 4, 156 facilities 
would be required to meet IM standards; in this case, EPA estimates 
that 139 facilities would need to install new technology to meet this 
requirement.
iii. Post-Compliance Facility Impact Analysis; Summary of Impacts
    Of the 504 Manufacturers facilities potentially subject to 
regulation after excluding baseline closures, EPA estimated that no 
facilities would close or incur employment losses as a result of the 
Options. EPA also found that no facilities would incur moderate impacts 
under Options 1, 2, and 4, but 17 facilities would incur moderate 
impacts under Option 3.
    Exhibit VII-5 summarizes the estimated impacts of the proposed rule 
on Manufacturers by option, including facility impacts and total 
annualized compliance costs on an after-tax basis. The reported costs 
exclude compliance costs for baseline closures. The total annualized, 
after-tax compliance cost reported in Exhibit VII-5 represents the cost 
actually incurred by complying firms, taking into account the 
reductions in tax liability resulting from compliance outlays and 
assuming no recovery of costs from customers through increased prices. 
The after-tax analysis uses a combined federal/State tax rate, and 
accounts for facilities' baseline tax circumstances. Specifically, tax 
offsets to compliance costs are limited not to exceed facility-level 
tax payments as reported in facility questionnaire responses. The total 
annualized, after-tax compliance cost reported here is the sum of 
annualized, after-tax costs by facility at the year of compliance, 
using a 7 percent after-tax cost of capital. This cost calculation 
differs from the calculation of compliance costs as included in the 
calculation of the total social costs of the regulation (see Section 
VII.C) where costs are accounted for on a pre-tax basis.

                     Exhibit VII-5--Facility Impacts and Compliance Costs for Manufacturers
----------------------------------------------------------------------------------------------------------------
                                              Option 1          Option 2          Option 3          Option 4
----------------------------------------------------------------------------------------------------------------
                                        Primary Manufacturing Industries
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in                      497               497               497               497
 Baseline...............................
Number of Closures (Severe Impacts).....                 0                 0                 0                 0
Percentage of Facilities Closing........                0%                0%                0%                0%
Number of Facilities with Moderate                       0                 0                17                 0
 Impacts................................
Percentage of Facilities with Moderate                  0%                0%             3.40%             0.00%
 Impacts................................
Annualized Compliance Costs (after tax,             $40.78           $108.71           $147.87            $23.38
 million 2009 $)........................
----------------------------------------------------------------------------------------------------------------
                                 Additional Known Facilities in Other Industries
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in                        7                 7                 7                 7
 Baseline...............................
Number of Closures (Severe Impacts).....                 0                 0                 0                 0
Percentage of Facilities Closing........                0%                0%                0%                0%
Number of Facilities with Moderate                       0                 0                 0                 0
 Impacts................................
Percentage of Facilities with Moderate                  0%                0%                0%                0%
 Impacts................................
Annualized Compliance Costs (after tax,              $1.13             $1.52             $1.99             $0.60
 million 2009 $)........................
----------------------------------------------------------------------------------------------------------------

iv. Firm-Level Impact
    In addition to analyzing the impact of the regulation at the 
facility level, EPA also examined the impact of the proposed rule on 
firms that own manufacturing facilities with cooling water intake 
structures. A firm that owns multiple facilities could be adversely 
affected due to the cumulative burden of regulatory requirements over 
these facilities. For the assessment of firm-level effects, EPA 
calculated annualized after-tax compliance costs as a percentage of 
firm revenue and reports here the estimated number and percentage of 
affected firms incurring compliance costs in three cost-to-revenue 
ranges: Less than 1 percent; at least 1 percent but less than 3 
percent; and 3 percent or higher.

[[Page 22222]]

    EPA's sample-based analysis of facilities in the Primary 
Manufacturing Industries supports specific estimates of the number of 
facilities expected to be affected by the regulation and the total 
compliance costs expected to be incurred in these facilities. However, 
the sample-based analysis does not support specific estimates of the 
number of firms that own facilities in the Primary Manufacturing 
Industries. In addition, and as a corollary, the sample-based analysis 
does not support specific estimates of the number of regulated 
facilities that may be owned by a single firm, or of the total of 
compliance costs across regulated facilities that may be owned by a 
single firm. For the firm-level analysis, EPA therefore considered two 
approximate bounding cases based on the sample weights developed from 
the facility survey. These cases provide a range of estimates for the 
number of firms incurring compliance costs and the costs incurred by 
any firm owning a regulated facility. The cases are as follows:
    1. Lower bound estimate of number of firms owning facilities that 
face requirements under the regulation; upper bound estimate of total 
compliance costs that a firm may incur. For this case, EPA assumed that 
any firm owning a regulated sample facility(ies), owns the known sample 
facility(ies) and all of the sample weights associated with the sample 
facility(ies). This case yields an approximate lower bound estimate of 
the count of affected firms, and an approximate upper bound estimate of 
the potential cost burden to any single firm (see EBA Chapter 4 for 
information on the analysis of firm-level impacts).
    2. Upper bound estimate of number of firms owning facilities that 
face requirements under the regulation; lower bound estimate of total 
compliance costs that a firm may incur. For this case, EPA inverted the 
prior assumption and assumed (1) that a firm owns only the regulated 
sample facility(ies) that it is known to own from the sample analysis 
and (2) that this pattern of ownership, observed for sampled facilities 
and their owning firms, extends over the facility population 
represented by the sample facilities. This case minimizes the 
possibility of multi-facility ownership by a single firm and thus 
maximizes the count of affected firms, but also minimizes the potential 
cost burden to any single firm.
    Exhibit VII-6 summarizes the results of the firm-level analysis for 
these two analytic cases.

                                 Exhibit VII-6--Firm-Level After-Tax Annual Compliance Costs as a Percentage of Revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Not analyzed due to   Number and percentage with after tax annual compliance costs/
                                                                       lack of revenue                          annual revenue of:
                                                                       information \b\   ---------------------------------------------------------------
            Number of firms in the analysis              Pot. reg. ----------------------    Less than 1%             1-3%               At least 3%
                                                                                         ---------------------------------------------------------------
                                                                      Number       %       Number      %        Number       %        Number       %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Primary Manufacturing Industries
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
Case 1: Lower bound estimate of number of firms owning facilities that face requirements under the regulation; upper bound estimate of total compliance
 costs that a firm may incur \a\........................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1...............................................        117          3          3      113         96          0          0          1          1
Option 2...............................................        117          3          3      113         96          0          0          1          1
Option 3...............................................        117          3          3      113         96          0          0          1          1
Option 4...............................................        117          0          0      117        100          0          0          0          0
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
Case 2: Upper bound estimate of number of firms owning facilities that face requirements under the regulation; lower bound estimate of total compliance
 costs that a firm may incur............................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1...............................................        359          9          3      349         97          0          0          1          0
Option 2...............................................        359          9          3      349         97          0          0          1          0
Option 3...............................................        359          9          3      349         97          0          0          1          0
Option 4...............................................        359          0          0      359        100          0          0          0          0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Other Industries
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1...............................................          9          0          0        9        100          0          0          0          0
Option 2...............................................          9          0          0        9        100          0          0          0          0
Option 3...............................................          9          0          0        9        100          0          0          0          0
Option 4...............................................          9          0          0        9        100          0          0          0          0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The alternative analysis case concepts are not applicable to the Other Industries firms and facilities, because these facilities do not receive
  sample weights.
\b\ For Options 1, 2, and 3, all facilities and parent firms are assigned costs; however three firms are not analyzed because no revenue data is
  available. In Option 4, these three firms are assigned no costs, and so by definition have cost to revenue ratios less than 1% and are categorized as
  such.

    As presented in Exhibit VII-6, EPA estimated that the number of 
firms owning regulated facilities in the Primary Manufacturing 
Industries range from 117 (Case 1 estimate) to 359 (Case 2 estimate), 
depending on the assumed ownership cases outlined above. An additional 
9 firms are known to own facilities in Other Industries.\70\
---------------------------------------------------------------------------

    \70\ The alternative analysis case approaches are not applicable 
to the Other Industries firms and facilities, because these 
facilities do not receive sample weights.
---------------------------------------------------------------------------

    EPA's analyses indicate that the number of firms falling in the 
reported cost-to-revenue impact ranges is the

[[Page 22223]]

same across Options 1, 2, and 3, by analysis case. No firms fall in the 
reported impact ranges under Option 4 for either analysis case. Under 
Case 1, Lower Bound Estimate of Number of Firms Owning Facilities/Upper 
Bound Estimate of Costs Incurred by these Firms, zero of the estimated 
117 firms owning Manufacturers facilities incur costs between 1 and 3 
percent of revenue for all Options, and one firm incurs costs exceeding 
3 percent of revenue under Options 1, 2, and 3. No firms incur costs 
exceeding 3 percent of revenue under Option 4. The remaining 113 
(Options 1, 2, and 3), and 117 (Option 4) firms incur costs below 1 
percent of revenue or no costs.
    Under Case 2, Upper Bound Estimate of Number of Firms Owning 
Facilities/Lower Bound Estimate of Costs Incurred by these Firms, zero 
firms in the Primary manufacturing industries are estimated to incur 
costs between 1 and 3 percent of revenue under all Options. Like Case 
1, one firm incurs costs exceeding 3 percent of revenue under Options 
1, 2, and 3, and no firms incur costs exceeding 3 percent of revenue 
under Option 4. The remaining 349, and 359 firms, respectively, incur 
costs below 1 percent of revenue or no costs.
    For the firms owning Other Industries facilities, EPA's analysis 
indicates that across all Options, no firms incur costs exceeding 1 
percent of revenue.
    Regardless of the analysis case or regulatory option, the number 
and percentage of firms incurring costs between one and three percent 
of revenue, or exceeding three percent of revenue, are small.
b. Electric Generators
    For Electric Generators, EPA assessed the economic impact of the 
regulatory options in three major ways: (1) Entity level impacts (at 
both the facility and parent company levels), (2) potential electricity 
price effects on residential and other electricity consumers, and (3) 
broader electricity market impacts (taking into account the 
interconnectedness of regional and national electricity markets, using 
five metrics, for the full industry, for in-scope facilities only, and 
as the distribution of impacts at the facility level).
1. Assessment of the Impact on Complying Facilities and Parent Entities
    EPA assessed the cost to complying facilities and parent entities 
based on cost-to-revenue analyses. For these two analyses, the Agency 
assumed that none of the compliance costs will be passed on to 
consumers through electricity rate increases and will instead be 
absorbed by complying facilities and their parent entities. In 
performing these and other impact analyses, EPA developed and used 
sample weights to extrapolate impacts assessed initially at the level 
of a sample of facilities to the full population of in-scope 
facilities. Specifically, EPA developed and used different sets of 
weights, with each weight set being used to derive a specific estimate 
and/or used with a different set of sample facilities to which the 
weights were applied to derive a given estimate. (See Appendix 3.A of 
the EBA report for a discussion on weights development and 
application.)
a. Cost-to-Revenue Analysis for Complying Facilities
    To provide insight on the potential significance of the compliance 
costs to complying facilities, EPA calculated the annualized after-tax 
compliance costs of the regulatory options as a percentage of baseline 
annual revenues, for 559 in-scope facilities.71 72 Most of 
the revenue estimates used in this analysis were developed using the 
average of facility-specific baseline (i.e., pre-promulgation) 
projections from the Integrated Planning Model (IPM) for 2015, 2020, 
2025, and 2028.\73\ In a few instances where IPM-based revenue values 
were not available, EPA used estimates based on Energy Information 
Administration (EIA) data. EPA performed this analysis for each of the 
257 facilities for which compliance cost estimates were explicitly 
developed. As stated above, EPA used facility sample weights to 
estimate the total numbers of in-scope facilities that fall within 
various cost-to-revenue ranges as reported in Exhibit VII-7 (see 
Chapter 5 of the EBA report for a discussion of the facility-level 
cost-to-revenue analysis).
---------------------------------------------------------------------------

    \71\ For private, tax-paying entities, after-tax costs are a 
more relevant measure of potential cost burden than pre-tax costs. 
For non tax-paying entities (e.g., State government and municipality 
owners of in-scope facilities), the estimated costs used in this 
calculation include no adjustment for taxes.
    \72\ For the facility cost-to-revenue analysis, EPA estimated 
compliance costs for all facilities as of an assumed single proxy 
compliance year, 2015, for comparison with 2015 revenues. EPA's 
choice of the year for which cost and revenue values are used in a 
particular part of the cost analysis was driven by the concept of a 
given analysis (e.g., should cost and revenue values be as of the 
Rule promulgation year, as of a facility's expected compliance year, 
or as of a post-compliance, steady state operations year?) and the 
availability of data for the analysis. For more information on the 
methodology for the facility-level cost-to-revenue analysis, see 
Chapter 5 of the EBA report.
    \73\ To develop the average of year-by-year revenue values over 
the data years, EPA set aside from the averaging calculation, 
revenue values for years that are substantially lower than the 
otherwise ``steady state average''--e.g., because of a generating 
unit being out of service for an extended period. EPA believes the 
resulting cost-to-revenue comparison provides a more realistic 
assessment of potential impact on a ``steady state'' operations 
basis.
---------------------------------------------------------------------------

    Exhibit VII-7, below, summarizes the facility-level cost-to-revenue 
analysis results for each option, by North American Electricity 
Reliability Corporation (NERC) region.\74\ EPA estimates for Options 1 
and 4, that the majority of facilities subject to today's proposal will 
incur annualized costs of less than 1 percent of revenue (481 
facilities or 86 percent). Under Options 2 and 3, the majority of in-
scope facilities, 333 (or approximately 60 percent) and 386 (or 
approximately 69 percent), respectively, will incur annualized costs 
exceeding 3 percent of revenue.
---------------------------------------------------------------------------

    \74\ The NERC regions used for summarizing these findings are as 
of 2008. Some NERC regions have been re-defined over the past few 
years. The NERC region definitions used in today's Proposed Existing 
Facilities Regulation analyses vary by analysis depending on which 
region definition aligns better with the data elements underlying 
the analysis.

     Exhibit VII-7--Facility-Level Cost-to-Revenue Analysis Results by Regulatory Option and NERC Region \a\
----------------------------------------------------------------------------------------------------------------
                                                   Number of facilities with cost-to-
 Number of in-scope facilities \a,   No revenue             revenue ratio of              Minimum      Maximum
                b\                      \c\     ---------------------------------------   ratio  %     ratio  %
                                                     < 1%         1-3%         > 3%
----------------------------------------------------------------------------------------------------------------
                                             Option 1: IM Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC..............................            0            0            0            0         0.00         0.00
ERCOT.............................            5           28            7            2         0.00         3.28
FRCC..............................            0           18            4            4         0.00         3.49

[[Page 22224]]

 
HICC..............................            0            2            2            0         0.34         1.04
MRO...............................            0           43            4            0         0.00         1.80
NPCC..............................            0           49           14            0         0.00         2.64
RFC...............................            0          148           13            3         0.00         3.58
SERC..............................            0          146            6            5         0.00         3.61
SPP...............................            0           28            6            0         0.00         2.38
WECC..............................            0           19            0            4         0.00         3.38
                                   -----------------------------------------------------------------------------
    Total.........................            5          481           55           18         0.00         3.61
----------------------------------------------------------------------------------------------------------------
                   Option 2: IM Everywhere and EM for Facilities With DIF  125 MGD
----------------------------------------------------------------------------------------------------------------
ASCC..............................            0            0            0            0         0.00         0.00
ERCOT.............................            5            5            1           31         0.00        43.39
FRCC..............................            0            5            4           16         0.00        35.37
HICC..............................            0            0            0            3         3.87         8.48
MRO...............................            0           20            6           20         0.00        10.96
NPCC..............................            0           15           10           38         0.00        37.53
RFC...............................            0           47           15          102         0.00        12.50
SERC..............................            0           44           14          100         0.00        24.23
SPP...............................            0           11            6           17         0.00        49.66
WECC..............................            0           19            0            4         0.00        40.10
                                   -----------------------------------------------------------------------------
    Total.........................            5          166           55          333         0.00        49.66
----------------------------------------------------------------------------------------------------------------
                                       Option 3: I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC..............................            0            0            0            0         0.00         0.00
ERCOT.............................            5            5            1           31         0.00        43.39
FRCC..............................            0            5            4           16         0.00        35.37
HICC..............................            0            0            0            3         3.87         8.48
MRO...............................            0            6            7           33         0.00        18.38
NPCC..............................            0            0            9           55         1.22        37.53
RFC...............................            0           38            8          119         0.00        51.38
SERC..............................            0           29           22          106         0.00        28.47
SPP...............................            0           11            6           17         0.00        49.66
WECC..............................            0           17            0            6         0.00        40.10
                                   -----------------------------------------------------------------------------
    Total.........................            5          112           57          386         0.00        51.38
----------------------------------------------------------------------------------------------------------------
                             Option 4: IM for Facilities With DIF  50 MGD
----------------------------------------------------------------------------------------------------------------
ASCC..............................            0            0            0            0         0.00         0.00
ERCOT.............................            5           28            7            2         0.00         3.28
FRCC..............................            0           18            4            4         0.00         3.49
HICC..............................            0            2            2            0         0.34         1.04
MRO...............................            0           43            4            0         0.00         1.80
NPCC..............................            0           52           11            0         0.00         2.64
RFC...............................            0          151           12            2         0.00         3.54
SERC..............................            0          148            5            5         0.00         3.61
SPP...............................            0           28            6            0         0.00         2.38
WECC..............................            0           19            0            4         0.00         3.38
                                   -----------------------------------------------------------------------------
    Total.........................            5          488           49           17         0.00         3.61
----------------------------------------------------------------------------------------------------------------
\a\ No explicitly analyzed facilities are located in the ASCC region. For more information on explicitly and
  implicitly analyzed in-scope facilities see Appendix 3.A of the EBA report.
\b\ Facility counts exclude baseline closures.
\c\ IPM and EIA report no revenue for 2 facilities (5 on the weighted basis); consequently, facility-level cost-
  to-revenue analysis is performed for 257 facilities (559 on the weighted basis).

b. Parent Entity-Level Cost-to-Revenue Analysis
    EPA also assessed the economic impact of the options considered for 
today's proposed rule at the parent entity-level. The cost-to-revenue 
analysis at the entity level provides insight on the impact of 
compliance requirements on those entities that own more than one in-
scope facility. For this analysis, EPA identified the domestic parent 
entity of each in-scope facility and obtained the entity's revenue from 
publicly available data sources. For 5 identified ultimate parent 
entities that own at least one explicitly analyzed Electric Generator 
(i.e., Detailed Questionnaire (DQ) facilities and a

[[Page 22225]]

subset of the Short Technical Questionnaire (STQ) facilities with re-
circulating systems in their baseline) and that are non-U.S. firms EPA 
could not obtain revenue for a domestic entity but did obtain revenue 
at the level of the international parent entity; for these 5 entities, 
EPA used this international entity revenue in the cost-to-revenue 
analysis. EPA compared the total annualized after-tax compliance costs, 
as of 2015 to the identified parent entity's total sales revenue (see 
Chapter 5 of the EBA report).
    Because compliance costs for the regulatory options were directly 
attributable to only a subset of the in-scope facilities (i.e., the 
explicitly analyzed, Detailed Questionnaire (DQ) facilities and a 
subset of the Short Technical Questionnaire (STQ) facilities with re-
circulating systems in their baseline) and were therefore able to be 
linked with only a subset of the parent entities that own in-scope 
facilities, EPA developed and used entity-level sample weights for this 
analysis, as outlined in the Appendix 3.A of the EBA report. EPA 
defined two cases combining entity-level sample weights with facility-
level weights to yield approximate estimates of the numbers of parent 
entities incurring costs in specific cost-to-revenue ranges. Each case 
addresses a specific element of the understanding of entity-level 
effects (see Chapter 5 of the EBA report for a discussion of the 
entity-level cost-to-revenue analysis):
     Estimation of facility costs at the level of the parent 
entity, accounting for the potential ownership of implicitly analyzed, 
sample-represented facilities by an identified parent entity and
     Estimation of the number of parent entities, accounting 
for the potential presence of parent entities that own only (an) 
implicitly analyzed facility(ies) and thus cannot be associated with 
the explicitly analyzed facilities.
    The two analysis cases and the findings from their analysis are as 
follows:
     Using facility-level weights: For this case, facility-
level weights were applied to the estimated compliance costs for 
facilities identified as being owned by a given parent entity.\75\ This 
calculation may overstate the number of facilities and compliance costs 
at the level of any given parent entity, but also likely underestimates 
the number of parent entities. This analysis indicates that 97 unique 
parent entities own 559 facilities subject to today's proposal. From 
this analysis, EPA estimates that the majority of parent entities will 
incur annualized costs of less than one percent of revenues under 
Option 1 (85 out of 97 parent entities or 89 percent), Option 2 (54 out 
of 97 parent entities or 56 percent), and Option 4 (86 out of 97 parent 
entities or 91 percent). Under the more costly Option 3, a nearly equal 
number of entities are expected to incur costs above and below 1 
percent of revenue, i.e., 46 and 45 out of 91 parent entities, 
respectively, not taking into account 6 parent entities with unknown 
revenue (see Exhibit VII-8).
---------------------------------------------------------------------------

    \75\ Parent entity weights were not used in this calculation 
because the combination of facility weights and entity weights would 
overstate, perhaps substantially, the estimate of in-scope 
facilities and compliance costs assigned to parent entities.

                               Exhibit VII-8--Entity-Level Cost-to-Revenue Analysis Results, Using Facility-Level Weights
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Total number                         Number of entities with cost-to-revenue ratio of\a\
            Parent entity type               of facilities   Total number  ---------------------------------------------------------------
                                                  \b\         of entities        < 1%            1-3%            > 3%           Unknown
------------------------------------------------------------------------------------------------------------------------------------------
                                                          Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative...............................              25              11              10               0               1               0
Federal...................................              16               1               1               0               0               0
Investor-owned............................             306              38              38               0               0               0
Municipality..............................              25              13               9               4               0               0
Nonutility................................             170              30              23               0               1               6
Other political subdivision...............               0               0               0               0               0               0
State.....................................              17               4               4               0               0               0
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................             559              97              85               4               2               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Option 2: IM Everywhere and EM for Facilities With DIF  125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative...............................              25              11               7               1               3               0
Federal...................................              16               1               0               0               1               0
Investor-owned............................             306              38              20              14               4               0
Municipality..............................              25              13               6               5               2               0
Nonutility................................             170              30              18               2               4               6
Other political subdivision...............               0               0               0               0               0               0
State.....................................              17               4               3               0               1               0
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................             559              97              54              22              15               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Option 3: I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative...............................              25              11               4               3               4               0
Federal...................................              16               1               0               0               1               0
Investor-owned............................             306              38              20              14               4               0
Municipality..............................              25              13               2               5               6               0
Nonutility................................             170              30              18               2               4               6
Other political subdivision...............               0               0               0               0               0               0
State.....................................              17               4               2               1               1               0
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................             559              97              46              25              20               6
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 22226]]

 
                                          Option 4: IM for Facilities With DIF  50 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative...............................              25              11              10               0               1               0
Federal...................................              16               1               1               0               0               0
Investor-owned............................             306              38              38               0               0               0
Municipality..............................              25              13              10               3               0               0
Nonutility................................             170              30              23               0               1               6
Other political subdivision...............               0               0               0               0               0               0
State.....................................              17               4               4               0               0               0
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................             559              97              86               3               2               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ EPA was unable to determine entity-level revenues for 6 (8 weighted) parent entities; consequently, for the purpose of this analysis, EPA used the
  sum of facility-level revenues for facilities owned by these parent entities.
\b\ Facility counts exclude baseline closures.

     Using entity-level weights: For this case, entity-level 
weights were applied to the calculated number of parent entities 
estimated to incur costs in each cost-to-revenue range.\76\ This 
calculation may understate the number of facilities and compliance 
costs at the level of any given parent entity, but accounts more 
comprehensively for the number of parent entities owning in-scope 
facilities. This analysis found that 140 unique domestic parent 
entities own 257 facilities subject to today's proposal (see Exhibit 
VII-9).\77\ From this analysis, EPA estimates that the majority of 
parent entities will incur annualized costs of less than one percent of 
revenues regardless of the option.
---------------------------------------------------------------------------

    \76\ In the same way as stated above, facility weights were not 
used in conjunction with entity weights because the combination of 
facility weights and entity weights would overstate, perhaps, the 
estimate of in-scope facilities and compliance costs assigned to 
parent entities.
    \77\ The NERC regions used to summarize these findings are as of 
2004, which is the NERC region basis used in the utility-level EIA 
2007 database. Some NERC regions have been re-defined over the past 
few years. The NERC region definitions used in these analyses vary 
by analysis depending on which region definition aligns better with 
the data elements underlying the analysis.

                                Exhibit VII-9--Entity-Level Cost-to-Revenue Analysis Results, Using Entity-Level Weights
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Total number    Total number        Number of entities with cost-to-revenue ratio of \a\
                   Parent entity type                      of facilities    of entities  ---------------------------------------------------------------
                                                                \b\             \c\            < 1%            1-3%            > 3%           Unknown
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative.............................................              13              20              18               2               0               0
Federal.................................................               7               1               1               0               0               0
Investor-owned..........................................             138              42              42               0               0               0
Municipality............................................              13              35              35               0               0               0
Nonutility..............................................              78              38              29               0               1               8
Other political subdivision.............................               0               0               0               0               0               0
State...................................................               8               4               4               0               0               0
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             257             140             129               2               1               8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Option 2: IM Everywhere and EM for Facilities With DIF  125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative.............................................              13              20              13               5               2               0
Federal.................................................               7               1               0               0               1               0
Investor-owned..........................................             138              42              35               6               1               0
Municipality............................................              13              35              24               8               3               0
Nonutility..............................................              78              38              25               4               1               8
Other political subdivision.............................               0               0               0               0               0               0
State...................................................               8               4               3               0               1               0
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             257             140             101              23               9               8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Option 3: I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative.............................................              13              20               9               9               2               0
Federal.................................................               7               1               0               0               1               0
Investor-owned..........................................             138              42              35               6               1               0
Municipality............................................              13              35              13              11              11               0
Nonutility..............................................              78              38              25               4               1               8
Other political subdivision.............................               0               0               0               0               0               0
State...................................................               8               4               3               0               1               0
                                                         -----------------------------------------------------------------------------------------------

[[Page 22227]]

 
    Total...............................................             257             140              86              29              17               8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Option 4: IM for Facilities With DIF  50MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative.............................................              13              20              18               2               0               0
Federal.................................................               7               1               1               0               0               0
Investor-owned..........................................             138              42              42               0               0               0
Municipality............................................              13              35              36               0               0               0
Nonutility..............................................              78              38              29               0               1               8
Other political subdivision.............................               0               0               0               0               0               0
State...................................................               8               4               4               0               0               0
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             257             140             130               2               1               8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ EPA was unable to determine entity-level revenues for 6 (8 weighted) parent entities; consequently, for the purpose of this analysis, EPA used the
  sum of facility-level revenues for facilities owned by these parent entities.
\b\ Facility counts exclude baseline closures.
\c\ There are a total of 143 parent entities on an unweighted basis, 3 of which are other political subdivision entities. These entities own only
  implicitly analyzed facilities; consequently, there is no explicitly analyzed other political subdivision parent entity to represent these implicitly
  analyzed parent entities and total weighted entity counts do not include 3 other political subdivision entities.

    As discussed above, because compliance costs for the regulatory 
options were directly attributable to only a subset of the in-scope 
facilities and were therefore able to be linked with only a subset of 
the parent entities that own in-scope facilities, EPA conducted entity 
cost-to-revenue analysis using two weighting approaches. Using 
facility-level weights is likely to underestimate the number of parent 
entities and overstate the number of facilities and compliance costs at 
the level of any given parent entity. At the same time, using entity-
level weights is likely to account more comprehensively for the number 
of parent entities owning in-scope facilities but understate the number 
of facilities and compliance costs at the level of any given parent 
entity.
    Under these alternative approaches, at the 1-3 percent of revenue 
impact level, EPA estimates that 4 and 2 firms (4.1 percent and 1.4 
percent of firms owning in-scope facilities, respectively) would fall 
in this impact range under Option 1, 22 and 23 firms (22.7 percent and 
16.4 percent, respectively) under Option 2, and 25 and 29 firms (25.8 
percent and 20.7 percent, respectively) under Option 3. At the 3 
percent of revenue impact level, the Agency estimates that 2 and 1 
firms (2.1 percent and 0.7 percent, respectively) would fall in this 
impact range under Option 1, 15 and 9 firms (15.5 percent and 6.4 
percent, respectively) under Option 2, and 20 and 17 firms (20.6 
percent and 12.1 percent, respectively) under Option 3. The results for 
Option 4 are virtually identical to those of Option 1, with one fewer 
entity incurring costs between 1 and 3 percent of revenue.
2. Assessment of Potential Electricity Price Effects
    As an additional measure of economic impact, EPA assessed the 
potential electricity price effects from today's Proposed Existing 
Facilities Regulation in two ways: (1) An assessment of the potential 
annual increase in household electricity costs and (2) an assessment of 
the potential annual increase in electricity costs per MWh of total 
electricity sales. These analyses assume that all compliance costs will 
be passed through on a pre-tax basis as increased electricity prices as 
opposed to the treatment in the facility- and firm-level analyses 
discussed in Section VII.D.b.1, which assume that none of the 
compliance costs will be passed to consumers through electricity rate 
increases. For discussion of the reasonableness of this assumption see 
EBA Chapter 5.
a. Cost to Residential Households
    Using the assumptions outlined above, EPA estimated the potential 
annual increase in electricity costs per household by NERC region. The 
analysis uses the total annualized pre-tax compliance cost per megawatt 
hour (MWh) for the year 2015, in conjunction with the reported total 
electricity sales quantity for each NERC region as reported by the EIA 
for 2007 for all NERC regions except ASCC and HICC, for which total 
2015 electricity sales projections came from the Department of Energy's 
Annual Energy Outlook 2009 (AEO 2009).\78\ This analysis also uses the 
quantity of residential electricity sales per household as reported by 
the 2007 EIA for all NERC regions 2007.
---------------------------------------------------------------------------

    \78\ AEO does not provide information for ASCC and HICC.
---------------------------------------------------------------------------

    To calculate the average cost per household, by region, EPA divided 
total compliance costs for each NERC region by the reported total MWh 
of sales within the region. The potential annual cost impact per 
household was then calculated by multiplying the estimated average cost 
per MWh by the average MWh per household, by NERC region.\79\
---------------------------------------------------------------------------

    \79\ The NERC regions used for summarizing these findings are as 
of 2004, which is the NERC region basis used in the utility-level 
EIA 2006 database. Some NERC regions have been re-defined over the 
past few years. The NERC region definitions used in today's Proposed 
Existing Facilities Regulation analyses vary by analysis depending 
on which region definition aligns better with the data elements 
underlying the analysis.
---------------------------------------------------------------------------

    Exhibit VII-10 below, summarizes the annual household impact 
results for each option, by NERC region. These results show that for 
Option 1, the average annual cost per residential household is expected 
to range from $0.05 in WECC to $3.93 in SPP, for Option 2 from $0.09 in 
WECC to $27.11 in SERC, and for Option 3 from $0.11 in WECC to $27.88 
in SERC. Overall, for a typical U.S. household, Option 4 is expected to 
result in the lowest annual cost of $1.37 per household, while Option 3 
is expected to result in the highest annual cost of $17.60 per 
household. Option 1 and Option 2 are estimated to result in annual 
costs of $1.41 per household and $17.09 per household, respectively.

[[Page 22228]]



 Exhibit VII-10--Average Annual Cost per Residential Household in 2015 by Regulatory Option and NERC Region \a\
                                                       \b\
----------------------------------------------------------------------------------------------------------------
             NERC Region \c\                  Option 1          Option 2          Option 3          Option 4
----------------------------------------------------------------------------------------------------------------
ASCC....................................             $0.00             $0.00             $0.00             $0.00
ECAR....................................              1.23             20.00             20.47              1.22
ERCOT...................................              1.76             26.52             26.52              1.74
FRCC....................................              2.37             17.89             18.21              2.37
HICC....................................              3.16             23.82             23.82              3.16
MAAC....................................              2.11             18.97             19.31              1.95
MAIN....................................              1.46             19.18             20.18              1.41
MAPP....................................              1.79             16.00             17.04              1.74
NPCC....................................              1.38             19.89             21.13              1.37
SERC....................................              1.64             27.11             27.88              1.61
SPP.....................................              3.93             21.56             21.56              3.86
WECC....................................              0.05              0.09              0.11              0.01
U.S.....................................              1.41             17.09             17.60              1.37
----------------------------------------------------------------------------------------------------------------
\a\ The rate impact analysis assumes full pass-through of all compliance costs to electricity consumers.
\b\ Cost estimates exclude baseline closures.
\c\ No explicitly analyzed facilities are located in the ASCC region. For more information on explicitly and
  implicitly analyzed in-scope facilities see Appendix 3.A of the EBA report.

    As stated above, this analysis assumes that all of the compliance 
costs will be passed onto consumers through increased electricity 
rates. However, at least some facilities and firms are likely to absorb 
some of these costs, thereby reducing the impact of today's proposed 
rule on electricity consumers. At the same time, EPA recognizes that 
Electric Generators that operate as regulated public utilities are 
generally permitted to pass on environmental compliance costs as rate 
increases to consumers.
b. Compliance Cost per Unit of Electricity Sales
    EPA also calculated the per unit of electricity sales cost of the 
regulatory options. EPA used two data inputs in this analysis (1) total 
pre-tax compliance cost by NERC region, and (2) estimated total 
electricity sales, from the AEO 2009 for 2015, by NERC region, for all 
NERC regions except ASCC and HICC; for ASCC and HICC EPA used 2007 EIA. 
The Agency summed sample-weighted pre-tax annualized compliance costs 
as of 2015 over complying facilities by NERC region to calculate an 
approximate total estimated annual cost in each region. EPA then 
calculated the approximate average price impact per unit of electricity 
consumption by dividing total compliance costs by the reported total 
MWh of sales in each NERC region.
    As reported in Exhibit VII-11, annualized compliance costs (in 
dollars per KWh sales) range from 0.001[cent] in the WECC region to 
0.040[cent] in the HICC region for Option 1, from 0.001[cent] in the 
WECC region to 0.303[cent] in the HICC region for Options 2 and 3, and 
from less than 0.001[cent] in the WECC region to 0.040[cent] in the 
HICC region for Option 4. On average, across the United States, Option 
4 results in the lowest cost of 0.012[cent] per KWh, while Option 3 
results in the highest cost of 0.157[cent] per KWh. Option 1 and Option 
2 result in national costs of 0.013[cent] per KWh and 0.153[cent] per 
KWh, respectively.

Exhibit VII-11--Compliance Cost per Unit of Electricity Sales in 2015 by Regulatory Option and NERC Region (2009
                                            [cent]/KWh Sales) \a\ \b\
----------------------------------------------------------------------------------------------------------------
                                                                                             Compliance cost per
                                                 Annualized pre-tax     Total electricity    unit of electricity
                NERC Region \c\                   compliance costs         sales (KWh)       sales (2009 [cent]/
                                                      (2009 $)                                   KWh sales)
----------------------------------------------------------------------------------------------------------------
                                             Option 1: IM Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC..........................................                    $0         6,326,610,000                 0.000
ECAR..........................................            62,390,503       569,849,487,305                 0.011
ERCOT.........................................            40,029,111       313,395,965,576                 0.013
FRCC..........................................            41,259,203       242,320,907,593                 0.017
HICC..........................................             4,259,468        10,585,038,000                 0.040
MAAC..........................................            61,468,467       294,365,234,375                 0.021
MAIN..........................................            41,292,594       275,415,008,545                 0.015
MAPP..........................................            27,565,966       165,189,056,396                 0.017
NPCC..........................................            51,647,619       284,990,412,176                 0.018
SERC..........................................            99,360,633       887,073,303,223                 0.011
SPP...........................................            63,811,175       204,172,271,729                 0.031
WECC..........................................             4,015,273       701,826,043,025                 0.001
U.S...........................................           497,100,012     3,960,424,804,688                 0.013
----------------------------------------------------------------------------------------------------------------
                   Option 2: IM Everywhere and EM for Facilities with DIF  125 MGD
----------------------------------------------------------------------------------------------------------------
ASCC..........................................                     0         6,326,610,000                 0.000
ECAR..........................................         1,010,953,670       569,849,487,305                 0.177
ERCOT.........................................           602,721,709       313,395,965,576                 0.192
FRCC..........................................           311,699,736       242,320,907,593                 0.129
HICC..........................................            32,074,166        10,585,038,000                 0.303

[[Page 22229]]

 
MAAC..........................................           551,710,436       294,365,234,375                 0.187
MAIN..........................................           542,786,160       275,415,008,545                 0.197
MAPP..........................................           246,541,770       165,189,056,396                 0.149
NPCC..........................................           744,738,535       284,990,412,176                 0.261
SERC..........................................         1,643,059,866       887,073,303,223                 0.185
SPP...........................................           350,239,021       204,172,271,729                 0.172
WECC..........................................             6,930,361       701,826,043,025                 0.001
U.S...........................................         6,043,455,430     3,960,424,804,688                 0.153
----------------------------------------------------------------------------------------------------------------
                                       Option 3: I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
ASCC..........................................                     0         6,326,610,000                 0.000
ECAR..........................................         1,035,075,751       569,849,487,305                 0.182
ERCOT.........................................           602,721,709       313,395,965,576                 0.192
FRCC..........................................           317,419,881       242,320,907,593                 0.131
HICC..........................................            32,074,166        10,585,038,000                 0.303
MAAC..........................................           561,627,430       294,365,234,375                 0.191
MAIN..........................................           571,233,958       275,415,008,545                 0.207
MAPP..........................................           262,582,596       165,189,056,396                 0.159
NPCC..........................................           791,203,354       284,990,412,176                 0.278
SERC..........................................         1,689,520,164       887,073,303,223                 0.190
SPP...........................................           350,239,021       204,172,271,729                 0.172
WECC..........................................             8,641,891       701,826,043,025                 0.001
U.S...........................................         6,222,339,919     3,960,424,804,688                 0.157
----------------------------------------------------------------------------------------------------------------
                             Option 4: IM for Facilities with DIF  50MGD
----------------------------------------------------------------------------------------------------------------
ASCC..........................................                     0         6,326,610,000                 0.000
ECAR..........................................            61,651,375       569,849,487,305                 0.011
ERCOT.........................................            39,560,948       313,395,965,576                 0.013
FRCC..........................................            41,259,203       242,320,907,593                 0.017
HICC..........................................             4,259,468        10,585,038,000                 0.040
MAAC..........................................            56,749,132       294,365,234,375                 0.019
MAIN..........................................            40,018,375       275,415,008,545                 0.015
MAPP..........................................            26,744,938       165,189,056,396                 0.016
NPCC..........................................            51,290,663       284,990,412,176                 0.018
SERC..........................................            97,785,654       887,073,303,223                 0.011
SPP...........................................            62,721,433       204,172,271,729                 0.031
WECC..........................................               913,556       701,826,043,025                 0.000
U.S...........................................           482,954,744     3,960,424,804,688                 0.012
----------------------------------------------------------------------------------------------------------------
\a\ This analysis assumes full pass-through of all compliance costs to electricity consumers.
\b\ Cost values exclude baseline closures.
\c\ There are no explicitly analyzed facilities located in the ASCC region. For more information on explicitly
  and implicitly analyzed in-scope facilities see Appendix 3.A of the EBA report.

3. Assessment of the Impacts in the Context of Electricity Markets
    In the analyses for the previous 316(b) regulations, EPA used the 
Integrated Planning Model (IPM), a comprehensive electricity market 
optimization model, to assess the economic impact of regulatory options 
within the context of regional and national electricity markets. For 
its economic impact assessment of today's proposed regulatory options, 
EPA used an updated version of this same analytic system, Integrated 
Planning Model Version 3.02 EISA (IPM V3.02), to assess facility and 
market-level effects of the options.
    Use of a comprehensive, market analysis system is important in 
assessing the potential impact of the options because of the 
interdependence of electricity generating units in supplying power to 
the electric transmission grid. Increases in electricity production 
costs and potential reductions in electricity output at directly 
affected facilities--whether due to the temporary shutdown of electric 
generating units during technology installation and/or the energy 
production penalties that can result from compliance system operation--
can have a range of broader market impacts that extend beyond the 
effect on complying facilities and their direct customers. In addition, 
the impact of compliance requirements on directly affected facilities 
may be seen differently when the analysis considers the impact on those 
facilities in the context of the broader electricity market instead of 
looking at the impact on a standalone, single-facility basis.
    IPM V3.02 provides outputs for the North American Electric 
Reliability Corporation (NERC) regions that lie within the continental 
United States. IPM V3.02 does not analyze electric power operations in 
Alaska and Hawaii because these states' electric power operations are 
not connected to the continental U.S. power grid.
    IPM V3.02 is based on an inventory of U.S. utility- and non-
utility-owned boilers and generators that provide power to the 
integrated electric transmission grid, as recorded in the Department of 
Energy's Energy Information Administration databases as

[[Page 22230]]

of 2005.\80\ The IPM baseline universe of facilities includes 533, or 
nearly all, of the 559 electric generating facilities that EPA 
estimates will be within the scope of today's proposed rule.\81\ IPM 
Version 3.02 embeds a baseline energy demand forecast that is derived 
from the Department of Energy's Annual Energy Outlook 2008 (AEO2008). 
IPM V3.02 incorporates in its analytic baseline the expected compliance 
response for the following air regulations affecting the power sector: 
Title IV of the Clean Air Act (the Acid Raid Program); the 
NOX SIP Call; various New Source Review (NSR) settlements; 
\82\ and several state rules \83\ affecting emissions of SO2 
and NOX that were finalized through February 3, 2009. IPM 
also includes state rules that have been finalized and/or approved by a 
state's legislature or environmental agency, and in certain instances, 
facility-level compliance technology installations that have already 
been undertaken because of CAIR requirements.84 85
---------------------------------------------------------------------------

    \80\ In some instances, facility information has been updated to 
reflect known material changes in a plant's generating capacity 
since 2005.
    \81\ The exclusions of facilities from the IPM analysis include 
4 facilities that are located in Alaska or Hawaii (and thus not 
included in IPM), 4 ``lower-48'' facilities that are not connected 
to the integrated electric transmission grid, 7 facilities excluded 
from the IPM baseline as the result of custom adjustments made by 
ICF, and 11 facilities that are not explicitly present in the 316(b) 
facility dataset for this analysis. See Chapter 6 of the EBA report 
for more details.
    \82\ Include agreements between EPA and Southern Indiana Gas and 
Electric Company (Vectren), Public Service Enterprise Group, Tampa 
Electric Company, We Energies (WEPCO), Virginia Electric & Power 
Company (Dominion), Santee Cooper, Minnkota Power Coop, American 
Electric Power (AEP), East Kentucky Power Cooperative (EKPC), Nevada 
Power Company, Illinois Power, Mirant, Ohio Edison, and Kentucky.
    \83\ Include current and future state programs in Connecticut, 
Delaware, Georgia, Illinois, Maine, Maryland, Massachusetts, 
Minnesota, Missouri, New Hampshire, North Carolina, New Jersey, New 
York, Oregon, Texas, and Wisconsin.
    \84\ For a detailed description of IPM Version 3.02, see Chapter 
6 of the EBA report.
    \85\ At the time that EPA began analyzing the Proposed Existing 
Facilities Rule options, the Agency was still developing the 
regulatory standards to replace CAIR requirements. The Transport 
Rule, which replaces CAIR, was proposed on July 6, 2010, i.e., after 
EPA began to develop the baseline for the current 316(b) existing 
facilities rule analyses. Consequently, the IPM baseline used for 
the analysis of the Proposed existing facilities rule options does 
not reflect requirements under the newly proposed Transport Rule. 
However, because EPA used IPM v3.02 EISA, i.e., the same IPM version 
used for the market model analysis of 316(b) regulatory options, to 
assess the impact of the proposed Transport Rule on the U.S. 
electric power sector, the 316(b) baseline includes other important 
existing regulations currently affecting this industry sector. 
Consequently, on balance, EPA judges that the performance of the 
market model analyses against the v3.02 EISA constitutes a 
reasonable cost and economic impact analysis for the Proposed 
Existing Facilities Rule--in particular, given the uncertainties 
regarding the final standards promulgated, and the specific 
requirements that States will adopt in implementing the Transport 
Rule.
---------------------------------------------------------------------------

    EPA recognizes that due to downtime or connection outages estimated 
to occur in conjunction with installation of several of the 
technologies, and the number of facilities that will need to come into 
compliance over the years after today's rule is promulgated, short-term 
electric reliability issues could occur unless care is taken within 
each region to coordinate outages with NERC and, where possible, with 
normal scheduled maintenance operations. Based on this concern, EPA's 
options were developed with flexibility provided to the permit 
authority to tailor compliance timelines. EPA anticipates in those 
instances where local electric reliability could be affected, 
facilities would notify the Director via provisions in the permit 
application. Once approved, facilities would receive workable 
construction schedules from permit writers to schedule installation 
down times without negatively impacting electric supply reliability.
    In performing analyses based on IPM V3.02, EPA first developed a 
baseline--i.e., without regulation--projection of electricity markets 
and facility operations over the period from the expected promulgation 
date, 2012, through 2028 (pre-regulation baseline case). EPA then 
overlaid this analysis with the estimated compliance costs and other 
operating effects--downtime for installation of compliance technology 
and energy penalty--for in-scope facilities under selected regulatory 
options (post-compliance cases).
    For the IPM analysis, EPA analyzed three options that closely 
correspond to those discussed elsewhere in this document: (1) Non-
Cooling Tower-Based Impingement and Entrainment requirements at all in-
scope facilities (Option 1: IM Everywhere), (2) Impingement Mortality 
Controls at all in-scope facilities, and Cooling Towers at all in-scope 
facilities with DIF exceeding 125 MGD (Option 2: IM Everywhere and EM 
for Facilities with DIF>125MGD), and (3) Cooling Towers at all in-scope 
facilities (Option 3: I&E Mortality Everywhere).\86\ The fourth option 
discussed elsewhere in this document--Option 4: Non-Cooling Tower-Based 
Impingement and Entrainment requirements at all in-scope facilities 
with DIF of 50 MGD or more--was not analyzed in IPM due to time 
constraints. Since this option mimics the requirements of Option 1, but 
only applies them to a subset of in-scope facilities, the findings for 
this option in the IPM analysis would be lower than those estimated for 
Option 1.
---------------------------------------------------------------------------

    \86\ The costs as analyzed in IPM differ slightly from those 
used in the non-IPM analyses. For more details on these differences 
see Chapter 6 of the EBA report.
---------------------------------------------------------------------------

    The IPM V3.02 runs provide analysis results for selected run-years. 
EPA specified these analysis years taking into account the expected 
promulgation date for today's Proposed Existing Facilities Regulation 
(2012), the years in which facilities would be expected to install 
compliance technology and achieve compliance (2013-2027),\87\ and the 
years in which all complying facilities would be expected to achieve 
compliance (2028 and subsequent years). In the following sections, EPA 
reports results for the analysis year 2028, which is the first year 
after promulgation in which all in-scope facilities would be expected 
to have achieved compliance and thus represents a steady state of post-
compliance operations, i.e., the steady-state year.\88\ In addition, 
EPA also analyzed potential electricity market-level effects for years 
during which facilities would be expected to shut down operations 
temporarily to complete technology installation. For the IPM-based 
analyses of IM-only installations, the specified compliance window is 
from 2013 to 2017, for cooling tower installations by fossil fuel 
electric power generating facilities from 2018 to 2022, and for cooling 
tower installations by nuclear electric power generating facilities 
from 2023 to 2027. Consequently, the analysis of compliance technology 
installation downtime used output from model run-years 2015 for IM 
technology installations and 2020 and 2025 for CT installations by 
fossil fuel and nuclear electric power generating facilities, 
respectively. The impacts of the analysis options are measured as the 
difference between key economic and operational impact metrics between 
the pre-regulation baseline case and the post-compliance case.
---------------------------------------------------------------------------

    \87\ For the IPM-based analyses of IM-only installations, the 
specified compliance window is from 2013 to 2017, for cooling tower 
installations by fossil fuel electric power generating facilities 
from 2018 to 2022, and for cooling tower installations by nuclear 
electric power generating facilities from 2023 to 2027.
    \88\ The first year of full compliance is 2028 for Options 2 and 
3, and 2018 for Option 1. To facilitate comparison of market-level 
impacts across options, this presentation focuses on 2028 as the 
steady state comparison year.

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

[[Page 22231]]

a. Analysis Results for the Year 2028--To Reflect Steady State, Post-
Compliance Operations
    For the steady-state analysis (year 2028), EPA considered impact 
metrics of interest at three levels of aggregation: (1) Impact on 
national and regional electricity markets, (2) impact on the group of 
in-scope power generating facilities (i.e., facilities that are 
expected to be within the scope of today's proposed regulation but do 
not necessarily incur technology cost), and (3) impact on individual 
in-scope facilities.
(1) Impact on National and Regional Electricity Markets
    For the assessment of market level impacts, EPA considered five 
output metrics from IPM V3.02: (1) Incremental capacity closures, 
calculated as the difference between capacity under the regulatory 
options and capacity under the base case, which includes both full 
facility closures and partial facility closures (i.e., unit closures) 
in aggregate capacity terms; (2) incremental capacity closures as a 
percentage of baseline capacity; (3) post-compliance changes in 
variable production costs per MWh, calculated as the sum of total fuel 
and variable O&M costs divided by net generation; (4) post-compliance 
changes in energy price, where energy prices are defined as the 
wholesale prices received by facilities for the sale of electric 
generation; and (5) post-compliance changes in pre-tax income, where 
pre-tax income is defined as total revenue minus the sum of fixed and 
variable O&M costs, fuel costs, and annualized capital costs.
    Exhibit VII-12 reports results for the three market model analysis 
Options for each of the five metrics above, with national totals and 
detail at level of regional electricity markets defined on the basis of 
the current NERC regions. These market model analysis options 
correspond to regulatory Options 1, 2, and 3 (EPA did not run Option 4 
separately because EPA assumes baseline MW capacity basis Options 1 and 
4 are similar, and Option 4 is less stringent than Option 1. Results 
for Option 1 can be viewed as an upper bound estimate of the market 
impacts of Option 4 in Exhibits VII-12, VII-13, VII-14, and VII-15). 
The NERC regions are as follows: ERCOT (Electric Reliability Council of 
Texas), FRCC (Florida Reliability Coordinating Council), MRO (Midwest 
Reliability Organization), NPCC (Northeast Power Coordination Council), 
RFC (ReliabilityFirst Corporation), SERC (Southeastern Electricity 
Reliability Council), SPP (Southwest Power Pool), and WECC (Western 
Electricity Coordinating Council).
    Additional results are presented in Chapter 6 of the EBA report. 
Chapter 6 also presents a more detailed interpretation of the results 
of the market-level analysis.

                        Exhibit VII-12--Impact of Market Model Analysis Options on National and Regional Markets at the Year 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Incremental closures
                                                               ------------------------------------     Change in     Change in energy   Change in pre-
                 NERC region                      Baseline                           Percent of         variable        price per MWh      tax income
                                                capacity (MW)     Capacity (MW)       baseline       production cost         (%)          (2009 $)  (%)
                                                                                      capacity        per MWh  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
ERCOT.......................................            98,757               151               0.2              -0.1               0.0              -0.4
FRCC........................................            79,298                75               0.1               0.3               0.0              -0.4
MRO.........................................            71,200                29               0.0              -0.4               0.0              -1.0
NPCC........................................            79,688               682               0.9              -0.4               0.1               0.3
RFC.........................................           244,700              -279              -0.1               0.2               0.1              -0.1
SERC........................................           286,461               -79               0.0              -0.1               0.0              -0.4
SPP.........................................            67,703                13               0.0               0.0               0.0              -0.5
WECC........................................           219,764                 9               0.0               0.0               0.0              -0.1
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................         1,147,571               601               0.1               0.0                NA              -0.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Option 2: IM Everywhere and EM for Facilities with DIF  125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
ERCOT.......................................            98,757             4,462               4.5              -1.1               0.2              -9.5
FRCC........................................            79,298                36               0.0               1.2               0.1              -4.7
MRO.........................................            71,200               806               1.1               1.5               0.1              -8.4
NPCC........................................            79,688             3,862               4.8              -2.6              -1.6             -10.4
RFC.........................................           244,700             3,197               1.3               2.7               0.3             -10.3
SERC........................................           286,461               903               0.3               2.0              -0.1              -8.9
SPP.........................................            67,703               969               1.4               0.9              -0.1              -8.6
WECC........................................           219,764               184               0.1               0.1              -0.3              -0.8
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................         1,147,571            14,418               1.3               1.0                NA              -7.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Option 3--I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
ERCOT.......................................            98,757             4,498               4.6              -1.2               0.2              -9.5
FRCC........................................            79,298                36               0.0               1.3               0.1              -4.8
MRO.........................................            71,200               801               1.1               1.5               0.1              -9.1
NPCC........................................            79,688             3,861               4.8              -2.7              -1.7             -11.0
RFC.........................................           244,700             3,195               1.3               2.7               0.5             -10.2
SERC........................................           286,461               997               0.3               2.0               0.0              -8.9
SPP.........................................            67,703             1,004               1.5               0.9               0.0              -8.7
WECC........................................           219,764               183               0.1               0.1              -0.3              -0.9
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................         1,147,571            14,576               1.3               1.0                NA              -7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 22232]]

    As reported in Exhibit VII-12, the market model analysis indicates 
that Option 1 would have very small effects on overall electricity 
markets, on both a national and regional sub-market basis, in the year 
2028, the first analysis year of full compliance with the regulation. 
At the national level, the analysis indicates a total reduction in 
capacity from closures of 601 MW, or less than 0.1 percent of the total 
capacity baseline in 2028. At the regional level, the greatest capacity 
reduction, 682 MW, occurs in the NPCC region; this reduction would be 
approximately 0.9 percent of baseline capacity. Two NERC regions--RFC 
and SERC--are estimated to experience avoided capacity closures--i.e., 
one or more generating units that are otherwise projected to cease 
operations in the baseline become more economically attractive sources 
of electricity in the post-compliance case, because of relative changes 
in the economics of electricity production across the full market, and 
thus avoid closure. This counterintuitive result is due to the 
integrated nature of electricity markets.
    At the national level, the variable production cost of electricity 
stays essentially the same, but with small variations by region. The 
greatest increase occurs in FRCC (0.3 percent) and the largest decline 
occurring in MRO and NPCC (0.4 percent). Energy prices also change 
little across NERC regions, with NPCC and RFC recording small increases 
of 0.1 percent--these very small estimated changes in energy prices are 
essentially within the analytic ``noise'' of the market model analysis 
system. Given the additional costs from compliance with almost no 
change in electricity prices, national sector-level pre-tax income is 
projected to decline slightly, by 0.3 percent. All regions except NPCC 
experience a decrease in pre-tax income; the greatest decrease, 
approximately 1.0 percent, occurs in MRO.\89\
---------------------------------------------------------------------------

    \89\ IPM does not model traditional utility rate regulation but 
attempts to capture price effects as though they occur in 
competitive, deregulated markets. As a result, the price effects 
estimated in IPM may be less than those that would actually occur, 
given that most States continue to operate under traditional utility 
regulation. Likewise, the proposed rule's impact on electric 
generators' net income may be overstated. In contrast, the 
electricity rate impact analyses presented earlier in this section 
(Section VII. 2), assume full pass-through of compliance costs as 
increased electricity prices, which may more closely approximate the 
price effect in regulated markets, but could overstate the price 
effect in deregulated markets.
---------------------------------------------------------------------------

    Option 2 requires that facilities with cooling water design intake 
of 125 MGD or less meet non-cooling tower-based impingement mortality 
requirements and site-specific entrainment mortality BTA (i.e., Option 
1 specifications), while facilities with cooling water design intake 
exceeding 125 MGD install cooling towers. As expected, the market model 
analysis projects that the more expensive Option 2 with some facilities 
installing cooling towers would have a greater impact than Option 1 on 
national and regional electricity markets. Under Option 2, capacity 
closures total 14,418 MW, or 1.3 percent of the baseline capacity 
value, with all regions projected to incur closures. The largest 
percentage impact occurs in NPCC, with a loss of approximately 4.8 
percent of the baseline capacity value. Similarly, variable production 
costs for electricity generation increase nationally by approximately 
1.0 percent, with the largest increase occurring in RFC, at 2.7 
percent; only two of the 8 NERC regions--ERCOT and NPCC--experience a 
decline of 1.1 percent and 2.6 percent, respectively. The effect on 
energy prices varies across regions, with RFC recording the largest 
increase, at 0.3 percent, and NPCC recording the largest decline, 1.6 
percent. Finally, as would be expected with the higher compliance 
outlays, longer installation downtimes, and energy penalties with some 
facilities installing cooling towers under Option 2, total sector pre-
tax income is more materially affected compared to Option 1: At the 
national level, pre-tax income declines by 7.6 percent. All regions 
experience a loss in pre-tax income, with the largest loss occurring in 
NPCC, at 10.4 percent.
    The market model analysis projects that the most expensive option, 
Option 3 (I&E Mortality Everywhere), would have a slightly greater 
impact on national and regional electricity markets than Option 2, as 
more in-scope facilities are required to install cooling towers (nearly 
all) to meet compliance requirements. Under Option 3, capacity loss is 
nearly the same as under Option 2--14,576 MW or 1.3 percent of the 
baseline capacity value--with all regions projected to incur closures. 
As under Option 2, the largest percentage impact under Option 3 occurs 
in NPCC, with a loss of approximately 4.8 percent of the baseline 
capacity value. Similarly, the impact on variable production costs for 
electricity generation under Option 3 is approximately the same as 
under Option 2 at the national and regional level. At the national 
level, variable production costs increase by 1.0 percent, with the 
largest increase also occurring in RFC, at 2.7 percent; again, only two 
of the 8 NERC regions--ERCOT and NPCC--record a decline of 1.2 percent 
and 2.7 percent, respectively. The effect on energy prices also varies 
across regions, with RFC recording the largest increase of 0.5 percent 
and NPCC recording the largest decline of 1.7 percent. The impact on 
total sector pre-tax income under Option 3 is also similar to the 
impact under Option 2; at the national level, pre-tax income declines 
by 7.7 percent with all regions experiencing a loss in pre-tax income.
(2) Impact on In-Scope Facilities
    EPA used IPM V3.02 results for 2028 to assess the potential impact 
of the regulatory Options on the subset of electric generating 
facilities that are estimated to be within the scope of today's 
proposed regulation compliance requirements. Only results for in-scope 
facilities are reported in this analysis.
    Exhibit VII-13 reports results for the first three of the 
regulatory Options for in-scope facilities, as a group. Chapter 6 of 
the EBA presents a more detailed interpretation of the results of the 
analysis of today's Proposed Existing Facilities Regulation.

        Exhibit VII-13--Impact of Market Model Analysis Options on In-Scope Facilities, at the Year 2028
----------------------------------------------------------------------------------------------------------------
                                                                   Incremental closures             Change in
                                                           ------------------------------------     variable
               NERC region                    Baseline                           Percent of      production cost
                                           capacity  (MW)    Capacity  (MW)       baseline           per MWh
                                                                                  capacity          (percent)
----------------------------------------------------------------------------------------------------------------
                                             Option 1--IM Everywhere
----------------------------------------------------------------------------------------------------------------
ERCOT...................................            35,985               -99              -0.3              -0.2
FRCC....................................            27,210               -11               0.0               0.0

[[Page 22233]]

 
MRO.....................................            29,131               298               1.0              -0.3
NPCC....................................            33,618               859               2.6              -1.2
RFC.....................................           138,519               -95              -0.1               0.1
SERC....................................           151,806               198               0.1               0.0
SPP.....................................            23,879              -102              -0.4              -0.2
WECC....................................            38,906                 9               0.0              -0.1
                                         -----------------------------------------------------------------------
    Total...............................           479,054             1,056               0.2              -0.1
----------------------------------------------------------------------------------------------------------------
                         Option 2--IM Everywhere and EM for Facilities With DIF 125 MGD
----------------------------------------------------------------------------------------------------------------
ERCOT...................................            35,985             5,486              15.2              -4.3
FRCC....................................            27,210              -336              -1.2               0.1
MRO.....................................            29,131               969               3.3               2.6
NPCC....................................            33,618             4,415              13.1              -8.8
RFC.....................................           138,519             3,329               2.4               1.9
SERC....................................           151,806               433               0.3               2.1
SPP.....................................            23,879             2,285               9.6              -1.2
WECC....................................            38,906               234               0.6               0.7
                                         -----------------------------------------------------------------------
    Total...............................           479,054            16,815               3.5               0.5
----------------------------------------------------------------------------------------------------------------
                                       Option 3--I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
ERCOT...................................            35,985             5,528              15.4              -4.9
FRCC....................................            27,210              -336              -1.2               0.0
MRO.....................................            29,131             1,016               3.5               2.7
NPCC....................................            33,618             4,415              13.1              -9.0
RFC.....................................           138,519             3,329               2.4               2.0
SERC....................................           151,806               699               0.5               2.1
SPP.....................................            23,879             2,259               9.5              -2.3
WECC....................................            38,906               234               0.6               0.8
                                         -----------------------------------------------------------------------
    Total...............................           479,054            17,144               3.6               0.4
----------------------------------------------------------------------------------------------------------------

    The market model analysis results for in-scope facilities show a 
greater degree of adverse impact than that observed over all generating 
units. These more substantial adverse impacts among the directly 
affected in-scope units are offset by generally positive changes in 
capacity and energy production at the facilities that are not directly 
by the proposed rule's requirements, and which are not included in this 
section's analysis.
    Under Option 1, today's preferred option, looking over all in-scope 
facilities, the total capacity loss from early retirements is 1,056 MW 
at the national level, or 0.2 percent of baseline capacity in the in-
scope units. The impact on capacity retirements varies across NERC 
regions with 4 out of 8 regions recording capacity closures and the 
remaining 4 experiencing avoided capacity closures. Some closures (or 
avoided closures) are full facility closures (i.e., all generating 
units at the facility close or avoid closure), while others are partial 
closures (i.e., at least one generating unit at the facility is 
assessed as closing, or avoiding closure, in the post-compliance case). 
Overall, 39 generating units close (approximately 9,874 MW) and 30 
generating units avoid closure (approximately 8,819 MW) in the post-
compliance case, resulting in net closure of 9 generating units 
(approximately 1,055 MW). The 39 generating unit closures reflect full 
closure of 20 units in 13 facilities (5,647 MW) and partial closure of 
19 units in 16 facilities (4,227 MW). The largest capacity loss occurs 
in NPCC (859 MW or 2.6 percent of baseline capacity).
    As described in the preceding section, these net losses of capacity 
due to early retirements among in-scope facilities are offset at the 
total market level by capacity increases among other facilities. These 
capacity increases typically occur through ``earlier'' construction of 
new generating units or repowering of existing units. These new units 
also typically operate with higher energy efficiency and lower 
electricity production cost. As a result, the early retirements among 
in-scope facilities under the proposed regulatory option have little 
impact at the level of national and regional electricity markets.
    Finally, at the national level, variable production costs decline 
by approximately 0.1 percent as older, less-efficient plants close and 
are replaced by newer plants in the IPM model. These effects vary by 
region, with some regions experiencing slight increases, while other 
regions experience slight decreases. These findings of very small 
national and regional effects in these impact metrics confirm EPA's 
assessment, stated in the preceding paragraph, that the assessed 
capacity closures among in-scope facilities are of little economic 
consequence in national and regional electricity markets.
    Again, the findings for the more expensive Option 2 (IM Everywhere 
and EM for Facilities with DIF > 125MGD) are of greater consequence, as 
some facilities would be required to incur the cost of cooling tower 
installation. The total loss in capacity in 2028 is assessed at 16,815 
MW, with the largest capacity loss of 15.2 percent occurring in NPCC.

[[Page 22234]]

    In the same way as reported for Option 1, the capacity loss of 
16,815 MW under Option 2 also reflects a combination of early 
retirements and avoided retirements of generating units. Under Option 
2, 149 generating units close (36,163 MW) and 86 generating units avoid 
closure (19,186 MW), leading to an estimated net closure of 63 
generating units (16,977 MW). Out of the 149 closed units, 72 units 
(22,976 MW) are in 35 fully closed facilities and 77 units (13,186 MW) 
are in 46 partially closed facilities.
    Under Option 2, the findings for the change in variable production 
cost are also considerably larger compared to Option 1. At the national 
level, Option 2 results in a 0.5 percent increase in variable 
production cost. This effect varies considerably by region, with NPCC 
recording the largest decrease in variable production costs (8.8 
percent) and MRO incurring the largest increase (2.6 percent).
    The analysis results for Option 3 are similar to those for Option 
2, and again show a greater degree of impact on capacity and 
electricity generation among in-scope facilities compared to the degree 
of impact observed at the market level. At the national level, Option 3 
results in 17,144 MW of retired capacity (compared to 16,815 MW under 
Option 2), which is approximately 3.6 percent of total baseline in-
scope capacity (compared to 3.5 percent under Option 2). As is the case 
for Options 1 and 2, the net capacity reduction of 17,144 MW reported 
for Option 3 includes early retirement and avoided retirement of 
generating units. Under Option 2, 162 generating units close (37,255 
MW) and 88 generating units avoid closure (20,258 MW), leading to an 
estimated net closure of 74 generating units (16,997 MW). Out of the 
162 closed units, 79 units (23,262 MW) are in 39 fully closed 
facilities and 83 units (13,992 MW) are in 50 partially closed 
facilities.
    The impact on variable production costs observed for Option 3 is 
similar in magnitude to that observed for Option 2. At the national 
level, variable production costs decline by approximately 0.4 percent. 
Under Option 3, this effect also varies considerably by region, with 
NPCC, again, recording the largest decrease in variable production 
costs (9.0 percent) and MRO incurring the largest increase (2.7 
percent).
(3) Impact on Individual In-Scope Facilities
    Results for the group of in-scope facilities as a whole may mask 
shifts in economic performance among individual facilities subject to 
today's proposed rule. To assess potential facility-level effects, EPA 
analyzed facility-specific changes between the base case and the post-
compliance cases for the following metrics: (1) Capacity utilization 
(defined as annual generation (MWh) divided by [capacity (MW) times 
8,760 hours]), (2) electricity generation, (3) revenue, (4) variable 
production costs per MWh, defined as variable O&M cost plus fuel cost 
divided by net generation, and (5) pre-tax income, defined as total 
revenues minus the sum of fixed and variable O&M costs, fuel costs, and 
capital costs.
    Exhibit VII-14 presents the estimated number of in-scope facilities 
with specific degrees of change in operations and financial performance 
as a result of today's regulatory options. This exhibit excludes in-
scope facilities with estimated significant status changes in 2028 that 
render these metrics of change not meaningful--i.e., under the analyzed 
Option, a facility that is assessed as either a full or partial closure 
between the base case and the post-compliance case. This is done 
because the measures presented in Exhibit VII-11 such as change in 
revenue would not be meaningful for these facilities. For example, for 
a facility that is projected to close in the post-compliance case, the 
reduction in revenue would be 100 percent. On this basis, 118 
facilities are excluded from assessment under Option 1, 159 facilities 
under Option 2, and 165 facilities under Option 3.
    In addition, the change in variable production cost per MWh of 
generation could not be developed for facilities that have zero 
generation in either the baseline or post-compliance cases. For these 
facilities--28, 21, and 18 facilities under Options 1, 2, or 3, 
respectively--variable production cost per MWh cannot be calculated for 
one or other of the two cases (because the divisor, MWh, is zero), and 
therefore the change in variable production cost per MWh cannot be 
meaningfully determined. Facilities excluded from this assessment are 
recorded in the ``N/A'' column.

  Exhibit VII-14--Impact of Market Model Analysis Options on Individual In-Scope Facilities at the Year 2028--Number of Facilities by Impact Magnitude
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Reduction                                    Increase
                        Economic measures                        --------------------------------- No change ---------------------------------  N/A \b\
                                                                     > 3%       1-3%       < 1%                  < 1%       1-3%       > 3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Option 1--IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Capacity Utilization \a\..............................          0          1         23        398         41          5          3        118
Change in Generation............................................          6          7         39        391         26          0          2        118
Change in Revenue...............................................          5          3        164          4        282         13          0        118
Change in Variable Production Costs/MWh.........................          0          2         91         22        319          6          3        146
Change in Pre-Tax Income........................................         40        126        243          0         55          4          3        118
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Option 2--IM Everywhere and EM for Facilities With DIF  125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Capacity Utilization \a\..............................         13         18        102        147        104         24         22        159
Change in Generation............................................        154         89          6        146          8         12         15        159
Change in Revenue...............................................        139        103         51          0         73         54         10        159
Change in Variable Production Costs/MWh.........................          3          5         24         14        107         55        201        180
Change in Pre-Tax Income........................................        267         33         55          0         28         23         24        159
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Option 3--I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Capacity Utilization \a\..............................         10         16        132         96        118         25         27        165
Change in Generation............................................        184        110          6         95          9         10         10        165
Change in Revenue...............................................        158        127         44          0         49         38          8        165
Change in Variable Production Costs/MWh.........................          4          8         15          9         74         63        233        183

[[Page 22235]]

 
Change in Pre-Tax Income........................................        315         12         41          0         24         11         21        165
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The change in capacity utilization is the difference between the capacity utilization percentages in the base case and post-compliance cases. For
  all other measures, the change is expressed as the percentage change between the base case and post-compliance values.
\b\ Facilities with status changes in either base case or post-compliance scenario have been excluded from these calculations. In addition, the change
  in variable production cost per MWh could not be developed for 28, 21, and 18 facilities with zero generation in either base case or Options 1, 2, or
  3 post-compliance scenarios, respectively.

    For Option 1, which corresponds to EPA's proposed option, the 
analysis of changes in individual facilities indicates that most 
facilities experience very slight effects--no change, or less than a 1 
percent reduction or 1 percent increase--in all of the impact metrics 
except Change in Pre-Tax Income. Only 1 facility is estimated to incur 
a reduction in capacity utilization exceeding 1 percent; 13 facilities 
incur a reduction in generation exceeding 1 percent; and 8 facilities 
incur a reduction in revenue exceeding 1 percent. Only 9 facilities 
incur an increase in variable production costs exceeding one percent. 
The estimated change in pre-tax income is more consequential as 126 
facilities are projected to incur reductions in pre-tax income of 1-3 
percent and 40 facilities are projected to incur reductions in pre-tax 
income exceeding 3 percent of the baseline value.
    The findings for Option 2 are substantially more consequential 
compared to those estimated for Option 1. For 243 facilities, the 
reduction in generation is estimated to exceed 1 percent; for 242 
facilities, the reduction in revenue is estimated to exceed 1 percent; 
for 256 facilities, the increase in variable production costs is 
estimated to exceed 1 percent. Again, the change in pre-tax income is 
more substantial, with 33 facilities expected to incur reductions in 
pre-tax income of 1-3 percent and 267 facilities, greater than 3 
percent.
    As in the preceding discussions, the findings for Option 3 are 
slightly more consequential than those estimated for Option 2. For 294 
facilities, the reduction in generation is estimated to exceed 1 
percent; for 285 facilities, the reduction in revenue is estimated to 
exceed 1 percent; for 296 facilities, the increase in variable 
production costs is estimated to exceed 1 percent. The change in pre-
tax income is more substantial, with 12 facilities expected to incur 
reductions in pre-tax income of 1-3 percent and 315 facilities, greater 
than 3 percent.
b. Analysis Results for the Years 2015, 2020, and 2025--To Capture the 
Effect of Installation Downtime
    This section presents market-level results for today's proposed 
rule options for model run years 2015, 2020, and 2025. As discussed 
above, run year 2015 captures the period when in-scope facilities 
install IM technologies, while run years 2020 and 2025 capture the 
period when fossil fuel and nuclear facilities install cooling towers, 
respectively, and may incur installation downtime. Of particular 
importance as a potential impact, the additional unit downtime from 
installation of compliance technology would manifest as increased 
electricity production costs resulting from the dispatch of higher 
production cost generating units during the periods when units are 
taken offline to install compliance technologies. Because these effects 
are of most concern in terms of potential impact on national and 
regional electricity markets, this section presents results only for 
the total set of facilities analyzed in IPM (Exhibit VII-15) and does 
not present results for the subset of only in-scope facilities.
    For the assessment of compliance technology installation downtime 
impacts at the national level, EPA considered five output metrics from 
IPM V3.02: (1) Changes in electricity generation, (2) changes in 
revenue, (3) cost changes, including changes in fuel costs, variable 
O&M costs, fixed O&M costs, and capital costs, (4) changes in pre-tax 
income, and (5) changes in variable production costs per MWh. For each 
measure of concern, Exhibit VII-15 presents the results for the base 
case and the existing facilities rule options for each downtime year, 
i.e., 2015, 2020, and 2025 and the percentage difference between the 
two. This section of the preamble discusses downtime impact at the 
national level only; for regional-level results see Appendix 6.A of EBA 
report.

       Exhibit VII-15--Impact of Market Model Analysis Options During the Period of Installation Downtime
----------------------------------------------------------------------------------------------------------------
                                                      Option 1              Option 2              Option 3
   Economic measures  (all dollar     Baseline -----------------------------------------------------------------
          values in $2009)             value      Value     % Change    Value     % Change    Value     % Change
----------------------------------------------------------------------------------------------------------------
                                                2015 (2013-2017)
----------------------------------------------------------------------------------------------------------------
Generation (TWh)...................      4,320      4,320        0.0      4,320        0.0      4,320        0.0
Revenue ($Millions)................   $212,857   $212,883        0.0   $214,124        0.6   $214,201        0.6
Costs ($Millions)..................   $144,212   $144,764        0.4   $144,251        0.0   $144,244        0.0
    Fuel Cost......................    $81,076    $81,080        0.0    $80,896       -0.2    $80,895       -0.2
    Variable O&M...................    $12,034    $12,080        0.4    $12,056        0.2    $12,054        0.2
    Fixed O&M......................    $43,697    $44,140        1.0    $43,683        0.0    $43,680        0.0
    Capital Cost...................     $7,405     $7,463        0.8     $7,616        2.8     $7,614        2.8
Pre-Tax Income ($Millions).........    $68,646    $68,119       -0.8    $69,873        1.8    $69,957        1.9
Variable Production Cost ($/MWh)...     $21.55     $21.57        0.1     $21.52       -0.2     $21.52       -0.2
----------------------------------------------------------------------------------------------------------------

[[Page 22236]]

 
                                                2020 (2018-2022)
----------------------------------------------------------------------------------------------------------------
Generation (TWh)...................      4,530  .........  .........      4,530        0.0      4,530        0.0
Revenue ($Millions)................   $261,531  .........  .........   $270,507        3.4   $270,709        3.5
Costs ($Millions)..................   $160,340  .........  .........   $167,450        4.4   $167,719        4.6
    Fuel Cost......................    $83,418  .........  .........    $82,295       -1.3    $82,295       -1.3
    Variable O&M...................    $13,349  .........  .........    $13,661        2.3    $13,673        2.4
    Fixed O&M......................    $46,160  .........  .........    $50,888       10.2    $51,016       10.5
    Capital Cost...................    $17,413  .........  .........    $20,605       18.3    $20,736       19.1
Pre-Tax Income ($Millions).........   $101,191  .........  .........   $103,057        1.8   $102,990        1.8
Variable Production Cost ($/MWh)...     $21.36  .........  .........     $21.18       -0.8     $21.18       -0.8
----------------------------------------------------------------------------------------------------------------
                                                2025 (2023-2027)
----------------------------------------------------------------------------------------------------------------
Generation (TWh)...................      4,746  .........  .........      4,746        0.0      4,746        0.0
Revenue ($Millions)................   $280,613  .........  .........   $282,363        0.6   $282,381        0.6
Costs ($Millions)..................   $174,856  .........  .........   $184,900        5.7   $185,148        5.9
    Fuel Cost......................    $86,633  .........  .........    $86,812        0.2    $86,834        0.2
    Variable O&M...................    $13,907  .........  .........    $14,295        2.8    $14,299        2.8
    Fixed O&M......................    $47,561  .........  .........    $53,500       12.5    $53,625       12.7
    Capital Cost...................    $26,755  .........  .........    $30,294       13.2    $30,390       13.6
Pre-Tax Income ($Millions).........   $105,757  .........  .........    $97,463       -7.8    $97,233       -8.1
Variable Production Cost ($/MWh)...     $21.18  .........  .........     $21.30        0.6     $21.31        0.6
----------------------------------------------------------------------------------------------------------------

    Because in-scope facilities would be required to meet compliance 
requirements not later than 5 years following rule promulgation, Option 
1 has downtime effects during only the five-year period of 2013-2017. 
Results for the year 2015 are indicative of annual effects during each 
of these years. With few facilities having an increase in net downtime 
under Option 1, the estimated effects of downtime are relatively minor. 
Variable production costs increase by less than 0.1 percent. Another 
potential market level impact due to the incurrence of downtime is the 
possible increase in electricity prices and, consequently, revenue. At 
the market level, the change in total revenue is nearly zero, 
indicating very small overall effects on consumer prices. While these 
effects vary at the regional level, these effects are overall very 
small (see Appendix 6.A of the EBA).
    Unlike Option 1, Option 2 would be expected to have downtime 
effects during each of the three five-year periods, as IM-only 
facilities comply during the first five years (2012-2017) following 
rule promulgation, fossil fuel facilities installing cooling tower 
technology comply during the second five years (2018-2022), and nuclear 
facilities installing cooling tower technology comply during the third 
five years (2023-2027).
    During the first five-year period (2012-2017), downtime effects 
under Option 2, although larger than those under Option 1, remain 
small. Variable production costs decline by a very minor amount, 0.2 
percent, as the market begins to adjust overall in anticipation of the 
larger effects on capacity availability as the result of cooling tower 
installation in later years. Total market-level revenue increases by 
$1.2 billion, or 0.6 percent, indicating small effects on consumer 
prices.
    During the second five-year period (2018-2022), downtime effects 
are more pronounced under Option 2. At the market level, variable 
production costs decline again, by 0.8 percent, but revenue increases 
by nearly $9.0 billion, or 3.4 percent. Thus, the impact on consumer 
prices is greater during this period than during the preceding five 
years. Again, the reduction in variable production costs and revenue 
reflect replacement of generation from older, less efficient and higher 
fuel cost capacity, with generation from more energy efficient, lower 
production cost capacity.
    The greatest impact on variable production cost under Option 2 
occurs during the third five-year period (2023-2027), when nuclear 
facilities incur downtime during technology installation. Net downtime 
for cooling tower installation at nuclear facilities is estimated at 24 
weeks compared to 0.3-4 weeks for installations at fossil fuel 
facilities. During this period, variable production costs increase by 
$0.12 per MWh or approximately 0.6 percent. Although variable 
production cost increases during this period (while declining during 
the preceding two five-year periods), annual revenue increases by a 
smaller amount, $1.8 billion, or a 0.6 percent increase above baseline. 
The smaller increase in revenue, and by inference in consumer prices, 
results from the ongoing market adjustment with replacement of less 
efficient, higher fuel cost generation with more efficient, lower fuel 
cost capacity. The effects at the national level vary at the regional 
level (see Appendix 6.A of the EBA).
    Like Option 2, Option 3 would be expected to have downtime effects 
during each of the three five-year periods. During the first five-year 
period (2012-2017), impacts are nearly identical to those of Option 2 
at the national and regional level. At the national level, variable 
production costs decline by 0.2 percent, and total revenue increases by 
$1.2 billion, or 0.6 percent, indicating small effects on consumer 
prices. While under Option 2, revenue declines by 0.2 percent, under 
Option 3 it increases by 0.5 percent. Further, under Option 3, the 
decline in variable production costs as well as the drop in electricity 
prices are slightly more significant.
    During the second five-year period (2018-2022), downtime effects of 
Option 3 are again similar to, but slightly higher than, those of 
Option 2.

[[Page 22237]]

At the national level, variable production costs decline by 0.8 
percent, while revenue increases by $9.2 billion, or 3.4 percent. 
Again, the impact on consumer prices under Option 3 is greater during 
this period than during the preceding five years.
    As with Option 2, under Option 3 the greatest impact on variable 
production cost occurs during the third five-year period (2023-2027). 
During this period, market-level variable production costs increase by 
$0.13 per MWh or approximately 0.6 percent. Although variable 
production cost increases during this period (while declining during 
the preceding two five-year periods), annual revenue increases by a 
smaller amount, $1.8 billion, or a 0.6 percent increase above baseline.
    At the regional level, as is the case for Option 2, under Option 3, 
these effects vary across regions. For all three analyzed five-year 
periods, the direction of the change in variable production costs, 
revenue, and electricity prices under Option 3 is the same as that 
under Option 2 for all NERC regions; the difference in the magnitude of 
change is not very pronounced either (see Appendix 6.A of the EBA).
5. Summary of Economic Impacts
    EPA performed cost and economic impact assessment in two parts. The 
first set of cost and economic impact analyses--entity level impacts 
(at both the facility and parent company levels), an assessment of the 
potential electricity rate impact of compliance costs to the 
residential sector, and across sectors--reflects baseline operating 
characteristics of in-scope facilities and assumes no changes in those 
baseline operating characteristics--e.g., level of electricity 
generation and revenue--as a result of the requirements of the proposed 
regulatory options. The second set of analyses look at broader 
electricity market impacts--taking into account the interconnection of 
regional and national electricity markets, for the full industry, for 
in-scope facilities only, and as the distribution of impacts at the 
facility level. No single metric or impact level definitively measures 
economic impacts. Rather, EPA has considered the totality of these 
measures of economic impacts in concluding that there are no 
significant economic impacts associated with Option 1 (the preferred 
option) or Option 4, while there are considerably greater economic 
impacts associated with Options 2 and 3.

VIII. Benefits Analysis

A. Introduction

    This section presents EPA's estimates of the national environmental 
benefits of the options analyzed for 316(b) facilities. In this 
section, EPA describes how it calculated values for those benefits it 
could monetize. It also presents descriptive information for those 
benefits for which it could not develop a monetary value. The benefits 
assessed occur because of reductions in impingement, where fish and 
other aquatic life are trapped on equipment at the entrance to the 
CWIS, and entrainment, where aquatic organisms, eggs, and larvae are 
taken into the cooling system, passed through the heat exchanger, and 
then discharged back into the source water body, (I&E mortality) at 
cooling water intake structures (CWIS) affected by the proposed 
rulemaking. I&E mortality kills or injures large numbers of aquatic 
organisms at all life stages. Based on impingement mortality and 
entrainment data presented in I&E mortality facility studies, EPA 
assumes a mortality rate of 100% for both impinged and entrained 
individuals. Mortality rates are then adjusted based on the efficiency 
of technology in place.\90\ By reducing I&E mortality rates, the 
proposed options are likely to increase the number of fish, shellfish, 
and other aquatic organisms in affected water bodies. In turn, this 
increased number of aquatic organisms directly improves welfare for 
individuals using the affected aquatic resources, generating so-called 
``use benefits'' such as increases to the value of recreational and 
commercial fisheries. Reductions to I&E mortality also improve welfare 
for individuals absent any use of the affected resources, so-called 
``nonuse benefits,'' such as improved ecosystem function and resource 
bequest values. Section VIII.D provides an overview of the types and 
sources of benefits anticipated, how these benefits are estimated, the 
level of benefits that the proposed options would achieve, and how 
monetized benefits compare to costs.
---------------------------------------------------------------------------

    \90\ See discussion in Section III on entrainment mortality data 
and assumptions.
---------------------------------------------------------------------------

    EPA derived national benefit estimates for the proposed options 
from a series of regional studies representing a range of water body 
types and aquatic resources. Section VIII.B provides detail on the 
regional study design. Sections VIII.C through VIII.E briefly describe 
the methods EPA used to evaluate I&E mortality impacts at Section 
316(b) facilities, and to derive an economic value associated with 
these losses. Further, because IPM does not predict where new capacity 
occurs, and EPA has not identified any other information projecting 
where new units would be located, EPA did not estimate benefits 
associated with new capacity (i.e. new units at an existing facility). 
As noted above, EPA also did not include costs for these new units in 
its social cost analysis. This is consistent with EPA's treatment of 
new facilities, such as new offshore oil and gas facilities in the 
Phase III rule.
    The methodologies used to estimate benefits of proposed options are 
largely built upon those used to estimate benefits for the suspended 
Phase II regulation and the remanded rule for 316(b) Phase III existing 
facilities. In addition to updating these analyses, EPA more fully 
investigated the effects of I&E mortality on threatened and endangered 
(T&E) species, and improved its estimation of nonuse benefits. The 2011 
Environmental and Economic Benefits Analysis document for the proposed 
316(b) Existing Facility rule (hereafter EEBA) provides detailed 
descriptions of the these new methodologies used to analyze the 
benefits of proposed regulatory options, and provides references to (i) 
Part A of the 2004 Regional Benefits Analysis for the suspended Final 
Section 316(b) Phase II Rule, and (ii) Part A of the 2006 Regional 
Benefits Analysis Document for the Final Section 316(b) Phase III 
Existing Facilities Rule for analyses using similar methodologies.
    The EEBA document provides EPA's benefit estimates for the proposed 
options. EPA relied on information on cooling water systems and intake 
structures already in place collected in the Section 316(b) Industry 
Surveys (the Industry Screener Questionnaire (SQ) and the Detailed 
Industry Questionnaire (DQ)) to estimate the number of manufacturing 
facilities that would potentially be in-scope of the regulatory options 
considered for the Proposed Existing Facilities Rule. Because the DQs 
were sent to a sample of the manufacturing industries that use cooling 
water, the respondents were assigned sample weights designed to 
represent other facilities that were not covered in the survey. For the 
analysis of in-scope Electric Generators, EPA used information on 
cooling water systems and intake structures already in place, from 656 
in-scope facilities that responded to the 2000 Section 316(b) Surveys 
(the Industry Short Technical Questionnaire (STQ) and the Detailed 
Industry Questionnaire (DQ)). All in-scope facilities have design 
intake flow of at least 2 million gallons per day (MGD). Regional 
benefits are estimated

[[Page 22238]]

from the sample of facilities for which there is sufficient DQ 
information to estimate the environmental impacts of regulatory 
options. The environmental impacts from the set of explicitly analyzed 
facilities are then extrapolated to the universe of facilities within a 
region using statistical weights developed for this analysis. National 
benefits are estimated as the sum of all regional benefits.

B. Regional Study Design

    EPA evaluated the benefits of today's rule in seven study regions 
(California,\91\ North Atlantic, Mid Atlantic, South Atlantic, Gulf of 
Mexico, Great Lakes, and Inland). Regions were defined based on 
ecological similarities within regions (e.g. similar communities of 
aquatic species), and on characteristics of commercial and recreational 
fishing activities. The five coastal regions identified (California, 
North Atlantic, Mid-Atlantic, South Atlantic, and Gulf of Mexico) 
correspond to those of the National Oceanic and Atmospheric 
Administration's National Marine Fisheries Service (NMFS). The Great 
Lakes region includes Lake Ontario, Lake Erie, Lake Huron (including 
Lake St. Clair), Lake Michigan, Lake Superior, and the connecting 
channels (Saint Mary's River, Saint Clair River, Detroit River, Niagara 
River, and Saint Lawrence River to the Canadian border) as defined in 
33 U.S.C. 1268, Sec. 118(a)(3)(b). The Inland region includes all 
remaining facilities that withdraw water from freshwater lakes, rivers, 
and reservoirs. Notably, of the 521 facilities that are located on 
freshwater streams or rivers, 31 percent (164) of these facilities have 
average intake greater than 5 percent of the mean annual flow of the 
source waters. During periods of low river flow, or during periods of 
higher than average withdrawals of cooling water, the proportionate 
withdrawal of source waters may be much higher. Thus, the potential for 
adverse environmental impacts may increase. The number and total 
operational intake flow of all 316(b) facilities by study region is 
presented in Exhibit VIII-1.
---------------------------------------------------------------------------

    \91\ The California region includes manufacturing facilities in 
the state of California and four facilities in Hawaii. It excludes 
coastal electric generating facilities in the state of California 
due to state regulation of cooling water intakes for these 
facilities. There are no coastal facilities in Oregon and a single 
facility in Washington classified as a baseline closure.

              Exhibit VIII-1--Number of Facilities and Total Mean Operational Flow (BGD), by Region
----------------------------------------------------------------------------------------------------------------
                                              Number of
                                             potentially      Once-through      Closed-cycle
                 Region                       regulated           flow              flow           Total flow
                                           facilities \a\
----------------------------------------------------------------------------------------------------------------
California \b\..........................                 8               1.2               0.0               1.2
Great Lakes.............................                67              18.8               0.2              19.0
Inland \c\..............................               669             134.9               3.9             138.8
Mid-Atlantic............................                54              28.1               0.1              28.2
Gulf of Mexico..........................                30              12.9               0.0              12.9
North Atlantic..........................                26               7.0               0.0               7.0
South Atlantic..........................                17               7.4             < 0.1               7.5
                                         -----------------------------------------------------------------------
    All Regions.........................               871             210.3               4.2             214.5
----------------------------------------------------------------------------------------------------------------
\a\ This table presents the unweighted number of facilities because weighted facilities counts are not estimated
  separately by benefits region. The estimated total weighted number of potentially regulated facilities is 1152
  (including baseline closures).
\b\ The California region includes manufacturing facilities in the state of California and four facilities in
  Hawaii. It excludes coastal electric generating facilities in the state of California due to state regulation
  of cooling water intakes for these facilities. There are no coastal facilities in Oregon and a single facility
  in Washington classified as a baseline closure.
\c\ A facility in Texas has intakes located in both the Inland and Gulf of Mexico regions. It is included within
  the Inland region in the current table to prevent double-counting.

    To estimate regional I&E mortality, EPA extrapolated loss data from 
97 facilities that conducted I&E mortality studies (model facilities) 
to all in-scope facilities within the same region. EPA judged these 97 
studies include the most representative studies with the best available 
data. EPA used regions to account for differences in ecosystems, 
aquatic species, and characteristics of commercial and recreational 
fishing activities. Extrapolation was conducted on the basis of actual 
intake flow reported for the period 1996-1998 by facilities in response 
to EPA's Section 316(b) Detailed Questionnaire and Short Technical 
Questionnaire. Chapter 3 of the EEBA document provides details of the 
extrapolation procedure. Because the goal of the analysis was to 
provide estimates of I&E mortality losses at regional and national 
scales, EPA recognizes that there may be substantial variability in the 
number of actual losses (and benefits) of individual facilities. 
However, EPA concludes that extrapolation is a reasonable basis for 
developing estimates of regional- and national-level benefits for the 
purposes of this proposed rulemaking.

C. Physical Impacts of I&E Mortality

    EPA's benefits analysis is based on facility-provided I&E mortality 
monitoring data. Facility data consist of records of impinged and 
entrained organisms sampled at intake structures and cover organisms of 
all ages and life stages. Sampling protocols were not standardized 
across facilities. Differences among facility protocols included 
sampling methods and equipment used, the number of samples taken, 
sampling duration, and the unit of time and volume of intake flow used 
to express I&E mortality losses. To standardize estimates across 
facilities, EPA converted sampling counts into annual I&E mortality 
losses. Using standard fishery modeling techniques,\92\ EPA constructed 
models that combined facility-derived I&E mortality counts with life 
history data from the scientific literature to derive annual estimates 
of:
---------------------------------------------------------------------------

    \92\ Ricker, W.E. 1975. Computation and interpretation of 
biological statistics of fish populations. Fisheries Research Board 
of Canada, Bulletin 191; Hilborn, R. and C.J. Walters. 1992. 
Quantitative Fisheries Stock Assessment, Choice, Dynamics and 
Uncertainty. Chapman and Hall, London and New York.; Quinn, T.J., 
II. and R.B. Deriso. 1999. Quantitative Fish Dynamics. Oxford 
University Press, Oxford and New York; Dixon, D.A. 1999. Catalog of 
Assessment Methods for Evaluating the Effects of Power Plant 
Operations on Aquatic Communities. Final Report. Report number TR--
112013.
---------------------------------------------------------------------------

     Age-one equivalent losses (A1Es)--the number of 
individuals of different ages impinged and entrained by facility

[[Page 22239]]

intakes, standardized to equivalent numbers of 1-year old fish. A 
conversion rate between all life history stages and age 1 is calculated 
using species-specific survival tables. The loss of an individual 
younger than age 1 results in a conversion rate less than 1 while the 
loss of an individual older than age 1 results in a conversion rate 
greater than 1.
     Foregone fishery yield--pounds of commercial harvest and 
numbers of recreational fish and shellfish that are not harvested due 
to I&E mortality. EPA used the Thompson-Bell equilibrium yield model 
(Ricker, 1975) to convert I&E mortality losses to forgone fishery yield 
assuming that (1) I&E mortality losses reduce the future yield of 
harvested adults, and (2) reductions in I&E mortality rates will lead 
to an increase in harvested biomass. The general procedure involves 
multiplying age-specific harvest rates by age-specific weights to 
calculate an age-specific expected yield.
     Biomass Production Foregone--biomass that would have been 
produced had individuals not been impinged or entrained (Rago, 1984), 
calculated for all forage species from species- and age-specific growth 
rates and survival probabilities. It refers to the weight 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.
    Estimates of foregone fishery yield include direct and indirect 
losses of impinged and entrained species that are harvested. Indirect 
losses represent the yield of harvested species lost due to reductions 
in prey availability based on a simple trophic transfer model (i.e. 
forage species).\93\ A detailed methodology for these analyses is 
provided in Chapter 3 of the EEBA document.
---------------------------------------------------------------------------

    \93\ Indirect losses account for about 9 percent of commercial 
and recreational harvest reductions at baseline.
---------------------------------------------------------------------------

    Studies from individual facilities may under or overestimate I&E 
mortality rates. For example, facility studies typically focus on a 
subset of fish species impacted by I&E mortality, resulting in some 
species being ignored, and thereby number of individuals lost to I&E 
mortality being underestimated. Due to the low number of replicate 
studies, estimating the magnitude of this underestimate is not 
possible. Moreover, studies often do not count early life stages of 
organisms that are difficult to identify. In addition, many of the I&E 
mortality studies used by the Agency were conducted over 30 years ago, 
prior to the improvement to aquatic conditions that have resulted from 
implementation of the Clean Water Act. In locations where water quality 
was degraded at the time of I&E mortality sampling relative to current 
conditions, the abundance and diversity of fish populations may have 
been depressed, resulting in low I&E mortality estimates. Therefore, 
use of these data may underestimate the magnitude of current I&E 
mortality losses. Alternatively, studies may have occurred in locations 
where local fish populations are currently lower than they were when 
the study occurred. Such a shift in fish populations may have occurred 
due to natural variability in populations, because of other 
anthropogenic effects (i.e., pollution, over-harvesting, etc.), or 
because of competition from invasive species. In such cases, the use of 
these data may overestimate the magnitude of current I&E mortality 
losses.
    The use of linear methods for projecting losses to fish and 
shellfish in the waterbody may also overstate or understate impacts. 
Nevertheless, EPA believes that the data from facility studies were 
sufficient to estimate the relative magnitude of I&E mortality losses 
nationwide. Exhibit VIII-2 presents EPA's estimates of baseline annual 
I&E mortality losses, and reductions to annual I&E mortality losses 
estimated to occur under various regulatory options. Option 3 results 
in the greatest reduction in I&E mortality, followed by Option 2, 
Option 1, and Option 4, respectively. EPA did not model the entrainment 
reductions for Option 1 and Option 4 because these are based on site-
specific determinations of BTA, which are impossible to predict. While 
EPA does estimate potential ranges of costs for these site-specific 
determinations in section VII (though not as part of the primary cost 
estimates), EPA cannot estimate comparable ranges of monetized benefits 
because benefits are location specific and EPA has no way of predicting 
what entrainment technology would be adopted at any specific facility. 
However, EPA believes the entrainment reductions resulting from site-
specific BTA determinations could be significant, depending on the 
technologies adopted.

                          VIII-2--Baseline I&E Mortality Losses and Reductions for All In-Scope Facilities by Regulatory Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Reduction in losses by regulatory option
                           Loss mode                              Baseline I&E   -----------------------------------------------------------------------
                                                                     losses           Option 1          Option 2          Option 3          Option 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Individuals (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................            517.46            421.62            500.44            504.14            413.70
EM............................................................        527,968.21              0.00        400,351.83        407,417.58              0.00
E Mortality...................................................        528,485.67            421.62        400,852.27        407,921.72            413.70
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Age-One Equivalents (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................            747.40            614.97            722.53            728.35            602.42
EM............................................................          1,441.52              0.00          1,259.02          1,285.20              0.00
I&E Mortality.................................................          2,188.92            614.97          1,981.55          2,013.55            602.42
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Forgone Fishery Yield (million lbs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................             15.21             11.99             14.86             14.93             11.86
EM............................................................             56.30              0.00             43.66             44.31              0.00
I&E Mortality.................................................             71.50             11.99             58.52             59.24             11.86
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 22240]]

 
                                                            Production Forgone (million lbs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IM............................................................            152.71            126.44            148.09            149.32            123.81
EM............................................................            485.07              0.00            393.39            406.88              0.00
I&E Mortality.................................................            637.78            126.44            541.48            556.20            123.81
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scenarios: Option 1 = IM limitations based on modified traveling screens for all facilities with flow greater than 2 million gallons per day (MGD);
  Option 2 = Intake flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2 MGD and IM limitations
  based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 3 = Intake flow commensurate with closed-cycle cooling for
  all facilities and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based
  on modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).

    Exhibit VIII-3 presents EPA's estimates of annual I&E mortality 
losses by option and by fish category. Estimates of annual forgone 
fishery yield include both direct losses to harvested species as well 
as indirect losses due to reductions in prey fish species. Because the 
vast majority of the biomass moving through food webs is lost due to 
low trophic transfer efficiency (i.e., does not reach the higher 
trophic levels with direct use value to humans), the portion of I&E 
mortality losses with direct human use values (i.e., those that 
contribute to forgone harvest) represent only a small percentage of all 
organisms suffering I&E mortality losses at CWIS. Neither forage 
species nor the unlanded portion of recreational and commercial species 
were assigned direct use values in this analysis, though losses in 
forage species did contribute to the overall losses in recreational and 
commercial species as noted above. Because the majority of annual I&E 
mortality losses include unharvested recreational and commercial fish 
and forage fish, considering nonuse values in the final Section 316(b) 
rule benefits analysis is particularly important.

 Exhibit VIII-3--Distribution of Annual Baseline I&E Mortality Losses and Reductions by Species Category and Regulatory Option, for Absolute Losses and
                                                                    Age-1 Equivalents
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Reduction in losses by regulatory option
                        I&E loss metric                           Baseline I&E   -----------------------------------------------------------------------
                                                                     losses           Option 1          Option 2          Option 3          Option 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Individuals (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Species...................................................        528,485.67            421.62        400,852.27        407,921.72            413.70
Forage Species................................................        360,431.51            307.89        278,690.45        283,584.80            301.21
Commercial & Recreational Species.............................        168,054.16            113.73        122,161.82        124,336.91            111.49
Commercial & Recreational Harvest.............................             59.41             15.66             53.28             54.05             15.51
Lost Individuals with Direct Use Value (%)....................              0.01              3.71              0.01              0.01              3.75
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Age-One Equivalents (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Species...................................................          2,188.92            614.97          1,981.55          2,013.55            602.42
Forage Species................................................          1,654.78            525.66          1,512.64          1,535.44            514.11
Commercial & Recreational Species.............................            534.15             89.31            468.91            478.11             88.31
Commercial & Recreational Harvest (million fish)..............             59.41             15.66             53.28             54.05             15.51
A1E Losses with Direct Use Value (%)..........................              2.71              2.55              2.69              2.68              2.57
--------------------------------------------------------------------------------------------------------------------------------------------------------
Scenarios: Option 1 = IM limitations based on modified traveling screens for all facilities with flow greater than 2 million gallons per day (MGD);
  Option 2 = Intake flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2 MGD and IM limitations
  based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 3 = Intake flow commensurate with closed-cycle cooling for
  all facilities and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based
  on modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).

D. National Benefits of Today's Considered Options

1. Overview
    Economic benefits of the proposed options for in-scope facilities 
can be broadly defined into use and nonuse benefit categories of goods 
and services.
    Use values include benefits that pertain to the use (direct or 
indirect) of affected fishery resources. Use value reflects the value 
of all current direct and indirect uses of a good or service. Direct 
use benefits can be further categorized according to whether or not 
affected goods and services are traded in the market (e.g. 
commercially-captured fish are traded, recreational catch is not). 
Likewise, indirect use benefits can be linked to either market or 
nonmarket goods and services. For example, reductions to I&E mortality 
losses of forage fish will enhance the biomass of species targeted for 
commercial (market) and recreational (nonmarket) uses.
    Nonuse benefits are those benefits that are independent of any 
current or anticipated use of a resource. Nonuse benefits reflect human 
values associated with existence and bequest motives.
    EPA estimated the economic benefits from national regulatory 
options using a range of valuation methods. Commercial fishery benefits 
were valued using market data. Recreational angling

[[Page 22241]]

benefits were valued using a benefits transfer approach. To estimate 
indirect use benefits from reduced I&E mortality losses to forage 
species, EPA used a simple trophic transfer model. This model 
translated changes in I&E mortality losses of forage fish into changes 
in the harvest of commercial and recreational species. All benefits for 
fish saved under today's proposed rule are estimates based on projected 
numbers of age-one equivalent fish, converted to harvestable age 
equivalents on a species-by-species basis for those commercial species 
analyzed.
    EPA calculated the monetary value of use benefits of the national 
categorical regulatory options for existing facilities using two 
discount rate values: 3% and 7%. All dollar values presented are in 
2009$. Because avoided fish deaths occur mainly in fish that are 
younger than harvestable age (eggs, larvae, and juveniles), the 
benefits from avoided I&E mortality would be realized typically 3-4 
years after their avoided death. A detailed description of the 
approaches used to address this can be found in Appendix C of the EEBA.
    Neither forage species nor the unlanded portion of recreational and 
commercial were assigned direct use values in this analysis. Their 
potential value to the public is derived from several alternative 
sources: Their indirect use as both food and breeding population for 
those fish that are harvested, the willingness of individuals to pay 
for the protection of fish based on a sense of altruism, stewardship, 
bequest, or vicarious consumption, and their support of ecosystem 
stability and function (nonuse benefits). To estimate a subset of 
nonuse benefits from reducing losses to forage species, and landed and 
unlanded commercial and recreational species, EPA explored benefits 
transfer from nonmarket valuation studies of nonuse values of aquatic 
ecosystem improvements. These efforts generated partial estimates of 
nonuse values for resource changes expected to result in the North 
Atlantic and Mid-Atlantic benefits regions from the proposed options, 
but EPA was unable to estimate reliable nonuse valuations for changes 
expected to result in other study regions. EPA is in the process of 
developing a stated preference survey to estimate total willingness to 
pay (WTP) for improvements to fishery resources affected by I&E 
mortality from in-scope 316(b) facilities (75 FR 42,438). However EPA 
did not have sufficient time to fully develop and implement this survey 
for the proposed regulation. EPA will issue a Notice of Data 
Availability pending completing survey implementation and data 
analysis. As a consequence of the challenges associated with estimating 
nonuse benefits, some non-monetized benefits are described only 
qualitatively or quantitatively.
2. Timing of Benefits
    Discounting refers to the economic conversion of future benefits 
and costs to their present values, thereby accounting for the fact that 
individuals value future outcomes less than comparable near-term 
outcomes. Discounting enables a valid comparison of benefits and costs 
that occur across different time periods. For the analysis of the 
proposed options, monetized benefits are calculated in a manner that 
makes the timing comparable to the annualized cost estimates. The 
benefits of the proposed options are estimated as the typical benefits 
expected once the rule takes effect. The need to discount arises from 
two different delays in the realization of benefits.
    First, facilities will not always achieve compliance in the same 
year that costs are incurred. Facilities will face regulatory 
requirements once the rule takes effect, but it will take time to make 
the required changes. It is assumed that facilities installing 
impingement technology will achieve compliance sooner than facilities 
installing cooling towers. Facilities installing only impingement 
technology are assumed to have an average compliance year of 2015, non-
nuclear electric generating facilities installing towers have an 
average compliance year of 2020, and nuclear electric generating 
facilities and manufacturing facilities installing towers have an 
average compliance year of 2025. To account for the lag between the 
incurrence of costs and the realization of benefits, benefits are 
discounted to a greater extent compared to the costs.
    Second, an additional time lag will result between technology 
implementation and increased fishery yields. This lag occurs because 
several years may pass between the time an organism is spared from I&E 
mortality and the time of its potential harvest. For example, a larval 
fish spared from entrainment (in effect, at age 0) may be caught by a 
recreational angler at age 3, meaning that a 3-year time lag arises 
between the incurred technology cost and the realization of the 
estimated recreational benefit. Likewise, if a 1-year-old fish is 
spared from impingement and is then harvested by a commercial waterman 
at age 2, there is a 1-year lag between the incurred cost and the 
subsequent commercial fishery benefit. To account for this growth 
period, EPA applied discounting by species groups in each regional 
study.
3. Recreational Fishing Valuation
a. Recreational Fishery Methods
    To estimate recreational benefits of the proposed options, EPA 
developed a benefits transfer approach based on a meta-analysis of 
recreational fishing valuation studies designed to measure the various 
factors that determine willingness to pay for catching an additional 
fish per trip. Regional benefits are summarized as follows (see Chapter 
7 of the EEBA document for details):
    1. Estimate annual foregone catch of recreational fish (number of 
fish) attributable to I&E mortality under current conditions.
    2. Estimate the marginal value per fish.
    3. Multiply forgone catch by the marginal value per fish to 
estimate the total annual value of forgone catch.
    4. Estimate the annual value of reductions in forgone catch 
attributable to the regulatory analysis options.
    5. Discount benefits at 3% and 7% to reflect the time lag between 
I&E mortality reductions and increased harvests.
b. Estimated Benefits to Recreational Anglers
    Decreasing I&E mortality increases the number of fish available to 
be caught by recreational anglers, thereby increasing angler welfare. 
Exhibit VIII-4 shows the estimated benefits resulting from reduced I&E 
mortality under today's options. The total annualized recreational 
fishing benefit for all regions, discounted at 3% (I&E mortality 
combined), ranges from $15.3 to $44.9 million; and the total for all 
regions, discounted at 7%, ranges from $13.9 to $33.3 million.

[[Page 22242]]



Exhibit VIII-4--Annual Recreational Fishing Benefits From Eliminating or Reducing I&E Mortality Losses at All In-
                                      scope Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
                                                    Increased harvest     3% Discount rate     7% Discount rate
                Regulatory Option                     (million fish)      (million 2009$)      (million 2009$)
----------------------------------------------------------------------------------------------------------------
Baseline.........................................                26.79               $76.89               $75.64
Option 1.........................................                 5.77                15.62                14.21
Option 2.........................................                23.55                43.52                32.40
Option 3.........................................                24.06                44.94                33.30
Option 4.........................................                 5.65                15.34                13.94
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
  traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
  flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
  MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
  Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
  modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on
  modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).

4. Commercial Fishing Valuation
    Reductions in I&E mortality at cooling water intake structures are 
expected to benefit the commercial fishing industry. By reducing the 
number of fish killed, the number of fish available for harvest is 
expected to increase. The next section summarizes the methods EPA used 
to estimate benefits to the commercial fishing sector. The following 
section presents the estimated commercial fishing benefits.
a. Commercial Fishing Valuation Methods
    The total loss to the economy from I&E mortality impacts on 
commercially harvested fish species is determined by the sum of changes 
in both producer and consumer surplus. EPA assumed a linear 
relationship between stock and harvest, such that if 10% of the current 
commercially targeted stock were harvested, then 10% of the 
commercially targeted fish lost to I&E mortality would have been 
harvested, absent I&E mortality. The percentage of fish harvested is 
based on data of historical fishing mortality rates.
    Producer surplus provides an estimate of the economic damages to 
commercial fishers, but welfare changes can also be expected to accrue 
to final consumers of fish and to commercial consumers (including 
processors, wholesalers, retailers, and middlemen) if the projected 
increase in harvest is accompanied by a change in price. The analysis 
of market impacts involves the following steps (see Chapter 6 of the 
EEBA for details):
    1. Assessing the net welfare changes for fish consumers due to 
changes in fish harvest and the corresponding change in fish price.
    2. Assessing net welfare changes for fish harvesters due to the 
change in total revenue, which could be positive or negative.
    3. Calculating the increase in net social benefits when the fish 
harvest changes by combining the welfare changes for consumers and 
harvesters.

For a more detailed description of the methodology for commercial 
fishing, see Chapter 6 of the EEBA.
b. Commercial Fishing Valuation Results
    Exhibit VIII-5 presents the estimated annual commercial fishing 
benefits attributable to the proposed options. The results reported 
include the total reduction in losses in pounds of fish, and the value 
of this reduction discounted at 3%, and 7%. With a 3% discount rate, 
total estimated annualized commercial fishing benefits for the U.S., 
range from $1.0 to $4.5 million. Applying a 7% rate, these benefits 
range from $0.9 to $3.3 million. EPA estimated the expected price 
changes from eliminating baseline levels of I&E mortality losses and 
found them to be small, ranging from 0.13 percent to 2.1 percent.

 Exhibit VIII-5 Annual Commercial Fishing Benefits From Eliminating or Reducing I&E Mortality Losses at All In-
                                      scope Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
                                                    Increased harvest     3% Discount rate     7% Discount rate
                Regulatory Option                     (million fish)      (million 2009$)      (million 2009$)
----------------------------------------------------------------------------------------------------------------
Baseline.........................................                32.62                $8.05                $7.89
Option 1.........................................                 9.89                 0.99                 0.89
Option 2.........................................                29.72                 4.47                 3.31
Option 3.........................................                29.99                 4.52                 3.34
Option 4.........................................                 9.86                 0.99                 0.89
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
  traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
  flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
  MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
  Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
  modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on
  modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).

5. Nonuse Benefits
    Aquatic organisms without any direct uses account for the majority 
of cooling water intake structure losses (Exhibit VIII-6.). Although 
individuals do not use these resources directly, they may value changes 
in their status or quality. To assess the public policy significance of 
the ecological gains from the national categorical regulatory options 
for existing facilities, EPA developed a benefit transfer approach to 
partially monetize nonuse benefits associated with reductions in I&E 
mortality of fish, shellfish, and other aquatic organisms under the 
categorical regulatory options for the North Atlantic and Mid-Atlantic 
benefits regions. EPA applied estimated values from a study occurring 
in Rhode Island; these estimates are likely to be

[[Page 22243]]

representative of nonuse values held by individuals residing in the 
Northeast US, and less accurate in other regions. EPA was unable to 
identify comparable studies occurring in other regions which could be 
used to estimate nonuse values. Chapter 8 of the EEBA provides further 
detail on this analysis.
a. Nonuse Valuation Methods
    The preferred techniques for estimating total resource values (use 
plus nonuse) are to use values from the existing studies or conduct 
original stated preference surveys. There are many studies in the 
environmental economics literature that quantify benefits or 
willingness to pay (WTP) associated with various types of water quality 
and aquatic habitat changes. However, none of these studies allows the 
isolation of non-market WTP associated with quantified reductions in 
fish losses for forage fish. Most available studies estimate WTP for 
broader, and sometimes ambiguously defined, policies that 
simultaneously influence many different aspects of aquatic 
environmental quality and ecosystem services, but for which WTP 
associated with fish or aquatic life alone cannot be identified. Stated 
preference methods rely on surveys which ask people to state their 
willingness to pay (WTP) for particular ecological improvements, such 
as increased protection of aquatic species or habitats with particular 
attributes. EPA is in the process of developing a stated preferences 
survey to estimate total willingness to pay (WTP) for improvements to 
fishery resources affected by I&E mortality from in-scope 316(b) 
facilities. The survey will provide estimates of total values, will 
allow estimates of value associated with specific choice attributes 
(following standard methods for choice experiments), and will also 
allow the flexibility to provide insight into the relative importance 
of use versus nonuse values in the 316(b) context. However EPA did not 
have sufficient time to fully develop and deploy this survey and derive 
reliable estimates of the monetary value of reducing those impacts at 
the national level. Benefit transfer of values from existing stated 
preference studies was used by EPA in the absence of an original study.
    EPA identified a recent study conducted by Johnston et al., (2009) 
that is closely related to the 316(b) policy context. Both Johnston et 
al., (2009) and the present context address policy changes that 
increase the number of forage fish in aquatic habitat with unknown 
effects on overall fish populations. Originally developed for a case 
study addressing Rhode Island residents' preferences for the 
restoration of migratory fish passage over dams in the Pawtuxet and 
Wood-Pawcatuck watersheds of Rhode Island, Johnston et al., (2009) 
estimates nonuse values by asking respondents to consider changes in 
ecological indicators reflecting quantity of habitat, abundance of 
wildlife, ecological condition, and abundance of migratory fish 
species. Within this study, estimated values were based on the relative 
change in abundance of fish species impacted to the greatest extent by 
restoration.
    Estimated benefit functions from the Johnston et al., (2009) choice 
experiment survey allows one to distinguish benefits associated with 
resource uses from those associated primarily with nonuse motives. 
Within the benefit transfer application, WTP is quantified for 
increases in non-harvested fish alone, based on the implicit price for 
migratory fish changes. This transfer holds all effects related to 
identifiable human uses constant (e.g., effects on catchable fish, 
public access, observable wildlife, etc.). The remaining welfare 
effect--derived purely from effects on forage fish with little or no 
direct human use--may therefore be most accurately characterized as a 
nonuse benefit realized by households.
    The estimation of nonuse values involved the following steps:
    1. Use a variant of the Johnston et al., (2009) model (the survey 
variant which characterizes effects on the number of migratory fish 
passing upstream) to estimate household WTP per percent increase in the 
number of fish in a given watershed.
    2. Calculate the relative change in abundance for the fish species 
impacted to the greatest extent by the regulation. By comparing 
increases in age-1 equivalent fish to estimates of biomass at species' 
carrying capacity, EPA found that of all species with habitats inside 
the boundaries of the North Atlantic and Mid-Atlantic benefits regions, 
winter flounder is likely to experience the largest percent change in 
population. This species is harvested; however fish and commercial 
species may be forage during early life-stages and have nonuse values.
    3. Estimate total household WTP by applying model results for WTP 
per percentage to estimated winter flounder losses. Total regional WTP 
is the product of household WTP and the number of households within the 
affected region (see Chapter 8 of the EEBA for details.)
b. Estimated Nonuse Benefits for the North Atlantic and Mid Atlantic 
Regions
    EPA expects that decreasing I&E mortality will lead to increased 
fish abundance in affected waterbodies, thus increasing nonuse 
benefits. Exhibit VIII-6 shows the benefits that would result from 
reducing I&E mortality losses through today's proposed options. 
Estimates of WTP were calculated based on the increase in age-1 
equivalent winter flounder relative to estimated current biomass. 
Discounted at 3%, the total annualized nonuse benefit for the North 
Atlantic and Mid-Atlantic regions, ranges from $0.5 to $75.5 million. 
When discounted at 7%, annualized nonuse benefits range from $0.5 to 
$58.5 million.

    Exhibit VIII-6--Annual Nonuse Benefits From Eliminating or Reducing I&E Mortality Losses at All In-scope
                                         Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
                                                     Increased winter
                                                      flounder age-1
                              Winter flounder I&E       equivalent        3% Discount rate     7% Discount rate
      Regulatory option         losses (million     abundance relative    (millions 2009$)     (millions 2009$)
                                      A1E)          to virgin biomass
                                                           (%)
----------------------------------------------------------------------------------------------------------------
Baseline....................                 6.50                 6.56              $128.64              $130.78
Option 1....................                 0.03                 0.03                 0.52                 0.48
Option 2....................                 5.32                 5.37                72.09                55.93
Option 3....................                 5.57                 5.63                75.48                58.52

[[Page 22244]]

 
Option 4....................                 0.03                 0.03                 0.52                 0.48
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
  traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
  flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
  MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
  Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
  modified traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on
  modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).

6. Threatened and Endangered Species
    This section summarizes methods and results of EPA's analysis of 
benefits from improved protection of threatened and endangered (T&E) 
species from the national categorical regulatory options considered in 
today's Proposal. Chapter 5 of the EEBA provides further detail on this 
analysis.
    For T&E species, mortality due to I&E mortality from CWISs may 
represent a substantial portion of annual reproduction because of the 
reduced population levels that cause a species to be protected. 
Consequently, I&E mortality may either lengthen recovery time, or 
hasten the demise of these species. Adverse effects of CWIS on T&E 
species may occur in several ways:
     Populations of T&E species may suffer direct harm as a 
consequence of I&E mortality
     T&E species may suffer indirect harm if CWIS alters food 
webs
     CWIS may alter habitat critical to the long-term survival 
of T&E species (e.g., thermal discharges associated with once through 
cooling)

Consequently, EPA believes that 316(b) regulation may help preserve a 
number of threatened and endangered species.
a. Qualitative Assessment of I&E Mortality Impacts to T&E Species
    By definition, T&E species are characterized by low population 
levels. As such, it is unlikely that these species are recorded in I&E 
mortality monitoring studies which sample only a portion of all I&E 
mortality losses. Thus, losses are difficult to identify and quantify 
within a framework developed for common species. Consequently, EPA 
developed a qualitative methodology to estimate the number of T&E 
species affected by I&E mortality.
    To qualitatively assess the potential for CWIS impacts on aquatic 
T&E species, EPA constructed a database that assessed the geographical 
overlap of CWIS and habitat used by aquatic T&E species. This database 
identified the number of T&E species potentially impacted by each in-
scope 316(b) facility, and the number of facilities potentially 
impacting each T&E species. Additional details can be found in Chapter 
5 of the EEBA document.
    Using this database, EPA found 89 federally-listed T&E species that 
overlap with at least one in-scope 316(b) CWIS (Exhibit VIII-7) Species 
included freshwater, marine, and anadromous fish, freshwater mussels, 
and sea turtles. On average, the habitat of each T&E species overlapped 
with 20 in-scope facilities (Exhibit VIII-7), suggesting that the 
regulation of 316(b) facilities may have substantial positive benefits 
on ensuring the long-term sustainability and recovery of T&E species.

        Exhibit VIII-7--Number of In-Scope 316(b) CWIS Within T&E Species Habitat on a Per-Species Basis
----------------------------------------------------------------------------------------------------------------
                                                                               Facilities per T&E species \4\
 Subset of affected species \1\ \2\        Species        Interactions \3\ -------------------------------------
                                                                                   Avg                Max
----------------------------------------------------------------------------------------------------------------
All T&E Species.....................                 88              1,734              19.70                135
Sea Turtles.........................                  6                652             108.67                135
T&E Freshwater Mussels..............                 43                836              19.44                 85
T&E Anadromous Fish.................                 13                115               8.85                 64
T&E Freshwater Fish.................                 21                 64               3.05                  7
T&E Marine Fish.....................                  3                 17               5.67                 11
----------------------------------------------------------------------------------------------------------------
\1\ T&E species included species of concern and species under review for listing by the US Fish and Wildlife
  Service (freshwater) or NOAA National Marine Fisheries Service (marine). Only species overlapping with a
  minimum of one CWIS are included.
\2\ Two species of coral are included in the `All Species' category, and not in any subcategory.
\3\ Each interaction represents an overlap between the range of a T&E species and CWIS.
\4\ Avg = average, Max = maximum.

b. Quantitative Assessment of I&E Mortality Impacts to T&E Species
    Although difficult to observe and quantify, EPA identified 15 T&E 
species with confirmed I&E mortality losses. In addition to documented 
species-level instances of T&E mortality, EPA identified I&E mortality 
losses at the level of genera \94\ when these genera contain a T&E 
species whose habitat range overlapped the reporting facility's CWIS. 
Although these are not confirmed I&E mortality losses of T&E species, 
they provide evidence that additional T&E species are likely to be 
directly affected by I&E mortality. A total of 19 genus-level matches 
were reported, suggesting that the 15 T&E species suffering I&E 
mortality losses may be an underestimate.
---------------------------------------------------------------------------

    \94\ Genera is the plural of genus. Genus is the rank superior 
to species in taxonomic biological classification. For example, the 
genus of Atlantic salmon (Salmo falar) is Salmo.

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

[[Page 22245]]

    Of the 15 federally-listed T&E species for which losses were 
documented within I&E mortality studies, EPA was able to quantify 
losses for 2 species. Data were either qualitative or of insufficient 
quality to quantify regional losses for the remaining 13 federally-
listed T&E species. EPA also quantified losses for the American 
Paddlefish (Polyodon spathula), listed as threatened or endangered on 
several state lists, using facility I&E mortality loss studies. Exhibit 
VIII-8 presents EPA's estimates of baseline annual I&E mortality 
losses, and reductions to I&E mortality losses estimated to occur under 
various regulatory options.

 Exhibit VIII-8--Baseline Annual I&E Mortality Losses for T&E Species and Reductions for All In-Scope Facilities
                                           by Regulatory Option (A1Es)
----------------------------------------------------------------------------------------------------------------
           Species                   Value         Baseline     Option 1     Option 2     Option 3     Option 4
----------------------------------------------------------------------------------------------------------------
Pallid Sturgeon..............  Use, Nonuse.....           88           73           85           86           72
American Paddlefish..........  Use, Nonuse.....       17,628        8,631       15,946       16,317        8,420
Topeka Shiner................  Nonuse..........        3,669        3,069        3,546        3,581        2,994
                              ----------------------------------------------------------------------------------
    Total....................  ................       21,384       11,773       19,577       19,984       11,486
----------------------------------------------------------------------------------------------------------------
Scenarios: Baseline = Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified traveling
  screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake flow
  commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2 MGD and
  IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD; Option 3 =
  Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on modified
  traveling screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on modified
  traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).

    I&E mortality is only one of many factors that adversely affect T&E 
species. Estimating total population impacts from changes in I&E losses 
requires estimates of current populations of these fish and estimates 
of other anthropogenic effects which were not readily available for all 
T&E species with quantified I&E mortality losses at the time of this 
analysis. Therefore, EPA was unable to quantify effects on T&E 
population from the 316(b) regulation.
c. Valuation Methods of T&E Fish Species
    EPA believes that for T&E species, the primary value is non-use 
value. Harvest of these species is prohibited (or at least restricted), 
reflecting a societal judgment that protection and preservation of 
these species is of greater value than harvest. As noted above, EPA had 
sufficient data from I&E mortality studies to quantify I&E mortality 
loss estimates for three T&E species (Exhibit VIII-8). EPA applied 
estimates from a Random Utility Model (RUM) analysis conducted for the 
suspended 316(b) Phase II regulation to evaluate recreational fishing 
benefits for I&E loss reductions for two of these species. EPA applied 
transfer values from this analysis to monetize I&E mortality losses for 
these species (see Chapter 5 for details). EPA emphasizes that nonuse 
values for T&E fish species are likely to be significantly greater than 
any use values, and these EPA was not able to quantify. With this 
caveat, the results of the analysis of recreational fishing benefits 
for two T&E species are shown below.
d. Estimated Monetary Benefits From Reduced Mortality of T&E Fish 
Species
    Using a 3% discount rate, total annualized use benefits for the two 
T&E species with monetized I&E mortality losses are estimated to range 
from $0.5 to $0.7 million. Applying a 7% discount rate, annualized 
benefits range from $0.4 to $0.6 million.

 Exhibit VIII-9--Annual Use Benefits From Eliminating or Reducing I&E Mortality Losses of T&E Species at All In-
                                      Scope Facilities by Regulatory Option
----------------------------------------------------------------------------------------------------------------
                                                    Increased harvest     3% Discount rate     7% Discount rate
                Regulatory option                    (number of fish)     (million 2009$)      (million 2009$)
----------------------------------------------------------------------------------------------------------------
Baseline.........................................            17,715.55                $1.14                $1.14
Option 1.........................................             8,704.08                 0.50                 0.45
Option 2.........................................            16,030.56                 0.72                 0.56
Option 3.........................................            16,403.11                 0.72                 0.55
Option 4.........................................             8,491.59                 0.49                 0.44
----------------------------------------------------------------------------------------------------------------
Note: Values are included for pallid sturgeon and paddlefish in the Inland region.
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM limitations based on modified
  traveling screens for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake
  flow commensurate with closed-cycle cooling for facilities that have a design intake flow of greater than 2
  MGD and IM limitations based on modified traveling screens for all facilities with flow greater than 2 MGD;
  Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on
  modified traveling screens for all facilities with flow greater than 2 MGD.; Option 4 = IM limitations based
  on modified traveling screens for all facilities with flow greater than 50 million gallons per day (MGD).

    EPA notes that the benefit values presented in Exhibit VIII-9 
represent only a fraction of values for T&E species potentially 
affected by the proposed regulation: the Agency was able to obtain use 
values for only a small subset of all affected T&E species. Moreover, 
because of the nature of T&E species, even a small increase in 
population may yield economic and ecological benefits (e.g., Richardson 
and Loomis 2008, Huppert et al., 2004; Berrens et al., 1996)
e. Valuation Methods for T&E Sea Turtles
    In addition to estimating values of T&E fish with quantitative 
estimates of I&E mortality losses, EPA estimated the WTP for sea turtle 
conservation. In this analysis, EPA applied estimates from a

[[Page 22246]]

study using a stated preference valuation approach to estimate total 
economic value of a management program that reduces the risk of 
extinction of loggerhead sea turtles (Whitehead 1993).
    Although I&E mortality is relatively low compared to mortality from 
shrimp trawling and other fisheries (Plotkin 1995), it is known that 
low levels of turtle mortality during juvenile and subadult life stages 
can have a substantial effect on population growth (Crouse et al., 
1987). EPA believes that the marginal decrease in extinction 
probability of sea turtles due to 316(b) regulatory options is likely 
to be at least 0.01, or a 1% decrease in the probability of extinction 
over 25 years. This assessment is based upon reports that I&E mortality 
may result in the loss of more than 100 turtles per year, and because 
turtle population growth rates are known to be sensitive to changes in 
juvenile and subadult life stages (Crouse et al., 1987).
f. Estimated Monetary Benefits From Reduced Mortality of T&E Sea 
Turtles
    The U.S. range of loggerhead sea turtles includes the Gulf of 
Mexico, South Atlantic, Mid-Atlantic, and North Atlantic 316(b) regions 
(USFWS 2010). To calculate national WTP for an increased 25-year 
survival probability of loggerhead sea turtles, EPA assumed the 
affected population to include households in states with in-scope 
316(b) facilities that occur within loggerhead sea turtle habitat. 
Using this assumption, EPA determined 53.4 million households would be 
willing to pay for improved protection of loggerhead sea turtles. 
Although incidences of mortality have been reported at facilities in 
California, Texas, Florida, South Carolina, North Carolina, and New 
Jersey EPA does not have sufficient information to quantify total sea 
turtle losses due to intakes, or the reductions in such losses that 
might occur from the various options. But as an illustrative example, 
assuming that the survival probability of loggerhead sea turtles over 
25 years was increased by 1%, and applying a mean household value of 
$0.35 (2009$, see the EEBA Chapter 5), the monetized value would be 
$16.6 million and $16.0 million using discount rates of 3% and 7%, 
respectively. Because EPA does not currently have accurate national 
estimates of I&E mortality for turtle species, nor are population 
models available that estimate the effect of 316(b) regulation on 
population size and extinction risk, these estimates are presented only 
as an illustrative example, and are not included in national totals.
g. Other Indications of Society's WTP for Protection of T&E Species
    Many sources provide information that indicates that society places 
significant value on protecting T&E species. These include, but are not 
limited to:
     The Endangered Species Act of 1973 which provides for the 
conservation of T&E species of fish and wildlife. To comply with this 
law the federal government and state governments spent a total of 
$467.6 million during fiscal year 2008 on protection of federally 
listed T&E species with habitat overlapping CWIS.
     Restrictions placed on the habitat occupied by T&E 
species. For example, water diversions on the San Joaquin-Sacramento 
River delta, in place to protect the Delta Smelt (Hypomesus 
transpacificus), limit the extraction of water for drinking and 
agriculture.
     The willingness of individuals to volunteer their time to 
conserve T&E species. For example, dozens of organizations recruit 
thousands of volunteers every year to participate in sea turtle 
conservation and research projects; volunteers are often required to 
undergo substantial training and commit to long hours.
    While costs to replace, protect or enhance stocks, and costs to 
users affected by efforts to conserve stocks are not direct measures of 
economic benefits, they indicate that society is willing to pay 
significant sums to protect and restore populations of T&E species. 
Although I&E mortality is only one of many stressors on these species, 
reducing the magnitude of these losses may contribute to the recovery 
of populations over time, thereby eliminating some costs associated 
with conserving threatened and endangered species.
7. Assessment of Thermal Discharge Impacts
    Since thermal discharges are a product of once-through cooling 
water systems, the impacts of thermal discharges are a relevant 
consideration when assessing appropriate technologies to reduce the 
effects of cooling water intakes. Thermal pollution has long been 
recognized to cause harm to the structure and function of aquatic 
ecosystems. Concerns about the impacts of thermal discharges are 
addressed by provisions of CWA Section 316(a) regulations. NPDES 
permits are required to limit thermal discharges in order to ensure 
that that there is no appreciable harm to a balanced, indigenous 
population of shellfish, fish and wildlife. Permit requirements, 
however, may not totally eliminate all adverse impacts in all cases. In 
addition to reducing total I&E mortality, closed cycle cooling reduces 
thermal pollution. Most retrofit installations of cooling towers at 
electric generating facilities have been required by NPDES permits for 
the sole purpose of reducing thermal discharges.
    EPA did not quantify nationally the impacts of thermal discharges. 
However, numerous studies have shown that thermal discharges may 
substantially alter the structure of aquatic communities by modifying 
photosynthetic, metabolic, and growth rates. Thermal discharges also 
harm aquatic life by reducing levels of dissolved oxygen, altering the 
location and timing of fish behavior such as spawning, aggregation, and 
migration, and may cause thermal shock-induced mortality for some 
species. Adverse temperature effects may also be more pronounced in 
aquatic ecosystems that are already subject to other environmental 
stressors such as high levels of biochemical oxygen demand, sediment 
contamination, or pathogens. Within mixing zones, which often extend 
several miles downstream from outfalls, thermal discharges may impair 
efforts to restore and protect the waterbody. For example, permit 
requirements to limit nitrogen discharges in a watershed, and thereby 
reduce harmful algal blooms, may be counteracted by thermal discharges 
which promote growth of harmful algae. Thermal discharges may have 
indirect effects on fish and other vertebrate populations through 
increasing pathogen growth and infection rates.
    Thermal discharges may thus alter the ecological services, and 
reduce the benefits, of aquatic ecosystems that receive heated 
effluent. The magnitude of thermal effects on ecosystem services is 
related to facility-specific factors, including the volume of the 
waterbody from which cooling water is withdrawn and returned, other 
heat loads, the rate of water exchange, the presence of nearby refugia, 
and the assemblage of nearby fish species. Again, EPA emphasizes that 
thermal impacts are supposed to be minimized through implementation of 
Section 316(a), but to the extent that any impacts remain after the 
requirements in 316(a) have been satisfied, replacing once-through 
cooling with closed-cycle cooling may provide additional benefits.
8. National Monetized Benefits
    Quantifying and monetizing reductions in I&E mortality losses due 
to

[[Page 22247]]

the regulatory options is extremely challenging. National benefit 
estimates are subject to uncertainties inherent in valuation approaches 
used to assess the benefits categories (See Chapters 5, 6, 7, and 8 of 
the EEBA document.). The combined effect of these uncertainties is of 
unknown magnitude or direction--that is, the estimates may over- or 
understate the anticipated national-level benefits. While EPA has no 
data to indicate that the results for each benefit category are 
atypical or unreasonable, EPA believes that some potentially 
significant benefit categories have not been fully monetized, and thus 
the national monetized benefits presented below likely underestimate 
total benefits, challenging the Agency's ability to base BTA decision 
making on the relationship of quantified costs and benefits alone.
    Exhibit VIII-10 presents EPA's estimates of the partial monetized 
benefits from I&E mortality reduction of the considered regulatory 
options. These monetized values represent use values from increased 
commercial and recreational catch, recreational fishing benefits from 
increased catch of threatened and endangered species, and nonuse values 
associated with an increase in fish abundance (those fish that are not 
caught) in the North and Mid-Atlantic benefit regions. Partial 
estimated benefits from reducing I&E mortality under the proposed rule 
and alternative options range from $17.3 to $125.6 million (2009$) per 
year, discounted at 3%, and from $15.8 to $95.7 million (2009$) per 
year when discounted at 7%. EPA was not able to fully monetize the 
benefits for this proposal. Thus, the estimates presented represent a 
conservative (i.e. low) estimate of total regulatory benefits.

                             Exhibit VIII-10--Summary of National Benefits for All In-Scope Facilities by Regulatory Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Monetized benefit categories
                                                                    ------------------------------------------------------------------------------------
                         Regulatory option                             Recreational      Commercial
                                                                         fishing          fishing           Nonuse      T&E Species \a\       Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            3% Discount Rate (Millions 2009$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...........................................................            76.89             8.05            12.64             1.14           214.72
Option 1...........................................................            15.62             0.99             0.52             0.50            17.63
Option 2...........................................................            43.52             4.47            72.09             0.72           120.79
Option 3...........................................................            44.94             4.52            75.48             0.72           125.65
Option 4...........................................................            15.34             0.99             0.52             0.49            17.33
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            7% Discount Rate (Millions 2009$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...........................................................            75.64             7.89           130.78             1.14           215.45
Option 1...........................................................            14.21             0.89             0.48             0.45            16.04
Option 2...........................................................            32.40             3.31            55.93             0.56            92.20
Option 3...........................................................            33.30             3.34            58.52             0.55            95.71
Option 4...........................................................            13.94             0.89             0.48             0.44            15.76
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Benefits estimates for T&E species are restricted to recreational fishing benefits from increased catch of T&E species. They do not include benefits
  for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.
Scenarios: Baseline = Eliminating Baseline I&E Mortality Losses; Option 1 = IM Everywhere; Option 1 = IM limitations based on modified traveling screens
  for all facilities with flow greater than 2 million gallons per day (MGD); Option 2 = Intake flow commensurate with closed-cycle cooling for
  facilities that have a design intake flow of greater than 2 MGD and IM limitations based on modified traveling screens for all facilities with flow
  greater than 2 MGD; Option 3 = Intake flow commensurate with closed-cycle cooling for all facilities and IM limitations based on modified traveling
  screens for all facilities with flow greater than 2 MGD; Option 4 = IM limitations based on modified traveling screens for all facilities with flow
  greater than 50 million gallons per day (MGD).

E. Uncertainty and Limitations

    EPA recognizes that its estimates of ecological and economic 
benefits projected to occur under regulation are impacted by 
uncertainty at many levels (uncertainty and limitations are discussed 
in detail in Chapters 2, 3, 4, 5, 6, 7, and 8). Moreover, due to 
incomplete data availability, and limited resources, the Agency 
recognizes that there are limitations to the analyses presented above 
and in the EEBA. Examples of uncertainty and limitations include, but 
are not limited to:
     Not all ecological goods and services impacted by CWIS at 
in-scope 316(b) facilities are modeled or monetized, suggesting that 
the total benefits of regulation may be underestimated. For example, 
potential increases to ecosystem stability that may occur as a result 
of regulation is not explicitly estimated nor monetized, though it is 
difficult to parse out what exactly is or is not included in WTP 
estimates for non-use values, which were included for the North 
Atlantic and Mid-Atlantic regions.
     When particular ecological goods and services are 
monetized, data is not always available at a national scale. For 
example, EPA was able to estimate nonuse benefits of I&E mortality 
reductions only within the North and Mid-Atlantic regions, suggesting 
that nonuse values are significantly underestimated.
     EPA makes simplifying assumptions that allow for I&E 
mortality losses and benefits to be estimated on a national scale. For 
example, EPA assumes that I&E mortality losses from model facilities 
are representative of all facilities within a region. The effect of 
these assumptions are unknown, and may lead to over- or under-estimates 
of modeled losses and benefits. However, EPA notes that the age of the 
studies and likely improvements to waters make them less representative 
of current conditions.
     EPA relies on biological and economic data of various 
scope, duration, and date to estimate regional and national baseline 
and benefits. The effect of these various differences on total regional 
and national benefits is uncertain.
     EPA developed methodologies to estimate regional and 
national baselines and benefits of 316(b) regulation. As such, 
location- and species-specific quantitative estimates may not be 
precise. Overall, however, EPA believes its approach is valid for 
regional and national-scale analyses that incorporate a large number of 
facilities and species.

[[Page 22248]]

    Overall, EPA recognizes many sources of uncertainty in its models, 
and is aware of the limitations of analysis. However, EPA has used the 
best available scientific and economic methodologies to partially 
monetize benefits using available resources. As noted above, EPA 
expects to improve its benefits estimates by incorporating the results 
of a national survey of WTP to protect fish and aquatic resources into 
the analysis for the final rule. Because EPA was only able to partially 
monetize non-use benefits, EPA expects that true benefits are greater 
than the estimates presented here.

IX. Implementation

    The following sections describe how the Agency expects the proposed 
rule requirements to be implemented.

A. How would the proposed requirements be applied?

    The requirements of today's proposal would be applied to individual 
facilities through NPDES permits issued by the EPA or authorized States 
under Section 402 of the Clean Water Act. Today's proposed requirements 
would apply to each cooling water intake structure located at a 
facility subject to the requirements. In cases where a facility has 
more than one cooling water intake structure, and each cooling water 
intake structure provides cooling water to one or more generating or 
manufacturing units, the proposed requirements would apply to each 
cooling water intake structure individually and compliance would be 
required at each cooling water intake structure.

B. When would affected facilities be required to comply?

    These promulgated regulations would become effective sixty (60) 
days after the date of publication in the Federal Register. After the 
effective date of a regulation, permitting authorities often allow 
facilities some time period to come into compliance. As proposed, 
facilities would have to comply with the impingement mortality 
requirements as soon as possible. Facilities may request additional 
time (not to exceed eight years as described below) to comply with the 
requirements for impingement mortality. With respect to entrainment 
requirements, under the proposal, existing facilities must comply as 
soon as possible under a schedule of compliance established by the 
permitting authority.
    EPA found during site visits that the vast majority of facilities 
indicated they could comply with the impingement requirements of the 
Phase II rule within a single permit term (5 years), with most sites 
needing less time and some sites needing slightly more. For example, 
facilities that already have traveling screens should be able to modify 
the existing traveling screens, add fish return systems, conduct 
necessary testing, and achieve the IM limits within a few years. On the 
other hand, EPA identified certain technical and logistical issues at 
some facilities that may warrant additional time, such as replacing 
intake structures to utilize wedgewire screens, adding additional 
intake bays to reduce intake velocity, or pilot testing of other 
technologies. As discussed in section 6, the need for outages by 
multiple facilities in one geographic area would need to be coordinated 
so as to minimize any impacts on the consistency and reliability of 
power generation; this could also result in the need for slightly more 
time. In these circumstances EPA expects a facility could reasonably 
require as long as 8 years to attain compliance.
    For those existing facilities that will be subject to both 
impingement mortality and entrainment mortality requirements, the 
Director should take this into account when establishing a deadline for 
compliance, which may also result in the facility needing more time to 
comply with the IM requirements. For example, if a facility plans to 
retrofit to wet cooling towers to both reduce entrainment mortality and 
to use the resulting lower intake velocity to comply with requirements 
for impingement mortality, the Director may be able to allow for 
compliance with the IM requirements to extend to the same schedule as 
the entrainment mortality requirements. However, where the Director 
determines a facility would need longer than 8 years to comply with the 
EM requirements established by the Director, the proposed rule would 
not allow the compliance schedule for IM to extend beyond 8 years. EPA 
recognizes that this limitation may penalize facilities that might 
install cooling towers to meet both IM and EM requirements but are 
unable to complete installation within 8 years. EPA requests comment on 
this limitation.
    The Director would have the discretion to implement a shorter 
(i.e., more stringent) timeline for compliance, but in no event should 
the Director allow a compliance schedule to extend beyond the dates 
specified at Sec.  125.93. Furthermore, EPA expects today's proposal 
gives advance notice to affected facilities what the Agency's 
expectations are regarding compliance schedules.
    The record demonstrates that biological organisms subject to 
impingement and entrainment from cooling water intake structures may 
vary considerably from site to site with respect to types of species, 
quantity of organisms, distribution of life stages, feeding habits, and 
other factors. As a result, EPA envisions that each facility subject to 
today's proposal would study available technologies and operational 
measures, and subsequently install, incorporate and optimize the 
technology most appropriate for each site. EPA believes the proposed 
Sec.  125.93 affords flexibility for a reasonable amount of time to 
conduct biological studies, assess and select appropriate technologies, 
apply for necessary permits, complete construction, and optimize the 
technologies' performance. The permitting authority would establish any 
additional interim milestones within these timelines in accordance with 
the existing NPDES provisions at Sec.  122.47.

C. What are my requirements?

    As proposed, all existing facilities subject to the proposed rule 
that withdraw a DIF of greater than two MGD would be required to comply 
with the impingement mortality requirements at Sec.  125.94(b). EPA 
estimates that 1262 facilities would be subject to impingement 
mortality requirements. As many as 93 percent of electric generators 
and 73 percent of manufacturers already employ traveling or other 
intake screens which could be modified to meet today's proposed 
requirements. In addition, 374 facilities already have full or partial 
cooling towers, and most of these facilities already have a maximum 
intake velocity of less than 0.5 feet per second. As a result, half of 
all manufacturers and more than three-fourths of all electric 
generators may already meet some or all of today's proposed 
requirements for impingement mortality.
    To provide flexibility in meeting proposed rule IM requirements, 
EPA is offering facilities two options for compliance with IM 
requirements. Facilities may install technologies and demonstrate that 
they are meeting the impingement mortality restrictions at Sec.  
125.94(b)(1), or demonstrate compliance with the monthly and annual 
intake velocity standards as described at Sec.  125.94(b)(2). As 
discussed in Section VI, intake velocity is an important parameter for 
minimizing impingement and therefore reducing impingement mortality. 
Data in the record demonstrate that facilities with a maximum intake 
velocity of 0.5 feet per second significantly reduce the potential for 
impingement and impingement mortality to a level equal

[[Page 22249]]

to or better than the impingement mortality restrictions. EPA is 
therefore proposing an alternative standard that would allow facilities 
to demonstrate to the Director that either the maximum design intake 
velocity, or the maximum actual intake velocity as it passes through 
the structural components of a screen measured perpendicular to the 
mesh (under Sec.  125.94(b)(2)(i)) or through the opening of the intake 
(under Sec.  125.94(b)(2)(ii)), will not exceed 0.5 feet per second.
    Under either option for compliance with the Impingement Mortality 
standard, facilities that withdraw water from an ocean or estuary would 
also be required to reduce IM of shellfish to a level commensurate with 
properly deployed barrier nets. EPA expects passive screens would meet 
or exceed this level of performance, and has identified passive screens 
in the proposed regulations as being pre-approved for purposes of 
meeting this requirement. Also, under either option, facilities would 
be required to ensure that their intakes are structured so as to avoid 
entrapment (i.e., organisms being trapped in an intake bay or canal and 
unable to escape). Facilities with traveling screens located in a 
forebay would be expected to install fish handling and return systems 
to meet this requirement. EPA expects passive screens such as 
cylindrical wedgewire would also meet this requirement.
    In addition, facilities would be required to meet entrainment 
mortality standards as determined by the Director on a case-by-case 
basis. Under today's proposal, facilities with an actual intake flow of 
125 MGD or greater would be required to submit with their application 
studies as described in this section to assist the Director in 
establishing appropriate entrainment mortality controls for that 
facility. The Director would evaluate each facility's application 
materials to make a site-specific determination of BTA for entrainment 
mortality for the facility. In some cases, the Director may determine 
that additional requirements are not necessary to satisfy BTA for 
entrainment.
    Cooling water intakes with flows totaling less than two MGD are not 
subject to the proposed requirements. In addition, intakes where less 
than 25% of flow is used for cooling are also not subject to these 
requirements. Emergency back-up water flows would not be considered 
cooling water for purposes of this calculation. Furthermore, EPA seeks 
to promote water reuse in the proposed rule by specifically exempting 
wastewater, process water, and other gray water (even when used for 
cooling) from the definition of cooling water used in this calculation. 
However, once an intake satisfies these threshold requirements, all 
flow from the intake is subject to the impingement requirements. To the 
extent that any entrainment requirements are based on flow commensurate 
with closed cycle cooling, these would be applied to the non-contact 
cooling portion of the intake only, and could be met, in full or in 
part, by reusing water for non-cooling purposes. Intakes not subject to 
the rule may still be subject to requirements under other Federal, 
state, or local authorities.
    New units at existing facilities would be required to meet the 
impingement mortality requirements at Sec.  125.94(b) and entrainment 
mortality requirements at Sec.  125.94(d). The impingement mortality 
requirements would be the same as those identified for existing 
facilities, i.e. either numerical restrictions on impingement mortality 
or a maximum intake velocity. The entrainment mortality requirements 
are based on the level of EM reductions achieved by closed-cycle 
cooling. The proposed rule would allow facilities to demonstrate 
performance commensurate with the closed-cycle cooling identical to the 
Phase I rule provision for new facilities.

D. What information must I submit in my permit application?

    All existing facilities would be required to complete and submit 
application studies to describe the source water body, cooling water 
intake structures, cooling water system; characterize the biological 
community in the vicinity of the cooling water intake structure; 
develop a plan for controlling impingement mortality; describe 
biological survival studies that address technology efficacy and other 
studies on impingement and entrainment at the facility; and, discuss 
the operational status of the facility. The application studies would 
be used by the Director to assess the impingement and entrainment 
impacts of the cooling water intake structure and determine appropriate 
technological and/or operational controls, as necessary. Facilities 
withdrawing more than 125 MGD and existing facilities with new units 
would also complete and submit studies to characterize entrainment 
mortality and assess the costs and benefits of installing various 
potential technological and operational controls. A list of the 
proposed application materials is presented below. EPA request comment 
on the practicability and burden for facilities to prepare and submit 
this information. EPA is particularly interested in the burden to 
facilities with DIF < 50 MGD. EPA also requests comment on the 
practical utility of this information.
List of Proposed Application Materials
Facilities that already employ closed-cycle cooling and new units at 
existing facilities that plan to employ closed cycle would submit:

    122.21(r)(2) Source water physical data
    122.21(r)(3) Cooling water intake structure data
    122.21(r)(4) Source water baseline biological characterization 
data
    122.21(r)(6) Proposed Impingement Mortality Reduction Plan
All other existing facilities would submit:
    122.21(r)(2) Source water physical data
    122.21(r)(3) Cooling water intake structure data
    122.21(r)(4) Source water baseline biological characterization 
data
    122.21(r)(5) Cooling water system data
    122.21(r)(6) Proposed Impingement Mortality Reduction Plan
    122.21(r)(7) Performance studies
    122.21(r)(8) Operational status
Facilities withdrawing more than 125 MGD (except those with closed 
cycle), and existing facilities with new units that plan to 
demonstrate performance equivalent to closed cycle would also 
submit:
    122.21(r)(9) Entrainment characterization study
    122.21(r)(10) Comprehensive technical feasibility and cost 
evaluation study
    122.21(r) (11) Benefits valuation study
    122.21(r) (12) Non-water quality impacts assessment

    A summary of each application requirement follows. The proposed 
timeline for submittal of the application materials is outlined in the 
next section.
Section 122.21(r)(2) Source Water Physical Data
    This requirement is unchanged from the Phase I rule and the 
suspended Phase II rule. The facility would be required to submit data 
to characterize the facility and evaluate the type of waterbody and 
species potentially affected by the cooling water intake structure. The 
applicant would be required to submit: A narrative description and 
scaled drawings showing the physical configuration of all source water 
bodies used by the facility, including areal dimensions, depths, 
salinity and temperature regimes, and other documentation that supports 
the determination of the water body type where each cooling water 
intake structure is located; identification and characterization of the 
source waterbody's hydrological and geomorphological features, as well 
as the methods used to conduct any physical studies to determine the

[[Page 22250]]

intake's area of influence within the waterbody and the results of such 
studies; and locational maps. The Director would use this information 
to evaluate the appropriateness of any design or technologies proposed 
by the applicant.
Section 122.21(r)(3) Cooling Water Intake Structure Data
    This requirement is unchanged from the Phase I rule and the 
suspended Phase II rule. This data would be used 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 evaluation of which species and 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, and would be used to evaluate gray water, waste water, 
and other reuses within the facility. The applicant would be required 
to submit: A narrative description of the configuration of each of 
cooling water intake structure and where it is located in the water 
body and in the water column; latitude and longitude in degrees, 
minutes, and seconds for each cooling water intake structure; a 
narrative description of the operation of each of cooling water intake 
structure, including design intake flows, daily hours of operation, 
number of days of the year in operation and seasonal changes, if 
applicable; a flow distribution and water balance diagram that includes 
all sources of water to the facility, recirculating flows, and 
discharges; and engineering drawings of the cooling water intake 
structure.
Section 122.21(r)(4) Source Water Baseline Biological Characterization 
Data
    This information would be 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. This 
supporting information must include existing data if they are 
available. However, the facility may supplement the data using newly 
conducted field studies if it chooses to do so. The information the 
applicant would submit includes: Identification of data that are not 
available and efforts made to identify sources of the data; a list of 
species (or relevant taxa) for all life stages and their relative 
abundance in the vicinity of the cooling water intake structure; 
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. In addition, the 
applicant must provide identification and evaluation of the primary 
period of reproduction, larval recruitment, and period of peak 
abundance for relevant taxa; 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; identification of all threatened, endangered, and other 
protected species that might be susceptible to impingement and 
entrainment at your cooling water intake structures; and documentation 
of any public participation or consultation with Federal or State 
agencies undertaken in development of the plan. If the applicant 
supplements the information with data collected using field studies, 
supporting documentation for the Source Water Baseline Biological 
Characterization would 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 used 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. The applicant may also identify protective 
measures and stabilization activities that have been implemented, and 
describe how these measures and activities affected the baseline water 
condition in the vicinity of the intake. Existing facilities with 
closed-cycle cooling would not be required to submit this information 
under the proposed rule.
Section 122.21(r)(5) Cooling Water System Data
    This data would be used by the Director in determining the 
appropriate standards that would be applied to the facility. Facilities 
would be able to use this information, along with the water balance 
diagram required by 122.21(r)(5), to demonstrate the extent to which 
flow reductions have already been achieved. The applicant would provide 
the following information for each cooling water intake structure they 
use: A narrative description of the operation of the cooling water 
system and its relationship to cooling water intake structures; the 
proportion of the design intake flow that is used in the system 
including a distribution of water used for contact cooling, non-contact 
cooling, and process uses; a distribution of water reuse (to include 
cooling water reused as process water, process water reused for 
cooling, and the use of gray water for cooling); description of 
reductions in total water withdrawals including cooling water intake 
flow reductions already achieved through minimized process water 
withdrawals; description of any cooling water that is used in a 
manufacturing process either before or after it is used for cooling, 
including other recycled process water flows; the proportion of the 
source waterbody withdrawn (on a monthly basis); the number of days of 
the year the cooling water system is in operation and seasonal changes 
in the operation of the system, if applicable. The applicant would also 
submit a description of existing impingement and entrainment 
technologies or operational measures and a summary of their 
performance, including but not limited to reductions in entrainment 
mortality due to intake location and reductions in total water 
withdrawals and usage, and efficiencies in energy production for each 
producing unit that result in the use of less cooling water, including 
but not limited to combined cycle and cogeneration. For example, the 
applicant may provide comparative density data for the intake to 
demonstrate the extent to which location of the intake has reduced 
adverse environmental impact.
Section 122.21(r)(6) Proposed Impingement Mortality Reduction Plan
    The facility's proposed Impingement Mortality Reduction Plan would 
identify the approach the facility would use to meet proposed rule IM 
requirements, i.e., direct measure of impingement mortality through 
sampling, or demonstration that the maximum intake velocity is equal to 
or less than 0.5 fps. For the former, the Plan would include the 
duration and frequency of monitoring (which EPA assumes would generally 
be conducted on a biweekly basis, although the exact frequency would be 
determined case-by-case), the monitoring location, the organisms to be 
monitored, and the method in which naturally moribund organisms would 
be identified and taken into account. The Plan would also address the 
impingement mortality of

[[Page 22251]]

shellfish, as appropriate, for intakes that withdraw from oceans and 
tidal waters, e.g., seasonal deployment of barrier nets, passive 
screens, or an appropriate handling and return system. The Plan would 
document all methods and quality assurance/quality control procedures 
for sampling and data analysis. The proposed sampling and data analysis 
methods would be appropriate for a quantitative survey and include 
consideration of the methods used in other studies performed in the 
source waterbody. The Plan would include a description of the study 
area (including the area of influence of the cooling water intake 
structure(s)), and provide a taxonomic identification of the sampled or 
evaluated biological assemblages (including all life stages of fish and 
shellfish).
    For facilities that plan to meet IM requirements by demonstrating 
that the maximum intake velocity is equal to or less than 0.5 fps, the 
Plan would provide for each intake either, (1) documentation that the 
design intake velocity is equal to or less than 0.5 feet per second, as 
described at Sec.  125.94(b)(2)(i-ii), or, (2) documentation of the 
facility's proposed method for demonstrating the required maximum 
intake velocity (equal to or less than 0.5 feet per second) in 
accordance with Sec.  125.94(b)(2)(i-ii). This velocity must be 
maintained while as much as 15 percent of the intake surface area is 
blocked due to debris, ice, plant growth, or any other clogging 
materials. EPA notes that its proposed definition of intake velocity at 
Sec.  125.92 provides that this requirement would be applicable for 
screen/mesh type intakes as well as offshore intakes. For facilities 
with traveling screens, EPA believes the low cost and ease of 
installing an effective fish handling and return system warrants the 
retrofit of such controls, even if the maximum intake velocity is less 
than 0.5 feet per second, however, this is not required by the proposed 
rule. If intake velocity is not maintained at less than 0.5 feet per 
second, the regulation requires modified traveling screens to include 
collection buckets designed to minimize turbulence to aquatic life, the 
addition of a guard rail or barrier to prevent loss of fish from the 
collection bucket, replacement of screen panel materials with smooth 
woven mesh, a low pressure wash to remove fish prior to any high 
pressure spray to remove debris on the ascending side of the screens, 
and a fish handling and return system with sufficient water flow to 
return the fish to the source water in a manner that does not promote 
predation or re-impingement of the fish.
    Under the proposed impingement requirements, the owner or operator 
of the facility must ensure that there is a means for impingeable fish 
or shellfish to escape the cooling water intake system or be returned 
to the waterbody through a fish return system. Thus, a facility would 
need to demonstrate that their cooling water intake structure does not 
lead to entrapment. This provision is intended to avoid the collection 
of impingeable organisms into a cooling water intake system where there 
is neither a fish handling and return system nor an opportunity for the 
organisms to escape the cooling water intake system. For example, a 
facility may have an offshore intake with a velocity cap that meets the 
maximum velocity requirements for IM. The intake then leads to a pipe, 
canal, or forebay for which there is no means to return the organisms 
to the source water. In this example, this provision would require that 
the facility implement a fish handling and return system. Note since 
the facility would meet the maximum velocity requirements for IM, the 
facility would not have to conduct biological monitoring to demonstrate 
compliance with the IM limits. EPA anticipates facilities that already 
employ closed-cycle cooling would document the maximum intake velocity 
is equal to or less than 0.5 feet per second. EPA requests comment on 
the additional controls to address entrapment at facilities that employ 
closed-cycle cooling or other technologies with velocity equal to or 
less than 0.5 feet per second.
Section 122.21(r)(7) Performance Studies
    Under the proposal, the applicant would submit a description of any 
biological survival studies conducted at the facility and a summary of 
any conclusions or results, including: Site-specific studies addressing 
technology efficacy, through-plant entrainment survival, and other 
impingement and entrainment mortality studies; studies conducted at 
other locations including a justification as to why the data is 
relevant and representative of conditions at the facility. Due to 
changes in the water body over time, studies older than 10 years should 
include an explanation of why (or why not) the data is still relevant 
and representative of conditions at the facility. The Director would 
use such studies when assessing the facility's approach to IM and when 
establishing technology based requirements for EM. Permit applicants 
are not required to conduct new studies to fulfill this requirement. 
This requirement is rather aimed at obtaining results for studies that 
have already been conducted as part of past permit proceedings or for 
other purposes.
Section 122.21(r)(8) Operational Status
    Under the proposal, the applicant would submit a description of the 
operational status of each unit including: Descriptions of each 
individual unit's operating status including age of the unit, capacity 
utilization for the previous 5 years, and any major upgrades completed 
within the last 15 years (e.g., boiler or condenser replacement, 
changes to fuel type); a description of completed, approved, or 
scheduled uprates and NRC relicensing status for nuclear facilities; a 
description of plans or schedules for decommissioning or replacement of 
units; and a description of current and future production schedules for 
manufacturing facilities. The Director would use such information in 
determining compliance schedules. Further, such information would be 
used to determine flow reductions due to unit closures, which may 
affect a facility's DIF or AIF, and therefore may result in changes to 
a facility's regulatory status and requirements. Where the remaining 
useful plant life is considerably shorter than the useful life of an EM 
technology, this information would also be used to support a discussion 
of benefits for that EM technology.
Section 122.21(r)(9) Entrainment Characterization Study
    Under the proposal, this study would include a plan for collecting 
entrainment mortality data, requires a peer review process, and then 
requires the owner or operator of the facility to carry out the data 
collection. This study would provide data necessary to evaluate EM for 
that facility. EPA envisions the information already collected to meet 
122.21(r)(4) requirements would be used in developing the Entrainment 
Characterization Study. For all species and life stages identified 
under the requirements of 122.21(r)(4), the owner or operator of the 
facility would develop and submit an entrainment mortality data 
collection plan for review by the Director. The entrainment mortality 
data collection plan would include: The duration and frequency of 
monitoring; the monitoring location, including a description of the 
study area and the area of influence of the cooling water intake 
structure(s); a taxonomic identification of the sampled or

[[Page 22252]]

evaluated biological assemblages (including all life stages of fish and 
shellfish); the organisms to be monitored, including species of concern 
and threatened or endangered species; any other organisms identified by 
the Director; the method in which latent mortality would be identified; 
and documentation of all methods and quality assurance/quality control 
procedures for sampling and data analysis. The proposed sampling and 
data analysis methods must be appropriate for a quantitative survey.
    The owner or operator of the facility must also provide for peer 
review of the entrainment mortality data collection plan. The Director 
may consult with Federal, State and Tribal fish and wildlife management 
agencies with responsibility for fish and wildlife potentially affected 
by the cooling water intake structure(s). Further, the Director may 
require the owner or operator of the facility to include additional 
peer reviewers of the plan. EPA expects peer reviewers would have 
appropriate qualifications (e.g., in the fields of biology, 
engineering, etc.) for the subject matter. An explanation for any 
significant reviewer comments not accepted must be included in the 
final plan submission. Additional guidance on conducting peer review 
may be found in EPA's Peer Review handbook, available online at http://www.epa.gov/peerreview/pdfs/Peer%20Review%20HandbookMay06.pdf.
    The Entrainment Characterization Study would include the following 
components:
    1. Taxonomic identifications of all life stages of fish, shellfish, 
and any species protected under Federal, State, or Tribal Law 
(including threatened or endangered species) that are in the vicinity 
of the cooling water intake structure(s) and are susceptible to 
entrainment;
    2. Characterization of all life stages of fish, shellfish, and any 
species protected under Federal, State, or Tribal Law (including 
threatened or endangered species), including a description of the 
abundance and temporal and spatial characteristics in the vicinity of 
the cooling water intake structure(s), based on sufficient data to 
characterize annual, seasonal, and diel variations in entrainment 
(e.g., related to climate and weather differences, spawning, feeding 
and water column migration). These may include historical data that are 
representative of the current operation of your facility and of 
biological conditions at the site; and,
    3. Documentation of the current entrainment of all life stages of 
fish, shellfish, and any species protected under Federal, State, or 
Tribal Law (including threatened or endangered species). The 
documentation may include historical data that are representative of 
the current operation of your facility and of biological conditions at 
the site. Entrainment samples to support the facility's calculations 
would be collected during periods of representative operational flows 
for the cooling water intake structure and the flows associated with 
the samples would be documented.
    EPA expects this information would be used to help determine the 
site-specific BTA for EM. For facilities with no EM technologies, this 
information would characterize the potential for EM. The information 
would also be used to demonstrate that technologies and other measures 
already in place, or site-specific factors such as intake location or 
design, already reduce EM. For example, abundance data may demonstrate 
lower comparative densities which can significantly lower entrainment 
rates. The information could also be used by new units to demonstrate 
that alternative technologies or a combination of technologies reduce 
EM at that site to a level commensurate with closed-cycle cooling.
Section 122.21(r)(10) Comprehensive Technical Feasibility and Cost 
Evaluation Study
    Under the proposal, the owner or operator of the facility would 
submit an engineering study of the technical feasibility and 
incremental costs of candidate entrainment mortality control 
technologies. The study would include an evaluation of technical 
feasibility of closed-cycle cooling and fine mesh screens with a mesh 
size of 2mm or smaller, as well as any other entrainment reduction 
technologies identified by the applicant or requested by the Director. 
This study would include: a description of all technologies and 
operational measures considered (which could include alternative 
designs of closed-cycle recirculating systems such as natural draft 
cooling towers, hybrid designs, and compact or multi-cell 
arrangements); documentation of factors that make a candidate 
technology impractical or infeasible for further evaluation. For 
example, a discussion of land availability might include an evaluation 
of adjacent land and acres potentially available due to generating unit 
retirements, production unit retirements, other buildings and equipment 
retirements, ponds, coal piles, rail yards, transmission yards, and 
parking lots; decommissioning of existing units; repurposing of 
existing land uses; documentation that insufficient acres are available 
on-site; and evidence that the purchase or other acquisition of 
property adjacent to the facility is not feasible. EPA is exploring 
providing guidance on assessing land availability that might suggest a 
threshold ratio of acres/capcity that could serve as a guideline for 
when sufficient land may not be available. EPA has not identified any 
electric generating facilities with more than the 160 acres per GW 
capacity that EPA believes would be unable to construct retrofit 
cooling towers. EPA specifically solicits comment on this ratio, and 
solicits data for determining whether alternative thresholds are more 
appropriate.
    The proposed rule would require that costs be presented as the net 
present value (NPV) of the social costs and the corresponding annual 
value. In addition to the required social costs, the owner or operator 
may choose to provide facility level compliance costs, however such 
costs must be provided and discussed separately from social costs. The 
cost evaluation component of this study would include engineering cost 
estimates of all technologies considered above and also discuss and 
provide documentation of any outages, downtime, energy penalties or 
other impacts to revenue. The cost evaluation should be based on least-
cost approaches to implementing each candidate technology while meeting 
all regulatory and operational requirements of the plant. Depreciation 
schedules, interest rates, further consideration of remaining useful 
life of the facility as discussed in 122.21(r)(8), and any related 
assumptions would be identified.
    The owner or operator of the facility must obtain peer review of 
the Comprehensive Technical Feasibility and Cost Evaluation Study, as 
described above for the Entrainment Characterization Study. EPA expects 
peer reviewers would have appropriate qualifications (e.g., 
engineering, hydrology, planning and design, etc.) for the subject 
matter.
Section 122.21(r)(11) Benefits Valuation Study
    Under the proposal, the owner or operator of the facility would 
submit a detailed discussion of the magnitude of water quality 
benefits, both monetized and non-monetized, of the candidate 
entrainment mortality reduction technologies evaluated in 122.21(r)(8), 
including incremental changes in the impingement mortality and 
entrainment mortality of fish and shellfish; and

[[Page 22253]]

monetization of these changes to the extent appropriate and feasible 
using the best available scientific, engineering, and economic 
information. This may include monetization using market values, market 
proxies (e.g., models based on travel costs or other methodologies), 
and stated preference methods. Benefits that cannot be monetized should 
be quantified where feasible and discussed qualitatively. The study 
would also include discussion of recent mitigation efforts already 
completed and how these have affected fish abundance and ecosystem 
viability in the intake structure's area of influence. Finally, the 
study would identify other benefits to the environment and the 
community, including improvements for mammals, birds, and other 
organisms and aquatic habitats. The owner or operator of the facility 
must obtain peer review of the benefits evaluation study, as described 
above for the Entrainment Characterization Study. EPA expects peer 
reviewers would have appropriate qualifications (e.g., biologist, 
hydrologist) for the subject matter.
Section 122.21(r)(12) Non-Water Quality Impacts Assessment
    The owner or operator of the facility would submit a detailed 
discussion of the changes in non-water quality factors attributed to 
technologies and/or operational measures considered. These changes may 
include, but are not limited to, increases or decreases in the 
following: Energy consumption; thermal discharges including an estimate 
of increased facility capacity, operations, and reliability due to 
relaxed permitting constraints related to thermal discharges; air 
pollutant emissions and their health and environmental impacts; noise; 
safety such as the potential for plumes, icing, and availability of 
emergency cooling water; grid reliability including an estimate of 
changes to facility capacity, operations, and reliability due to 
cooling water availability; consumptive water use, and facility 
reliability such as production of steam and impacts to production based 
on process unit heating or cooling. The owner or operator of the 
facility would provide for peer review of the Non-water Quality Impacts 
Assessment as described above for the Entrainment Characterization 
Study. EPA expects peer reviewers would have appropriate qualifications 
(e.g., biologist, safety engineer, power engineer, hydrologist) for the 
subject matter. EPA recognizes that in some cases it may be efficient 
for permit applicants to combine several of the required studies into a 
single document and have them reviewed holistically by a single set of 
peer reviewers. Such an approach is not precluded by the proposed rule 
as long as the peer review panel has the background appropriate to 
conduct the combined review and the permitting authority approves. EPA 
requests comment on the peer review requirements and the level of 
specificity regarding peer review in the draft rule text.
    EPA is aware that specialized experience may be useful or 
appropriate in assessing some of the factors indentified in 122.21(r). 
EPA solicits comment on further guidance or rule language that could 
assist in the consistent development of these studies and more uniform 
review of these factors by the Director. For example, EPA could 
establish modeling of plume drift as part of the assessment of icing 
and safety. This requirement could also be included as part of the 
technical feasibility and costs analysis required at 122.21 (r)(10). 
Similarly, required emissions estimates could include more specific 
criteria under 122.21(r)(11).
Facilities Demonstrating Flow Reduction Commensurate With Closed-Cycle 
Recirculating System
    Under Sec.  125.94(d), new units at existing facilities would be 
subject to entrainment mortality requirements. These facilities may 
choose to demonstrate that they have already reduced actual intake flow 
(AIF) to a level commensurate with a closed-cycle recirculating system 
in their permit application to meet rule requirements. In general, flow 
reduction may be achieved through the use of a closed-cycle cooling 
system such as a wet cooling tower (mechanical or natural draft), a dry 
cooling system, variable speed pumps, or operational measures such as 
seasonal reductions in flow. Under today's proposal, each facility 
would have the flexibility to select the flow reduction technique or 
combinations thereof that best meets their operational needs, so long 
as the total reduction in flow is commensurate with that of a closed-
cycle cooling system.\95\
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    \95\ The term ``commensurate'' is intended to be viewed in terms 
of a reduction in the facility's actual intake flow. The facility's 
DIF reflects the maximum volume of water that the facility can 
withdraw (and would be the basis for applicability) but the AIF 
(based on the facility's average flows over the previous 3 year 
period) represents the impacts to aquatic communities. Reducing the 
AIF is the most appropriate approach, as it represents actual 
impacts and is most representative of a facility's actual 
operational schedule. EPA fully expects, however, that many 
facilities would construct a closed-cycle cooling system based on 
its DIF to comply with the proposed rule, as this enables the 
facility to utilize its full DIF at any given time, thereby 
maintaining full operational flexibility. EPA's costs reflect the 
costs for the entire DIF. See below for more information on how a 
facility can demonstrate that it has achieved a reduction in flow 
that is commensurate with closed-cycle cooling.
---------------------------------------------------------------------------

    For today's proposal, EPA is clarifying the term ``commensurate'' 
in the context of flow reductions. EPA examined its record to clarify 
how a facility could demonstrate a reduced flow ``commensurate'' with a 
closed-cycle recirculating system. EPA's record demonstrates that for 
the traditional steam electric utility industry, facilities located in 
freshwater areas (with a salinity of less than 0.5 parts per thousand) 
that have closed-cycle recirculating cooling water systems typically 
reduce water use by 97.5% percent from the amount they would use if 
they had once-through cooling water systems.\96\ Similarly, facilities 
that have closed-cycle recirculating cooling systems using salt (or 
brackish) water \97\ typically reduce water usage by 94.9 percent.\98\ 
Therefore, if a facility selects to demonstrate flow reduction 
commensurate with closed-cycle cooling using flow reduction 
technologies and controls other than through closed-cycle cooling 
(e.g., through seasonal flow reductions, unit retirements, and other 
flow reductions), EPA is proposing that it would have to demonstrate 
total flow reductions approximating 97.5% for freshwater withdrawals 
and 94.9% for saltwater withdrawals. Today's proposal includes these 
criteria in the definition of closed-cycle recirculating systems at 
Sec.  125.92. EPA solicits comment on whether to establish these 
metrics as a binding requirement, or whether the determination of what 
flow measure is commensurate with closed-cycle cooling should be left 
to the Director for each facility.
---------------------------------------------------------------------------

    \96\ Assuming a cycle of concentration of 3.0 and a condenser 
delta T of 20[deg]F. See Section V for more information.
    \97\ Saltwater also includes brackish water, tidal rivers, and 
estuaries where the water has a salinity of equal to or greater than 
0.5 parts per thousand (by mass) at a time of annual low flow.
    \98\ Assuming a cycle of concentration of 1.5 and a condenser 
delta T of 20[deg]F. See Section V for more information.
---------------------------------------------------------------------------

    EPA expects the Director to carefully consider the approach 
proposed by the facility to ensure that it is reasonable. For example, 
many facilities have two pumps installed per unit, but typically only 
operate one pump at a time. The second pump may provide additional 
pumping capacity (such as may be required in summer) or it may only 
serve as a back-up or for use during maintenance of the main pump. In 
the former case, the facility's intake flow

[[Page 22254]]

(both DIF and AIF) should properly account for the pumping capacity of 
both pumps. In the latter, the true flow for the intake structure may 
be equivalent to the pumping capacity of only a single pump.\99\ Also, 
EPA is aware that some facilities may elect to retire units to 
demonstrate a reduced flow and wants to ensure that such facilities 
would qualify for this alternative provided they meet the applicable 
requirements.\100\ EPA is proposing that these credits for unit 
closures be valid for 10 years from the date of the closure.\101\ EPA 
believes this approach reasonably allows facilities to get credit for 
flow reductions attributable to unit closures, but also requires such 
facilities to make future progress to ensure its operations reflect 
best available technology to control entrainment. EPA is seeking 
comment on this approach.
---------------------------------------------------------------------------

    \99\ In this scenario, EPA does not envision that a facility 
would be able to remove the second pump to demonstrate a reduction 
in flow, as the pump is simply redundant equipment and would not 
reduce the overall water withdrawals.
    \100\ As a point of clarification, EPA notes that flow reduction 
credit would be available to a facility regardless of the rationale 
for maintaining the reduced flow. In other words, a facility may 
have ceased operation of a unit for reasons other than today's 
proposed regulation, and as such, withdraws much less water than 
before. Nevertheless, the net effect is that entrainment would be 
reduced.
    \101\ Some facilities have intake systems for units that have 
not operated for an extended time period. These units have 
essentially ceased operations; such facilities may include the 
pumping capacity associated with these units in their DIF even 
though it may not accurately represent their actual operations 
(i.e., it may be inappropriate to consider these units under 
125.94(c)(5)(ii)).
---------------------------------------------------------------------------

    Under 125.94(d)(2), EPA would allow facilities to implement 
technologies other than closed-cycle cooling systems that reduce 
entrainment mortality by at least 90 percent of what would have been 
obtained via flow reduction commensurate with closed-cycle cooling 
under 125.94(d)(1). This compliance provision mirrors the Track II 
provision of the Phase I rule, and is intended to provide opportunities 
for facilities to consider technologies such intake relocation or fine 
mesh screens, or operational measures such as the recyle and reuse of 
cooling water for other purposes. Further, facilities could adopt a 
combination of such technologies and practices, provided the facility 
can demonstrate reductions in entrainment mortality of 90 percent or 
better as compared to closed-cycle cooling. EPA seeks comment on this 
provision.

E. When are application studies due?

    EPA recognizes that facilities previously subject to the withdrawn 
Phase II rule (existing electric generating facilities with a DIF 
greater than 50 MGD) should have already compiled much of the proposed 
application information and expects that these data would be used to 
meet many of the requirements under today's proposal. In some cases the 
information may have been collected, but reports may not have been 
generated or finalized. EPA also understands that many other facilities 
may not have collected this information, e.g., smaller power plants and 
manufacturers, and in those cases facilities would have to initiate new 
data collection efforts. For this reason, EPA is proposing two 
different timelines for application submittal, as illustrated in 
Exhibits IX-1 and IX-2. EPA is proposing that facilities previously 
subject to the Phase II rule would be required to submit some 
application studies six months after rule promulgation. Other studies 
would follow in sequence over a period of time not to exceed five 
years. Other existing facilities not previously subject to the 
withdrawn Phase II rule (e.g., small power plants and all existing 
manufacturers) would begin submitting application studies three years 
after rule promulgation. Additional required studies would be submitted 
over a period not to exceed seven years and six months. EPA believes 
that these proposed schedules will afford facilities ample time to 
plan, complete, and submit application materials as well as provide 
Directors time to evaluate the submissions and develop appropriate 
permit conditions. These schedules are linked to the effective date of 
the rule in order to establish a level playing field and to avoid 
delays implementing the rule regardless of a facility's current permit 
status. EPA solicits comment on the proposed schedule, and specifically 
seeks comment and data on the appropriate amount of time to collect 
data, write reports, conduct peer reviews, obtain comment, provide for 
public participation, and issue final permit conditions.
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[GRAPHIC] [TIFF OMITTED] TP20AP11.001

BILLING CODE 6560-50-C

F. What are the monitoring requirements in today's proposal for 
existing facilities?

1. Monitoring Requirements for Impingement Mortality
    Today's proposed rule proposes impingement mortality requirements 
for all existing facilities. As such, facilities would be required to 
monitor to demonstrate compliance with the impingement mortality 
restrictions at Sec.  125.94(b)(1), demonstrating a monthly average of 
fish impingement mortality of 31% or less, and an annual average of 12% 
or less. (Different monitoring requirements apply for compliance with 
the alternative requirements at Sec.  125.94(b)(2) for design intake 
velocity; these are discussed in a later section.) To demonstrate 
compliance with the impingement mortality standards at Sec.  
125.94(b)(1), the facility would be required to monitor at a frequency 
specified by the Director. EPA assumes the facility would monitor no 
less than

[[Page 22257]]

once per week during primary periods of impingement as determined by 
the Director, and no less than biweekly during all other times. For 
each monitoring event, the facility would determine the number of 
organisms that are collected or retained on a \3/8\ inch sieve (i.e., 
that are impinged [I]), and the number that die within 24-48 hours of 
impingement (i.e., impingement mortality [IM]). Fish that are included 
in any carryover from a traveling screen or removed from a screen as 
part of debris removal would be counted as fish impingement mortality. 
Under the proposed definition at 125.92, naturally moribund fish and 
invasive species would be excluded from the totals for both impingement 
and impingement mortality. The percentage of impingement mortality is 
defined by the following equation:
[GRAPHIC] [TIFF OMITTED] TP20AP11.002

    For each calendar month, the facility would calculate the 
arithmetic average of the percentage impingement mortalities observed 
during each of the sampling events. For example, if a facility 
conducted four sampling events in December, it would calculate the 
monthly average from the weekly values. If a facility's calculated 
monthly average is less than the monthly average limitation (31%), then 
it would be in compliance that month. To demonstrate compliance with 
the annual average limit, the facility would calculate the arithmetic 
average of all of its sampling events during the year. If the 
facility's calculated annual average percentage impingement mortality 
is less than the annual average limitation, then it would be in 
compliance.
    EPA envisions that the permitting authority would review and 
approve the Impingement Mortality Reduction Plan including the 
frequency and duration of monitoring, the monitoring location, the 
organisms to be monitored, and the method in which naturally moribund 
organisms would be identified and taken into account. In establishing 
the monitoring requirements, EPA expects facilities and permitting 
authorities would consider whether data collection should cover the 
entire daily and (where appropriate) tidal cycles. Typically, 
facilities have collected impingement samples continuously for 6 or 8 
hours, and repeated this cycle to cover an entire 24-hour period. 
Stratifying collection in this manner allows an analysis of the diel 
variation exhibited by many aquatic organisms. EPA expects that 
facilities would continue to conduct sampling in such a manner to 
account for diel variations, where appropriate. EPA also expects the 
plan would ensure that sampling occurs during periods of representative 
flow and not during periods of non-peak flow or scheduled outages. The 
sampling plan would cover all five years of the permit term.
    EPA is not proposing a list of the species to be monitored due to 
the site-specific nature of the biological organisms impacted by an 
intake structure. Rather, EPA is proposing that a facility provide data 
on the composition of all species in its waterbody as part of its NPDES 
permit application (information from the source water baseline 
characterization data required at Sec.  122.21(r)(4) and impingement 
plan at Sec.  125.95(b)) to help inform the Director's determination of 
the species that would be monitored for compliance with the proposed 
impingement mortality limitations. In addition, the permitting 
authority may impose additional monitoring requirements such as 
consideration of threatened or endangered species, as appropriate. EPA 
is also not including provisions for reducing the monitoring frequency 
in the future; given that the source waterbody may change over time 
(including hosting different or increased numbers of individuals or 
species), EPA believes that weekly monitoring at a minimum is 
appropriate.
    The ideal point to measure impingement mortality is the location 
where organisms are returned to the waterbody. However, for ease of 
sampling and access, EPA envisions most facilities would collect 
samples from the fish return system(s) at some point prior to the fish 
return discharge point.\102\ Based on the studies in EPA's database, 
EPA envisions facilities would either (1) divert some or all of the 
flow from the fish return into a fish collection and holding area or 
(2) place a net or debris basket fitted with 3/8'' mesh spacing in the 
fish return and collect and transfer the retained organisms to a 
holding tank. Facilities would handle the organisms in the collection 
device as little as possible and transfer them to a holding area with 
conditions as close as practicable to the source water. Facilities 
would count the number of living organisms in the holding area and 
subsequently hold the sample using proper technique \103\ to maintain 
the health of the collected organisms.\104\ At a time period of 48 
hours after the initial collection, the facility would count the number 
of dead organisms. The facility would then determine the percentage of 
organisms that died after 48 hours in comparison to the total number of 
living organisms measured initially. Any organisms not collected by the 
fish handling and return system, such as organisms in the carryover of 
a traveling screen or organisms collected by a high pressure wash and 
sent to debris bins, would be counted as 100% mortality. Naturally 
moribund organisms would be excluded from the calculation. The facility 
would keep records of this information and subsequently compare its 
result to today's proposed impingement mortality limitations.
---------------------------------------------------------------------------

    \102\ Based on EPA's site visits and other data, even facilities 
with multiple intakes (and multiple screens, etc.) typically only 
have one fish handling and return system. This is consistent with 
EPA's proposed approach to determine compliance at the facility 
level. For facilities with more than one return system (including 
those that are bi-directional in tidal waters), compliance is still 
determined at the facility level.
    \103\ EPA recognizes that there are no standard methods for 
conducting impingement and entrainment studies and that there can be 
variability in designing a sampling plan between sites. However, 
there are elements that should be incorporated into any sampling 
plan, as outlined in DCN 10-6708.
    \104\ Facilities that divert the flow directly would similarly 
pass the flow through a net or debris basket fitted with 3/8'' mesh 
spacing or would only count organisms that would have been collected 
with such a basket or net.
---------------------------------------------------------------------------

    EPA requests comment on all aspects of these monitoring 
requirements. In particular, EPA requests comment on whether EPA should 
specific minimum sampling frequencies or leave this determination to 
the Director. EPA also requests comment on methods for evaluating 
latent mortality effects resulting from impingement. EPA's record 
demonstrates that a holding time of no more than 48 hours is optimal 
for evaluating the latent mortality associated with impingement while 
at the same time minimizing mortality associated with holding the 
organisms. In the majority of recent studies, 48 hours appears to be 
the standard holding time. EPA specifically requests comment and 
supporting data on whether it should: Specifically establish 48 hours 
after initial impingement as the time at which to monitor impingement 
mortality; allow a range such as 24 to 48 hours; establish 24 hours as 
the standard holding time; or adopt some other technique for 
standardizing results. EPA also requests comment on whether survival 
under monitored holding conditions as discussed above is reflective of 
survival in the wild and thus an appropriate measure of the impingement 
mortality achieved by the facility.
    As explained in Section VI, the impingement mortality restrictions 
proposed today are based on the

[[Page 22258]]

operation of a modified coarse mesh traveling screen with a fish 
return. Because EPA wants to ensure that a facility's monitoring plan 
is consistent with the technical basis for today's restrictions, EPA is 
proposing to require facilities to monitor impingement mortality using 
a sample that has been passed through a sieve or net with a \3/8\'' 
mesh size, so that only organisms that do not pass through this mesh 
size are counted.\105\ In doing so, facilities would only retain (and 
therefore count) organisms that would have been impinged on a coarse 
mesh screen, which was the technological basis used for developing the 
proposed impingement mortality limits.\106\ Facilities could similarly 
apply a ``hypothetical net'' in that they could elect to only count 
organisms that would not have passed through a net with \3/8\'' mesh. 
For example, a facility that uses a fine-mesh screen or diverts the 
flow directly to a sampling bay would only need to count organisms that 
would remain if the flow passed through a net, screen, or debris basket 
fitted with 3/8'' mesh spacing. EPA further believes the IM 
restrictions could be applied to other screen-based fish protection 
technologies, and allows for future better performing technologies. EPA 
solicits comment on this approach to measuring impingement mortality. 
EPA specifically solicits comment on ways to ensure that the procedures 
used to collect and analyze samples do not inadvertently lead to 
greater mortality than would occur among organisms that were returned 
to the water body without being sampled.
---------------------------------------------------------------------------

    \105\ See section 3 for a discussion of how EPA has changed its 
view of screen mesh size. EPA recognizes that fine mesh screens may 
simply ``convert'' smaller organisms that previously would have 
passed through the screen to impinged organisms.
    \106\ EPA's analysis of impingement survival rates is based on 
data from facilities with coarse mesh screens; these limits may be 
applied differently at facilities with smaller mesh size. Therefore, 
these limits do not provide a disincentive to facilities from using 
finer-meshed screens (i.e., screens with a mesh opening smaller than 
3/8'') on their traveling screens. As long as the organisms that are 
large enough to have been impinged upon a coarse mesh screen achieve 
the required survival rates, the facility would be considered to 
meet the impingement mortality requirements.
---------------------------------------------------------------------------

    If the Director has approved a plan for compliance with the 
velocity requirements specified in Sec.  125.94(b)(2) and the facility 
has documented a maximum design intake flow for the intake equal to or 
less than 0.5 feet per second, there are no compliance monitoring 
requirements. If the facility cannot document a design intake flow for 
the intake equal to or less than 0.5 feet per second under all 
conditions, including during minimum ambient source water surface 
elevations (based on the Director's judgment using hydrological data) 
and maximum head loss across the screens, the permit must require 
compliance monitoring for intake velocity to demonstrate the intake 
velocity is consistent with the requirements of Sec.  125.94(b)(2). The 
frequency of monitoring would be no less than twice per week. In this 
circumstance facilities would not be subject to the impingement 
mortality monitoring requirements otherwise specified in Sec.  
125.96(a)(1) and (2). EPA requests comment on whether it should specify 
a minimum frequency for intake velocity monitoring or leave this 
determination to the Director.
    EPA notes the proposed rule does not specify the owner or operator 
of a facility with a cooling water intake structure that supplies 
cooling water exclusively for operation of a wet or dry cooling 
tower(s) and that meets the definition of closed-cycle recirculating 
system at Sec.  125.92 is deemed to meet this impingement mortality 
standard. This is because the largest facilities with closed cycle 
cooling still have the potential to withdraw 100 MGD or more in makeup 
water. EPA's record shows virtually all facilities with wet cooling 
towers have a maximum intake velocity of 0.5 feet per second. EPA 
expects a facility that operates a cooling tower would be able to 
demonstrate the maximum design intake velocity does exceed 0.5 feet per 
second, and the proposed rule already provides that such facilities do 
not have any additional monitoring requirements for impingement 
mortality.
2. Monitoring Requirements for Entrainment Mortality
Existing Facilities
    Whenever the Director is establishing entrainment control, 
monitoring requirements must also be developed. As proposed, the permit 
application studies at Sec.  122.21(r) would be required for each 
permit renewal. EPA expects the Director would use these studies, 
including the Entrainment Characterization Study at Sec.  122.21 
(r)(9), as a basis for any additional monitoring requirements for 
entrainment mortality.
New Units at Existing Facilities
    Under Sec.  125.96(c), existing facilities with new units would be 
required to conduct compliance monitoring to demonstrate flow 
reductions consistent with the requirements of Sec.  125.94(d)(1) and 
(2), or equivalent I&E reductions. For facilities required to 
demonstrate flow reductions consistent with the requirements of Sec.  
125.94(d)(1), the frequency of monitoring would be no less than once 
per week and would be representative of normal operating conditions. 
Flow monitoring would include measuring cooling water withdrawals, 
make-up water, and blowdown volume. The Director may require additional 
monitoring necessary to demonstrate compliance with both Sec.  
125.94(d) as well as any more stringent standards under Sec.  
125.94(f).
    To meet requirements under Sec.  125.94(d)(1), EPA expects 
facilities would first measure AIF in order to establish a site-
specific baseline prior to installing any new technologies or employing 
new operational measures. EPA has defined AIF as the average volume of 
water withdrawals on an annual basis over the past three calendar years 
(see Sec.  125.92). Facilities would then conduct flow monitoring which 
would include measuring cooling water withdrawals, make-up water, and 
blowdown volume. The Director may require additional monitoring 
necessary to demonstrate compliance with Sec.  125.94(d). These flows 
would be used to document the facility has minimized make-up and 
blowdown flows.
    To meet requirements under Sec.  125.94(d)(2), facilities would 
again measure AIF in order to establish a site-specific baseline prior 
to installing any new technologies or employing new operational 
measures. The facility would also measure the density of entrainable 
organisms (ED) at a proximity to the intake that is 
representative of the entrainable organisms present in the absence of 
the cooling water intake structure and is representative of annual 
average abundance. For the purpose of today's rule, entrainable is 
defined as any organism that passes through a \3/8\ inch sieve. As 
discussed in Section VI, this would avoid any confusion as to which 
organisms would be subject to which standards. Facilities would also 
monitor the latent entrainment mortality in front of the intake 
structure. Entrainable organisms passing the cooling water intake 
structure would be counted as 100 percent entrainment mortality unless 
the facility demonstrates to the approval of the Director that the 
mortality for each species of concern is less than 100 percent. Samples 
would be collected at a minimum to monitor each species of concern or 
other species as required by the Director over a 24-hour period. 
Samples would be collected no less than biweekly during the primary 
period of reproduction, larval recruitment, and peak abundance 
identified during the source water

[[Page 22259]]

baseline characterization required under Sec.  122.21(r)(4). Samples 
would be representative of the cooling water intake when the structure 
is in operation. In addition, sufficient samples would be collected to 
allow for calculation of annual average entrainment levels. The 
sampling would measure the total count of entrainable organisms or 
density of organisms, unless the Director approves of a different 
metric for such measurements. In addition, facilities would monitor the 
AIF for each intake. The AIF would be measured at the same time as the 
samples of entrainable organisms are collected.
    The following equation illustrates how to calculate a baseline 
level of entrainment (EB):

EB = ED x AIF

    Performance commensurate with a closed-cycle cooling system 
(EBTA) can therefore be determined by reducing EB 
by the percentage of flow reduced through the use of a closed-cycle 
cooling system. For example, a facility withdrawing makeup water from a 
freshwater source (as described above, would achieve a reduction of 
97.5 percent) would calculate its performance as:

EBTA = (EB) x (100-97.5) / 100

    The resulting value, EBTA, is the required level of 
entrainment performance (as measured by entrainment mortality). The 
facility could implement any combination of flow reduction, 
technologies, and operational measures to meet the required level of 
entrainment performance. For example, a facility withdraws 200 MGD AIF 
from a freshwater river. The annual average entrainment density in the 
proximity of the intake structure is 6,400 organisms per 100 cubic 
meters withdrawn.

EB = ED x AIF

6,400 organisms/100m3 x (100m3/26,417 gallons) x 
200,000,000 gallons per day = 48 million organisms per day

    The maximum entrainment mortality for a closed-cycle cooling system 
is thus

EBTA = (EB) x (100-97.5) / 100 = (48 x 
106 organisms per day) x (100-97.5) / 100 = 1.2 x 
106 organisms.

    The minimum required level of performance for demonstrating 
entrainment mortality at a comparable level (EC) to a 
closed-cycle cooling system is the level corresponding to 90 percent 
\107\ of the reduction that a facility with a closed-cycle cooling 
system could achieve:
---------------------------------------------------------------------------

    \107\ Sec.  125.86 specifies ``reduced both impingement 
mortality and entrainment of all life stages of fish and shellfish 
to 90 percent or greater of the reduction that would be achieved 
through Sec.  125.84(b)(1) and (2).''

EC = (EB) x (100 - (97.5 x .9)) / 100 = (48 x 
106 organisms per day) x (100 - (97.5 x .9)) / 100 = 5.9 x 
---------------------------------------------------------------------------
106 organisms.

    The Director may require additional monitoring necessary to 
demonstrate compliance with both Sec.  125.94(d) as well as any more 
stringent standards under Sec.  125.94(f).
    EPA requests comment on all aspects of these monitoring 
requirements. EPA specifically requests comment on whether it should 
specify minimum monitoring frequencies or leave this to the 
determination of the Director.

Visual or Remote Inspections--All Existing facilities
    All facilities would either conduct visual inspections or employ 
remote monitoring devices during the period the cooling water intake 
structure is in operation. The facility would conduct such inspections 
at least weekly to ensure that any technologies installed to comply 
with Sec.  125.94 are maintained and operated to ensure that they will 
continue to function as designed. EPA is aware that for some 
facilities, this requirement could pose a feasibility challenge (i.e., 
ice cover during the winter season, inability of divers to see through 
more than a few inches of water, or certain intakes located in deep 
water during rough weather). The proposed rule therefore authorizes the 
Director to establish alternative procedures during periods of 
inclement weather. EPA solicits comment and data on this provision. EPA 
specifically requests comment on whether it should establish minimum 
frequencies for inspections, or leave this to the determination of the 
Director.

G. What reports would I be required to submit?

1. Status Reports
    Facilities that establish a compliance schedule (under Sec.  
125.93) would submit (at a minimum) quarterly status reports as to the 
progress of the facility towards meeting the terms of the compliance 
schedule and the applicable limits. These reports may include updates 
on biological monitoring, technology testing results, construction 
schedules, or other appropriate topics.
2. Monitoring Reports
    As described above, facilities would have ongoing impingement 
mortality monitoring requirements; some facilities would also have 
entrainment mortality monitoring requirements. The proposed monitoring 
activities are similar to monitoring required for other effluent 
discharges already included in NPDES permits. Facilities would be 
required to include impingement mortality monitoring reports with their 
Discharge Monitoring Reports (DMRs) (or equivalent) and their permit 
annual report to the Director. As described at Sec.  125.97, those 
reports would be required to include:
     The compliance measurement location;
     Identification of species of concern;
     Counts and percentage mortality of organisms sampled, as 
well as the average for all measurements taken during the preceding 12-
month period (i.e., a 12-month ``rolling'' average);
     Time period for evaluating latent mortality effects;
     Intake velocity measurements, as appropriate, to determine 
compliance with the design intake velocity requirement of 0.5 fps or 
less; and
     Any other monitoring requirements specified in the permit.
    The Director would evaluate these reports for compliance with 
monthly and annual impingement mortality limits, velocity limits, and 
other permit requirements where appropriate.
    For facilities that require entrainment mortality controls, the 
Director would require ongoing entrainment mortality flow monitoring. 
Facilities would be required to include entrainment mortality flow 
monitoring reports with their DMRs (or equivalent) and their annual 
report to the Director. Those reports would be required to include:
     The compliance measurement location;
     A description of the flow monitoring procedure;
     Documentation of flow reductions; and
     Any other monitoring requirements specified in the permit.

The Director would evaluate these reports for compliance with monthly 
entrainment mortality limits, flow reductions and flow monitoring, and 
permit requirements as required.
3. Annual Certifications
    Today's proposal would require a facility to submit an annual 
certification statement signed by the responsible corporate officer. 
This statement would indicate each technology is being maintained and 
operated as set forth in its permit, or a justification to allow 
modification of the practices listed in the facility's most recent 
annual certification. If the Director has approved impingement 
mortality or

[[Page 22260]]

entrainment mortality compliance alternatives, the statement would 
specify the information submitted in the most recent annual 
certification is still valid and appropriate, or provide a 
justification to allow modification of the practices listed in the most 
recent annual certification. For example, the statement would include 
data and information documenting compliance with the requirement in 
Sec.  124.94(d)(1) that flow commensurate with a closed-cycle 
recirculating system is met. If the Director has approved the IM 
maximum intake velocity compliance alternative and the facility cannot 
document a design intake velocity for the intake equal to or less than 
0.5 feet per second, the statement would include data and information 
documenting compliance with the maximum allowable intake velocity.
    If the information contained in the previous year's annual 
certification is still applicable, the statement would simply state as 
such and, along with any applicable data submission requirements 
specified in this section, would constitute the annual certification. 
However, if the facility has substantially modified its operation of 
any unit that impacts cooling water withdrawals or operation of cooling 
water intake structures, it would submit revisions to the information 
required in the permit application.

H. What records would I be required to keep?

    As described at Sec.  125.97(d), facilities would be required to 
keep all application, status, monitoring, and annual reports and 
related supporting information and materials for a minimum of 5 years, 
but facilities may wish to keep records for a longer period to maintain 
a complete regulatory history of the facility. For example, existing 
source water biological studies submitted with a facility's permit 
application may contain data that has been collected within the past 10 
years. The proposed rule requires that records be kept from the 
preceding permit term when the Director has approved a request for 
reduced information collection in the permit application. The Director 
may establish additional record keeping requirements in the permit, 
such as additional records documenting the EM determination and related 
compliance monitoring or data collection.

I. Are there other Federal statutes that could be incorporated into a 
facility's permit?

    EPA's NPDES permitting regulations at Sec.  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 Sec.  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 proposal would authorize activities that are not in 
compliance with these or other applicable Federal laws (e.g., Marine 
Mammal Protection Act, 16 U.S.C. 1361 et seq., and Migratory Bird 
Treaty Act, 16 U.S.C. 703 et seq.).

J. What is the Director's role under today's proposal?

    Under today's proposed rule, the Director would need to review all 
materials submitted by an existing facility with its permit application 
each permit term to determine appropriate NPDES permit requirements for 
impingement mortality, entrainment mortality for new units at existing 
facilities, and site-specific entrainment mortality, as necessary. The 
Director is encouraged to provide any comments expeditiously on 
submitted materials so the facility can make responsive modifications 
to its information gathering activities. More specific responsibilities 
are described below:
    (1) The Director would review materials to determine compliance 
with the applicable requirements. The proposed rule also provides some 
discretion to the Director to waive the submittal requirements under 
certain conditions. First, if the circumstances at the facility have 
not changed after a five year permit cycle, the Director can reduce the 
submission requirements. Second, if the Director has made a BTA 
determination prior to the effective date of the rule, and 
substantially the same information was already submitted and considered 
by the Director in making that determination, the Director can reduce 
the submission requirements. To clarify further, EPA has included a 
``transition'' provision in the submission requirements of today's 
proposed rule that makes it clear that for any facility that has 
submitted a permit application before the effective date of the 
regulation, the Director can select the best approach to permit 
development and implementation. These provisions are further intended 
to avoid any unnecessary delay in recently issued permits. EPA expects 
facilities would continue with any monitoring requirements, study 
requirements, and compliance schedules in recently issued permits.
    (2) If the Director establishes an alternate schedule under Sec.  
125.93, the Director would establish a schedule that is as expeditious 
as possible, but does not extend beyond the dates specified in Sec.  
125.93. In establishing the schedule, the Director is encouraged to 
consider the extent to which those technologies proposed to be 
implemented to meet the requirements of Sec.  125.95(c) and/or (d) will 
be used, or may otherwise affect a facility's choice of 
technology(ies), to meet the requirements of Sec.  125.95(b). Impacts 
of thermal discharges, along with other stressors, may be a relevant 
consideration when assessing benefits of technologies to reduce impacts 
of cooling water intakes or discharges. See EEA for more information. 
The Director is also encouraged to consider energy reliability and grid 
requirements when establishing a schedule for electric power generating 
facilities. The Director may consult with local and regional electric 
power agencies when establishing a schedule for electric power 
generating facilities. The Director may determine that extenuating 
circumstances (e.g., lengthy scheduled outages, future production 
schedules) warrant establishing a different compliance date for any 
manufacturing facility.
    (3) The Director would review and approve the species of fish and 
shellfish identified as species of concern.
    (4) The Director would review and approve the site-specific 
impingement mortality plan including the duration and frequency of any 
monitoring beyond the minimum specified by the rule, the monitoring 
location, the organisms to be monitored, and the method in which 
naturally moribund organisms would be identified and taken into 
account. EPA solicits comment on whether the Director should review, 
but not approve, the identified plans.
    (5) The Director would review the permit application materials and 
studies submitted under Sec.  122.21(r) on a case-by-case basis and 
determine which entrainment requirements are necessary.
    (6) The Director would review and approve the site-specific 
entrainment mortality sampling plan for new units at existing 
facilities (other than those employing closed cycle cooling) including 
the duration and frequency of monitoring, the monitoring location, the 
organisms to be monitored, and the method in which latent mortality 
would

[[Page 22261]]

be identified. EPA solicits comment on whether the Director should 
review, but not formally approve, the identified plans.
    (7) The Director would issue a written explanation for the BTA 
determination and make this determination, and any other information 
submitted by third parties, available along with the draft permit for 
public review. This determination is discussed in more detail in 
Section VI above. In addition, the following discussion guides the 
Director when considering cost-benefit analysis for permit 
determinations.
Social Cost-Benefit Analysis for Permit Determinations
    In deciding whether and which technology to require a permittee to 
install to address entrainment mortality, the Director may undertake an 
evaluation of social costs and benefits of implementing such 
requirements. This analysis would be based on the information submitted 
by the applicant, supplemented by information submitted by third 
parties, and additional information as determined appropriate by the 
Director. EPA recognizes the resource limitations faced by permitting 
authorities and does not generally expect that the Director would 
develop additional information on which to base the evaluation of 
social benefits and costs, though the Director may opt to do so. This 
analysis should evaluate benefits and costs from the perspective of 
society as a whole.
    A number of cost elements should be accounted for in assessing the 
social cost of entrainment technology implementation. These are 
summarized below.
     Technology installation cost. These peer reviewed 
engineering cost estimates of the physical construction of candidate 
entrainment technologies at the facility are required in section 
122.21(r)(10). These costs would be provided by the applicant under 
122.21(r)(10).
     Installation downtime cost. Installation of closed cycle 
cooling systems will often require generating facilities to take 
additional downtime beyond ordinary annual maintenance downtime. An 
estimate of downtime cost to the facility is required under 
122.21(r)(10). Downtime costs include the value of lost production 
minus any variable cost savings, as well as any other costs to the 
facility associated with downtime (shutdown and startup routines, 
special maintenance protocols, etc) minus any savings associated with 
downtime.
     Energy penalty cost. Operation of closed cycle cooling 
systems generally imposes an energy penalty, which means additional 
energy input is required to generate the same quantity of electricity 
otherwise available for sale to end-use consumers. Again, an assessment 
of these costs to the facility would be determined under the section 
122.21(r)(10) demonstration. The appropriate cost measure is the cost 
of additional production costs to the facility, if the permittee's 
facility has sufficient capacity to make up the lost electricity 
production, or the net revenue loss to the permittee, if the 
permittee's facility cannot make up the lost electricity production.
     Operation and maintenance costs for the entrainment 
technology equipment. The cost of energy to operate the entrainment 
technology for electric generators would be accounted for in the 
assessment of energy penalty costs and should not reappear in the O&M 
costs. These cost which would be estimated as part of the 122.21(r)(10) 
assessment would enter the social cost framework unchanged.
     Other administrative expenses--e.g., additional permitting 
and/or reporting expenses. Being a social cost concept the estimate 
must include not only the costs to the facility but those expected to 
be incurred by the permitting authority as well. Permitting costs would 
generally be lower if a facility opts to install a closed cycle cooling 
system without going through the BTA site-specific determination, as 
this allows the facility to minimize the amount of permit application 
information submitted.
    For the assessment of social cost, the cost elements outlined above 
would typically be accounted for on a real cost basis--that is, pre-tax 
and excluding the effects of inflation. Costs are tallied over an 
appropriate timeframe, which will typically be the expected useful life 
of the technology installation or the remaining life of the facility, 
if less. Costs should be calculated as both net present value and 
annualized values, using an appropriate discount rate. The applicant 
should document the basis for the discount rate chosen.
    In assessing the benefits of entrainment technology installation, 
the Director would assess the value to society from the reductions in 
I&E mortality that would result from installation of a closed cycle 
cooling system or alternative entrainment technology. All benefits, 
including quantified and non-quantified benefits, should be considered 
in this assessment. The benefits assessment would typically look at a 
range of potential benefit mechanisms, including increased harvest for 
commercial fisheries, increased use values for recreational fisheries, 
and non-use values (existence and bequest values). The latter may be 
difficult to quantify and/or monetize. If appropriate data are 
available from stated preference studies or other sources that can be 
applied to the site being evaluated, these should be used to monetize 
non-use values. Otherwise, non-use values should be evaluated 
qualitatively. Quantitative analysis, even in the absence of 
monetization, can be quite useful in evaluating non-use benefits. For 
example, quantifying impacts to forage and T&E species, and other 
indirect impacts on the aquatic environment, may allow the permitting 
authority to derive a more complete understanding of benefits.
    Quantifying and valuing the benefit categories listed above 
involves significant challenges, as described in the Environmental and 
Economic Benefits Analysis report. For example, assessing the 
productivity and value of commercial fisheries involves estimating the 
expected increases in commercial yield of economically valued species 
over time as a result of reduced I&E mortality, and valuing these at 
market prices minus any incremental production costs associated with 
the incremental catch. Similarly, the assessment of recreational use 
benefits involves estimating the improvements in recreational fishing 
opportunities resulting from reduced I&E mortality, and assigning a 
value to these improvements. The assignment of value is based on the 
estimated population profile--in particular, number and proximity to 
affected water resources--of recreational users, the availability of 
alternative competing water resources for recreational usage, and the 
resulting estimated change in demand for use and value of the affected 
water resources based on reduced I&E mortality and increased 
recreational fishing performance. EPA acknowledges this may be hard to 
do on a site-specific basis, and solicits comment on tools EPA could 
consider producing to aid this process.
    Non-use benefits, which encompass existence and bequest values, 
include impacts in such areas as population resilience and support, 
nutrient cycling, natural species assemblages, and ecosystem health and 
integrity. These may be assessed on the basis of benefits transfer 
analysis (using findings from prior analyses involving a similar study 
context) or by performance of a peer reviewed stated preference survey 
to assess the value assigned for the environmental improvements 
resulting from the technology installation. Non-

[[Page 22262]]

use values include improving the survival probability of a threatened 
or endangered species if present in the vicinity of the facility. 
Benefits may also need to be assessed beyond the vicinity of the 
facility's intake if migratory species are affected by the intake. 
Residual impacts of thermal discharges may also be appropriate to 
consider in the social benefits calculation.
    In much the same way as described for the social cost assessment, 
social benefits are tallied on a year-by-year basis over the expected 
performance life of the compliance technology. If possible, this 
tallying should account for the ``phase-in'' of benefits (e.g., 
benefits may build up over time as the I&E mortality reductions affect 
commercial fisheries productivity) and ``phase-down'' of benefits at 
the end of the technology equipment's performance life (e.g., the I&E 
mortality reduction benefits may continue beyond the performance life 
of the compliance technology). Benefits are computed on a present value 
basis and annualized using an appropriate discount rate as described 
above. The same discount rate should be used for benefits and costs. 
Often, it is appropriate to calculate benefits and costs using more 
than one discount rate. For example, for regulatory impact analysis, 
the Office of Management and Budget recommends that costs and benefits 
be annualized using both a 7% and a 3% rate. However, comparisons 
between specific benefit and cost numbers should always involve values 
computed using the same rate.
    The resulting estimates of social cost and benefits must be taken 
into account in reaching determinations on whether to require a 
permittee to install entrainment technology and the specific level of 
entrainment technology to be installed. The Director may reject an 
otherwise available technology as BTA standards for entrainment 
mortality if the social costs of compliance are not justified by the 
social benefits, or if there are adverse impacts that cannot be 
mitigated that the Director deems to be unacceptable. If all 
technologies considered have social costs not justified by the social 
benefits, or have unacceptable adverse impacts that cannot be 
mitigated, the Director may determine that no additional control 
requirements are necessary beyond what the facility is already doing. 
The director should document the basis for this determination and 
include it in the public notice for the draft permit. (8) The Director 
would review I&E mortality monitoring reports. EPA is shifting towards 
an electronic DMR system, and many of the IM and EM standards could be 
incorporated into the DMR itself, rather than requiring a separate 
report. EPA solicits comment on whether such reports should accompany 
monthly Discharge Monitoring Reports (DMRs). EPA expects the more 
detailed monitoring information would be submitted in annual reports 
and as part of the facility's subsequent permit application submission.

X. Related Acts of Congress, Executive Orders, and Agency Initiatives

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    Under section 3(f)(1) of Executive Order (EO) 12866 (58 FR 51735, 
October 4, 1993), this action is an ``economically significant 
regulatory action'' because it is likely to have an annual effect on 
the economy of $100 million or more. Accordingly, EPA submitted this 
action to the Office of Management and Budget (OMB) for review under EO 
12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in 
response to OMB recommendations have been documented in the docket for 
this action.
    In addition, EPA prepared an analysis of the potential costs and 
benefits associated with this action. This analysis is contained in 
Chapter 12 of the EA report. A copy of the analysis is available in the 
docket for this action and the analysis is briefly summarized here.
    Exhibit X-1 (drawn from Table 12-2 of the EA) provides the results 
of the benefit-cost analysis. Placeholders for nonmonetized benefits 
are represented by B1, B2, B3, and 
B4 which are expected to be option specific in value. EPA's 
analysis using a habitat equivalence approach (see EEBA, Chapter 9) 
suggests that B1, B2, B3, and 
B4 have the potential to be significant, though EPA does not 
have the same confidence in those estimates as in the monetized 
estimates, and is therefore using placeholders.

   Exhibit X-1--Total Annualized Benefits and Costs of the Regulatory
                                 Options
                         [Millions; 2009 $] \a\
------------------------------------------------------------------------
                                    Social costs
              Option                     \b\              Benefits
------------------------------------------------------------------------
1. IM Everywhere.................            $384  $18 + B1
2. IM Everywhere, EM for                    4,463  121 + B2
 Facilities with DIF > 125 MGD.
3. I&E Mortality Everywhere......           4,632  126 + B3
4. IM for Facilities with DIF >               327  17 + B4
 50 MGD.
------------------------------------------------------------------------
a All costs and benefits were annualized over 50 years and discounted
  using 3 percent rate.
b Total Social Costs include compliance costs to facilities and
  government administrative costs. Costs and benefits for Options 1, 2,
  and 4 do not include costs or benefits associated site-specific BTA
  determinations. In section VI.I, EPA presents several scenarios to
  illustrate potential costs associated with these determinations for
  Options 1 and 4. EPA believes the costs and benefits of these
  determinations could be substantial, and could be significantly larger
  than the costs and benefits shown for Options 1 and 4. For Option 2,
  only facilities with AIF < 125 MGD would be subject to site-specific
  BTA and additional costs and benefits for these facilities are likely
  to be small relative to the costs and benefits already estimated for
  this option.

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. The 
Information Collection Request (ICR) document prepared by EPA has been 
assigned EPA ICR number 2060.05.
    Compliance with the applicable information collection requirements 
imposed under a final rule based on this proposal would be mandatory. 
Today's proposed rule would require several distinct types of 
information collection as part of the NPDES permit application. In 
general, the information will be used to identify how a 316(b) existing 
facility would meet the impingement mortality and entrainment 
requirements. Today's rule would also require other reporting and 
recordkeeping requirements to demonstrate and document compliance with 
the proposed requirements.

[[Page 22263]]

    The OMB previously approved information collection requirements 
contained in the 2004 Phase II final rule and assigned OMB control 
number 2040-0257. The 2004 Phase II final rule required applicable 
facilities to perform several data-gathering activities as part of the 
permit renewal application process. It also required certain monitoring 
and reporting after permit issuance. The previously-approved 
information collection requirements included one-time burden associated 
with the initial permit application and those activities associated 
with monitoring and reporting once the permit was issued. The total 
average annual burden associated with the 2004 Phase II rule 
information collection requirements for the entire Phase II industry 
was estimated at 1,700,392 hours. The annual average reporting and 
record keeping burden associated with the 2004 Final Phase II rule for 
a 316(b) existing facility was estimated to be 5,428 hours per 
respondent (i.e., total annual average burden of 1,595,786 hours 
divided by an anticipated 294 respondents). The Director's reporting 
and record keeping burden for the review, oversight, and administration 
of the 2004 final Phase II rule was estimated to average 2,615 hours 
per respondent (i.e., a total annual average burden of 104,606 hours 
divided by an anticipated 40 States).
    Today's proposal streamlines some aspects of the permit application 
and implementation process and would impose reduced information 
collection requirements in comparison to the 2004 Phase II rule (for 
existing power plants with DIF > 50 MGD). For example, under the 2004 
Phase II rule, facilities would have been required to submit a 
Technology Implementation and Operations Plan, which is not required as 
part of today's proposed rule. Like the 2004 Phase II rule, today's 
proposal would require facilities to collect and report impingement 
mortality compliance monitoring data. Under certain alternatives 
provided in today's proposed rule, design documentation and flow data 
would be provided instead of biologically monitoring data. The 
information reporting requirements under today's proposed compliance 
alternatives, described at Sec.  125.95, include some additional 
requirements such as submission of an initial certification statement 
and annual certification statements thereafter, submission of 
monitoring reports along with DMRs, and submission of annual reports, 
as well as maintenance of various records.
    Facilities that were not part of Phase II would have additional 
reporting and recordkeeping requirements relative to the current BPJ 
permitting approach. EPA is currently preparing a revised ICR that will 
estimate the total burden of the proposed rule using the Phase II 
burden estimates as a starting point. These will be adjusted to account 
for differences in what is required under the proposed rule, as well as 
the extension of new requirements to Phase III facilities. EPA will 
announce in the Federal Register when this information has been placed 
in the docket for today's rule and will allow a separate 60-day comment 
period on the proposed paperwork requirements, including the revised 
burden estimates.
    Burden is defined at 5 CFR 1320.3(b).
    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 in 40 CFR are listed in 40 CFR part 9.
    To comment on the Agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, EPA has established a public docket for 
this rule, which includes this ICR, under Docket ID number EPA-HQ-OW-
2008-0667. Submit any comments related to the ICR to EPA and OMB. See 
ADDRESSES section at the beginning of this proposed rule for where to 
submit comments to EPA. Send comments to OMB at the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
725 17th Street, NW., Washington, DC 20503, Attention: Desk Office for 
EPA. Since OMB is required to make a decision concerning the ICR 
between 30 and 60 days after April 20, 2011, a comment to OMB is best 
assured of having its full effect if OMB receives it by May 20, 2011. 
The final rule will respond to any OMB or public comments on the 
information collection requirements contained in this proposal.

C. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (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.
1. Definition of Small Entities and Estimation of the Number of Small 
Entities Subject to Today's Proposed Regulation
    For EPA's assessment of the impact of today's proposed rule on 
small entities, small entity is defined as either a: (1) A small 
business as defined by the Small Business Administration's (SBA) 
regulations at 13 CFR 121.201; (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; or (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field. 
Federal or State entities owning in-scope facilities are not small 
entities.
a. Electric Generators
    For assessing the impacts of today's rule on small Electric 
Generator entities, small entity is defined in accordance with SBA 
criteria for identifying small, non-government entities in the electric 
power industry, as follows:
     For non-government entities with electric power generation 
as a primary business, small entities are those with total annual 
electric output less than 4 million MWh; small governments are those 
serving a population of less than 50,000.
     For entities with a primary business other than electric 
power generation, the relevant size criteria are based on revenue or 
number of employees by NAICS sector (see Exhibit X-2).

   Exhibit X-2--NAICS Codes and SBA Entity Size Standards for In-Scope
  Electric Generators With a Primary Business Other Than Electric Power
                            Generation \108\
------------------------------------------------------------------------
                                                            SBA size
          NAICS code               NAICS description        standard
------------------------------------------------------------------------
221112........................  Fossil Fuel Electric    4,000,000 MWh.
                                 Power Generation.
221113........................  Nuclear Electric Power  4,000,000 MWh.
                                 Generation.
221119........................  Other Electric Power    4,000,000 MWh.
                                 Generation.
221122........................  Electric Power          4,000,000 MWh.
                                 Distribution.

[[Page 22264]]

 
221210........................  Natural Gas             500 Employees.
                                 Distribution.
238210........................  Electrical Contractors  $14,000,000
                                                         Revenue.
331111........................  Iron and Steel Mills..  1,000 Employees.
331315........................  Aluminum Sheet, Plate,  750 Employees.
                                 and Foil
                                 Manufacturing.
523910........................  Miscellaneous           $7,000,000
                                 Intermediation.         Revenue.
486210........................  Pipeline                $7,000,000
                                 Transportation of       Revenue.
                                 Natural Gas.
523920........................  Portfolio Management..  $7,000,000
                                                         Revenue.
523930........................  Investment Advice.....  $7,000,000
                                                         Revenue.
524126........................  Direct Property and     1,500 Employees.
                                 Casualty Insurance
                                 Carriers.
525990........................  Other Financial         $7,000,000
                                 Vehicles.               Revenue.
525910........................  Open-End Investment     $7,000,000
                                 Funds.                  Revenue.
541990........................  All Other               $7,000,000
                                 Professional,           Revenue.
                                 Scientific, and
                                 Technical Services.
551112........................  Offices of Other        $7,000,000
                                 Holding Companies.      Revenue.
561499........................  All Other Business      $7,000,000
                                 Support Services.       Revenue.
562212........................  Solid Waste Landfill..  $12,500,000
                                                         Revenue.
562219........................  Other Nonhazardous      $12,500,000
                                 Waste Treatment and     Revenue.
                                 Disposal.
562920........................  Materials Recovery      $12,500,000
                                 Facilities.             Revenue.
611310........................  Colleges,               $7,000,000
                                 Universities, and       Revenue.
                                 Professional Schools.
------------------------------------------------------------------------

    For this analysis, EPA identified the domestic parent entity of 
each electric generating facility subject to today's proposed rule (for 
a discussion on determination of parent entities of in-scope Electric 
Generators see Chapter 5 of the EA report). To determine whether these 
entities are small entities based on the size criteria outlined above, 
EPA compared the relevant measure for the identified parent entities to 
the appropriate SBA size criterion.
---------------------------------------------------------------------------

    \108\ Certain in-scope facilities are owned by entities whose 
primary business is not electric power generation.
---------------------------------------------------------------------------

    From this analysis, EPA estimates that 33 small entities (out of a 
total of 143 entities that own in-scope Electric Generators) own 
Electric Generators that would be subject to today's proposed rule, 
representing 1.6 percent of total estimated small entities in the 
electric power industry (see Exhibit X-3). Municipalities make up the 
largest number of small entities owning in-scope facilities (17 out of 
33); these small entities represent 1.8 percent of all small entities 
in that category. Small entities owning in-scope facilities as a 
percentage of total small entities range, by ownership category, from 
0.9 percent for rural electric cooperatives and other political 
subdivisions, to 10.9 percent for the investor-owned utilities.\109\
---------------------------------------------------------------------------

    \109\ The entity counts include entities owning known 316(b) 
Electric Generators and are not weighted estimates.

   Exhibit X-3--Number of Small Entities Owning In-Scope Electric Generating Facilities as a Percentage of the
                        Total Number of Small Entities in the Industry, by Ownership Type
----------------------------------------------------------------------------------------------------------------
                                                                              Small entities owning in-scope
                                                                                        facilities
                                                                         ---------------------------------------
                                                        Total number of                         Small in-scope
                    Ownership type                     small entities in    Number of  in-       entities as
                                                        the industry \a\    scope entities    percentage of all
                                                                                 \b\          in-scope entities
                                                                                               in the industry
----------------------------------------------------------------------------------------------------------------
Investor-Owned Utilities.............................                 18                  2                 10.9
Nonutilities.........................................                130                  5                  3.8
Rural Electric Cooperatives..........................                848                  8                  0.9
Municipality.........................................                968                 17                  1.8
Other Political Subdivision..........................                113                  1                  0.9
Federal..............................................                  0                  0                  0
State................................................                  0                  0                  0
All Entity Types.....................................              2,078                 33                  1.6
----------------------------------------------------------------------------------------------------------------
\a\ State and Federal entities are considered large.
\b\ The entity counts include entities owning known 316(b) Electric Generators and are not weighted estimates.

b. Manufacturers
    For purposes of assessing the impacts of today's rule on small 
Manufacturers, small entity is defined in accordance with SBA criteria. 
Exhibit X-4 lists the SBA size threshold guidelines for entities owning 
Manufacturers facilities.

[[Page 22265]]



   Exhibit X-4--NAICS Codes and SBA Entity Size Standards for In-Scope
                    Entities in Manufacturers Sectors
------------------------------------------------------------------------
                                                            SBA Size
          NAICS Code               NAICS Description        standard
------------------------------------------------------------------------
111930........................  Sugarcane Farming.....  $750,000 in
                                                         Revenue
113110........................  Timber Tract            $7,000,000 in
                                 Operations.             Revenue
211111........................  Crude Petroleum and     500 Employees
                                 Natural Gas
                                 Extraction.
212210........................  Iron Ore Mining.......  500 Employees
212391........................  Potash, Soda, and       500 Employees
                                 Borate Mineral Mining.
221119........................  Other Electric Power    4,000,000 MWh of
                                 Generation.             Electric
                                                         Generation
311221........................  Wet Corn Milling......  750 Employees
311311........................  Sugarcane Mills.......  500 Employees
311312........................  Cane Sugar Refining...  750 Employees
311313........................  Beet Sugar              750 Employees
                                 Manufacturing.
311942........................  Spice and Extract       500 Employees
                                 Manufacturing.
313210........................  Broadwoven Fabric       1,000 Employees
                                 Mills.
321113........................  Sawmills..............  500 Employees
322121........................  Paper (except           750 Employees
                                 Newsprint) Mills.
322122........................  Newsprint Mills.......  750 Employees
322130........................  Paperboard Mills......  750 Employees
322211........................  Corrugated and Solid    500 Employees
                                 Fiber Box
                                 Manufacturing.
322222........................  Coated and Laminated    500 Employees
                                 Paper Manufacturing.
322291........................  Sanitary Paper Product  500 Employees
                                 Manufacturing.
324110........................  Petroleum Refineries..  1,500 Employees
324191........................  Petroleum Lubricating   500 Employees
                                 Oil and Grease
                                 Manufacturing.
325120........................  Industrial Gas          1,000 Employees
                                 Manufacturing.
325181........................  Alkalis and Chlorine    1,000 Employees
                                 Manufacturing.
325188........................  All Other Basic         1,000 Employees
                                 Inorganic Chemical
                                 Manufacturing.
325199........................  All Other Basic         1,000 Employees
                                 Organic Chemical
                                 Manufacturing.
325211........................  Plastics Material and   750 Employees
                                 Resin Manufacturing.
325311........................  Nitrogenous Fertilizer  1,000 Employees
                                 Manufacturing.
325320........................  Pesticide and Other     500 Employees
                                 Agricultural Chemical
                                 Manufacturing.
325412........................  Pharmaceutical          750 Employees
                                 Preparation
                                 Manufacturing.
325510........................  Paint and Coating       500 Employees
                                 Manufacturing.
325992........................  Photographic Film,      500 Employees
                                 Paper, Plate and
                                 Chemical
                                 Manufacturing.
325998........................  All Other               500 Employees
                                 Miscellaneous
                                 Chemical Product and
                                 Preparation
                                 Manufacturing.
331111........................  Iron and Steel Mills..  1,000 Employees
331112........................  Electrometallurgical    750 Employees
                                 Ferroalloy Product
                                 Manufacturing.
331210........................  Iron and Steel Pipe     1,000 Employees
                                 and Tube
                                 Manufacturing from
                                 Purchased Steel.
331221........................  Rolled Steel Shape      1,000 Employees
                                 Manufacturing.
331222........................  Steel Wire Drawing....  1,000 Employees
331312........................  Primary Aluminum        1,000 Employees
                                 Production.
331315........................  Aluminum Sheet, Plate   750 Employees
                                 and Foil
                                 Manufacturing.
332312........................  Fabricated Structural   500 Employees
                                 Metal Manufacturing.
337910........................  Mattress Manufacturing  500 Employees
339999........................  All Other               500 Employees
                                 Miscellaneous
                                 Manufacturing.
423310........................  Lumber, Plywood,        100 Employees
                                 Millwork, and Wood
                                 Panel Merchant
                                 Wholesalers.
423930........................  Recyclable Material     100 Employees
                                 Merchant Wholesalers.
424510........................  Grain and Field Bean    100 Employees
                                 Merchant Wholesalers.
424690........................  Other Chemical and      100 Employees
                                 Allied Products
                                 Merchant Wholesalers.
424710........................  Petroleum Bulk          100 Employees
                                 Stations and
                                 Terminals.
447190........................  Other Gasoline          $9,000,000 in
                                 Stations.               Revenue
522220........................  Sales Financing.......  $7,000,000 in
                                                         Revenue
523910........................  Miscellaneous           $7,000,000 in
                                 Intermediation.         Revenue
523930........................  Investment Advice.....  $7,000,000 in
                                                         Revenue
524126........................  Direct Property and     1,500 Employees
                                 Casualty Insurance
                                 Carriers.
525990........................  Other Financial         $7,000,000 in
                                 Vehicles.               Revenue
531110........................  Lessors of Residential  $7,000,000 in
                                 Buildings and           Revenue
                                 Dwellings.
551112........................  Offices of Other        $7,000,000 in
                                 Holding Companies.      Revenue
561110........................  Office Administrative   $7,000,000 in
                                 Services.               Revenue
------------------------------------------------------------------------

    To determine entity size, EPA started with information reported in 
the Detailed Industry Questionnaire and Industry Screener 
Questionnaire, and updated information on each owner's primary NAICS, 
current revenue, and employment size data from SEC filings, Dun & 
Bradstreet (D&B, 2009), and corporate Web sites. For details of this 
process, see Chapter 4 of the EA report. EPA compared the relevant 
measure for the identified parent entities to the appropriate SBA size 
criterion.
    Because EPA undertook this assessment for the sample of 
Manufacturers facilities and related owning entities responding to the 
previous 316(b) questionnaires, it was necessary to estimate the number 
of owning entities and to assess whether these entities are small, 
based on application of sample weights. Because the sample weights are 
based on facilities instead of entities, the facility-based weights do 
not provide statistically precise estimates of the numbers of owning 
entities. As a result, EPA applied alternative sample-weighting 
assumptions that yield lower and upper bound estimates of the

[[Page 22266]]

numbers of small entities in the Primary Manufacturing Industries 
owning in-scope Manufacturers facilities, as reported in Exhibit X-5. 
Because the analysis of facilities in Other Industries is not based on 
a statistically valid sample, EPA could not estimate the number of 
entities in Other Industries that would be subject to the requirements 
of the regulatory analysis options, or the percentage that are small 
entities. However, based on a review of nationwide water withdrawals 
and cooling water use, the Census of Manufacturers, and comments 
received on the Phase III proposed rule, EPA does not expect a 
significant number of additional small entities would be subject to 
today's proposed regulatory requirements.

Exhibit X-5--Number and Percentage of Small Entities in Primary Manufacturing Industries Subject to the Proposed
                                             Regulation, by Industry
----------------------------------------------------------------------------------------------------------------
                                                  Lower bound estimate of number  Upper bound estimate of number
                                                            of entities                     of entities
                                   Total sector  ---------------------------------------------------------------
             Sector               small entities                   Percentage of                   Percentage of
                                        \a\          Estimated    small entities     Estimated    small entities
                                                   316(b) small     subject to     316(b) small     subject to
                                                     entities       regulation       entities       regulation
----------------------------------------------------------------------------------------------------------------
Paper...........................             218               9             4.1              29            13.2
Chemicals.......................           2,506               4             0.2              18             0.7
Petroleum.......................             188               4             2.1               4             2.2
Steel...........................           1,149               3             0.3               8             0.7
Aluminum........................             227               2             0.9               5             2.0
Food............................          23,546               1             0.0               1             0.0
Total for primary manufacturing           27,834              23             0.1              64             0.2
 industries \b\.................
----------------------------------------------------------------------------------------------------------------
\a\ Includes all firms with less than 500 employees from 2006 Statistics of U.S. Businesses (SUSB) of the U.S.
  Department of Commerce (U.S. DOC). The Small Business Administration defines firms in nearly all profiled
  NAICS codes according to the firm's number of employees; however, for some in-scope manufacturing NAICS codes
  this threshold is 500 employees while for others this threshold is 750, 1,100, or 1,500 employees. Because the
  SUSB employment size categories do not correspond to the SBA entity size classifications, EPA used the 500
  employee threshold for all in-scope NAICS.
\b\ Due to rounding columns may not sum.

    From this analysis, EPA estimates that 23 to 64 small entities own 
Manufacturers facilities that are subject to today's proposed rule, 
representing 0.1 to 0.2 percent of total estimated small entities in 
the Primary Manufacturing Industries (see Exhibit X-5). Of the six 
Primary Manufacturing Industries, Paper has the largest number of small 
entities (9 to 29), and these small entities also account for the 
largest percentage of total small entities in any of the six 
industries--4.1 to 13.2 percent of estimated total small entities in 
the Paper industry. The percentage of estimated total small entities 
subject to regulation reaches 2 percent for two of the remaining 
Primary Manufacturing Industries (Petroleum and Aluminum).
    From the 316(b) survey data, EPA identified an additional 4 
entities in the Other Industries that are also small entities; however, 
as noted, EPA is unable to estimate the total number of small in-scope 
entities in the Other Industries.
c. Total Estimate of Small In-Scope Entities
    On a combined basis, EPA estimates that 56-96 small entities would 
be within the scope of the existing facilities rule options. These 
counts do not include the additional known 4 small entities in the 
Other Industries.

2. Statement of Basis

    As described above, EPA began its assessment of the impact of 
today's proposed regulatory options on small entities by first 
estimating the number of small entities within the two industry 
segments subject to the proposed rule--Electric Generators and 
Manufacturers--that would be expected to be within the scope of today's 
proposed rule. EPA then assessed whether these small entities would be 
expected to incur costs that constitute a significant impact; and 
assessed whether the number of those small entities estimated to incur 
a significant impact represent a substantial number of small entities.
    To assess whether small entities' compliance costs might constitute 
a significant impact, EPA summed annualized compliance costs \110\ for 
the Electric Generators and Manufacturers facilities estimated to be 
owned by a given small entity and calculated these costs as a 
percentage of entity revenue (Cost-to-Revenue Test). EPA compared the 
resulting percentages to impact criteria of 1 percent and 3 percent of 
revenue. Small entities estimated to incur compliance costs exceeding 
one or more of these impact thresholds were identified as potentially 
incurring a significant impact.
---------------------------------------------------------------------------

    \110\ Option 1 does not include an assessment of site-specific 
entrainment costs. However, Option 3 includes EM based on closed-
cycle cooling at all existing facilities.
---------------------------------------------------------------------------

    For both Electric Generators and Manufacturers, EPA used 
alternative sample-weighting approaches, which provide a range of 
estimates of the numbers of small entities and in-scope facilities 
owned by these small entities.
    The results of this analysis using both weighting approaches are 
summarized below. In the following summary table (Exhibit X-6), the 
estimated numbers of small entities incurring costs exceeding 1 percent 
and 3 percent of revenue are presented as ranges, based on the 
alternative sample weighting approaches. In addition, EPA compared the 
estimated numbers of small entities with costs exceeding a given impact 
threshold with the estimated number of small in-scope entities. The 
resulting estimated numbers and percentages of small in-scope entities 
that may incur a significant impact, as reported in Exhibit X-6, 
provide a measure of the potential impact of the existing facilities 
rule options on small in-scope entities.
    From these analyses, EPA estimates under Option 1, the proposed 
option, that 5 to 7 small entities will incur costs exceeding 1 percent 
of revenue, and 3 small entities will incur costs exceeding 3 percent 
of revenue. As percentages of the estimated total of 56 to 96 small in-
scope entities,\111\ these small entities

[[Page 22267]]

represent 5 to 13 percent of small in-scope entities at the 1 percent 
of revenue threshold, and 3 to 5 percent of small in-scope entities at 
the 3 percent of revenue threshold. Both the number of small in-scope 
entities incurring a potential impact and the total of small in-scope 
entities are estimated as ranges. EPA calculated the range of 
percentage of total small in-scope entities incurring a potential 
impact by comparing (1) the lower of the estimated number of small in-
scope entities incurring a potential impact with the higher of the 
estimated total of small in-scope entities (yields the lower value of 
the percentage range) and (2) the higher of the estimated number of 
small in-scope entities incurring a potential impact with the lower of 
the estimated total of small in-scope entities (yields the higher value 
of the percentage range).
---------------------------------------------------------------------------

    \111\ The estimated total of small in-scope entities does not 
include the known 4 small Manufacturers entities in the Other 
Industries. EPA assessed the potential impact of the regulatory 
options on these 4 small entities; none were found to incur a 
significant impact under any of the four regulatory options.
---------------------------------------------------------------------------

    For Option 2, EPA estimates that 5 to 7 small entities will incur 
costs exceeding 1 percent of revenue (5-13 percent of small in-scope 
entities), and 3 to 7 small entities will incur costs exceeding 3 
percent of revenue (3-13 percent of small in-scope entities). For 
Option 3, EPA estimates that 10 to 22 small entities will incur costs 
exceeding 1 percent of revenue (10-39 percent of small in-scope 
entities), and 7 to 15 small entities will incur costs exceeding 3 
percent of revenue (7-27 percent of small in-scope entities). For 
Option 4, EPA estimates that 4 to 6 small entities will incur costs 
exceeding 1 percent of revenue (4-11 percent of small in-scope 
entities), and 2 small entities will incur costs exceeding 3 percent of 
revenue (2-4 percent of small in-scope entities) (see Exhibit X-6).
    For more details on this analysis see EA Chapter 7: Regulatory 
Flexibility Act (RFA) Analysis.

                    Exhibit X-6--Estimated Cost-to-Revenue Impact for Small In-Scope Entities
----------------------------------------------------------------------------------------------------------------
                                                                       Cost impact category
                                                 ---------------------------------------------------------------
                                                       Cost > 1% of revenue             Cost >3% of revenue
                Regulatory option                ---------------------------------------------------------------
                                                                  % of small  in-    Number of    % of small  in-
                                                     Number of         scope           small           scope
                                                  small entities   entities \c\    entities a,c    entities \b\
----------------------------------------------------------------------------------------------------------------
Option 1: IM Everywhere.........................             5-7          5%-13%           \b\ 3           3%-5%
Option 2: IM Everywhere and EM for Facilities                5-7          5%-13%             3-7          3%-13%
 with DIF>125 MGD...............................
Option 3: I&E Mortality Everywhere..............           10-22         10%-39%            7-15          7%-27%
Option 4: IM for Facilities with DIF > 50 MGD...             4-6          4%-11%           \b\ 2           2%-4%
----------------------------------------------------------------------------------------------------------------
\a\ The number of entities with cost-to-revenue ratios exceeding 3 percent is a subset of the number of entities
  with such ratios exceeding 1 percent.
\b\ The estimated number of small entities exceeding the impact threshold is the same under both estimation
  approaches; however, the total number of entities differs.
\c\ For both Electric Generators and Manufacturers, EPA used alternative sample-weighting approaches, which
  provide a range of estimates of the numbers of small entities and in-scope facilities owned by these small
  entities (see Section VII(D)(a)(iv) for manufacturers and see Section VII(D)(b)(1)(b) for electric generator
  weighting approaches).

    As described in the preamble above, EPA eliminated 115 facilities 
from the analysis that are projected to close as a result of baseline 
financial conditions. Of the 115 baseline closures, 18 are small 
entities.
    To summarize, for the Proposed Option \112\--Option 1, EPA 
estimates that 5 to 7 small entities would incur costs exceeding 1 
percent of revenue and 3 small entities would incur costs exceeding 3 
percent of revenue. These numbers of adversely affected small entities 
represent 5-13 percent of the estimated total of small in-scope 
entities for the 1 percent of revenue threshold, and 3-5 percent of the 
estimated total of small in-scope entities for the 3 percent of revenue 
threshold. Given the small number and percentage of small in-scope 
entities estimated to incur a potentially significant economic impact, 
EPA judges that the Proposed Option, Option 1, will not cause a 
significant economic impact on a substantial number of small entities 
(SISNOSE).
---------------------------------------------------------------------------

    \112\ Option 1 does not include an assessment of site-specific 
entrainment costs.
---------------------------------------------------------------------------

3. Certification Statement
    After considering the economic impacts of this proposed rule on 
small entities, EPA certifies that this action will not have a 
significant economic impact on a substantial number of small entities.

D. Unfunded Mandates Reform Act (UMRA)

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 
U.S.C. 1531-1538, requires Federal agencies, unless otherwise 
prohibited by law, to assess the effects of their regulatory actions on 
State, local, and tribal governments and the private sector. 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 under section 202 of the UMRA a written statement which is 
summarized below (see Chapter 8 of the EA report).
1. Summary of Written Statement
a. Authorizing Legislation
    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. See section III of this preamble for detailed 
information on the legal authority of this rule.
b. Cost-Benefit Analysis
    Today's proposed options are expected to have total annualized pre-
tax (social) costs of $383.80 million (2009 $) under Option 1, of 
$4,462.90 million under Option 2, $4,631.62 million under Option 3, and 
of $326.55 under Option 4, including direct costs incurred by 
facilities and implementation costs incurred by federal, State, and 
local governments (annualized over 50 years and discounted at 3 
percent).\113\ The total monetized use and non-use benefits of

[[Page 22268]]

today's proposed options are estimated to be $17.63 million under 
Option 1, $120.79 million under Option 2, $125.65 million under Option 
3, and $17.33 million under Option 4 (annualized over 50 years and 
discounted at 3 percent).\114\ Thus, the total social costs exceed the 
total monetized benefits of the proposed options by $366.17 million for 
Option 1, by $4,342.11 million for Option 2, by $4,505.97 million for 
Option 3, and by $309.22 under Option 4. EPA notes that these 
differences are based on a comparison of a partial measure of benefits 
with a more complete measure of costs; \115\ therefore, the results 
must be interpreted with caution. After considering the monetized and 
non-monetized benefits of the proposed option, EPA has determined that 
the benefits of this option justify the costs. For a more detailed 
comparison of the costs and benefits of today's proposed rule, see 
Chapter 12 of the EA report.
---------------------------------------------------------------------------

    \113\ These social cost estimates use a different estimate of 
downtime than the private cost estimates cited above, and are thus 
lower. For more details see Chapter 11 in the EA report.
    \114\ EPA was able to estimate nonuse benefits for the North 
Atlantic and Mid-Atlantic benefit regions.
    \115\ The costs reflect the costs for facilities do comply with 
the primary BTA requirements, and do not reflect any facilities with 
reduced costs due to the available compliance alternatives and 
flexibilities. Since EPA anticipates a facility would generally 
participate in a compliance alternative if it was less burdensome or 
less costly to do so, today's costs may be overstated.
---------------------------------------------------------------------------

    EPA notes that States may be able to use existing sources of 
financial assistance to revise and implement this proposed rule. 
Section 106 of the Clean Water Act authorizes EPA to award grants to 
States, Tribes, intertribal consortia, and interstate agencies for 
administering programs for the prevention, reduction, and elimination 
of water pollution. These grants may be used for various activities to 
develop and carry out a water pollution control program, including 
permitting, monitoring, and enforcement. Thus, State and Tribal NPDES 
permit programs represent one type of State program that can be funded 
by section 106 grants.
c. Summary of State, Local, and Tribal Government Input
    EPA consulted with State governments and representatives of local 
governments in developing the rule. The outreach activities are 
discussed in section III.A.3 of this preamble.
d. Least Burdensome Option
    EPA considered and analyzed several alternative regulatory options 
to determine the best technology available for minimizing adverse 
environmental impact. These regulatory options are discussed in today's 
proposed rule at 67 FR 17154-17168, as well as in section VIII of this 
preamble. These options included a range of technology-based approaches 
including impingement mortality technology at all facilities with a DIF 
greater than 50 MGD to additionally requiring impingement mortality 
controls and intake flow commensurate with closed-cycle cooling for all 
facilities.\116\ As discussed in detail in section VI, EPA did not 
select options exclusively because they were the most cost-effective 
among the options that fulfill the requirements of section 316(b). EPA 
selected the preferred option because it meets the requirement of 
section 316(b) of the CWA that the location, design, construction, and 
capacity of CWIS reflect the best technology available for minimizing 
adverse environmental impact. In addition, EPA has determined that the 
benefits of this option justify the costs, taking quantified and non-
quantified costs and benefits into account. The preferred option 
reflects a flexible approach among the options considered that allows 
consideration of costs and benefits on a site-specific basis in 
determining BTA.
---------------------------------------------------------------------------

    \116\ All options also require site-specific determinations of 
BTA where uniform national controls are not included.
---------------------------------------------------------------------------

2. Impact of Compliance Requirements on Small Governments
    This rule is not subject to the requirements of section 203 of UMRA 
because it contains no regulatory requirements that might significantly 
or uniquely affect small governments (i.e., governments with a 
population of less than 50,000). For its assessment of the impact of 
compliance requirements on small governments, EPA compared total costs 
and costs per facility as estimated to be incurred by small governments 
with those values as estimated to be incurred by large governments. EPA 
also compared costs for small government-owned facilities with those of 
non-government-owned facilities. The Agency evaluated costs per 
facility on the basis of both average and maximum annualized cost per 
facility. In these comparisons, both for the cost totals and, in 
particular, for the average and maximum cost per facility, the costs 
for small government-owned facilities were less than those for large 
government-owned facilities or for small non-government-owned 
facilities. On this basis, EPA concluded that the compliance cost 
requirements of the proposed 316(b) Existing Facilities Rule would not 
significantly or uniquely affect small governments.
    Because no Manufacturers facility is government-owned, EPA 
conducted this analysis for Electric Generators only.
a. Government-Owned Electric Generator Facilities by Ownership and 
Entity Size Category
    Exhibit X-8 provides an estimate of the number of non-Federal 
Government entities that operate Electric Generators subject to today's 
proposed rule, by ownership type and size of government entity. As 
reported in Exhibit X-8, 24 large government entities operate 41 
Electric Generators subject to this proposed rule, and 18 small 
government entities operate 18 Electric Generators subject to the rule. 
Of the 59 facilities that are owned by government entities, 43 are 
owned by Municipalities, 9 are owned by State Governments, and 7 are 
owned by an Other Political Subdivision.

                              Exhibit X-8--Number of Government Entities and Government-Owned Electric Generator Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Number of government entities (by Size) \a\     Number of facilities (by government entity
                                                         ------------------------------------------------                    size) \b\
                     Ownership Type                                                                      -----------------------------------------------
                                                               Large           Small           Total           Large           Small           Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Municipality............................................              18              17              35              26              17              43
State Government........................................               4               0               4               9               0               9
Other Political Subdivision.............................               2               1               3               6               1               7
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................              24              18              42              41              18              59
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Counts of entities owning explicitly and implicitly analyzed Electric Generators; these are not weighted entity counts.
\b\ Counts of explicitly and implicitly analyzed Electric Generators; these are not weighted estimates.


[[Page 22269]]

b. Compliance Costs for Small Government-Owned Electric Generators 
Facilities
    EPA estimates that 10 of the 41 (24%) non-federal government-owned 
Electric Generators facilities subject to today's proposed rule are 
owned by small governments (Table X-9).\117,118\ Exhibit X-9 summarizes 
total, average annualized compliance costs, and maximum annualized 
compliance costs for government (State, local, and Tribal governments) 
and non-government-owned facilities for the three regulatory options 
and by size category of owning entity.
---------------------------------------------------------------------------

    \117\ A small governmental jurisdiction is defined `` as the 
government of a city, county, town, township, village, school 
district, or special district with a population of less than 50,000 
(5 U.S.C. 601(5)).
    \118\ The entity counts described in this section were developed 
on a weighted basis and differ from the values reported in the 
preceding section, where were developed on an un-weighted basis. The 
values in this section were developed on a weighted basis because 
compliance costs were estimated only for explicitly analyzed 
facilities and facility weights are used to extend these results to 
the full set of in-scope facilities.
---------------------------------------------------------------------------

    EPA first looked at the relationship between costs incurred by 
small governments and small government-owned Electric Generators in 
comparison to those incurred by large governments and large government-
owned facilities. As reported in Exhibit X-9, the estimated total 
annualized compliance costs for all non-federal government-owned 
Electric Generators are $10.8 million for Option 1, $102.3 million for 
Option 2, $120.1 million for Option 3, and $9.5 million for Option 4. 
The 31 facilities owned by large governments would incur costs of $9.2 
million under Option 1, $100.7 million under Option 2, $107.6 million 
under Option 3, and $8.1 million under Option 4. In comparison, the 10 
facilities owned by small governments would incur costs of $1.5 million 
under Options 1 and 2, $12.5 million under Option 3, and $1.4 million 
under Option 4. On an average cost per facility basis, these costs are 
$0.1 million under Options 1, 2, and 4, and $1.2 million under Option 
3, for facilities owned by small governments, with large government-
owned facility costs of $0.3 million under Options 1 and 4, $3.2 
million under Option 2, and $3.4 million under Option 3. In addition, 
the maximum per facility costs owned by small governments are $0.2 
million under Options 1, 2, and 4, and $2.1 million under Option 3. The 
comparable values for large government-owned facilities are $1.0 
million under Options 1 and 4, and $17.8 million under Options 2 and 3. 
Accordingly, the costs for small government-owned facilities are 
considerably lower than those for large governments on the basis of 
total costs, average cost per-facility, and maximum cost per-facility. 
EPA therefore concludes that the compliance requirements of today's 
proposed rule do not significantly or uniquely affect small governments 
in comparison to large governments.

         Exhibit X-9--Electric Generators Facilities and Compliance Costs by Ownership Type and Size for 316(b) Existing Facilities Rule Options
                                                                    [Millions; 2009$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Number of
                Ownership type                             Entity size               facilities     Total compliance  Average cost per  Maximum facility
                                                                                     (weighted)           costs           facility          cost \c\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Option 1: IM Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................  Small...........................                10              $1.5              $0.1              $0.2
                                                Large...........................                31               9.2               0.3               1.0
Private.......................................  Small...........................                16               7.7               0.5               2.5
                                                Large...........................               485             354.4               0.7               7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities \b\                                                                             559             394.2               0.7               7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Option 2: IM Everywhere and EM for Facilities with DIF  125 MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................  Small...........................                10              $1.5              $0.1              $0.2
                                                Large...........................                31             100.7               3.2              17.8
Private.......................................  Small...........................                16              32.3               2.0              10.9
                                                Large...........................               485           4,171.7               8.6              59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities \b\                                                                             559           4,811.3               8.6              59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Option 3: I&E Mortality Everywhere
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................  Small...........................                10             $12.5              $1.2              $2.1
                                                Large...........................                31             107.6               3.4              17.8
Private.......................................  Small...........................                16              34.0               2.2              10.9
                                                Large...........................               485           4,300.3               8.9              59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities \b\                                                                             559           4,959.4               8.9              59.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Option 4: IM for Facilities with DIF  50MGD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Government (excluding Federal)................  Small...........................                10              $1.4              $0.1              $0.2
                                                Large...........................                31               8.1               0.3               1.0
Private.......................................  Small...........................                16               6.0               0.4               2.5
                                                Large...........................               485             346.1               0.7               7.2

[[Page 22270]]

 
                                                Small...........................               559             383.0               0.7               7.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
a. Facility counts are weighted estimates and differ from the values reported in Exhibit X-8, above, which are un-weighted counts. Sample weighted
  values are needed in this table because costs were developed only for the explicitly analyzed Electric Generators facilities. See EA Appendix A.3:
  Used of Sample Weights in the Proposed Existing Facilities Rule Analysis for more detail.
b. The All Facilities counts and cost values include 15 federal government-owned facilities and 10 private facilities owned by entities of unknown size.
  The individual facility count and cost estimates for the small and large entity categories exclude the values for these 25 facilities.
c. Reflects maximum of un-weighted costs to explicitly analyzed facilities only.

    EPA's analysis also considered whether this proposed rule may 
significantly or uniquely affect small governments in relation to non-
government-owned Electric Generators. As reported in Exhibit X-9 the 
total compliance cost for 10 small government-owned Electric Generators 
incurring costs under today's proposed rule are $1.5 million under 
Options 1 and 2, $12.5 million under Option 3, and $1.4 million under 
Option 4, or on a per facility basis, approximately $0.1 million for 
Options 1, 2, and 4, and $1.2 million for Option 3. In addition, the 
highest annualized compliance cost for a small government-owned 
facility is $0.2 million under Options 1, 2, and 4, and $2.1 million 
under Option 3. In comparison, all small non-government-owned Electric 
Generators subject to today's proposed rule are expected to incur 
annualized compliance costs of $7.7 million under Option 1, $32.3 
million under Option 2, $34.0 million under Option 3, and $6.0 million 
under Option 4, or $0.5, $2.0, $2.2, and $0.4 million per facility, 
respectively by regulatory option. The highest annualized cost for a 
small non-government-owned facility is $2.5 million under Options 1 and 
4, and $10.9 million under Options 2 and 3. On the basis of this 
comparison, as well, EPA further concludes that the compliance 
requirements of the proposed rule do not significantly or uniquely 
affect small governments. The EA report provides more detail on EPA's 
analysis of impacts on governments.
3. Administrative Costs
    The requirements of Section 316(b) are implemented through the 
NPDES (National Pollutant Discharge Elimination System) permit program. 
Forty-six States and territories with NPDES permitting authority under 
section 402(b) of the CWA are expected to incur costs to administer the 
Existing Facilities Rule in their jurisdictions. EPA estimates that 
States and territories will incur costs associated with five types of 
activities for implementing the requirements of today's proposed rule: 
(1) Start-Up activities to learn and understand the requirements of 
today's regulation and to implement administrative structures and 
procedures for administering the regulation; (2) first permit issuance 
activities; (3) permit reissuance activities; (4) entrainment study 
costs, and (5) annual activities. EPA estimates that the total 
annualized cost for these activities will be $5.31 million for Option 
1, $2.19 for Option 2, $1.28 million for Option 3, and $4.06 for Option 
4. Monitoring costs comprise the largest share of administrative costs 
under all three regulatory options. Exhibit X-10 presents the 
annualized costs of the major administrative activities.

                            Exhibit X-10--Annualized Government Administrative Costs
                                                [Millions; 2009$]
----------------------------------------------------------------------------------------------------------------
                                                                                   Cost
                                                        --------------------------------------------------------
                        Activity                              Electric
                                                             Generators       Manufacturers      Total In-Scope
----------------------------------------------------------------------------------------------------------------
                                             Option 1: IM Everywhere
----------------------------------------------------------------------------------------------------------------
Start-up Activities....................................              $0.02              $0.02              $0.04
First Permit Issuance Activities.......................              $0.23              $0.24              $0.45
Annual Monitoring Activities...........................              $1.17              $1.12              $2.29
Entrainment Study......................................              $1.19              $0.97              $2.16
Permit Reissuance Activities...........................              $0.18              $0.18              $0.36
                                                        --------------------------------------------------------
    Total..............................................              $2.79              $2.52              $5.31
----------------------------------------------------------------------------------------------------------------
                   Option 2: IM Everywhere and EM for Facilities with DIF  125 MGD
----------------------------------------------------------------------------------------------------------------
Start-up Activities....................................              $0.02              $0.02              $0.04
First Permit Issuance Activities.......................              $0.17              $0.23              $0.35
Annual Monitoring Activities...........................              $0.36              $1.07              $1.37
Entrainment Study......................................              $0.00              $0.00              $0.00
Permit Reissuance Activities...........................              $0.14              $0.17              $0.31
                                                        --------------------------------------------------------
    Total..............................................              $0.69              $1.48              $2.19
----------------------------------------------------------------------------------------------------------------

[[Page 22271]]

 
                                       Option 3: I&E Mortality Everywhere
----------------------------------------------------------------------------------------------------------------
Start-up Activities....................................              $0.02              $0.02              $0.04
First Permit Issuance Activities.......................              $0.16              $0.13              $0.29
Annual Monitoring Activities...........................              $0.20              $0.52              $0.72
Entrainment Study......................................              $0.00              $0.00              $0.00
Permit Reissuance Activities...........................              $0.13              $0.10              $0.23
                                                        --------------------------------------------------------
    Total..............................................              $0.51              $0.77              $1.28
----------------------------------------------------------------------------------------------------------------
                             Option 4: IM for Facilities with DIF  50MGD
----------------------------------------------------------------------------------------------------------------
Start-up Activities....................................              $0.02              $0.02              $0.04
First Permit Issuance Activities.......................              $0.23              $0.06              $0.29
Annual Monitoring Activities...........................              $1.04              $0.31              $1.35
Entrainment Study......................................              $1.19              $0.97              $2.16
Permit Reissuance Activities...........................              $0.18              $0.05              $0.23
                                                        --------------------------------------------------------
    Total..............................................              $2.65              $1.41              $4.06
----------------------------------------------------------------------------------------------------------------

E. Executive Order 13132: Federalism

    Under Executive Order 13132, EPA may not issue an action that has 
federalism implications, that imposes substantial direct compliance 
costs on the State and local governments, 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 action.
    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. This proposed rule would not 
alter the basic State-federal scheme established in the Clean Water Act 
under which EPA authorizes States to carry out the NPDES permitting 
program. EPA expects today's proposed rule would have little effect on 
the relationship between, or the distribution of power and 
responsibilities among, the federal and State governments. EPA expects 
an average annual burden of 21,785 hours with total average annual cost 
of $1.1 million under Option 1, 6,538 hours and $346,000 under Option 
2, and 20,395 hours and $1.0 million under Option 3, for States to 
collectively administer this rule during the compliance period.\119\ 
After the initial compliance period, EPA expects an average annual 
burden of 23,550 hours with an average annual cost of $1.2 million for 
Option 1, 2,528 hours and $154,000 for Option 2, and 16,988 hours and 
$841,000 for Option 3. EPA has identified 47 Phase II facilities that 
are owned by State or local government entities. The estimated average 
annual compliance cost incurred by these facilities is approximately 
$452,000 per facility under Option 1, $4.5 million under Option 2, and 
$1.1 million under Option 3. EPA does not expect Option 4 to impose 
substantial direct compliance costs on the State and local governments 
higher than Option 1, and therefore is not expected to pose Federalism 
implications. Thus, Executive Order 13132 does not apply to this rule.
---------------------------------------------------------------------------

    \119\ Because of late revisions to the Existing Facilities 
Rule's administrative requirements, EPA was unable to update these 
values from those developed earlier in the regulatory analysis. In 
addition, EPA did not estimate administrative costs for Option 4, 
but expects that these costs would be very similar to those 
estimated for Option 1.
---------------------------------------------------------------------------

    In the spirit of Executive Order 13132, 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.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). It would not 
have substantial direct effects on tribal governments, on the 
relationship between the Federal government and the Indian tribes, or 
the distribution of power and responsibilities between the Federal 
government and Indian tribes as specified in Executive Order 13175. The 
national cooling water intake structure requirements would be 
implemented through permits issued under the NPDES program. No tribal 
governments are currently authorized pursuant to section 402(b) of the 
CWA to implement the NPDES program. In addition, EPA's analyses show 
that no facility subject to today's proposed rule is owned by tribal 
governments and thus this rule does not affect Tribes in any way in the 
foreseeable future. Thus, Executive Order 13175 does not apply to this 
action.
    EPA specifically solicits additional comment on this proposed 
action from tribal officials.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to EO 13045 because it does not 
establish an environmental standard intended to mitigate health or 
safety risks. This rule establishes requirements for cooling

[[Page 22272]]

water intake structures to protect aquatic organisms.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    Executive Order 13211 (66 FR 28355 (May 22, 2001)) requires EPA to 
prepare and submit a Statement of Energy Effects to the Administrator 
of the Office of Information and Regulatory Affairs, Office of 
Management and Budget, for actions identified as ``significant energy 
actions.'' Based on the Office of Management and Budget's guidance for 
assessing the potential energy impact of regulations (http://www.whitehouse.gov/omb/memoranda/m01_27.html), the Agency does not 
anticipate that today's rule will have a significant adverse effect on 
the supply, distribution, or use of energy and thus will not constitute 
a significant regulatory action under Executive Order 13211.
    The Agency analyzed the potential energy effects of today's rule 
and other regulatory options considered for proposal. The potentially 
significant effects of today's rule on energy supply, distribution or 
use concern the electric power sector. This analysis found that the 
rule's compliance requirements would not cause effects in the electric 
power sector that would constitute a significant adverse effect under 
Executive Order 13211. Namely, the Agency's analysis found that today's 
rule would not reduce electricity production in excess of 1 billion 
kilowatt hours per year or in excess of 500 megawatts of installed 
capacity, and therefore would not constitute a significant regulatory 
action under Executive Order 13211.
    For more detail on the potential energy effects of this proposal, 
see Section VII of this preamble or Chapter 9 in the EA report.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
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 standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This proposed rulemaking may involve technical standards, for 
example in the measurement of impingement and entrainment. Nothing in 
this proposed rule would prevent the use of voluntary consensus 
standards for such measurement where available, and EPA encourages 
permitting authorities and regulated entities to do so.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this proposed rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. Because EPA expects that this proposed rule will 
help to preserve the health of aquatic ecosystems located in reasonable 
proximity to 316(b) Existing Facilities, EPA believes that all 
populations, including minority and low-income populations, will 
benefit from improved environmental conditions as a result of this 
rule.\120\
---------------------------------------------------------------------------

    \120\ Affected populations include all individuals who live 
within a 50-mile radius of the facility who will be receiving a non-
use benefit from the improved health of the aquatic ecosystem in the 
area, and any additional anglers who live outside of the 50-mile 
facility buffer and within a 50-mile radius of the reaches nearest 
to 316(b) Existing Facilities, who will be receiving the use benefit 
of improved catches as a result of the proposed rule.
---------------------------------------------------------------------------

    To meet the objectives of Executive Order 12898, EPA assessed 
whether today's proposed rule could distribute benefits among 
population sub-groups in a way that is significantly unfavorable to 
low-income and minority populations. EPA compared key demographic 
characteristics of affected sub-state populations to those demographic 
characteristics at the level of the state. If the demographic profile 
of the sub-state ``benefit population'' were found to differ in a 
statistically significant and unfavorable \121\ way from the 
demographic profile of the state, generally, then the proposed rule 
might be assessed as yielding an unfavorable distribution of benefits, 
from the perspective of the public policy principles of Executive Order 
12898. The two demographic variables of interest for this EJ analysis 
are those within the Fish Consumption Pathway (FCP) Module that best 
capture the minority and low-income aspects of the populations 
affected, which are annual household income and race.122 123 
Variable averages at the sub-state and state levels were compared to 
determine whether or not the demographic profile of the affected 
population was consistent with the state profile (for details see 
Chapter 9 of the EA report).
---------------------------------------------------------------------------

    \121\ That is, the estimated benefit population is comprised of 
a significantly lower share of low-income and/or minority 
populations than the general population of the state.
    \122\ Annual household income data in the FCP Module is 
available for the following categories: Less than $10,000; $10,000 
to $19,999; $20,000 to $24,999; $25,000 to $29,999; $30,000 to 
$34,999; $35,000 to $39,999; $40,000 to $49,999; $50,000 to $74,999; 
$75,000 to $99,999; and more than $100,000. For this analysis as 
well as previous 316(b) rule analyses, these categories were 
combined into low- and not low-income groups based on the U.S. 
Department of Health and Human Services' poverty guidelines for a 
family of four living in the contiguous United States or D.C. The 
current (2009) poverty guideline is $22,050, which falls within the 
$20,000 to $24,999 income range (U.S. HHS, 2009). For the current 
analysis, EPA used $20,000 as the threshold for separating 
populations into low- and not low-income groups.
    \123\ Race categories used in the analysis include white, black 
or African American, Asian or Native Hawaiian or Other Pacific 
Islander, American Indian or Alaska Native, and some other race.
---------------------------------------------------------------------------

    The comparison of minority populations affected by the 316(b) 
Existing Facilities to the affected states' overall populations found 
no statistically significant difference between these groups. While 
low-income populations were less present in the benefit population than 
in the State's overall population in many states, the differences were 
generally very small and the two groups were not found to be 
significantly different. EPA thus believes that the proposed regulation 
does not systematically discriminate against, or exclude or deny 
participation of, the lower income population group or the minority 
population group in the benefits of the proposed regulation in a way 
that would be contrary to the intent of E.O. 12898. Because today's 
proposed regulation requires all 316(b) Existing Facilities to achieve 
compliance regardless of

[[Page 22273]]

location, there can be no systematic discrimination or exclusion of low 
income or minority populations from participation in the rule's 
benefits, based, for example, on selection of only specific facilities 
to which the regulation would apply.\124\ EPA thus concludes, overall, 
that the proposed regulation is consistent with the policy intent of 
E.O. 12898. Anecdotally, minority (e.g., Native American) and low-
income populations may be more likely to include a larger proportion of 
subsistence fishermen. Since this rule will increase abundance of all 
fish species in the areas affected by cooling water intakes, it may 
provide a particular benefit to subsistence fishermen. To the extent 
that minority and low-income populations are over-represented in this 
group, they may especially benefit from this rule.
---------------------------------------------------------------------------

    \124\ Additionally, in states in which low-income populations 
are less present in the benefits group than in the state population 
overall, these populations are not subject to the environmental 
damages today's rule seeks to ameliorate to the same extent as other 
income groups.
---------------------------------------------------------------------------

K. Executive Order 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.''
    Today's 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 rule provides requirements to minimize adverse 
environmental impact for cooling water intake structures located on 
these types of waterbodies.
    EPA used GIS data of the locations of Marine Protected Areas (MPAs) 
from the national MPA program (http://www.mpa.gov/helpful_resources/inventory.html) to locate 316(b) existing facilities with intakes 
within MPAs. Under Option 1, 87 percent of in-scope facilities within 
MPAs obtain reductions in impingement mortality, while reductions in 
entrainment mortality cannot be estimated because they will be based on 
site-specific determinations of BTA. Under Options 2 and 3, impingement 
mortality is reduced at 92 and 97 percent of 316(b) facilities in MPAs, 
while the addition of closed-cycle cooling towers results in reduced 
entrainment mortality at 72 and 92 percent of in-scope facilities found 
in MPAs, respectively. Therefore, EPA expects today's proposed 
regulation would advance the objective of the Executive Order to 
protect marine areas. For more details of the methodology used in this 
analysis and the specific water bodies expected to be improved, see 
Section 5 in Chapter 9 in the EA report.

XI. Solicitation of Data and Comments

A. General Solicitation of Comment

    EPA encourages public participation in this rulemaking. EPA asks 
that commenters address any perceived deficiencies in the record 
supporting this proposal and that suggested revisions or corrections to 
the rule, preamble or record be supported by data. EPA invites all 
parties to coordinate their data collection activities with the Agency 
to facilitate cost-effective data submissions. Please refer to the FOR 
FURTHER INFORMATION CONTACT section at the beginning of this preamble 
for technical contacts at EPA.
    Requests for comment on specific issues are scattered throughout 
this preamble in the sections where such issues are discussed. In 
addition, EPA specifically requests comment on the issues discussed 
below.

B. Specific Solicitation of Comments and Data

 Definition of ``Design Intake Flow''
    EPA requests comment on whether the definition of DIF should be 
further revised to clarify that EPA intends for the design intake flow 
to reflect the maximum volume of water that a plant can physically 
withdraw from a source waterbody over a specific time period. This 
would mean that a facility that has permanently taken a pump out of 
service or has flow limited by piping or other physical limitations 
should be able to consider such constraints when reporting its DIF. See 
Section V.G.
2. National BTA Categorical Standards for Offshore Oil and Gas 
Extraction and Seafood Processing Facilities
    EPA requests comment and data on the appropriateness of a single 
BTA categorical standards for offshore oil and gas extraction 
facilities and seafood processing facilities. Today's rule would 
continue to require that the BTA for existing offshore oil and gas 
extraction facilities and seafood processing facilities be established 
by NPDES permit directors on a case-by-case basis using best 
professional judgment. See Section V.H.
3. Cost-cost Alternative From Phase II Rule
    EPA does not have technical data for all existing facilities. EPA 
concluded that the Phase II rule costs provided in Appendix A are not 
appropriate for use in a facility-level cost-cost test. See Section 
III. Moreover, under the national requirements EPA is proposing today, 
EPA concluded that a specific cost-cost variance is not necessary 
because the Director already has the discretion to consider such 
factors. EPA requests comment on these conclusions.
4. Entrainment Survival
    There are circumstances where certain species of eggs have been 
shown to survive entrainment under certain conditions, however EPA has 
not received any new data for either the most common species or the 
species of concern most frequently identified in available studies. For 
purposes of today's national rulemaking, entrainment is still presumed 
to lead to 100 percent mortality. See Section VI. Today's proposed rule 
would allow facilities to demonstrate, on a site-specific basis, that 
entrainment mortality of one or more species of concern is not 100 
percent. EPA requests comment on this approach.
5. Alternative Impingement Mortality Compliance Requirements
    EPA requests comment and data on a provision that would require 
facilities seeking to comply with the impingement mortality standard by 
meeting an intake velocity requirement either to demonstrate that the 
species of concern is adequately protected by the maximum intake 
velocity requirements, or else to employ fish friendly protective 
measures including a fish handling and return system. EPA is 
considering this provision because the Agency is concerned that some 
facilities that comply with the impingement mortality requirements by 
reducing intake velocity to 0.5 fps or less, may still impact species 
of concern. See Section VI.D.1.a.
6. Monthly and Annual Limits on Impingement Mortality
    EPA requests comment on the need to tailor the impingement 
mortality requirements of today's proposal to

[[Page 22274]]

account for site-specific circumstances and/or technologies, including 
location of cooling water intakes that impinge relatively few fish or 
other approaches that achieve impingement mortality reductions 
equivalent to the proposed performance standards. For example, if EPA 
were to consider number of fish killed as an alternative, it might 
statistically model the data or select the minimum observed value. 
Studies and information supporting these alternatives would be most 
helpful. EPA also requests comment on the monthly and annual limits in 
the proposed rule and way in which they were calculated.
7. Flow Basis for Option
    EPA requests comment on both the threshold and the flow basis for a 
variation of option 2 that would use 125 MGD Actual Intake Flow (AIF) 
rather than a 125 MGD Design Intake Flow (DIF) as the threshold. See 
Section VI.D.2.
8. Waterbody Type as a Basis for Different Standards
    EPA's reanalysis of impingement and entrainment data does not 
support the premise that the difference in the density of organisms 
between marine and fresh waters justifies different standards. More 
specifically, the average density of organisms in fresh waters may be 
less than that found on average in marine waters, but the actual 
density of aquatic organisms in some specific fresh water systems 
exceeds that found in some marine waters. EPA also believes the 
different reproduction strategies of freshwater versus marine species 
make broad characterizations regarding the density less valid a 
rationale for establishing different standards for minimizing adverse 
environmental impact. EPA requests comment on its proposal not to 
differentiate requirements by water body type.
9. Capacity Utilization Rating as a Basis for Different Standards
    Electric generating facilities may still continue to withdraw 
significant volumes of water when not generating electricity. Further, 
EPA found that load-following and peaking plants operate at or near 100 
percent capacity (and therefore 100 percent design intake flow) when 
they are operating. Peaking facilities (those with a CUR of less than 
15 percent, as defined in the 2004 Phase II rule) may withdraw 
relatively small volumes on an annual basis, but if they operate during 
biologically important periods such as spawning seasons or migrations, 
then they may have nearly the same adverse impact as a facility that 
operates year round. EPA requests comment on its decision not to 
exclude facilities with a low capacity utilization rate. Comments who 
believe that EPA should include a CUR threshold in the final rule 
should provide a suggested threshold and explain the basis for it.
10. Flow Commensurate With Closed-Cycle Cooling
    EPA requests comment on whether the demonstration that a facility's 
flow reduction will be commensurate with closed-cycle cooling should be 
based on a defined metric, or determined by the permitting authority on 
a site-specific basis for each facility. EPA is proposing that a 
facility seeking to demonstrate flow reduction commensurate with 
closed-cycle cooling using flow reduction technologies and controls 
other than through closed-cycle cooling (e.g., through seasonal flow 
reductions, unit retirements, and other flow reductions) would have to 
demonstrate total flow reductions approximating 97.5% for freshwater 
withdrawals and 94.9% for saltwater withdrawals. See Section IX.D.
11. Credits for Unit Closures
    EPA requests comments on the proposed approach to allow credits for 
unit closures to be valid for 10 years from the date of the closure. In 
EPA's current thinking this approach reasonably allows facilities to 
get credit for flow reductions attributable to unit closures, but also 
requires such facilities to make future progress to ensure its 
operations reflect best available entrainment controls. See Section 
IX.D.
12. Land Constraints
    EPA requests comment on the use of a ratio for determining the land 
constraint threshold for retrofit construction of cooling tower, as 
well as data for determining alternative thresholds. EPA has not 
identified any facilities with more than 160 acres/1000MWs that EPA 
believes would be unable to construct retrofit cooling towers. EPA is 
exploring the use of such a ratio to support determinations regarding 
adequate land area to construct retrofit cooling towers. See Section 
IX.D (footnote 1).
13. Proposed Implementation Schedule
    EPA requests comment on its proposed schedule for implementing the 
proposed rule. The proposed schedule uses a phased approach for 
information submittal, requiring some facilities to submit application 
materials as soon as six months after rule promulgation. The longest 
timeframe for information submittal would not exceed seven years and 
six months. EPA solicits comment on the proposed schedule, and 
specifically seeks comment and data on the appropriate amount of time 
to collect data, conduct reviews, obtain comment, provide for public 
participation, and issue final permit conditions. See Section IX.E.
14. Methods for Evaluating Latent Mortality Effects Resulting From 
Impingement
    EPA requests comment on methods for evaluating latent mortality 
effects resulting from impingement. EPA requests comment on whether it 
should specifically establish 24 or 48 hours after initial impingement 
as the time at which to monitor impingement mortality. EPA's record 
demonstrates that a holding time of no more than 48 hours is optimal 
for evaluating the latent mortality associated with impingement while 
at the same time minimizing mortality associated with holding the 
organisms. See Section IX.F.1.
15. Counting Impinged Organisms With the ``Hypothetical Net''
    EPA requests comment on the ``hypothetical net'' approach to 
measuring impingement mortality. Facilities could apply a 
``hypothetical net'' in that they could elect to only count organisms 
that would not have passed through a net with 3/8'' mesh. For example, 
a facility that uses a fine-mesh screen or diverts the flow directly to 
a sampling bay would only need to count organisms that could be 
collected if the flow passed through a net, screen, or debris basket 
fitted with 3/8'' mesh spacing. See Section IX.F.1. EPA further 
solicits comment on alternative approaches that would not penalize 
facilities for employing fine mesh screens.
16. Incentives for Reducing I&E by Reducing Water Withdrawals
    EPA requests comment on incentives or alternative requirements for 
exceptionally energy efficient or water efficient facilities. See 
Section III. EPA also solicits comment on the regulatory provisions 
that encourage the use of recycled water as cooling water, including 
reclaimed water from wastewater treatment plants and process water from 
manufacturing facilities, EPA solicits comment on other incentives to 
encourage use of recycled water to supplement or replace marine, 
estuarine, or freshwater intakes.

[[Page 22275]]

17. Options Which Provide Closed-Cycle Cooling as BTA
    EPA solicits comment on regulatory options that establish closed-
cycle cooling as BTA. EPA specifically requests comment on the 
regulatory options 2 and 3 included in today's proposal, which would 
establish closed-cycle cooling as BTA for EM at a DIF of 2 MGD and 125 
MGD, respectively. See Section VI and VII. EPA further solicits comment 
and supporting data on alternative thresholds, including whether such 
alternative thresholds should be based on DIF or AIF. EPA also solicits 
comment and supporting data for alternative criteria that would 
establish closed-cycle cooling as BTA for some facilities.
18. Costs of Controls To Eliminate Entrapment
    EPA assumes facilities with modified traveling screens including a 
fish handling and return system would meet the proposed requirements to 
eliminate entrapment of fish and shellfish. EPA believes those 
facilities with an offshore velocity cap leading to a forebay but 
without a fish return system would incur costs to meet the proposed 
requirements for entrapment. For facilities with closed-cycle cooling 
systems, EPA does not have data on the number of facilities that also 
have a fish handling and return system. Further, EPA does not have data 
on the number of facilities that have less than 0.5 feet per second 
intake velocity but have a cooling water intake system that may cause 
entrapment. EPA solicits comment and data on the types and numbers of 
facilities with a cooling water intake system that may cause 
entrapment, and the costs to eliminate entrapment.
19. Analysis of New Capacity
    EPA requests comment on the number of new units and the amount of 
new capacity construction projected. See Section VII.
20. Monitoring Reports
    EPA solicits comment on how frequently I&E mortality monitoring 
reports should be submitted. EPA further solicits comment on 
incorporating the monitoring reports into monthly DMRs, or whether less 
frequent reporting is appropriate. EPA also requests comment on whether 
minimum monitoring frequencies should be established in this rule or 
left to the discretion of the Director. See Section IX.
21. Seasonal Operation of Cooling Towers
    EPA solicits comment on an option that would require cooling towers 
on some or all facilities but recognize the site-specific nature of EM 
by allowing seasonal operation of cooling towers during peak 
entrainment season. EPA also requests comment on including a similar 
provision for new units at existing facilities, which are required to 
achieve I&E reductions commensurate with closed cycle cooling in the 
proposed rule.
22. New Unit Provision
    EPA solicits comment on the new unit provision. Specifically, EPA 
solicits comment on the clarity of the definition of new unit, and 
whether it should be expanded to include other units such as those that 
are repowered or rebuilt. EPA also solicits comment on whether the new 
unit provision should be deleted, therefore subjecting these units to 
the same site-specific entrainment BTA determination required of 
existing units.
23. Review Criteria To Guide Evaluation of Entrainment Feasibility 
Factors
    EPA solicits comment on the criteria specified in the regulation 
for guiding the evaluation of closed-cycle cooling as BTA for EM. EPA 
further solicits comment on additional criteria that EPA should 
address, and whether such criteria should be developed in the 
regulation or provided in guidance.
24. Alternative Procedures for Visual or Remote Inspections
    EPA requests comment on its proposal to permit the Director to 
establish alternative procedures for conducting visual or remote 
inspections during periods of inclement weather. EPA also requests 
comment on whether the rule should specific minimum frequencies for 
visual or remote inspections, or leave this to the determination of the 
permitting authority. See Section IX.F.
25. Threshold for In-Scope Facilities
    EPA requests comment on the threshold of DIF greater than 2 MGD for 
identifying facilities in-scope of this rule.
26. Application Requirements
    EPA requests comment on the burden and practical utility of all of 
the proposed application requirements. EPA is particularly interested 
in the burden of application requirements to facilities with DIF < 50 
MGD. EPA also requests comment on its proposal to limit application 
requirements for facilities that have already installed closed-cycle 
cooling, or opt to do so without a site-specific assessment of BTA, and 
whether there are additional requirements that could be relaxed for 
this group.
27. Comment From State and Local Officials
    EPA specifically requests comment on this proposed rule from State 
and local officials. See Section X.E.
28. Comment From Tribal Officials
    EPA specifically requests additional comment on this proposed 
action from Tribal officials. See Section X.F.

List of Subjects

40 CFR Part 122

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

40 CFR Part 125

    Environmental protection, Cooling water intake structure, Reporting 
and recordkeeping requirements, Waste treatment and disposal, Water 
pollution control.

    Dated: March 28, 2011.
Lisa P. Jackson,
Administrator.
    For reasons set out in the preamble, Chapter I of Title 40 of the 
Code of Federal Regulations is proposed to be amended as follows:

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. The suspension of 40 CFR 122.21(r)(1)(ii) and (r)(5), published 
on July 9, 2007 (72 FR 37109) is lifted.
    3. Section 122.21 is amended as follows:
    a. Revising paragraph (r)(1)(ii).
    b. Revising paragraphs (r)(2) introductory text, (r)(2)(i) though 
(iii), and (r)(3) through (5).
    c. Adding paragraphs (r)(6) through (12).


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

* * * * *
    (r) * * *
    (1) * * *
    (ii) Existing facilities. (A) The owner or operator of an existing 
facility as

[[Page 22276]]

defined in 40 CFR part 125, subpart J, with a cooling water intake 
structure that supplies cooling water exclusively for operation of a 
wet or dry cooling system and that meets the definition of closed cycle 
recirculating system at 40 CFR 125.92 must submit to the Director for 
review the information required under paragraphs (r)(2), (3), and (6) 
of this section. The owner or operator of all other existing facilities 
as defined in part 125, subpart J, of this chapter must also submit to 
the Director for review the information required under paragraphs (r) 
(5), (7), and (8) of this section as part of its permit application.
    (B) The owner or operator of an existing facility as defined in 40 
CFR part 125, subpart J, of this chapter that withdraws greater than 
125 MGD actual intake flows (AIF) of water for cooling purposes must 
submit to the Director for review the information required under 
paragraphs (r)(9), (10), (11), and (12) of this section.
    (C) New units at existing facilities. New units at existing 
facilities with cooling water intake structures as defined in part 125, 
subpart J, of this chapter must provide an update to the information 
required under paragraphs (r)(2), (3), and (6) of this section and 
Sec.  125.95 of this chapter. Requests for alternative requirements 
under Sec.  125.94(d)(4) of this chapter must be submitted with your 
permit application.
* * * * *
    (2) Source water physical data. The owner or operator of the 
facility must submit:
    (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;
    (iii) Locational maps; and
* * * * *
    (3) Cooling water intake structure data. The owner or operator of 
the facility must submit:
    (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. The 
owner or operator of each facility must submit the following 
information in order 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. This supporting 
information must include any available existing data. However, you may 
also supplement the data using newly conducted field studies. In the 
case of a new facility, 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) of this 
chapter should be revised. 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 must 
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.
    (ix) Identification of protective measures and stabilization 
activities that have been implemented, and a description of how these 
measures and activities affected the baseline water condition in the 
vicinity of the intake.
    (5) Cooling water system data. The owner or operator of the 
facility must provide the following information for each cooling water 
intake structure used:
    (i) A narrative description of the operation of the cooling water 
system and its relationship to cooling water intake structures; the 
proportion of the design intake flow that is used in the system 
including a distribution of water used for contact cooling, non-contact 
cooling, and process uses; a distribution of water reuse (to include 
cooling water reused as process water, process water reused for 
cooling, and the use of gray water for cooling); description of 
reductions in total water withdrawals including cooling water intake 
flow reductions already achieved through minimized process water 
withdrawals; description of any cooling water that is used in a 
manufacturing process either before or after it is used for cooling, 
including other recycled process water flows; the proportion of the 
source waterbody withdrawn (on a monthly basis); the number of days of 
the year the cooling water system is in operation and seasonal changes 
in the operation of the system, if applicable;
    (ii) Design and engineering calculations prepared by a qualified 
professional and supporting data to support the description required by 
paragraph (r)(5)(i) of this section;
    (iii) Description of existing impingement and entrainment

[[Page 22277]]

technologies or operational measures and a summary of their 
performance, including but not limited to reductions in entrainment 
mortality due to intake location and reductions in total water 
withdrawals and usage.
    (6) Impingement Mortality Reduction Plan. The Impingement Mortality 
Reduction Plan must identify the approach the owner or operator of the 
facility will use to meet the BTA standards for impingement mortality 
at 40 CFR 125.94(b), including:
    (i) Identification of the method of intended compliance with the 
BTA standards for impingement mortality for each intake by either 
conducting a direct measure of impingement mortality through sampling, 
by demonstrating that the maximum design intake velocity is equal to or 
less than 0.5 feet per second, or by measuring the intake velocity and 
demonstrating that the actual intake velocity is equal to or less than 
0.5 feet per second.
    (ii) If you plan to comply with the BTA standards for impingement 
mortality requirements by conducting a direct measure of impingement 
mortality through sampling, you must provide a description of the study 
area including the area of influence of each cooling water intake 
structure and a taxonomic identification of the sampled or evaluated 
biological assemblages including all life stages of fish and shellfish 
that may be susceptible to impingement.
    (iii) If you plan to comply with the BTA standards for impingement 
mortality requirements by conducting a direct measure of impingement 
mortality through sampling, you must also provide a description of any 
sampling or monitoring approach to be used in measuring impingement 
mortality, including:
    (A) The duration and frequency of monitoring, subject to the 
minimum monitoring requirements established by the Director under 40 
CFR 125.96 but in no case less frequently than a biweekly basis;
    (B) The monitoring locations;
    (C) The organisms to be monitored, and
    (D) The method in which naturally moribund organisms are identified 
and taken into account.
    (iv) If you plan to comply with the BTA standards for impingement 
mortality requirements by demonstrating that the design intake velocity 
is equal to or less than 0.5 feet per second, documentation including:
    (A) A demonstration that the maximum design intake velocity is 
equal to or less than 0.5 feet per second;
    (B) A description of technologies or operational measures to keep 
any debris from blocking the intake at no more than 15 percent of the 
opening of the intake; and
    (C) A description of technologies or operational measures to 
prevent entrapment of fish or shellfish by the cooling water intake 
system.
    (v) If you plan to comply with the BTA standards for impingement 
mortality by measuring the intake velocity to demonstrate the intake 
velocity is equal to or less than 0.5 feet per second, documentation 
including:
    (A) Velocity monitoring to demonstrate that the actual intake 
velocity is equal to or less than 0.5 feet per second;
    (B) Documentation of the technologies and operational measures 
taken to ensure the actual intake velocity will not exceed 0.5 feet per 
second; and,
    (C) A description of technologies or operational measures to 
prevent entrapment of impingeable fish or shellfish by the cooling 
water intake system.
    (vi) For intakes that withdraw from oceans and tidal waters, a 
description of the measures and technologies to reduce impingement 
mortality of shellfish to a level comparable to that achieved by 
properly deployed and maintained barrier nets, including but not 
limited to cylindrical wedgewire screens, seasonal deployment of 
barrier nets, intake location, and/or an appropriate handling and 
return system.
    (vii) You must demonstrate that the cooling water intake structure 
does not lead to entrapment. This demonstration must include 
documentation that organisms are excluded from entering any portion of 
the intake where there is not an opportunity for them to escape. If 
your cooling water intake structure results in entrapment and the only 
way for fish to escape is by being impinged upon the screens or to pass 
through the facility (in the case of open intakes), you must document 
that additional protective measures will be deployed such as, for 
example, modification of traveling screens with collection buckets 
designed to minimize turbulence to aquatic life, addition of a guard 
rail or barrier to prevent loss of fish from the collection bucket, 
replacement of screen panel materials with smooth woven mesh, a low 
pressure wash to remove fish prior to any high pressure spray to remove 
debris on the ascending side, and a fish return with adequate flow to 
ensure fish return to the source water body. If you cannot document 
these additional protective measures, you must count all entrapment of 
organisms as mortality.
    (viii) Documentation of all methods and quality assurance/quality 
control procedures for sampling and data analysis. The proposed 
sampling and data analysis methods must be appropriate for a 
quantitative survey.
    (7) Performance studies. If the owner or operator has conducted 
studies, or chooses to use previously conducted studies obtained from 
other facilities, you must submit a description of those biological 
survival studies conducted, together with underlying data, and a 
summary of any conclusions or results, including but not limited to:
    (i) Site-specific studies addressing technology efficacy, through-
plant entrainment survival, and other impingement and entrainment 
mortality studies;
    (ii) Studies conducted at other locations including an explanation 
as to why the data from other locations is relevant and representative 
of conditions at your facility;
    (iii) Studies older than 10 years must include an explanation of 
why the data is still relevant and representative of conditions at your 
facility.
    (8) Operational status. The owner or operator of the facility must 
submit a description of its operational status for each generating, 
production, or process unit, including but not limited to:
    (i) Descriptions of individual unit operating status including age 
of each unit, capacity utilization (or equivalent) for the previous 5 
years, and any major upgrades completed within the last 15 years, 
including but not limited to boiler replacement, condenser replacement, 
turbine replacement, or changes to fuel type;
    (ii) Descriptions of completed, approved, or scheduled uprates and 
NRC relicensing status of each unit at nuclear facilities;
    (iii) Descriptions of plans or schedules for decommissioning or 
replacement of units;
    (iv) Descriptions of current and future production schedules at 
manufacturing facilities; and
    (v) Descriptions of plans or schedules for any new units planned 
within the next 5 years.
    (9) Entrainment characterization study. For all species and life 
stages identified under the requirements of paragraph (r)(4) of this 
section, the owner or operator of the facility must:
    (i) Develop and submit an entrainment mortality data collection 
plan for review and comment by the Director. The entrainment mortality 
data collection plan must include, at a minimum:
    (A) The duration and frequency of monitoring;

[[Page 22278]]

    (B) The monitoring locations, including a description of the study 
area and the area of influence of the cooling water intake 
structure(s);
    (C) A taxonomic identification of the sampled or evaluated 
biological assemblages;
    (D) Identification of all life stages of fish and shellfish, 
including identification of any surrogate life stages used, and 
identification of data representing both motile and non-motile life-
stages of organisms;
    (E) The organisms to be monitored, including species of concern and 
threatened or endangered species;
    (F) Any other organisms identified by the Director;
    (G) The method by which latent mortality would be identified;
    (H) Documentation of all methods and quality assurance/quality 
control procedures for sampling and data analysis. The proposed 
sampling and data analysis methods must be appropriate for a 
quantitative survey.
    (ii) Obtain peer review of the entrainment mortality data 
collection plan. You must select peer reviewers in consultation with 
the Director, including that the Director may require additional peer 
reviewers. The Director may consult with EPA and Federal, State and 
Tribal fish and wildlife management agencies with responsibility for 
fish and wildlife potentially affected by the cooling water intake 
structure(s) to determine which peer review comments must be addressed 
by the final plan. You must provide an explanation for any significant 
reviewer comments not accepted. Peer reviewers must have appropriate 
qualifications in biology, engineering, hydrology, or other fields and 
their names and credentials must be included in the peer review report.
    (iii) Implement the entrainment mortality data collection plan no 
later than 6 months after submission of the entrainment mortality data 
collection plan to the Director.
    (iv) The Entrainment Characterization Study must include all of the 
following components:
    (A) Taxonomic identifications of all life stages of fish, 
shellfish, and any species protected under Federal, State, or Tribal 
Law (including threatened or endangered species) that are in the 
vicinity of the cooling water intake structure(s) and are susceptible 
to entrainment;
    (B) Characterization of all life stages of fish, shellfish, and any 
species protected under Federal, State, or Tribal Law (including 
threatened or endangered species), including a description of the 
abundance and temporal and spatial characteristics in the vicinity of 
the cooling water intake structure(s), based on sufficient data to 
characterize annual, seasonal, and diel variations in entrainment, and 
including but not limited to variations related to climate and weather 
differences, spawning, feeding and water column migration. These may 
include historical data that are representative of the current 
operation of your facility and of biological conditions at the site; 
and,
    (C) Documentation of the current entrainment of all life stages of 
fish, shellfish, and any species protected under Federal, State, or 
Tribal Law (including threatened or endangered species). The 
documentation may include historical data that are representative of 
the current operation of your facility and of biological conditions at 
the site. Entrainment samples to support the facility's calculations 
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. Data for specific organism mortality or 
survival that is applied to other life-stages or species must be 
identified. The owner or operator of the facility must identify and 
document all assumptions and calculations used to determine the total 
entrainment and entrainment mortality for that facility.
    (D) Information collected to meet paragraphs (r)(4) and (r)(7) of 
this section may be used in developing the Entrainment Characterization 
Study.
    (10) Comprehensive technical feasibility and cost evaluation study. 
The owner or operator of the facility must submit an engineering study 
of the technical feasibility and incremental costs of candidate 
entrainment mortality control technologies. The study must include the 
following:
    (i) Technical feasibility. At a minimum, the owner or operator of 
the facility must conduct a study to evaluate the technical feasibility 
of closed-cycle recirculating systems (cooling towers) and fine mesh 
screens with a mesh size of 2mm or smaller. This study must include:
    (A) A description of all technologies and operational measures 
considered (including alternative designs of closed-cycle recirculating 
systems--such as natural draft cooling towers, mechanical draft cooling 
towers, hybrid designs, and compact or multi-cell arrangements);
    (B) A discussion of land availability, including an evaluation of 
adjacent land and acres potentially available due to generating unit 
retirements, production unit retirements, other buildings and equipment 
retirements, and ponds, coal piles, rail yards, transmission yards, and 
parking lots, and
    (C) Documentation of factors other than cost that may make a 
candidate technology impractical or infeasible for further evaluation.
    (ii) Other entrainment mortality control technologies. Following 
submission of the engineering study, the Director may require 
evaluation of additional technologies for reducing entrainment 
mortality.
    (iii) Cost evaluations. The study must include engineering cost 
estimates of all technologies considered in paragraphs (r)(10)(i) and 
(ii) of this section. All costs must be presented as the net present 
value (NPV) of the social costs and the corresponding annual value. In 
addition to the required social costs, you may choose to provide 
facility level compliance costs, however you must separately discuss 
facility level compliance costs and social costs. You must discuss and 
provide documentation for:
    (A) Any outages, downtime, or other impacts to facility revenue. 
Depreciation schedules, interest rates and related assumptions must be 
identified.
    (B) Costs and explanation of any additional facility modifications 
necessary to support construction and operation of technologies 
considered in paragraphs (r)(10)(i) and (ii) of this section, including 
but not limited to relocation of existing buildings or equipment, 
reinforcement or upgrading of existing equipment, and additional 
construction and operating permits. Depreciation schedules, interest 
rates, useful life of the technology considered, and any related 
assumptions must be identified.
    (C) Costs and explanation for addressing any non-water quality 
impacts identified in paragraph (r)(12) of this section. The cost 
evaluation must include a discussion of all reasonable attempts to 
mitigate each of these impacts.
    (iv) Peer review. Obtain peer review of the comprehensive technical 
feasibility and cost evaluation study. You must select peer reviewers 
in consultation with the Director, including that the Director may 
require additional peer reviewers. The Director may consult with EPA 
and Federal, State and Tribal fish and wildlife management agencies 
with responsibility for fish and wildlife potentially affected by the 
cooling water intake structure(s) to determine which peer review 
comments must be addressed by the final study. You must provide an 
explanation for any significant reviewer comments not accepted. Peer 
reviewers must have

[[Page 22279]]

appropriate qualifications in biology, engineering, hydrology, or other 
fields and their names and credentials must be included in the peer 
review report.
    (11) Benefits valuation study. The owner or operator of the 
facility must submit an evaluation of the magnitude of water quality 
benefits, both monetized and non-monetized, of the candidate 
entrainment mortality reduction technologies and operational measures 
evaluated in paragraph (r)(10) of this section, including but not 
limited to:
    (i) Incremental changes in the numbers of fish and shellfish, for 
all life stages, lost due to impingement mortality and entrainment 
mortality as defined in 40 CFR 125.92;
    (ii) Identification of basis for any monetized values you assigned 
to changes in commercial and recreational species, forage fish, and 
shellfish, and to any other ecosystem or non-use benefits;
    (iii) Discussion of recent mitigation efforts already completed;
    (iv) Identification of other benefits to the environment and local 
communities, including but not limited to improvements for mammals, 
birds, and other organisms and aquatic habitats.
    (v) Peer review. Obtain peer review of the benefits valuation 
study. You must select peer reviewers in consultation with the 
Director, including that the Director may require additional peer 
reviewers. The Director may consult with EPA and Federal, State and 
Tribal fish and wildlife management agencies with responsibility for 
fish and wildlife potentially affected by the cooling water intake 
structure(s) to determine which peer review comments must be addressed 
by the final study. You must provide an explanation for any significant 
reviewer comments not accepted. Peer reviewers must have appropriate 
qualifications in biology, engineering, hydrology, or other fields and 
their names and credentials must be included in the peer review report.
    (12) Non-water Quality and Other Environmental Impacts Study. The 
owner or operator of the facility must submit a detailed site-specific 
discussion of the changes in non-water quality factors and other 
environmental impacts attributed to each technology and operational 
measure considered in paragraph (r)(10) of this section, including but 
not limited to both increases and decreases of each factor. The study 
must include the following:
    (i) Estimates of changes to energy consumption, including but not 
limited to parasitic load and turbine backpressure energy penalties;
    (ii) Estimates of changes to thermal discharges, including an 
estimate of any increased facility capacity, operations, and 
reliability that may be possible due to relaxed permitting constraints 
related to thermal discharges;
    (iii) Estimates of air pollutant emissions and of the human health 
and environmental impacts associated with such emissions;
    (iv) Estimates of changes in noise;
    (v) Discussion of impacts to safety, including documentation of the 
potential for plumes, icing, and availability of emergency cooling 
water;
    (vi) Impacts to grid reliability for the facility and for each 
power generating unit, including an estimate of changes to facility 
capacity, operations, and reliability due to cooling water 
availability;
    (vii) Facility reliability, including but not limited to facility 
availability, production of steam, and impacts to production based on 
process unit heating or cooling;
    (viii) Significant changes in consumption of water, including a 
site-specific comparison of the evaporative losses of both once-through 
cooling and closed cycle recirculating systems, and documentation of 
impacts attributable to changes in water consumption;
    (ix) A discussion of all reasonable attempts to mitigate each of 
these factors.
    (x) Peer review. Obtain peer review of the non-water quality and 
other environmental impacts study. You must select peer reviewers in 
consultation with the Director, including that the Director may require 
additional peer reviewers. The Director may consult with EPA and 
Federal, State and Tribal fish and wildlife management agencies with 
responsibility for fish and wildlife potentially affected by the 
cooling water intake structure(s) to determine which peer review 
comments must be addressed by the final study. You must provide an 
explanation for any significant reviewer comments not accepted. Peer 
reviewers must have appropriate qualifications in biology, engineering, 
hydrology, or other fields and their names and credentials must be 
included in the peer review report.

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

    4. 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.

Subpart I--[Amended]

    5. Section 125.84 is amended as follows:
    a. In the heading of paragraph (c) by removing the words ``equal to 
or greater than 2 MGD'' and adding in their place the words ``greater 
than 2 MGD.''
    b. By revising paragraph (d)(1).


Sec.  125.84  As an owner or operator of a new facility, what must I do 
to comply with this subpart?

* * * * *
    (d) * * *
    (1) You must demonstrate to the Director that the technologies 
employed will reduce the level of adverse environmental impact from 
your cooling water intake structures to a comparable level to that 
which you would achieve were you to implement the requirements of 
paragraphs (b)(1) and (2) of this section. This 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 implement the 
requirements of paragraphs (b)(1) and (2) of this section. The Director 
may consider information provided by any fishery management agency(ies) 
along with data and information from other sources.
* * * * *
    6. Section 125.86 is amended as follows:
    a. Revise paragraph (b)(3) introductory text.
    b. Revise paragraph (b)(4)(iii).
    b. Remove and reserve paragraph (c)(2)(iv)(C).
    c. Remove and reserve paragraph (c)(2)(iv)(D)(2).


Sec.  125.86  As an owner or operator of a new facility, what must I 
collect and submit when I apply for my new or reissued NPDES permit?

* * * * *
    (b) * * *
    (3) Source waterbody flow information. You must submit to the 
Director the following information to demonstrate that your cooling 
water intake structure meets the flow requirements in Sec.  
125.84(b)(3) or (c)(2).
* * * * *
    (4) * * *
    (iii) The owner or operator of a new facility required to install 
design and construction technologies and/or operational measures must 
develop a plan explaining the technologies and measures selected that 
is based on information collected for the Source Water Biological 
Baseline Characterization required by 40 CFR 122.21(r)(4). (Examples of 
appropriate technologies include, but are not limited to, wedgewire 
screens, fine mesh

[[Page 22280]]

screens, fish handling and return systems, barrier nets, aquatic filter 
barrier systems, etc. Examples of appropriate operational measures 
include, but are not limited to, seasonal shutdowns or reductions in 
flow, continuous operations of screens, etc.) The plan must contain the 
following information:
* * * * *
    7. Section 125.87 is amended by revising paragraph (a) introductory 
text and paragraph (a)(2) to read as follows:


Sec.  125.87  As an owner or operator of a new facility, must I perform 
monitoring?

* * * * *
    (a) Biological monitoring. You must monitor both impingement and 
entrainment of the commercial, recreational, and forage base fish and 
shellfish species identified in either the Source Water Baseline 
Biological Characterization data required by 40 CFR 122.21(r)(4) or the 
Comprehensive Demonstration Study required by Sec.  125.86(c)(2), 
depending on whether you chose to comply with Track I or Track II. The 
monitoring methods used must be consistent with those used for the 
Source Water Baseline Biological Characterization data required in 40 
CFR 122.21(r)(4) or the Comprehensive Demonstration Study required by 
Sec.  125.86(c)(2). You must follow the monitoring frequencies 
identified below for at least two (2) years after the initial permit 
issuance. After that time, the Director may approve a request for less 
frequent sampling in the remaining years of the permit term and when 
the permit is reissued, if the Director determines the supporting data 
show that less frequent monitoring would still allow for the detection 
of any seasonal and daily variations in the species and numbers of 
individuals that are impinged or entrained.
* * * * *
    (2) Entrainment sampling. You must collect samples at least 
biweekly to monitor entrainment rates (simple enumeration) for each 
species over a 24-hour period during the primary period of 
reproduction, larval recruitment, and peak abundance identified during 
the Source Water Baseline Biological Characterization required by 40 
CFR 122.21(r)(4) or the Comprehensive Demonstration Study required in 
Sec.  125.86(c)(2). You must collect samples only when the cooling 
water intake structure is in operation.
* * * * *
    8. Section 125.89 is amended by revising paragraph (b)(1)(ii) to 
read as follows:


Sec.  125.89  As the Director, what must I do to comply with the 
requirements of this subpart?

* * * * *
    (b) * * *
    (1) * * *
    (ii) For a facility that chooses Track II, you must review the 
information submitted with the Comprehensive Demonstration Study 
required in Sec.  125.86(c)(2), evaluate the suitability of the 
proposed design and construction technologies and operational measures 
to determine whether they will reduce both impingement mortality and 
entrainment of all life stages of fish and shellfish to 90 percent or 
greater of the reduction that could be achieved through Track I. In 
addition, you must review the Verification Monitoring Plan in Sec.  
125.86(c)(2)(iv)(D) and require that the proposed monitoring begin at 
the start of operations of the cooling water intake structure and 
continue for a sufficient period of time to demonstrate that the 
technologies and operational measures meet the requirements in Sec.  
125.84(d)(1). Under subsequent permits, the Director must review the 
performance of the additional and/or different technologies or measures 
used and determine that they reduce the level of adverse environmental 
impact from the cooling water intake structures to a comparable level 
that the facility would achieve were it to implement the requirements 
of Sec.  125.84(b)(1) and (2).
* * * * *
    9. The suspension of 40 CFR 125.90(a), (c), and (d), published on 
July 9, 2007 (72 FR 37109) is lifted.
    10. The suspension of 40 CFR 125.91 through 125.99, published on 
July 9, 2007 (72 FR 37109) is lifted.
    11. Subpart J to part 125 is revised to read as follows:
Subpart J--Requirements Applicable to Cooling Water Intake Structures 
for Existing Facilities Under Section 316(b) of the Clean Water Act
Sec.
125.90 Purpose of this subpart.
125.91 Applicability.
125.92 Special definitions.
125.93 Compliance.
125.94 As an owner or operator of an existing facility, what must I 
do to comply with this subpart?
125.95 Permit application and supporting information requirements.
125.96 Monitoring requirements.
125.97 Other permit reporting and recordkeeping requirements.
125.98 Director requirements.
125.99 [Reserved]

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


Sec.  125.90  Purpose of this subpart.

    (a) This subpart establishes the section 316(b) requirements that 
apply to cooling water intake structures at existing facilities that 
are subject to this subpart. These requirements include a number of 
components. These include standards for minimizing adverse 
environmental impact associated with the use of cooling water intake 
structures and required procedures (e.g., permit application 
requirements, information submission requirements) for establishing the 
appropriate technology requirements at certain specified facilities as 
well as required monitoring, reporting, and recordkeeping requirements 
to demonstrate compliance. In combination, these components represent 
the best technology available for minimizing adverse environmental 
impact associated with the use of cooling water intake structures. 
These requirements are to be established and implemented in National 
Pollutant Discharge Elimination System (NPDES) permits issued under 
authority of sections 301, 308, and 402 of the Clean Water Act (CWA).
    (b) Cooling water intake structures not subject to requirements 
under this or another subpart of this part must meet requirements under 
section 316(b) of the CWA established by the Director on a case-by-
case, best professional judgment (BPJ) basis.
    (c) 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 
more stringent than those required by Federal law.


Sec.  125.91  Applicability.

    (a) An existing facility, as defined in Sec.  125.92, is subject to 
this subpart if it meets each of the following criteria:
    (1) It is a point source;
    (2) It uses or proposes to use cooling water intake structures with 
a total design intake flow (DIF) of greater than 2 million gallons per 
day (MGD) to withdraw water from waters of the United States; and
    (3) Twenty-five percent or more of the water it withdraws is used 
exclusively for cooling purposes, measured on an average annual basis 
for each calendar year.

[[Page 22281]]

    (b) Use of a cooling water intake structure includes obtaining 
cooling water by any sort of contract or arrangement with one or more 
independent suppliers of cooling water if the independent supplier 
withdraws water from waters of the United States but is not itself a 
new or existing facility as defined in subparts I or J of this part, 
except as provided in paragraph (d) of this section. An owner or 
operator of an existing facility may not circumvent these requirements 
by creating arrangements to receive cooling water from an entity that 
is not itself a facility subject to subparts I or J of this part.
    (c) Notwithstanding paragraph (b) of this section, obtaining 
cooling water from a public water system, using reclaimed water from 
wastewater treatment facilities or desalination plants, or recycling 
treated effluent as cooling water does not constitute use of a cooling 
water intake structure for purposes of this subpart.
    (d) This subpart does not apply to seafood processing facilities, 
offshore liquefied natural gas terminals, and offshore oil and gas 
extraction facilities that are existing facilities as defined in Sec.  
125.92. The owners and operators of such facilities must meet 
requirements established by the Director on a case-by-case, best 
professional judgment (BPJ) basis.


Sec.  125.92  Special definitions.

    In addition to the definitions provided in Sec.  122.2 of this 
chapter, the following special definitions apply to this subpart:
    Actual Intake Flow (AIF) means the average volume of water 
withdrawn on an annual basis by the cooling water intake structures 
over the past three calendar years.
    All life stages means eggs, larvae, juveniles, and adults. All life 
stages of fish and shellfish does not include members of the infraclass 
Cirripedia in the subphylum Crustacea (barnacles), green mussels (Perna 
viridis), or zebra mussels (Dreissena polymorpha). The Director may 
determine that all life stages of fish and shellfish does not include 
specified invasive species and naturally moribund species.
    Closed-cycle recirculating system means a system designed, using 
minimized make-up and blowdown flows, to withdraw water from a natural 
or other water source to support contact or noncontact cooling uses 
within a facility, or a system designed to include cooling ponds that 
are not themselves a waters of the U.S. and that does not rely upon 
continuous intake flows of water. New source water (make-up water) is 
added to the system to replenish losses that have occurred due to 
blowdown, drift, and evaporation. Closed-cycle recirculating system 
includes, but is not limited to, wet or dry cooling towers. For cooling 
towers where the source for make-up water is freshwater or has a 
salinity equal to or less than 0.5 parts per thousand, minimized make-
up and blow down means operating at a minimum cycles of concentration 
of 3.0. For cooling towers where the source for make-up water is 
saltwater, brackish water, or has a salinity of greater than 0.5 parts 
per thousand, minimized make-up and blow down means operating at a 
minimum cycles of concentration of 1.5. For facilities with a closed-
cycle recirculating system other than a cooling tower, minimized make-
up and blowdown flows means a reduction in actual intake flow of 97.5 
percent for freshwater, and 94.9 percent for salt water or brackish 
water.
    Contact cooling water means water used for cooling which comes into 
direct contact with any raw material, product, or byproduct. Examples 
of contact cooling water may include but are not limited to quench 
water at iron and steel plants, cooling water in a cracking unit, and 
cooling water directly added to food and agricultural products 
processing.
    Cooling pond means a man-made canal, channel, lake, pond or other 
impoundment designed and constructed to provide cooling for a nearby 
electric generating or manufacturing unit. A cooling pond may comprise 
a closed-cycle recirculating system when waters of the U.S. are 
withdrawn only for the purpose of replenishing losses of cooling water 
due to blowdown, drift, and evaporation.
    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 obtained from a public water system, reclaimed 
water from wastewater treatment facilities or desalination plants, 
treated effluent from a manufacturing facility, or cooling water that 
is used in a manufacturing process either before or after it is used 
for cooling as process water, is not considered cooling water for the 
purposes of calculating the percentage of a facility's intake flow that 
is used for cooling purposes in Sec.  125.91(a)(3).
    Cooling water intake structure means the total physical structure 
and any associated constructed waterways used to withdraw cooling water 
from waters of the United States. The cooling water intake structure 
extends from the point at which water is withdrawn from the surface 
water source up to, and including, but not limited to, the intake 
pumps.
    Design intake flow (DIF) means the value assigned during the 
cooling water intake structure design to the maximum volume of water 
the cooling water intake system is capable of withdrawing from a source 
waterbody over a specific time period. The facility's DIF may be 
adjusted to reflect permanent changes to the maximum capabilities of 
the cooling water intake system to withdraw cooling water, including 
but not limited to pumps permanently removed from service, flow limit 
devices, and physical limitations of the piping. DIF does not include 
values associated with emergency and fire suppression capacity or 
redundant pumps (i.e., back-up pumps).
    Entrainment means the incorporation of any life stages of fish and 
shellfish with the intake water flow entering and passing through a 
cooling water intake structure and into a cooling water system. 
Entrainable organisms includes any organisms potentially subject to 
entrainment. For purposes of this subpart, entrainment includes those 
organisms that pass through a \3/8\ inch sieve, and excludes those 
organisms collected or retained on a \3/8\ inch sieve.
    Entrainment mortality means death as a result of entrainment 
through the cooling water intake structure, or death as a result of 
exclusion from the cooling water intake structure by fine mesh screens 
or other protective devices intended to prevent the passage of 
entrainable organisms through the cooling water intake structure.
    Entrapment means the condition where impingeable fish and shellfish 
lack the means to escape the cooling water intake system. Entrapment 
includes but is not limited to: organisms caught in the bucket of a 
traveling screen and unable to reach a fish return; organisms caught in 
the forebay of a cooling water intake system without any means of being 
returned to the source waterbody without experiencing mortality; or 
cooling water intake systems where the velocities in the intake pipes 
or in any channels leading to the forebay prevent organisms from being 
able to return to the source waterbody through the intake pipe or 
channel.
    Existing facility means any facility that commenced construction as 
described in 40 CFR 122.29(b)(4) on or before January 17, 2002; and any 
modification of, or any addition of a

[[Page 22282]]

unit at such a facility that is not a new facility at Sec.  125.83.
    Flow reduction means any modification that serves to reduce the 
volume of cooling water withdrawn. Examples include, but are not 
limited to, variable speed pumps, seasonal flow reductions, wet cooling 
towers, dry cooling towers, hybrid cooling towers, and unit closures.
    Impingement means the entrapment of any 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. Impingement 
includes those organisms collected or retained on a \3/8\ inch sieve, 
and excludes those organisms that pass through a \3/8\ inch sieve.
    Impingement mortality means death as a result of impingement.
    Independent supplier means an entity, other than the regulated 
facility, that owns and operates its own cooling water intake structure 
and directly withdraws water from waters of the United States. The 
supplier provides the cooling water to other facilities for their use, 
but may also use a portion of the water itself. An entity that provides 
potable water to residential populations (e.g., public water system) is 
not a supplier for purposes of this subpart.
    Moribund means dying; close to death.
    New unit means any addition of an operating unit at an existing 
facility where the construction begins after [effective date of the 
final rule], including but not limited to a new unit added to a new or 
existing facility for the same general industrial operation, but that 
does not otherwise meet the definition of a new facility at Sec.  
125.83. New unit includes any additional unit where that unit is not 
subject to the requirements of Subpart I. For purposes of this subpart, 
new unit refers to newly built units added to increase capacity at the 
facility and does not include any rebuilt, repowered or replacement 
unit, including any units where the generation capacity of the new unit 
is equal to or greater than the unit it replaces.
    Operational measure means a modification to any operation that 
serves to minimize impact to all life stages of fish and shellfish from 
the cooling water intake structure. Examples of operational measures 
include, but are not limited to, more frequent rotation of traveling 
screens, use of a low pressure wash to remove fish prior to any high 
pressure spray to remove debris on the ascending side of a traveling 
screen, maintaining adequate volume of water in a fish return, and 
debris minimization measures such as air sparging of intake screens 
and/or other measures taken to maintain the design intake velocity.


Sec.  125.93  Compliance.

    (a) The owner or operator of a facility subject to this subpart 
must comply with the applicable BTA standards for impingement mortality 
in Sec.  125.94(b) as soon as possible based on the schedule of 
requirements set by the Director, but in no event later than [date 8 
years after the effective date of the final rule].
    (b) The owner or operator of a facility subject to this subpart 
must comply with the applicable BTA standards for entrainment mortality 
in Sec.  125.94(c) as soon as possible, based on the schedule of 
requirements set by the Director.
    (c) The owner or operator of an existing facility subject to this 
subpart that commences construction of a new unit after [effective date 
of the final rule] must comply with the BTA standards with respect to 
the new unit in Sec.  125.94(b) and Sec.  125.94(d) upon commencement 
of the new unit's operation. With respect to the existing units at the 
existing facility, the owner or operator must comply with paragraphs 
(a) and (b) of this section.


Sec.  125.94  As an owner or operator of an existing facility, what 
must I do to comply with this subpart?

    (a) Applicable BTA standards. (1) The owner or operator of an 
existing facility with a design intake flow (DIF) greater than 2 MGD is 
subject to the impingement mortality standard under paragraph (b) of 
this section.
    (2) The owner or operator of an existing facility with a design 
intake flow (DIF) greater than 2 MGD is subject to the BTA standards 
for entrainment mortality under paragraph (c) of this section. The 
owner or operator may choose instead to comply with the entrainment 
mortality standard at paragraph (d) of this section.
    (3) New units at an existing facility that are not a new facility 
under Sec.  125.83 and that have a design intake flow (DIF) greater 
than 2 MGD are subject to the BTA standards for impingement mortality 
at paragraph (b) of this section and the entrainment mortality 
standards at paragraph (d) of this section.
    (b) BTA Standards for Impingement Mortality. By the dates specified 
in Sec.  125.93, the owner or operator of an existing facility subject 
to this subpart must achieve the impingement mortality standards 
provided in paragraphs (b)(1), or (2), of this section:
    (1) The owner or operator of an existing facility must:
    (i) Achieve the following impingement mortality limitations for all 
life stages of fish that are collected or retained in a \3/8\ inch 
sieve and held for a period of 24 to 48 hours to assess latent 
mortality. The annual average comprises the average for all 
measurements taken during the preceding 12-month period. The compliance 
period for the annual average will be established by the Director.

                   Impingement Mortality Not to Exceed
------------------------------------------------------------------------
                                                             Monthly
          Regulated parameter            Annual average      average
                                           (percent)        (percent)
------------------------------------------------------------------------
Fish Impingement Mortality............              12               31
------------------------------------------------------------------------

     (ii) The owner or operator of a facility that withdraws water from 
an ocean or tidal waters must also reduce impingement mortality of 
shellfish at a minimum to a level comparable to that achieved by 
properly deployed and maintained barrier nets. Passive screens such as 
cylindrical wedgewire screens, and through-flow or carry-over free 
intake screens such as dual-flow screens and drum screens, will meet 
this requirement.
    (iii) The owner or operator of a facility that employs traveling 
screens or equivalent active screens must:
    (A) Count any fish that are included in carryover from a screen or 
removed from a screen as part of debris removal as fish impingement 
mortality.
    (B) Incorporate protective measures including but not limited to: 
modified traveling screens with collection buckets designed to minimize 
turbulence to aquatic life, addition of a guard rail or barrier to 
prevent loss of fish from the collection bucket,

[[Page 22283]]

replacement of screen panel materials with smooth woven mesh, a low 
pressure wash to remove fish prior to any high pressure spray to remove 
debris on the ascending side of the screens, and a fish handling and 
return system with sufficient water flow to return the fish to the 
source water in a manner that does not promote predation or re-
impingement of the fish.
    (iv) The owner or operator of the facility must ensure that there 
is a means for impingeable fish or shellfish to escape the cooling 
water intake system or be returned to the waterbody through a fish 
return system. Passive screens such as cylindrical wedgewire screens, 
and through-flow or carry-over free intake screens such as dual-flow 
screens and drum screens, will meet this requirement;
    (2) The owner or operator of an existing facility must demonstrate 
to the Director that its cooling water intake system has a maximum 
intake velocity of 0.5 feet per second. In addition, you must meet the 
following criteria:
    (i) The maximum velocity must be demonstrated as either the maximum 
actual intake velocity or the maximum design intake velocity as water 
passes through the structural components of a screen measured 
perpendicular to the screen mesh;
    (ii) The maximum velocity limit must be achieved under all 
conditions, including during minimum ambient source water surface 
elevations (based on BPJ using hydrological data) and during periods of 
maximum head loss across the screens or other devices during normal 
operation of the intake structure. If the intake does not have a 
screen, the maximum intake velocity perpendicular to the opening of the 
intake must not exceed 0.5 feet per second during minimum ambient 
source water surface elevations.
    (iii) Each intake must be operated and maintained to keep any 
debris blocking the intake at no more than 15 percent of the opening of 
the intake. A demonstration that the actual intake velocity is less 
than 0.5 feet per second through velocity measurements will meet this 
requirement;
    (iv) The owner or operator of a facility that withdraws water from 
the ocean or tidal waters must also reduce impingement mortality of 
shellfish at a minimum to a level comparable to that achieved by 
properly deployed and maintained barrier nets. Passive screens such as 
cylindrical wedgewire screens, and through-flow or carry-over free 
intake screens such as dual-flow screens and drum screens, will meet 
this requirement.
    (v) The owner or operator of a facility that employs traveling 
screens or equivalent active screens must:
    (A) Count any fish that are included in carryover from a screen or 
removed from a screen as part of debris removal as fish impingement 
mortality.
    (B) Incorporate protective measures including but not limited to: 
modified traveling screens with collection buckets designed to minimize 
turbulence to aquatic life, addition of a guard rail or barrier to 
prevent loss of fish from the collection bucket, replacement of screen 
panel materials with smooth woven mesh, a low pressure wash to remove 
fish prior to any high pressure spray to remove debris on the ascending 
side of the screens, and a fish handling and return system with 
sufficient water flow to return the fish to the source water in a 
manner that does not promote predation or re-impingement of the fish.
    (vi) The owner or operator of the facility must ensure that there 
is a means for impingeable fish or shellfish to escape the cooling 
water intake system or be returned to the waterbody through a fish 
return system. Passive screens such as cylindrical wedgewire screens, 
and through-flow or carry-over free intake screens such as dual-flow 
screens and drum screens, will meet this requirement;
    (c) BTA standards for entrainment mortality for existing 
facilities. The Director must establish BTA standards for entrainment 
mortality on a case-by-case basis. These standards must reflect the 
Director's determination of the maximum reduction in entrainment 
mortality warranted after consideration of all factors relevant for 
determining the best technology available at each facility, including 
the factors specified in Sec.  125.98.
    (d) BTA standards for entrainment mortality for new units at 
existing facilities. The owner or operator of a new unit at an existing 
facility must achieve the entrainment standards provided in either 
paragraph (d)(1) or (d)(2) of this section.
    (1) The owner or operator of a facility must reduce actual intake 
flow (AIF) at a new unit, at a minimum, to a level commensurate with 
that which can be attained by the use of a closed-cycle recirculating 
system for the same level of cooling. The owner or operator of a 
facility with a cooling water intake structure that supplies cooling 
water exclusively for operation of a wet or dry cooling tower(s) and 
that meets the definition of closed cycle recirculating system at Sec.  
125.92 meets this entrainment mortality standard.
    (2) The owner or operator of a facility must demonstrate to the 
Director that it has installed, and will operate and maintain, 
technologies for each intake at the new unit that reduce entrainment 
mortality of all stages of fish and shellfish that pass through a \3/8\ 
inch sieve. The owner or operator of a facility must demonstrate 
entrainment mortality reductions equivalent to 90 percent or greater of 
the reduction that could be achieved through compliance with paragraph 
(d)(1) of this section.
    (3) This standard does not apply to:
    (i) Process water, gray water, waste water, reclaimed water, or 
other waters reused as cooling water in lieu of water obtained by 
marine, estuarine, or freshwater intakes;
    (ii) Cooling water used by manufacturing facilities for contact 
cooling purposes;
    (iii) Portions of those water withdrawals for auxiliary plant 
cooling uses totaling less than two MGD;
    (iv) Any volume of cooling water withdrawals used exclusively for 
make-up water at existing closed-cycle recirculating systems. For 
facilities with a combination of closed-cycle recirculating systems and 
other cooling water systems the entrainment mortality standard does not 
apply to that portion of cooling water withdrawn as make-up water for 
the closed-cycle recirculating system;
    (v) Any quantity of emergency back-up water flows.
    (4) The Director may establish alternative requirements if:
    (i) The data specific to the facility indicate that compliance with 
the requirements of paragraphs (d)(1) or (2) of this section for the 
new unit would result in compliance costs wholly out of proportion to 
the costs EPA considered in establishing the requirements at issue or 
would result in significant adverse impacts on local air quality, 
significant adverse impacts on local water resources other than 
impingement or entrainment, or significant adverse impacts on local 
energy markets;
    (ii) The alternative requirements must achieve a level of 
performance as close as practicable to the requirements of paragraphs 
(d)(1) or (2) of this section;
    (iii) The alternative requirements will ensure compliance with 
other applicable provisions of the Clean Water Act and any applicable 
requirement of state law;
    (iv) The burden is on the owner or operator of the facility 
requesting the alternative requirement to demonstrate that alternative 
requirements should be authorized for the new unit.
    (5) For cooling water flows specified in paragraph (d) of this 
section that are

[[Page 22284]]

not subject to this standard, the Director may establish additional BTA 
standards for entrainment mortality on a case by case basis.
    (e) Nuclear facilities. If the owner or operator of a nuclear 
facility demonstrates to the Director, upon the Director's consultation 
with the Nuclear Regulatory Commission, that compliance with this 
subpart would result in a conflict with a safety requirement 
established by the Commission, the Director must make a site-specific 
determination of best technology available for minimizing adverse 
environmental impact that would not result in a conflict with the 
Commission's safety requirement.
    (f) 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 this section would not 
meet the requirements of applicable State and Tribal law, or other 
Federal law.
    (g) The owner or operator of a facility subject to this subpart 
must:
    (1) Submit and retain permit application and supporting information 
as specified in Sec.  125.95;
    (2) Conduct compliance monitoring as specified in Sec.  125.96; and
    (3) Report information and data and keep records as specified in 
Sec.  125.97.


Sec.  125.95  Permit application and supporting information 
requirements.

    (a) The Director may waive some or all of the information 
requirements of 40 CFR 122.21(r)(8), (9), (10), (11), and (12) in the 
first permit application submitted after [effective date of the final 
rule] if:
    (1) The Director has already made a BTA determination requiring 
operation commensurate with a closed-cycle recirculating system;
    (2) The owner or operator of the facility uses cooling water 
exclusively for operation of a wet or dry cooling system that meets the 
definition of closed cycle recirculating system at 40 CFR 125.92; or
    (3) The Director determines substantially all of the information 
requirements specified at 40 CFR 122.21(r)(8), (9), (10), (11), and 
(12) have already been submitted by the owner or operator.
    (b) Permit application submittal timeframe for existing facilities. 
The owner or operator of a facility subject to this subpart must submit 
to the Director the following according the following schedule:
    (1) For existing power producers with a DIF of 50 MGD or above:
    (i) Information required in 40 CFR 122.21(r)(2), (r)(3), (r)(4), 
(r)(5), (r)(6), (r)(7), and (r)(8) must be submitted to the Director no 
later than six months after [effective date of the final rule].
    (ii) Results of the Impingement Mortality Reduction Plan as 
required in 40 CFR 122.21(r)(6) must be submitted to the Director no 
later than 3 years and six months after [effective date of the final 
rule].
    (2) For existing power producers with an AIF of greater than 125 
MGD:
    (i) Information required in 40 CFR 122.21(r)(9)(i), including the 
Entrainment Mortality Data Collection Plan with peer reviewers 
identified must be submitted to the Director no later than six months 
after [effective date of the final rule].
    (ii) Information required in 40 CFR 122.21(r)(9)(ii), including the 
peer reviewed Entrainment Mortality Data Collection Plan, must be 
submitted to the Director no later than 12 months after [effective date 
of the final rule].
    (iii) Information required in 40 CFR 122.21(r)(9)(iii), including 
the completed Entrainment Characterization Study, must be submitted to 
the Director no later than 4 years after [effective date of the final 
rule].
    (iv) Information required in 40 CFR 122.21(r)(10), including the 
Comprehensive Technical Feasibility and Cost Evaluation Study, 40 CFR 
122.21(r)(11), including the Benefits Valuation Study, and 40 CFR 
122.21(r)(12), including the Non-water Quality and Other Environmental 
Impacts Study, must be submitted to the Director no later than 5 years 
after [effective date of the final rule].
    (3) For the owner or operator of all other existing facilities 
subject to this subpart, with the exception of those facilities 
identified in Sec.  125.95(b):
    (i) Information required in 40 CFR 122.21(r)(2), (r)(3), (r)(4), 
(r)(5), (r)(6), (r)(7), and (r)(8) must be submitted to the Director no 
later than three years after [effective date of the final rule].
    (ii) Results of the Impingement Mortality Reduction Plan as 
required in 40 CFR 122.21(r)(6) must be submitted to the Director no 
later than 6 years after [effective date of the final rule].
    (4) For the owner or operator of all other existing facilities 
subject to this subpart with an actual intake flow (AIF) of greater 
than 125 MGD, with the exception of those facilities identified in 
Sec.  125.95(b)(2):
    (i) Information required in 40 CFR 122.21(r)(9)(i), including the 
Entrainment Mortality Data Collection Plan, with peer reviewers 
identified, must be submitted to the Director no later than three years 
after [effective date of the final rule].
    (ii) Information required in 40 CFR 122.21(r)(9)(ii), including the 
peer reviewed Entrainment Mortality Data Collection Plan, must be 
submitted to the Director no later than three years and six months 
after [effective date of the final rule].
    (iii) Information required in 40 CFR 122.21(r)(9)(iii), including 
the completed Entrainment Characterization Study, must be submitted to 
the Director no later than 6 years and six months after [effective date 
of the final rule].
    (iv) Information required in 40 CFR 122.21(r)(10), including the 
Comprehensive Technical Feasibility and Cost Evaluation Study, 40 CFR 
122.21(r)(11), including the Benefits Valuation Study, and 40 CFR 
122.21(r)(12), including the Non-water Quality and Other Environmental 
Impacts Study, must be submitted to the Director no later than 7 years 
and six months after [effective date of the final rule].
    (c) Permit application submittal timeframe for new units. For the 
owner or operator of any new units at existing facilities subject to 
this subpart:
    (1) Information required in 40 CFR 122.21(r)(2), (r)(3), r(4)and 
(r)(6) specific to the new unit must be submitted to the Director 6 
months prior to the commencement of operation of the new unit.
    (2) Application requirements. To demonstrate compliance of the new 
unit with requirements in Sec.  125.94(b) and (d), you must collect and 
submit to the Director the information in paragraphs (c)(2)(i), (ii), 
(iii) and (iv) of this section 6 months prior to the start of facility 
operations.
    (i) Impingement information. If you choose to comply with the 
impingement mortality requirements in Sec.  125.94(b)(1), you must 
submit a plan to implement a monitoring program as specified in Sec.  
125.96(a) upon the start of the new unit operation.
    (ii) Velocity information. If you choose to comply with the 
impingement mortality requirements in Sec.  125.94(b)(2), you must 
submit the following information 6 months prior to the start of 
facility operations:
    (A) A narrative description of the design, structure, equipment, 
and operation used to meet the velocity requirement; and
    (B) Design calculations showing that the velocity requirement will 
be met at minimum ambient source water surface elevations (based on 
best professional judgment using available hydrological data) and 
maximum head loss across the screens or other device.

[[Page 22285]]

    (iii) Flow reduction information. If you choose to comply with the 
flow reduction requirements in Sec.  125.94(d)(1), you must submit the 
following information to the Director to demonstrate that you have 
reduced your flow to a level commensurate with that which can be 
attained by a closed-cycle recirculating cooling water system:
    (A) A narrative description of your system that has been designed 
to reduce your intake flow to a level commensurate with that which can 
be attained by a closed-cycle recirculating cooling water system and 
any engineering calculations, including documentation demonstrating 
that your make-up and blowdown flows have been minimized consistent 
with the definition of closed-cycle recirculating system at Sec.  
125.92; and
    (B) If the flow reduction requirement is met entirely, or in part, 
by reusing or recycling water withdrawn for cooling purposes in 
subsequent industrial processes, you must provide documentation that 
the reused or recycled water, along with other technologies you employ, 
including additional flow reductions, meets the flow reduction 
requirement of Sec.  125.94(d)(1) or the entrainment mortality 
reduction requirement of Sec.  125.94(d)(2).
    (iv) Comprehensive Demonstration Study. If you choose to comply 
with the entrainment mortality requirements in Sec.  125.94(d)(2), you 
must perform and submit the results of a Comprehensive Demonstration 
Study (Study). This information is required to characterize the source 
water baseline in the vicinity of the cooling water intake 
structure(s), characterize operation of the cooling water intake(s), 
and to confirm that the technology(ies) proposed and/or implemented at 
your cooling water intake structure reduce the impacts to fish and 
shellfish to levels comparable to those you would achieve were you to 
implement the requirements in Sec.  125.94(d)(1). To meet the 
``comparable level'' requirement, you must demonstrate that:
    (A) You have reduced entrainment mortality of all life stages of 
fish and shellfish to 90 percent or greater of the reduction that would 
be achieved through Sec.  125.94(d)(1); and
    (B) You must develop and submit a plan to the Director containing a 
proposal for how information will be collected to support the study. 
The plan must include:
    (1) A description of the proposed and/or implemented 
technology(ies) to be evaluated in the Study;
    (2) A list and description of any historical studies characterizing 
the physical and biological conditions in the vicinity of the proposed 
or actual intakes and their relevancy to the proposed Study. If you 
propose to rely on existing source water body data, it must be no more 
than 5 years old, you must demonstrate that the existing data are 
sufficient to develop a scientifically valid estimate of potential 
entrainment impacts, and provide documentation showing that the data 
were collected using appropriate quality assurance/quality control 
procedures;
    (3) Any public participation or consultation with Federal or State 
agencies undertaken in developing the plan; and
    (4) A sampling plan for data that will be collected using actual 
field studies in the source water body. The sampling plan must document 
all methods and quality assurance procedures for sampling, and data 
analysis. The sampling and data analysis methods you propose must be 
appropriate for a quantitative survey and based on consideration of 
methods used in other studies performed in the source water body. The 
sampling plan must include a description of the study area (including 
the area of influence of the cooling water intake structure and at 
least 100 meters beyond); taxonomic identification of the sampled or 
evaluated biological assemblages (including all life stages of fish and 
shellfish); and sampling and data analysis methods.
    (C) You must submit documentation of the results of the Study to 
the Director. Documentation of the results of the Study must include:
    (1) Source Water Biological Study. If your new unit will use a new 
cooling water intake structure, you must update your Source Water 
Biological Study to include:
    (i) A taxonomic identification and characterization of aquatic 
biological resources including: a summary of historical and 
contemporary aquatic biological resources; 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 multiple years of data to capture the seasonal and 
daily activities (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;
    (ii) An identification of all threatened or endangered species that 
might be susceptible to entrainment by the proposed cooling water 
intake structure(s); and
    (iii) A description of additional chemical, water quality, and 
other anthropogenic stresses on the source waterbody.
    (2) Evaluation of potential cooling water intake structure effects. 
This evaluation will include:
    (i) Calculations of the reduction in entrainment mortality of all 
life stages of fish and shellfish that would need to be achieved by the 
technologies you have selected to implement to meet requirements under 
Sec.  125.94(d)(1). To do this, you must determine the reduction in 
entrainment mortality that would be achieved by implementing the 
requirements of Sec.  125.94(d)(1) at your site.
    (ii) An engineering estimate of efficacy for the proposed and/or 
implemented technologies used to minimize entrainment mortality of all 
life stages of fish and shellfish. You must demonstrate that the 
technologies reduce entrainment mortality of all life stages of fish 
and shellfish to a comparable level to that which you would achieve 
were you to implement the requirements in Sec.  125.94(d)(1). The 
efficacy projection must include a site-specific evaluation of 
technology(ies) suitability for reducing impingement mortality and 
entrainment based on the results of the Source Water Biological Study 
of this section. Efficacy estimates may be determined based on case 
studies that have been conducted in the vicinity of the cooling water 
intake structure and/or site-specific technology prototype studies.
    (3) Verification monitoring plan. You must include in the Study the 
following: 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. The verification study must begin 
at the start of operations of the cooling water intake structure and 
continue for a sufficient period of time to demonstrate that the 
facility is reducing the level of entrainment to the level documented 
in paragraph (c)(2) of this section. The plan must describe the 
frequency of monitoring and the parameters to be monitored. The 
Director will use the verification monitoring to confirm that you are 
meeting the level of entrainment mortality reduction required in Sec.  
125.94(d), and that the operation of the technology has been optimized.
    (d) After the initial submission of the 40 CFR 122.21(r) 
application studies, the owner or operator of a facility may, in 
subsequent permit applications, request to reduce the information

[[Page 22286]]

required, if conditions at the facility and in the waterbody remain 
substantially unchanged since the previous application so long as the 
relevant previously submitted information remains representative of 
current source water, intake structure, cooling water system, and 
operating conditions. The owner or operator of a facility must submit 
its request for reduced cooling water intake structure and waterbody 
application information to the Director at least one year prior to the 
expiration of its NPDES permit. The owner or operator's request must 
identify each element in this subsection that it determines has not 
substantially changed since the previous permit application and the 
basis for the determination. The Director has the discretion to accept 
or reject any part of the request.
    (e) After issuance of the first permit pursuant to this subpart, 
the owner or operator of a facility must:
    (1) Commence information collection activities pursuant to this 
subsection no later than eighteen months prior to permit expiration;
    (2) Submit all required 40 CFR 122.21(r) application studies, or 
the reduced permit application studies if approved by the Director 
under Sec.  125.95, to the Director no later than six months prior to 
permit expiration.
    (f) The Director has the discretion to request or determine 
additional information to supplement the permit application process, 
including inspection of the facility.
    (g) Permit application records. The owner or operator of a facility 
must keep records of all submissions that are part of its permit 
application for a minimum of 5 years to document compliance with the 
requirements of this section. If the Director approves a request for 
reduced permit application studies under Sec.  125.95(d), the owner or 
operator of a facility must keep records of all submissions that are 
part of the previous permit application for an additional 5 years.


Sec.  125.96  Monitoring requirements.

    (a) Monitoring requirements for impingement mortality. The owner or 
operator of an existing facility subject to Sec.  125.94(b) must 
monitor as follows:
    (1) Permit compliance monitoring is required at each intake, or 
where appropriate other points of compliance as approved by the 
Director including but not limited to forebays, barrier nets, or fish 
handling and return systems, to demonstrate compliance with the 
impingement mortality limitations listed in Sec.  125.94(b).
    (2) You must collect samples to monitor impingement rates (simple 
enumeration) for each species over a 24-hour period and no less than 
once per month when the cooling water intake structure is in operation.
    (3) If the Director has approved a compliance alternative provided 
under Sec.  125.94(b)(2), the monitoring requirement in paragraphs 
(a)(1) and (a)(2) of this section is waived.
    (4) Compliance monitoring for intake velocity. If your facility is 
subject to Sec.  125.94(b)(2) and you cannot document a design intake 
flow for the intake equal to or less than 0.5 feet per second under all 
conditions, including during minimum ambient source water surface 
elevations (based on BPJ using hydrological data) and maximum head loss 
across the screens, compliance monitoring is required to demonstrate 
the intake velocity is consistent with the requirements of Sec.  
125.94(b)(2). The frequency of monitoring must be no less than twice 
per week.
    (b) Monitoring requirements for entrainment mortality for new 
units. Monitoring is required to demonstrate compliance with the 
requirements of Sec.  125.94(d).
    (1) If you are required to demonstrate flow reductions consistent 
with the requirements of Sec.  125.94(d)(1), the frequency of 
monitoring must be no less than once per week and must be 
representative of normal operating conditions. Flow monitoring must 
include measuring cooling water withdrawals, make-up water, and 
blowdown volume. The Director may require additional monitoring 
necessary to demonstrate compliance with Sec.  125.94(d).
    (2) If you are required to demonstrate reductions consistent with 
the requirements of Sec.  125.94(d)(2), you must monitor entrainable 
organisms that pass through a 3/8-inch sieve at a proximity to the 
intake that is representative of the entrainable organisms in the 
absence of the intake structure. You must also monitor the latent 
entrainment mortality in front of the intake structure. Mortality after 
passing the cooling water intake structure must be counted as 100 
percent mortality unless you have demonstrated to the approval of the 
Director that the mortality for each species of concern is less than 
100 percent. Samples must be representative of the cooling water intake 
when the structure is in operation. In addition, sufficient samples 
must be collected to allow for calculation of annual average 
entrainment levels of all life stages of fish and shellfish. Specific 
sampling protocols and frequency of sampling will be determined by the 
Director. The sampling must measure the total count of entrainable 
organisms or density of organisms, unless the Director approves of a 
different metric for such measurements. In addition, you must monitor 
the AIF for each intake. The AIF must be measured at the same time as 
the samples of entrainable organisms are collected. The Director may 
require additional monitoring necessary to demonstrate compliance with 
Sec.  125.94(d).
    (c) Visual or remote inspections. You must either conduct visual 
inspections or employ remote monitoring devices during the period the 
cooling water intake structure is in operation. You must conduct such 
inspections at least weekly to ensure that any technologies installed 
to comply with Sec.  125.94 are maintained and operated to ensure that 
they will continue to function as designed. The Director may establish 
alternative procedures for use during periods of inclement weather.


Sec.  125.97  Other permit reporting and recordkeeping requirements.

    The owner or operator of an existing facility subject to this 
subpart is required to submit to the Director the following 
information:
    (a) Monitoring reports. You must include the applicable impingement 
mortality and entrainment mortality monitoring reports with both your 
Discharge Monitoring Reports (DMRs) (or equivalent State reports) and 
your permit annual report to the Director.
    (1) Impingement mortality. If you intend to comply with the 
Impingement Mortality requirements by biological measurements, your 
report must describe the compliance measurement location for each 
intake, the species of concern, the counts and percentage mortality of 
organisms sampled, the time period for evaluating latent mortality 
effects, and other information specified in the permit. If you intend 
to comply with the Impingement Mortality requirements by demonstrating 
an intake velocity of less than 0.5 feet per second, your report must 
describe the compliance measurement location for each intake, the 
method for velocity measurements, the intake velocity measurements and 
calculations, and other information specified in the permit.
    (2) Impingement mortality compliance monitoring. Your report must 
contain impingement mortality compliance monitoring data to document 
compliance with the requirements of Sec.  125.94(b) for each intake. If 
you intend to comply with the Impingement Mortality requirements by 
biological measurements, you must also

[[Page 22287]]

update and submit your calculated annual average for each month covered 
by the report. The annual average comprises the average for all 
measurements taken during the preceding 12-month period.
    (3) Entrainment mortality at existing facilities. The Director will 
determine what (if any) other reporting requirements are necessary.
    (4) Entrainment mortality for new units at existing facilities. The 
owner or operator of a facility complying with Sec.  125.94(d) must 
describe the compliance measurement location for the facility, the 
species of concern, the counts and percentage mortality of organisms 
sampled, and other information specified in the permit.
    (5) Entrainment mortality compliance monitoring for new units at 
existing facilities. The owner or operator of a facility must submit 
monthly reports containing compliance monitoring data to document 
compliance with the requirements of Sec.  125.94(d)(1) or (d)(2).
    (i) For compliance with Sec.  125.94(d)(1), flow measurements of 
water withdrawn for make-up and blowdown.
    (ii) For compliance with Sec.  125.94(d)(2), measurements of 
entrainment mortality, and your monthly actual intake flow. You must 
also update and submit your calculated annual average of entrainment 
mortality. The annual average comprises the average for all 
measurements taken during the preceding 12-month period.
    (b) Status reports. If you have a schedule established under Sec.  
125.93 you must submit a quarterly status report as to the progress of 
meeting the applicable standards. These reports may include updates on 
pilot study results, construction schedules, maintenance outages, or 
other appropriate topics.
    (c) Annual certification statement and report. You must submit an 
annual certification statement signed by the responsible corporate 
officer as defined in 40 CFR 403.12(l) or 40 CFR 122.22. This statement 
must include, at a minimum the following information:
    (1) An annual certification statement which indicates that each 
technology as approved by the Director is being maintained and operated 
as set forth in its permit, or a justification to allow modification of 
the practices listed in the facility's most recent annual 
certification.
    (2) If your facility is subject to BTA standards for impingement 
mortality or entrainment mortality specified in Sec.  124.94(b)(2) or 
(d)(2), you must include a statement in your annual certification that 
specifies the information submitted in your most recent annual 
certification is still valid and appropriate or a justification to 
allow modification of the practices listed in the most recent annual 
certification.
    (i) If you cannot document that you are operating a closed-cycle 
recirculating system, you must also submit data and information in the 
annual certification statement documenting compliance with the 
requirement in Sec.  124.94(d)(1) that flow commensurate with a closed-
cycle recirculating system is met.
    (ii) If your facility is subject to the Impingement Mortality 
Standard specified in Sec.  125.94(b)(2) and you cannot document a 
design intake velocity for the intake equal to or less than 0.5 feet 
per second, you must also submit data and information in the annual 
certification documenting compliance with the intake velocity 
requirements.
    (3) If the information contained in the previous year's annual 
certification is still applicable, you may simply state as such in a 
letter to the Director, and the letter, along with any applicable data 
submission requirements specified in this section shall constitute the 
annual certification. However, if you have substantially modified 
operation of any unit at your facility that impacts cooling water 
withdrawals or operation of your cooling water intake structures, you 
must submit revisions to the information required in the permit 
application.
    (d) Permit reporting records retention. You must keep records of 
all submissions that are part of the permit reporting requirements of 
this section for a period of at least five (5) years from the date of 
permit issuance.
    (e) The Director has the discretion to require additional 
supplemental permit reporting when necessary to establish permit 
compliance and may provide for periodic inspection of the facility.


Sec.  125.98  Director requirements.

    (a) Permit application. The Director must review the materials 
submitted on a timely basis by the applicant under Sec.  122.21(r) 
before each permit renewal or reissuance to determine compliance with 
all applicable requirements. The Director is encouraged to provide 
comments expeditiously so that the permit applicant may modify its 
information gathering activities and provide any necessary supplemental 
materials.
    (b) Alternate schedule. When the Director establishes an alternate 
schedule under Sec.  125.93, the schedule must provide for compliance 
as expeditiously as possible. In no event may the schedule provide for 
compliance beyond the dates specified in Sec.  125.93. In establishing 
the schedule, the Director is encouraged to consider the extent to 
which those technologies proposed to be implemented to meet the 
requirements of Sec.  125.94(c) and/or (d) will be used, or may 
otherwise affect choice of technology(ies), to meet the requirements of 
Sec.  125.94(b). When establishing a schedule for electric power 
generating facilities, the Director should consider measures to 
maintain adequate energy reliability and necessary grid reserve 
capacity during any facility outage. These may include establishing a 
staggered schedule for multiple facilities serving the same localities. 
The Director may consult with local and regional electric power 
agencies when establishing a schedule for electric power generating 
facilities. The Director may determine that extenuating circumstances 
(e.g., lengthy scheduled outages, future production schedules) warrant 
establishing a different compliance date for any manufacturing 
facility. In no event may the schedule provide for compliance beyond 
the dates specified in Sec.  125.93.
    (c) Species of concern. The Director must review and approve the 
species of fish and shellfish identified as species of concern, 
including but not limited to:
    (1) Any species of concern identified using the source water 
baseline biological characterization data submitted under 40 CFR 
122.21(r)(4);
    (2) Any fish and shellfish identified for evaluation under Sec.  
125.94;
    (3) Data submitted as part of the impingement mortality reduction 
plan under 40 CFR 122.21(r)(6);
    (4) Data submitted as part of the site-specific entrainment 
mortality data collection plan under 40 CFR 122.21(r)(9);
    (5) The Director may request additional information in determining 
the site-specific species of concern and any additional fish and 
shellfish to be included in the impingement mortality reduction plan 
and, where applicable, the entrainment mortality data collection plan;
    (6) The Director may determine invasive species, naturally moribund 
species, and other specific species may be excluded from any 
monitoring, sampling, or study requirements of 40 CFR 122.21 and Sec.  
125.94.
    (7) The Director may consider data submitted by other interested 
parties.
    (d) Site-specific impingement mortality reduction plan. The 
Director must review and approve the site-specific Impingement 
Mortality Reduction Plan required under 40 CFR 122.21(r)(6). The plan 
must include, at a minimum, the duration and frequency

[[Page 22288]]

of required monitoring, the monitoring location, the organisms to be 
monitored and, where appropriate, the method in which naturally 
moribund organisms would be identified and taken into account.
    (e) Site-specific entrainment mortality controls. The Director must 
establish case-by-case BTA standards for entrainment mortality for any 
facility subject to such requirements after reviewing the information 
submitted under 40 CFR 122.21(r) and Sec.  125.95. These entrainment 
mortality controls must reflect the Director's determination of the 
maximum reduction in entrainment mortality warranted after 
consideration of factors relevant for determining the best technology 
available at each facility. Prior to any permit renewal, the Director 
must review the performance of the entrainment mortality technologies 
used and determine that they continue to meet the BTA requirements of 
Sec.  125.94(c). The Director must provide a written explanation of the 
proposed BTA determination in the fact sheet pursuant to 40 CFR 124.8 
(or statement of basis pursuant to 40 CFR 124.7) for the proposed 
permit. The written explanation must describe why the Director has 
rejected any entrainment mortality control technologies or measures 
that are better performing than the selected technologies or measures, 
and must reflect consideration of all reasonable attempts to mitigate 
any adverse impacts of otherwise available better performing 
entrainment technologies. The Director may reject an otherwise 
available technology as BTA standards for entrainment mortality if the 
social costs of compliance are not justified by the social benefits, or 
if there are adverse impacts that cannot be mitigated that the Director 
deems to be unacceptable. If all technologies considered have social 
costs not justified by the social benefit, or have unacceptable adverse 
impacts that cannot be mitigated, the Director may determine that no 
additional control requirements are necessary beyond what the facility 
is already doing. At a minimum, the proposed determination in the fact 
sheet or statement of basis must be based on consideration of the 
following factors:
    (1) Numbers and types of organisms entrained;
    (2) Entrainment impacts on the waterbody;
    (3) Quantified and qualitative social benefits and social costs of 
available entrainment technologies, including ecological benefits and 
benefits to any threatened or endangered species;
    (4) Thermal discharge impacts;
    (5) Impacts on the reliability of energy delivery within the 
immediate area;
    (6) Impact of changes in particulate emissions or other pollutants 
associated with entrainment technologies;
    (7) Land availability inasmuch as it relates to the feasibility of 
entrainment technology; and
    (8) Remaining useful plant life; and
    (9) Impacts on water consumption.
    (f) Ongoing permitting proceedings. Where ongoing permit 
proceedings have begun prior to [effective date of the final rule] and 
the Director has determined that the information already submitted by 
the owner or operator of the facility is substantially the same as 
required under 40 CFR 122.21(r)(9), (10), (11) and (12), the Director 
may proceed with any site-specific determination of BTA standards for 
entrainment mortality without requiring the owner or operator of the 
facility to resubmit the information required in 40 CFR 122.21(r)(9), 
(10), (11) and (12), and the Director may choose to address the factors 
specified in Sec.  125.98(e). If the Director has received permit 
application information from the owner or operator of the facility, and 
the Director has determined that the information is substantially the 
same as required under 40 CFR 122.21(r)(9), (10), (11) and (12) but the 
Director has not yet made a BTA standards for entrainment mortality 
determination, the Director must address the factors specified in Sec.  
125.98 (e). In all subsequently issued permits for that facility the 
Director must address the factors specified in Sec.  125.98 (e).
    (g) Site-specific entrainment mortality data collection plan and 
studies. The Director must review and approve the site-specific 
entrainment mortality data collection plan for new units at existing 
facilities. The plan must include, at a minimum, the duration and 
frequency of monitoring, the monitoring location, the organisms to be 
monitored, and the method in which latent mortality would be 
identified. The Director may require the owner or operator of a 
facility to include additional peer reviewers for the entrainment 
mortality data collection plan, the comprehensive technical feasibility 
and cost evaluation study, the benefits valuation study, and the non-
water quality and other environmental impacts assessment.
    (h) Annual certification statement. The Director must review and 
verify the Annual Certification Statement required under Sec.  
125.97(c).
    (i) Additional information. In implementing the Director's 
responsibilities under this provision, the Director is authorized to 
request additional necessary information and to inspect the facility.


Sec.  125.99  [Reserved]

[FR Doc. 2011-8033 Filed 4-19-11; 8:45 am]
BILLING CODE 6560-50-P