[Federal Register Volume 68, Number 92 (Tuesday, May 13, 2003)]
[Rules and Regulations]
[Pages 25686-25745]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 03-4258]



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Part II





Environmental Protection Agency





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40 CFR Part 438



Effluent Limitations Guidelines and New Source Performance Standards 
for the Metal Products and Machinery Point Source Category; Final Rule

Federal Register / Vol. 68, No. 92 / Tuesday, May 13, 2003 / Rules 
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 438

[FRL-7453-6]
RIN 2040-AB79


Effluent Limitations Guidelines and New Source Performance 
Standards for the Metal Products and Machinery Point Source Category

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is publishing final regulations establishing Clean Water 
Act (CWA) technology-based effluent limitations guidelines for the 
metal products and machinery (MP&M) point source category. The metal 
products and machinery point source category includes facilities that 
manufacture, rebuild, or maintain metal products, parts, or machines. 
EPA is promulgating limitations and standards only for facilities that 
directly discharge wastewaters from oily operations in the Oily Wastes 
subcategory.
    EPA expects compliance with this regulation to reduce the discharge 
of conventional pollutants by approximately 500,000 pounds per year. 
EPA estimates the annual cost of the rule will be $13.8 million (pre-
tax $2001). EPA estimates that the annual benefits of the rule to be 
approximately $1.5 million ($2001).

DATES: This regulation shall become effective June 12, 2003.

ADDRESSES: The administrative record is available for inspection and 
copying at the Water Docket, located at the EPA Docket Center (EPA/DC) 
in the basement of the EPA West Building, Room B-102, 1301 Constitution 
Ave., NW., Washington, DC. The rule and key supporting materials are 
also electronically available via EPA Dockets (Edocket) at http://
www.epa.gov/edocket/ under Edocket number OW-2002-0033 or at http://
www.epa.gov/guide/mpm/.

FOR FURTHER INFORMATION CONTACT: For technical information concerning 
today's final rule, contact Mr. Carey A. Johnston at (202) 566-1014 or 
Ms. Shari Z. Barash at (202) 566-0996. For economic information contact 
Mr. James Covington at (202) 566-1034.

SUPPLEMENTARY INFORMATION:

What Entities Are Potentially Regulated by This Final Rule?

    Entities potentially regulated by this action include facilities 
that directly discharge wastewaters from oily operations and include 
the following types:

------------------------------------------------------------------------
           Category                  Examples of regulated entities
------------------------------------------------------------------------
Industry.....................  Facilities that discharge wastewater from
                                oily operations and manufacture,
                                maintain, or rebuild metal parts,
                                products or machines used in the
                                following sectors: Aerospace, Aircraft,
                                Bus & Truck, Electronic Equipment,
                                Hardware, Household Equipment,
                                Instruments, Mobile Industrial
                                Equipment, Motor Vehicles, Office
                                Machines, Ordnance, Precious Metals and
                                Jewelry, Railroad, Ships and Boats,
                                Stationary Industrial Equipment, and
                                Miscellaneous Metal Products.
Government...................  State and local government facilities
                                that discharge wastewater from oily
                                operations and manufacture, maintain, or
                                rebuild metal parts, products or
                                machines in one of the sectors
                                previously listed (e.g., a town that
                                operates its own bus, truck, and/or snow
                                removal equipment maintenance facility).
                               Federal facilities that discharge
                                wastewater from oily operations and
                                manufacture, maintain, or rebuild metal
                                parts, products or machines.
------------------------------------------------------------------------
Note: The term ``oily operations'' is defined at 40 CFR 438.2(f) and
  appendix B of part 438.
Note: See Appendix A of the TDD for a list of example NAICS and SIC
  codes that may apply to facilities regulated by MP&M.

    EPA does not intend the preceding table to be exhaustive, but 
rather it provides a guide for readers regarding entities likely to be 
regulated by this action. This table lists the types of entities that 
EPA is now aware could potentially be regulated by this action. Other 
types of entities not listed in the table could also be regulated. To 
determine whether your facility is regulated by this action, you should 
carefully examine the applicability criteria listed at 40 CFR 438.1 and 
438.10 of today's rule. If you still have questions regarding the 
applicability of this action to a particular entity, consult one of the 
persons listed for technical information in the preceding FOR FURTHER 
INFORMATION CONTACT section.

How Can I Get Copies of This Document and Other Related Information?

    EPA has established an official public docket for this action under 
Docket ID. No. OW-2002-0033. The official public docket is the 
collection of materials that is available for public viewing at the 
Water Docket in the EPA Docket Center (EPA/DC) in the basement of EPA 
West, Room B102, 1301 Constitution Ave., NW., Washington DC. The EPA 
Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., 
Monday through Friday, excluding legal holidays. The telephone number 
for the Public Reading Room is (202) 566-1744, and the telephone number 
for the Water Docket is (202) 566-2426. For access to the docket 
materials, please call ahead to schedule an appointment. A reasonable 
fee may be charged for photocopying.
    An electronic version of the public docket is available through 
EPA's electronic public docket and comment system, EPA Dockets. You may 
use EPA Dockets at http://www.epa.gov/edocket/ to view public comments, 
access the index listing of the contents of the official public docket, 
and to access those documents in the public docket that are available 
electronically. Although not all docket materials may be available 
electronically, you may still access any of the publicly available 
docket materials through the docket facility previously identified. 
Once in the system, select ``search,'' then key in the appropriate 
docket identification number (OW-2002-0033).
    Major supporting documents are also available in hard copy from the 
National Service Center for Environmental Publications (NSCEP), U.S. 
EPA/NSCEP, PO Box 42419, Cincinnati, Ohio, USA 45242-2419, (800) 490-
9198, http://www.epa.gov/ncepihom/. You can obtain electronic copies of 
this preamble and rule as well as major supporting documents at EPA 
Dockets at http://www.epa.gov/edocket/ and http://www.epa.gov/guide/
mpm. The two major documents supporting the final regulations are:
    [sbull] ``Development Document for the Final Effluent Limitations 
Guidelines and Standards for the Metal Products & Machinery Point 
Source Category'' [EPA-821-B-03-001] referred to in the preamble as the 
Technical Development Document (TDD): This document presents the 
technical information that formed the basis for EPA's decisions in 
today's final rule. The TDD describes, among other things, the data 
collection activities, the wastewater treatment

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technology options considered by the Agency as the basis for effluent 
limitations guidelines and standards, the pollutants found in MP&M 
wastewaters, and the estimation of pollutant removals associated with 
certain pollutant control options.
    [sbull] ``Economic, Environmental, and Benefits Analysis of the 
Final Metal Products & Machinery Rule'' [EPA-821-B-03-002] referred to 
in the preamble as the Economic, Environmental, and Benefits Analysis 
(EEBA): This document presents the methodology employed to assess 
economic impacts and environmental impacts and benefits of the final 
rule and the results of the analysis.

What Process Governs Judicial Review for Today's Final Rule?

    In accordance with 40 CFR 23.2, today's rule is considered 
promulgated for the purposes of judicial review as of 1 p.m. Eastern 
Daylight Time, May 27, 2003. Under section 509(b)(1) of the Clean Water 
Act (CWA), judicial review of today's effluent limitations guidelines 
and standards may be obtained by filing a petition in the United States 
Circuit Court of Appeals for review within 120 days from the date of 
promulgation of these guidelines and standards. Under section 509(b)(2) 
of the CWA, the requirements of this regulation may not be challenged 
later in civil or criminal proceedings brought by EPA to enforce these 
requirements.

What Are the Compliance Dates for Today's Final Rule?

    Existing direct dischargers must comply with today's limitations 
based on the best practicable control technology currently available 
(BPT) and the best conventional pollutant control technology (BCT) as 
soon as their National Pollutant Discharge Elimination System (NPDES) 
permits include such limitations. New direct discharging sources must 
comply with applicable new source performance standards (NSPS) on the 
date the new sources begin discharging. For purposes of NSPS, a source 
is a new source if it commences construction after June 12, 2003.

How Does EPA Protect Confidential Business Information (CBI)?

    EPA notes that certain information and data in the record 
supporting the final rule have been claimed as CBI and, therefore, EPA 
has not included these materials in the record that is available to the 
public in the Water Docket. Further, the Agency has withheld from 
disclosure some data not claimed as CBI because release of this 
information could indirectly reveal information claimed to be 
confidential. To support the rulemaking while preserving 
confidentiality claims, EPA is presenting in the public record certain 
information in aggregated form or, alternatively, is masking facility 
identities or employing other strategies. This approach assures that 
the information in the public record explains the basis for today's 
final rule without compromising CBI claims.

How Is This Preamble Organized?

    The following outline is for the preamble to the final rule. It is 
written in plain language designed to help the reader understand the 
information in the final rule. This preamble contains a short summary 
of what was proposed, the key comments that the Environmental 
Protection Agency (EPA) received on the proposed rule, and the 
principal bases for EPA's decisions.

I. Legal Authority
II. Legislative Background
    A. Clean Water Act
    B. Pollution Prevention Act
    C. Section 304(m) Requirements
III. Metal Products & Machinery Effluent Guidelines Rulemaking 
History
    A. 1995 and 2001 Proposed Regulations
    B. June 2002 Notice of Data Availability
IV. Summary of Significant Decisions
    A. Decisions Regarding the Content of the Regulation
    B. Decisions Regarding Methodology
V. Scope/Applicability of the Final Regulation
    A. General Overview and Wastewaters Covered
    B. Subcategorization
VI. The Final Regulation
    A. General Metals Subcategory
    B. Metal Finishing Job Shops Subcategory
    C. Printed Wiring Board Subcategory
    D. Non-Chromium Anodizing Subcategory
    E. Steel Forming & Finishing Subcategory
    F. Oily Wastes Subcategory
    G. Railroad Line Maintenance Subcategory
    H. Shipbuilding Dry Dock Subcategory
VII. Pollutant Reduction and Compliance Cost Estimates
    A. Pollutant Reductions
    B. Regulatory Costs
VIII. Economic Analyses
    A. Introduction and Overview
    B. Economic Costs of Technology Options by Subcategory
    C. Facility Level Economic Impacts of the Final Rule by 
Subcategory
    D. Firm Level Impacts
    E. Impacts on Government-Owned Facilities
    F. Community Level Impacts
    G. Foreign Trade Impacts
    H. Administrative Costs
    I. Social Costs
    J. Cost and Removal Comparison Analysis
    K. Cost-Effectiveness Analysis
IX. Water Quality Analysis and Environmental Benefits
    A. Introduction and Overview
    B. Reduced Human Health Risk
    C. Improved Ecological Conditions and Recreational Uses
    D. Effect on POTW Operations
    E. Summary of Benefits
    F. National Cost-Benefit Comparison
    G. Ohio Case Study
X. Non-Water Quality Environmental Impacts
    A. Air Pollution
    B. Solid Waste
    C. Energy Requirements
XI. Regulatory Implementation
    A. Implementation of the Limitations and Standards for Direct 
Dischargers
    B. Upset and Bypass Provisions
    C. Variances and Modifications
XII. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health & 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. Congressional Review Act

Appendix A To The Preamble: Abbreviations, Acronyms, and Other Terms 
Used in Today's Final Rule

I. Legal Authority

    The U.S. Environmental Protection Agency is promulgating these 
regulations under the authority of sections 301, 304, 306, 307, 308, 
402, and 501 of the Clean Water Act, 33 U.S.C. 1311, 1314, 1316, 1317, 
1318, 1342, and 1361 and under authority of the Pollution Prevention 
Act of 1990 (PPA), 42 U.S.C. 13101 et seq., Public Law 101-508, 
November 5, 1990.

II. Legislative Background

A. Clean Water Act

    Congress adopted the Clean Water Act (CWA) to ``restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters'' (section 101(a), 33 U.S.C. 1251(a)). To achieve this 
goal, the CWA prohibits the discharge of pollutants into navigable 
waters except in compliance with the statute. The Clean Water Act 
confronts the problem of water pollution on a number of different 
fronts. Its primary reliance, however, is on establishing restrictions 
on the types and amounts of pollutants discharged from various 
industrial, commercial, and public sources of wastewater.

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    Congress recognized that regulating only those sources that 
discharge effluent directly into the nation's waters would not be 
sufficient to achieve the CWA's goals. Consequently, the CWA requires 
EPA to promulgate nationally applicable pretreatment standards that 
restrict pollutant discharges from facilities that discharge wastewater 
through sewers flowing to publicly-owned treatment works (POTWs) 
(section 307(b) and (c), 33 U.S.C. 1317(b) and (c)). National 
pretreatment standards are established for those pollutants in 
wastewater from indirect dischargers which pass through, interfere 
with, or are otherwise incompatible with POTW operations. Generally, 
pretreatment standards are designed to ensure that wastewater from 
direct and indirect industrial dischargers are subject to similar 
levels of treatment. In addition, POTWs are required to develop and 
enforce local pretreatment limits applicable to their industrial 
indirect dischargers to satisfy any local requirements (see 40 CFR 
403.5).
    Direct dischargers must comply with effluent limitations in 
National Pollutant Discharge Elimination System (NPDES) permits; 
indirect dischargers must comply with pretreatment standards. These 
limitations and standards are established by regulation for categories 
of industrial dischargers and are based on the degree of control that 
can be achieved using various levels of pollution control technology.
1. Best Practicable Control Technology Currently Available (BPT)--
Section 304(b)(1) of the CWA
    In the regulations, EPA defines BPT effluent limitations for 
conventional, toxic, and non-conventional pollutants. Section 304(a)(4) 
designates the following as conventional pollutants: biochemical oxygen 
demand (BOD5), total suspended solids (TSS), fecal coliform, 
pH, and any additional pollutants defined by the Administrator as 
conventional. The Administrator designated oil and grease (O&G) as an 
additional conventional pollutant on July 30, 1979 (see 44 FR 44501). 
EPA has identified 65 pollutants and classes of pollutants as toxic 
pollutants, of which 126 specific substances have been designated 
priority toxic pollutants (see Appendix A to part 403, reprinted after 
40 CFR 423.17). All other pollutants are considered to be non-
conventional.
    In specifying BPT, EPA looks at a number of factors. EPA first 
considers the total cost of applying the control technology in relation 
to the effluent reduction benefits. The Agency also considers the age 
of the equipment and facilities, the processes employed and any 
required process changes, engineering aspects of the control 
technologies, non-water quality environmental impacts (including energy 
requirements), and such other factors as the EPA Administrator deems 
appropriate (CWA 304(b)(1)(B)). Traditionally, EPA establishes BPT 
effluent limitations based on the average of the best performances of 
facilities within the industry of various ages, sizes, processes or 
other common characteristics. Where existing performance is uniformly 
inadequate, BPT may reflect higher levels of control than currently in 
place in an industrial category if the Agency determines that the 
technology can be practically applied.
2. Best Conventional Pollutant Control Technology (BCT)--Section 
304(b)(4) of the CWA
    The 1977 amendments to the CWA required EPA to identify effluent 
reduction levels for conventional pollutants associated with BCT for 
discharges from existing industrial point sources. In addition to the 
other factors specified in section 304(b)(4)(B), the CWA requires that 
EPA establish BCT limitations after consideration of a two part ``cost-
reasonableness'' test. EPA explained its methodology for the 
development of BCT limitations in July 1986 (see 51 FR 24974).
3. Best Available Technology Economically Achievable (BAT)--Section 
304(b)(2) of the CWA
    In general, BAT effluent limitations guidelines represent the best 
available economically achievable performance of plants in the 
industrial subcategory or category. The factors considered in assessing 
BAT include the cost of achieving BAT effluent reductions, the age of 
equipment and facilities involved, the process employed, potential 
process changes, and non-water quality environmental impacts, including 
energy requirements. The Agency retains considerable discretion in 
assigning the weight to be accorded these factors. BAT limitations may 
be based on effluent reductions attainable through changes in a 
facility's processes and operations. Where existing performance is 
uniformly inadequate, BAT may reflect a higher level of performance 
than is currently being achieved within a particular subcategory based 
on technology transferred from a different subcategory or category. BAT 
may be based upon process changes or internal controls, even when these 
technologies are not common industry practice.
4. New Source Performance Standards (NSPS)--Section 306 of the CWA
    NSPS reflect effluent reductions that are achievable based on the 
best available demonstrated control technology. New sources have the 
opportunity to install the best and most efficient production processes 
and wastewater treatment technologies. As a result, NSPS should 
represent the most stringent controls attainable through the 
application of the best available demonstrated control technology for 
all pollutants (i.e., conventional, non-conventional, and priority 
pollutants). In establishing NSPS, EPA is directed to take into 
consideration the cost of achieving the effluent reduction and any non-
water quality environmental impacts and energy requirements.
5. Pretreatment Standards for Existing Sources (PSES)--Section 307(b) 
of the CWA
    PSES are designed to prevent the discharge of pollutants that pass 
through, interfere with, or are otherwise incompatible with the 
operation of publicly-owned treatment works (POTWs), including sludge 
disposal methods at POTWs. Pretreatment standards for existing sources 
are technology-based and are analogous to BAT effluent limitations 
guidelines.
    The General Pretreatment Regulations, which set forth the framework 
for the implementation of national pretreatment standards, are found at 
40 CFR 403.
6. Pretreatment Standards for New Sources (PSNS)--Section 307(c) of the 
CWA
    Like PSES, PSNS are designed to prevent the discharges of 
pollutants that pass through, interfere with, or are otherwise 
incompatible with the operation of POTWs. PSNS are to be issued at the 
same time as NSPS. New indirect dischargers have the opportunity to 
incorporate into their plants the best available demonstrated 
technologies. The Agency considers the same factors in promulgating 
PSNS as it considers in promulgating NSPS.

B. Pollution Prevention Act

    The Pollution Prevention Act of 1990 (PPA) (42 U.S.C. 13101 et 
seq., Public Law 101-508, November 5, 1990) ``declares it to be the 
national policy of the United States that pollution should be prevented 
or reduced whenever feasible; pollution that cannot be prevented should 
be recycled in an environmentally safe manner, whenever

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feasible; pollution that cannot be prevented or recycled should be 
treated in an environmentally safe manner whenever feasible; and 
disposal or release into the environment should be employed only as a 
last resort * * *'' (Sec. 6602; 42 U.S.C. 13101 (b)). In short, 
preventing pollution before it is created is preferable to trying to 
manage, treat or dispose of it after it is created. The PPA directs the 
Agency to, among other things, ``review regulations of the Agency prior 
and subsequent to their proposal to determine their effect on source 
reduction'' (Sec. 6604; 42 U.S.C. 13103(b)(2)). EPA reviewed this 
effluent guideline for its incorporation of pollution prevention.
    According to the PPA, source reduction reduces the generation and 
release of hazardous substances, pollutants, wastes, contaminants, or 
residuals at the source, usually within a process. The term source 
reduction ``include[s] equipment or technology modifications, process 
or procedure modifications, reformulation or redesign of products, 
substitution of raw materials, and improvements in housekeeping, 
maintenance, training or inventory control. The term `source reduction' 
does not include any practice which alters the physical, chemical, or 
biological characteristics or the volume of a hazardous substance, 
pollutant, or contaminant through a process or activity which itself is 
not integral to or necessary for the production of a product or the 
providing of a service.'' 42 U.S.C. 13102(5). In effect, source 
reduction means reducing the amount of a pollutant that enters a waste 
stream or that is otherwise released into the environment prior to out-
of-process recycling, treatment, or disposal.
    In these final regulations, EPA supports pollution prevention 
technology by including pollution prevention in its technology basis 
for today's limitations and new source performance standards. This 
includes water conservation and re-use of lubricants and solvents.

C. Section 304(m) Requirements

    Section 304(m) of the CWA, added by the Water Quality Act of 1987, 
requires EPA to establish schedules for: (1) Reviewing and revising 
existing effluent limitations guidelines and standards; and (2) 
promulgating new effluent guidelines. On January 2, 1990, EPA published 
an Effluent Guidelines Plan (see 55 FR 80), in which schedules were 
established for developing new and revised effluent guidelines for 
several industry categories, including the metal products and machinery 
industry. Natural Resources Defense Council, Inc., and Public Citizen, 
Inc., challenged the Effluent Guidelines Plan in a suit filed in the 
U.S. District Court for the District of Columbia, (NRDC et al., v. 
Browner, Civ. No. 89-2980). On January 31, 1992, the Court entered a 
consent decree (the ``304(m) Decree''), which establishes schedules 
for, among other things, EPA's proposal and promulgation of effluent 
guidelines for a number of point source categories. The consent decree, 
as amended, requires EPA to take final action on the Metal Products and 
Machinery effluent guidelines by February 14, 2003.

III. Metal Products & Machinery Effluent Guidelines Rulemaking History

A. 1995 and 2001 Proposed Regulations

    On May 30, 1995, EPA published a proposal entitled, ``Effluent 
Limitations Guidelines, Pretreatment Standards, and New Source 
Performance Standards: Metal Products and Machinery'' (see 60 FR 
28210). Throughout today's preamble, EPA refers to this 1995 proposal 
as the ``Phase I'' or the ``1995'' proposal for the Metal Products and 
Machinery industry. To make the regulation more manageable, EPA 
initially divided the industry into two phases based on industrial 
sectors. The Phase I proposal included the following industry sectors: 
Aerospace; Aircraft; Electronic Equipment; Hardware; Mobile Industrial 
Equipment; Ordnance; and Stationary Industrial Equipment. At that time, 
EPA planned to propose a rule for the Phase II sectors approximately 
three years after the MP&M Phase I proposal. Phase II sectors included: 
Bus & Truck, Household Equipment, Instruments, Job Shops, Motor 
Vehicles, Office Machines, Precious Metals and Jewelry, Printed Wiring 
Boards, Railroad, Ships and Boats, and Miscellaneous Metal Products.
    EPA received over 350 public comments on the Phase I proposal. One 
area where commentors from all stakeholder groups (i.e., industry, 
environmental groups, regulators) were in agreement was that EPA should 
not divide the industry into two separate regulations. Commentors 
raised concerns regarding the regulation of similar facilities with 
different compliance schedules and potentially different limitations 
solely based on whether they were in a Phase I or Phase II MP&M 
industrial sector. Furthermore, many facilities performed work in 
multiple sectors. In such cases, permit writers and control authorities 
(e.g., POTWs) would need to decide which MP&M rule (Phase I or II) 
applied to a facility. EPA's responses to comments can be found in 
section 20.3 of the docket for the rule.
    Based on these comments, EPA published a new proposal on January 3, 
2001 (see 66 FR 424) which completely replaced the 1995 proposal. 
Throughout this preamble, EPA refers to this proposal as the ``2001'' 
proposal for the Metal Products and Machinery industry. In that notice, 
EPA proposed to establish new limitations and standards for 
approximately 10,000 facilities in the 18 industrial sectors (without 
any designation of ``Phase I'' or ``Phase II''). EPA also divided the 
industry into eight regulatory subcategories: General Metals, Metal 
Finishing Job Shops, Printed Wiring Board, Non-Chromium Anodizing, 
Steel Forming & Finishing, Oily Wastes, Railroad Line Maintenance, and 
Shipbuilding Dry Docks (see 66 FR 439 for a discussion on the 
development of EPA's proposed subcategorization scheme).
    EPA found two basic types of waste streams in the industry: (1) 
Wastewater with high metals content (metal-bearing); and (2) wastewater 
with low concentration of metals, and high oil and grease content (oil-
bearing). When looking at facilities generating metal-bearing 
wastewater (with or without oil-bearing wastewater), EPA identified 
five groups of facilities that could potentially be subcategorized by 
dominant product, raw materials used, and/or nature of the waste 
generated (i.e., General Metals, Metal Finishing Job Shops, Printed 
Wiring Board, Non-Chromium Anodizing, and Steel Forming & Finishing). 
When evaluating facilities with only oil-bearing wastewater for 
potential further subcategorization, EPA identified two types of 
facilities (i.e., Railroad Line Maintenance and Shipbuilding Dry Docks) 
that were different from the other facilities in the Oily Wastes 
subcategory based on size, location, and dominant product or activity. 
This subcategorization scheme allowed EPA to more accurately assess 
various technology options in terms of compliance costs, pollutant 
reductions, benefits, and economic impacts.
    EPA proposed new limitations and standards for direct dischargers 
in all eight MP&M subcategories and proposed pretreatment standards for 
all indirect dischargers in three subcategories (i.e., Metal Finishing 
Job Shops, Printed Wiring Board, and Steel Forming & Finishing); 
pretreatment standards for facilities above a certain wastewater flow 
volume in two subcategories (i.e., General Metals and Oily Wastes); and 
no national pretreatment standards for facilities in three 
subcategories (i.e., Non-Chromium

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Anodizing, Railroad Line Maintenance, and Shipbuilding Dry Docks). EPA 
received over 1500 comment letters on the 2001 proposal. EPA's 
responses to the comments can be found in section 20.3 of the 
rulemaking.

B. June 2002 Notice of Data Availability

    On June 5, 2002, EPA published a Notice of Data Availability (NODA) 
at 67 FR 38752. In the NODA, EPA discussed major issues raised in 
comments on the 2001 proposal; suggested revisions to the technical and 
economic methodologies used to estimate compliance costs, pollutant 
loadings, and economic and environmental impacts; presented the results 
of these suggested methodology changes and incorporation of new (or 
revised) data; and summarized the Agency's thinking on how these 
results could affect the Agency's final decisions.
    The NODA also included a discussion of possible alternative options 
for certain subcategories based on comments, including an Environmental 
Management System (EMS) alternative in lieu of part 438 limitations and 
standards, and a discussion of ``upgrading'' facilities currently 
regulated under the Electroplating regulations (40 CFR part 413) to 
meet the Metal Finishing regulations (40 CFR part 433) (see 67 FR 
38797). Finally, the NODA included preliminary revised effluent 
limitations and pretreatment standards for all eight proposed 
subcategories. EPA received over 300 comment letters on the NODA. EPA's 
responses to the comments can be found in section 20.3 of the docket 
for the rule.

IV. Summary of Significant Decisions

    As the previous discussion of the development of this regulation 
explains, EPA proposed regulating discharges associated with a number 
of different operations in the MP&M industry. Thus, EPA proposed 
regulations that would have established new limitations and standards 
for approximately 10,000 facilities in 18 industrial sectors that EPA 
subcategorized in eight subcategories. Following its consideration of 
comments submitted to EPA as well as intensive scrutiny of the data 
used to develop the proposal, EPA has determined that it should only 
finalize regulations for the Oily Wastes subcategory. These regulations 
would affect approximately 2,400 facilities. The following material 
explains EPA's decisions underlying today's regulation. It discusses 
significant issues considered by EPA or raised by commentors on the May 
1995 and January 2001 proposed rules and June 2002 NODA, and how EPA 
has resolved these issues in today's final rule.

A. Decisions Regarding the Content of the Regulation

    The following discussion describes how EPA has subcategorized this 
industry in developing limitations and standards, and EPA's decisions 
about whether to subject particular subcategories to limitations and 
standards. It also identifies the pollution control technology EPA used 
as the basis for establishing limitations and standards. Next, this 
section discusses the applicability of the rule to iron and steel 
operations and to ``oily operations.'' The section also looks at the 
regulated pollutants and describes EPA decisions concerning the use of 
a ``pollution prevention'' alternative for complying with the final 
rule.
1. Subcategorization Structure
    The CWA requires EPA, in developing effluent limitations guidelines 
and pretreatment standards that reflect the best available technology 
economically achievable to consider a number of different factors. 
Among others, these include the age of the equipment and facilities in 
the category, manufacturing processes employed, types of treatment 
technology to reduce effluent discharges, and the cost of effluent 
reductions (section 304(b)(2)(b) of the CWA, 33 U.S.C. 1314(b)(2)(B)). 
The statute also authorizes EPA to take into account other factors that 
the Administrator deems appropriate.
    One way in which the Agency has taken some of these factors into 
account is by breaking down categories of industries into separate 
classes of similar characteristics. This recognizes the major 
differences among companies within an industry that may reflect, for 
example, different manufacturing processes or wastewater 
characteristics. One result of subdividing an industry by subcategories 
is to safeguard against overzealous regulatory standards, increase the 
confidence that the regulations are practicable, and diminish the need 
to address variations between facilities through a variance process 
(Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1053 (D.C. Cir. 1978)).
    As discussed in section III.A of today's final rule, in 2001 EPA 
proposed to divide the MP&M industry into eight regulatory 
subcategories based on the manufacturing, maintenance or rebuilding 
operations performed at a facility (called ``unit operations'' in this 
preamble): General Metals, Metal Finishing Job Shops, Printed Wiring 
Board, Non-Chromium Anodizing, Steel Forming & Finishing, Oily Wastes, 
Railroad Line Maintenance, and Shipbuilding Dry Docks. Based on 
comments submitted on the proposed rule and NODA, EPA has refined 
today's final subcategorization structure for the analyses performed to 
support today's final rule. For the purposes of analyzing issues in 
developing the final rule, EPA retained the eight subcategory 
structure, but altered the placement of some operations within certain 
subcategories. For example, the subcategorization approach that EPA has 
used for analyses supporting today's final rule incorporates printed 
wiring board job shops in the Printed Wiring Board subcategory (as 
opposed to the Metal Finishing Job Shop subcategory, as proposed) and 
places printed wiring assembly facilities in the General Metals 
subcategory (see 67 FR 38756).
    As discussed in the NODA, EPA also considered an additional 
subcategory for facilities that primarily perform zinc electroplating 
(``zinc platers''). Depending on whether or not these facilities 
operate as a captive or a job shop, EPA had proposed to include them as 
part of the General Metals or Metal Finishing Job Shop subcategories, 
respectively. The NODA explained that EPA was also considering: (1) 
Creating a separate subcategory for zinc platers; (2) segmenting zinc 
platers within the General Metals and Metal Finishing Job Shop 
subcategories for zinc platers; or (3) retaining the proposed 
subcategory structure and establishing numerical limitations and 
standards for zinc that would be achievable by zinc platers (see 67 FR 
38756). Commentors on the NODA supported retaining the proposed 
subcategories as long as the record demonstrated that zinc platers 
could achieve the zinc numerical limitations and standards. They raised 
concerns that creating a separate subcategory or segment to address the 
limitations for one pollutant would be confusing and difficult to 
implement. EPA did not create a separate subcategory or segment for 
zinc platers in evaluating the data for the final rule. These zinc 
platers remain subject to parts 413 and/or 433.
    Also, as discussed in the NODA, EPA considered establishing the 
Steel Forming and Finishing subcategory for wastewater discharges 
resulting from: (1) Steel forming and finishing operations (e.g., cold 
forming on steel wire, rod, bar, pipe, and tube); and (2) continuous 
electroplating of flat steel products (e.g., strip, sheet, and plate). 
EPA re-examined its database for facilities that perform continuous 
steel electroplating, and found that, contrary to its initial finding, 
continuous electroplaters do not perform operations similar to other 
facilities in this

[[Page 25691]]

subcategory (i.e., steel forming and finishing facilities performing 
cold forming on steel wire, rod, bar, pipe, and tube). Thus, EPA 
included continuous electroplaters performing electroplating and 
coating operations in the General Metals subcategory for analyses 
supporting today's final rule.
    Finally, as explained in section IV.B, based on comments and 
revisions to analytical databases, the Agency re-evaluated its 
technical and economic analyses for the final rule. EPA performed its 
re-evaluation of all proposed subcategories. As a result of this 
assessment, EPA decided to only establish effluent guidelines for the 
Oily Wastes subcategory.
2. Summary of Regulatory Decisions
    The analyses for today's final rule incorporate database changes, 
additional data, and methodological changes as discussed in the NODA 
and in section IV.B of today's preamble. Based on EPA's analyses for 
today's final rule, EPA is establishing limitations and standards for 
one of the subcategories listed in the January 2001 proposed rule. For 
others, EPA has concluded that national limitations and standards are 
not warranted. In addition, EPA is not establishing pretreatment 
standards for existing or new sources for any of the subcategories in 
today's rule. Some of today's limitations and standards are based on 
the technology options that formed the basis for the proposal while 
others are based on modified technology options.
    Table IV-1 Summarizes EPA's decisions for each subcategory 
considered for today's final rule and each regulatory level. Each of 
these decisions is further detailed in section VI of today's final 
rule.

                               Table IV-1.--Summary of Final Regulatory Decisions
----------------------------------------------------------------------------------------------------------------
                                                        Final regulation
                                      ----------------------------------------------------   Section of today's
        Subcategory considered             Discharger status        Selected technology          final rule
                                          (regulatory level)              option
----------------------------------------------------------------------------------------------------------------
General Metals.......................  Direct Dischargers (BPT/  No new or revised         VI.A.1-4
                                        BCT/BAT/NSPS).            limitations or
                                                                  standards established.
                                       Indirect Dischargers      No new or revised         VI.A.5-6
                                        (PSES/PSNS).              standards established.
Metal Finishing Job Shop.............  Direct Dischargers (BPT/  No revised limitations    VI.B.1-2
                                        BCT/BAT/NSPS).            or standards
                                                                  established.
                                       Indirect Dischargers      No revised standards      VI.B.3-4
                                        (PSES/PSNS).              established.
Printed Wiring Board.................  Direct Dischargers (BPT/  No revised limitations    VI.C.1-2
                                        BCT/BAT/NSPS).            or standards
                                                                  established.
                                       Indirect Dischargers      No revised standards      VI.C.3-4
                                        (PSES/PSNS).              established.
Non-Chromium Anodizing...............  Direct Dischargers (BPT/  No revised limitations    VI.D.1-2
                                        BCT/BAT/NSPS).            or standards
                                                                  established.
                                       Indirect Dischargers      No revised standards      VI.D.3
                                        (PSES/PSNS).              established.
Steel Forming & Finishing............  Direct Dischargers (BPT/  No revised limitations    VI.E.1-2
                                        BCT/BAT/NSPS).            or standards
                                                                  established.
                                       Indirect Dischargers      No revised standards      VI.E.3-4
                                        (PSES/PSNS).              established.
Oily Wastes..........................  Direct Dischargers (BPT/  Pollution Prevention +    VI.F.1-4
                                        BCT/NSPS).                Chemical Emulsion
                                                                  Breaking + Oil-Water
                                                                  Separation (Option 6).
                                       Indirect Dischargers      No standards established  VI.F.5-6
                                        (PSES/PSNS).
Railroad Line Maintenance............  Direct Dischargers (BPT/  No limitations or         VI.G.1-4
                                        BCT/BAT/NSPS).            standards established.
                                       Indirect Dischargers      No standards established  VI.G.5
                                        (PSES/PSNS).
Shipbuilding Dry Dock................  Direct Dischargers (BPT/  No limitations or         VI.H.1
                                        BCT/BAT/NSPS).            standards established.
                                       Indirect Dischargers      No standards established  VI.H.2
                                        (PSES/PSNS).
----------------------------------------------------------------------------------------------------------------

3. Summary of Significant Applicability Decisions
a. Applicability of MP&M to Certain Iron and Steel Operations
    EPA received comment regarding the inclusion of certain operations 
now subject to the Iron & Steel effluent guidelines (40 CFR part 420) 
within the proposed MP&M effluent guidelines. In the proposed MP&M 
rule, EPA refers to facilities with these operations as the Steel 
Forming & Finishing subcategory. Specifically, EPA proposed to move 
operations that produce finished products such as bars, wire, pipe and 
tubes, nails, chain link fencing, and steel rope into the MP&M rule (as 
the Steel Forming & Finishing subcategory) from stand-alone facilities, 
as well as from facilities that also have other operations that are 
currently regulated by the Iron & Steel effluent guidelines (i.e., 
facilities that are making steel and producing wire and wire products 
and are subject to both ELGs through the combined wastestream formula).
    Commentors stated that these operations and resulting wastewaters 
are comparable to those at facilities subject to the Iron and Steel 
Manufacturing effluent guidelines and that these discharges should 
remain subject to part 420 rather than today's rule. In addition, 
commentors stated that part 420 adequately protects the environment 
from discharges associated with these activities. Based on its analyses 
for this final rule, EPA has determined that limitations and standards 
for the proposed Steel Forming & Finishing subcategory based on MP&M 
Option 2 technology are not economically achievable. Therefore, today's 
final rule does not establish a Steel Forming & Finishing subcategory 
and accompanying limitations and standards. Thus, wastewaters generated 
by these operations remain subject to the Iron & Steel Manufacturing 
effluent limitations guidelines and standards (40 CFR part 420). Also, 
as discussed in section IV.A.1, EPA included continuous electroplaters 
in the General Metals subcategory for analyses supporting today's final 
rule.
b. Applicability to Certain Oily Operations
    Today's final rule revises the proposed definition of ``oily 
operations'' by including additional operations (see 67 FR 38765). EPA 
is incorporating into the definition of ``oily operations'' the 
following unit operations and any associated rinses:
    [sbull] Abrasive blasting;
    [sbull] Adhesive bonding;
    [sbull] Alkaline treatment without cyanide;
    [sbull] Assembly/disassembly;

[[Page 25692]]

    [sbull] Burnishing;
    [sbull] Calibration;
    [sbull] Electrical discharge machining;
    [sbull] Iron phosphate conversion coating;
    [sbull] Painting-spray or brush (including water curtains);
    [sbull] Polishing;
    [sbull] Thermal cutting;
    [sbull] Tumbling/barrel finishing/mass finishing/vibratory 
finishing;
    [sbull] Washing (finished products);
    [sbull] Welding; and
    [sbull] Wet air pollution control for organic constituents
    EPA notes that this revision to the oily operations definition has 
the effect of moving 1,550 facilities from the General Metals 
subcategory to the Oily Wastes subcategory. See section V.B for the 
complete list of oily operations subject to regulation in today's final 
rule.
    In addition, as discussed in the NODA, EPA is removing 
``laundering'' from the definition of oily operations (see 67 FR 
38766). EPA does not consider wastewater discharges from laundering 
(e.g., uniforms) at MP&M facilities to be process wastewater under the 
MP&M final rule. The inclusion of laundering in the proposed definition 
of oily operations was an oversight which the Agency has now corrected 
for the final rule.
    At proposal, EPA excluded bilge water (or any other wastewater) 
from ships that are afloat from the scope of the rule; however, bilge 
water was inadvertently included in the oily operations definition in 
the NODA (see 67 FR 38765). Today's final rule corrects this and 
removes bilge water from the definition of oily operations. Because EPA 
is not promulgating limitations and standards for the Shipbuilding Dry 
Dock subcategory, EPA also does not consider bilge water from ships in 
a dry dock or similar structure (e.g., graving docks, building ways, 
marine railways and lift barges) a MP&M process wastewater.
c. Applicability to Certain Metal Drum Reconditioning and Cleaning 
Operations
    At proposal EPA considered whether it should include wastewater 
generated from unit operations performed by drum reconditioners/
cleaners to prepare metal drums for resale, reuse, or disposal in this 
rulemaking. These operations include chaining, caustic washing, acid 
cleaning, acid etching, impact deformation, leak testing, corrosion 
inhibition, shot blasting, and painting. In EPA's ``Preliminary Data 
Summary for Industrial Container and Drum Cleaning Industry'' (EPA-821-
R-02-011), EPA did not identify any metal drum reconditioning or 
cleaning facilities that discharge directly to surface waters. The 
Agency estimates that the drum reconditioning facilities are either 
indirect or zero or alternative dischargers.
    EPA solicited comment on whether these facilities would be more 
appropriately covered under the MP&M rule or under a new industrial 
category of effluent guidelines for drum reconditioners (see 66 FR 
434). Commentors stated that these operations should not be subject to 
MP&M because drum reconditioning/cleaning wastewaters are more variable 
than MP&M wastewaters. EPA reviewed its database on drum reconditioning 
operations and wastewater characteristics. EPA found that its database 
is insufficient to evaluate the technical and economic achievability of 
the options considered for today's final rule. Therefore, EPA is not 
including drum reconditioning and cleaning operations as within the 
scope of this final rule.
4. Environmental Management Systems and the Pollution Prevention 
Alternative
    In the proposed rule, EPA discussed the use of a compliance 
alternative (i.e., the Pollution Prevention Alternative) for indirect 
dischargers in the Metal Finishing Job Shop (MFJS) subcategory (see 66 
FR 511). The Pollution Prevention (P2) Alternative would act as a 
voluntary incentive for MFJS indirect dischargers that agreed to 
perform specific best management/pollution prevention practices. These 
MFJS indirect dischargers would be allowed to meet the pretreatment 
standards of part 433 in lieu of meeting the more stringent 
pretreatment standards of the proposed MP&M rule. Because EPA is not 
promulgating pretreatment standards that are more stringent than those 
in part 433 or part 413 for those facilities covered by part 413 
pretreatment standards, EPA is not promulgating today the use of a 
compliance alternative for metal finishing job shops. EPA notes that 
many metal finishing jobs shops are currently employing best 
management/pollution prevention practices similar to those described in 
the proposal as part of the National Metal Finishing Strategic Goals 
Program.
    As discussed in the NODA (see 67 FR 38798), EPA also considered an 
industry suggested alternative for the General Metals subcategory based 
on the use of an Environmental Management System (EMS) to mitigate 
economic impacts associated with today's rule. Similar in concept to 
the Pollution Prevention Alternative previously discussed, the EMS 
compliance alternative would act as a voluntary incentive for 
facilities that implemented an EMS which would include specific 
monitoring, controls, and recordkeeping. These facilities would be 
allowed to meet the limitations and standards of part 433 in lieu of 
meeting the more stringent limitations and standards of the proposed 
MP&M rule.
    EPA received several comments on the EMS compliance alternative. 
Some commentors were in favor of the EMS compliance alternative and 
stated that: (1) The EMS compliance alternative is an innovative tool 
for continually enhancing environmental regulation; (2) an EMS does not 
replace the need for regulatory enforcement, but can be used as a tool 
to enhance a facility's environmental performance; and (3) requiring 
ISO 14001 adds another level of compliance assurance due to independent 
third party auditing. Other commentors were not in favor of this EMS 
compliance alternative and stated that: (1) The administrative and 
enforcement burden for pretreatment control authorities would be 
excessive as it could result in protracted discussions regarding the 
adequacy of the EMS; and (2) the EMS compliance alternative is overly 
restrictive and does not allow for variability found among MP&M 
industries and the POTWs to which they discharge. In particular, 
commentors noted that requiring ISO 14001 certification is extremely 
expensive and would have the effect of rendering this option untenable 
for any small business and many larger businesses as well.
    EPA encourages the wide spread use of EMSs across a range of 
organizations and settings, with particular emphasis on adoption of 
EMSs to achieve improved environmental performance and compliance, 
pollution prevention through source reduction, and continual 
improvement (see EPA Position Statement on Environmental Management 
Systems, May 15, 2002, DCN 17848, section 24.4). However, EPA is not 
promulgating an EMS-based compliance alternative for facilities in the 
General Metals subcategory as EPA is not promulgating limitations and 
standards for the General Metals subcategory (see section VI.A).

B. Decisions Regarding Methodology

    Sections 11 and 12 of the TDD provide detailed description of the 
methodologies used to develop compliance cost estimates and pollutant 
reductions for this final MP&M regulation. In addition, the EEBA for 
the final rule provides a detailed description of the economic impacts

[[Page 25693]]

and environmental benefits analyses and methodologies. This section of 
today's final rule summarizes the changes to the EPA Cost & Loadings 
Model and the changes in the economic impacts and benefits analyses 
methodologies. This section also discusses EPA's decisions regarding 
selection of facilities with ``BAT'' treatment technologies.
1. Changes to the EPA Cost & Loadings Methodology for MP&M Options
a. General Methodology Changes
    Based on comments to the proposed rule and considerations discussed 
in the NODA (see 67 FR 38756), EPA made significant changes to the EPA 
Cost & Loadings Model used to estimate compliance costs and pollutant 
reductions at the national level for the technology options considered 
for today's final rule. EPA included all of the changes identified in 
the NODA (e.g., review of survey discharge status and reviewed 
additional industry-supplied data) into the analyses for the final 
rule. EPA also stated in the NODA that we would also examine other 
potential changes in response to comments after publication of the NODA 
but before the final rule (see DCN 17804, section 16.0). This section 
provides additional information on EPA's final analyses with respect to 
these potential changes and any changes identified by NODA comments.
b. Assignment of Treatment-in-Place (TIP) Credit
    EPA developed a computerized Cost & Loadings Model to estimate 
compliance costs and pollutant loadings for the various technology 
options. EPA estimates the baseline pollutant loadings (i.e., pollutant 
loading prior to compliance with the MP&M regulations) from model 
facilities based on actual TIP at those facilities as determined by the 
site's response to EPA's questionnaire. EPA calculates the pollutant 
loads removed by the technology option under consideration as the 
difference between the pollutant loadings estimated for the option and 
the pollutant loadings estimated for the baseline conditions.
    In general, commentors stated that EPA failed to extend proper TIP 
credit to facilities in the MP&M survey questionnaire database and 
overestimated pollutant discharge loadings. Based on comments received 
on the proposal and NODA, EPA has re-evaluated its assignment of TIP 
credit used for estimating baseline pollutant loadings for the final 
rule and has concluded that additional technologies are equivalent (or 
better than) the BAT technology options in the proposal and the NODA.
    In the NODA, EPA assumed that end-of-pipe ion exchange would 
achieve cyanide removals equivalent to alkaline chlorination, a 
proposed BAT technology basis. Therefore, EPA set cyanide treatment 
credit for process lines with ion exchange as equivalent to alkaline 
chlorination. Commentors requested that EPA also provide credit for in-
process ion exchange for cyanide removal and for metals removal. EPA 
reviewed the information supporting these comments and concluded that 
ion exchange, whether in-process or end-of-pipe would provide pollutant 
reductions that are equivalent to the corresponding BAT technology 
option. Therefore, for the analyses supporting the final rule, EPA 
provided TIP credit for all streams receiving end-of-pipe or in-process 
ion exchange treatment for cyanide and metals.
    EPA also reviewed its NODA assumptions regarding TIP credit for 
gravity thickening and filter presses. In the NODA, EPA assumed that 
facilities with sludge thickening or a filter press had both components 
in place. Upon closer review of the survey questionnaires, EPA finds 
that facilities may pump their sludge directly from a clarifier to a 
filter press without using a sludge thickening step. Consequently, EPA 
no longer assumes all facilities using filter presses also operate 
gravity thickeners. EPA notes that it is equating ``sludge thickening 
tanks'' and ``sludge dryers'' with gravity thickening. For facilities 
indicating only gravity thickening or filter press, EPA has estimated 
costs associated with the addition of the necessary equipment.
    At proposal EPA did not assume that facilities that indicated some 
form of oily wastewater treatment (e.g., oil-water separator) would be 
performing chemical emulsion breaking (and receive TIP credit for 
chemical emulsion breaking) prior to oil water separation if they have 
emulsified oils. For the final rule analyses, EPA reviewed all 
questionnaires to ensure that the same TIP assignments were given to 
Phase I and Phase II questionnaire facilities. Based on this review, 
EPA is assuming for the final rule that facilities that indicated some 
form of oily wastewater treatment (e.g., oil-water separator) are 
performing chemical emulsion breaking prior to oil-water separation if 
they have emulsified oils.
c. Pollutant Loadings Baseline for MP&M Options for Metal-Bearing 
Wastewater Subcategories
    EPA received many comments on its estimation of baseline pollutant 
loadings and reductions for the various options. For treated streams, 
EPA estimated zero pollutant removals for pollutants that are already 
present in low concentrations (i.e., are present at a concentration 
below the technology option long term average (LTA). For untreated 
streams, EPA estimated baseline loadings and pollutant removals based 
on unit operation pollutant concentrations, and did not adjust for 
local or Federal regulatory limits on the facility. Many commentors 
were concerned that EPA's use of unit operation-specific average 
concentrations to model the concentration of untreated wastewater 
streams would overestimate current pollutant loadings at facilities, 
particularly those currently regulated by parts 413 or 433 and at 
facilities that do not treat their wastewaters due to low initial 
concentrations. In the NODA, EPA presented information on corrections 
and other revisions made to the costs and pollutant loadings model, and 
solicited comment on a sensitivity analysis which assumed at baseline 
that all MP&M facilities currently regulated by existing effluent 
guidelines (i.e., 40 CFR parts 413 and 433) are not discharging 
pollutant concentrations above their applicable effluent limitations 
guidelines and standards (see 67 FR 38762).
    For the final rule, EPA implemented two strategies to estimate 
baseline loadings and removals more accurately for untreated, low 
concentration streams at model facilities. First, EPA evaluated 
discharge monitoring report (DMR) data available for direct discharger 
model facilities. If all pollutant concentrations measured, as 
indicated from the DMR data, were below the technology option limits, 
EPA estimated zero pollutant removals for the model facility. Second, 
EPA considered regulatory limits on the model facility. EPA assumed the 
pollutant concentrations discharged from each stream at sites regulated 
under part 433 were at least meeting the monthly average limits set by 
part 433.
    Table IV-2 summarizes the new method and how EPA estimated baseline 
pollutant concentrations for its pollutant reduction estimates 
associated with the final rule MP&M technology options.

[[Page 25694]]



Table IV-2.--Current Pollutant Concentrations Used To Estimate Pollutant
         Reductions Associated With the MP&M Technology Options
------------------------------------------------------------------------
                                  433 regulated        433 unregulated
                                   parameters            parameters
------------------------------------------------------------------------
Treated Wastewater Streams..  LTAs from part 433..  LTAs from Technology
                                                     Option 2 of Today's
                                                     rule.
Untreated Wastewater Streams  Monthly Average       Concentrations from
 Regulated by 413 or 433.      Limitations from      Subcategory-
                               part 433.             Specific Unit
                                                     Operations Data.
Untreated Wastewater Not      Concentrations from   Concentrations from
 Regulated by 413 or 433.      Subcategory-          Subcategory-
                               Specific Unit         Specific Unit
                               Operations Data.      Operations Data.
------------------------------------------------------------------------
Note: See Section VI and Section 9 of the TDD for further discussion of
  Technology Option 2.
Note: EPA assigns Option 2 LTAs to all wastewater streams for all
  pollutant to model facilities TIP equal to or greater than BAT
  treatment

    For the final rule, EPA assumed that facilities currently treating 
their wastewater discharges (regardless of their regulatory status) 
operate their wastewater treatment systems to achieve the long-term 
average concentrations of the part 433 regulations. Furthermore, in the 
case of pollutants of concern not regulated in part 433, EPA made the 
conservative assumption that facilities with wastewater treatment 
operate their wastewater treatment systems to achieve the long-term 
average concentrations for such pollutants from MP&M Option 2 (see 
section VI and section 9 of the TDD for further discussion of 
Technology Option 2).
    For untreated streams at facilities currently regulated by parts 
413 or 433 for the parameters regulated by part 433, EPA assumed for 
its evaluations for the final rule that facilities achieve the monthly 
average limitation of part 433. As discussed in the NODA, EPA concluded 
it is appropriate to use the monthly average limitation, as opposed to 
the long-term average concentration, for streams that are not being 
treated or for parameters that are not being targeted for treatment. 
Finally, for untreated streams (regardless of regulatory status) for 
the parameters not regulated by part 433, and for regulated parameters 
for untreated streams at facilities not subject to parts 413 or 433, 
EPA has assumed the baseline concentrations are equivalent to the raw 
waste load using subcategory-specific unit operations data.
    For all direct discharging facilities in the General Metals 
subcategory, EPA has assumed the facilities achieve permit limits for 
non-conventional pollutants Chemical Oxygen Demand (COD), Total 
Kjeldahl Nitrogen (TKN), and Ammonia as Nitrogen (NH3-N). 
EPA received several comments that the Agency overestimated 
concentrations of COD. While this parameter is not regulated by Parts 
413 or 433, comments stated that it is typically regulated in National 
Pollutant Discharge Elimination System (NPDES) permits. Additionally, 
EPA notes that COD removals had a significant impact on the cost and 
removal comparison ratio ($/lb-removed) for the General Metals 
subcategory. While these parameters are also not regulated by Parts 413 
or 433, limits for these parameters are found in EPA's Permit 
Compliance System (PCS). To reduce overestimation of pollutant removals 
for COD, TKN, and NH3-N, EPA did not allow the pollutant 
concentrations discharged from the facility to exceed permit limits. 
EPA modeled the limits based on data from EPA's Permit Compliance 
System (PCS) for these types of facilities. Because EPA could not 
determine which sites in PCS were MP&M sites, for the purposes of this 
analysis, EPA calculated the average permit limit concentrations for 
process wastewater discharged from each facility in the 3000 series of 
SIC codes. Based on these data, EPA set the maximum concentration for 
the commingled MP&M wastewater discharged from each model site at 175, 
35.67, and 19.3 milligrams per liter (mg/L) for COD, TKN, and 
NH3-N, respectively (see DCN 17846, section 24.7).
d. Unit Operations Data
    EPA used unit operations data from the questionnaires, sampling 
episodes, and commentors data, to estimate baseline pollutant loading 
for some untreated wastewaters at certain facilities. As described in 
section IV.B.1, and as discussed in the NODA (see 67 FR 38756), in 
response to proposal commentors, EPA changed its proposal methodology 
to account for subcategory-specific differences in pollutant 
concentrations for the same unit operations. EPA received additional 
comments on the unit operations data from commentors on the NODA. In 
particular, comments on the NODA focused on three specific areas: (1) 
Requests to subdivide the ``testing'' unit operation to better reflect 
various types of testing wastewaters; (2) requests to remove additional 
``outliers'' from the data set used to estimate the average pollutant 
concentrations for certain unit operation; and (3) requests to re-
evaluate the ratio of pollutant concentrations in unit operation baths 
and the corresponding rinse. For direct dischargers, EPA also compared 
the baseline pollutant loadings from the pollutant loading model to 
available Discharge Monitoring Report (DMR) data (see section 
IV.B.2.b).
    For the proposed rule, EPA combined testing unit operations from 
wastewater sampling of hydraulic testing, hydrostatic testing, dye 
penetrant testing, and alpha-case detection into a single pollutant 
concentration set for the ``testing'' unit operation (UP-42). 
Commentors explained that EPA should not group all testing operations 
together because these operations produce non-similar wastewaters. For 
example, commentors noted that dye penetrant testing produces 
wastewater with high pollutant concentrations while hydrostatic testing 
produces wastewater with low pollutant concentrations, but very large 
flows.
    For today's final rule, EPA re-evaluated its data sets. EPA has 
concluded that it should divide the testing unit operations into 
subcategory-specific unit operations. Furthermore, EPA found no clear 
indication that facilities continue to perform alpha-case detection. 
Consequently, EPA's final database included separate, subcategory-
specific data for two testing operations: Hydrostatic and dye 
penetrant. EPA reviewed each survey questionnaire and made a case-by-
case determination of which of the two types of testing is being 
performed at a site (if any). See section 12 of the TDD for more 
information.
    EPA has also addressed commentors concerns regarding the ratio of 
pollutant concentrations in unit operation baths (e.g., electroplating 
baths) and their corresponding rinses. EPA has reviewed all bath-rinse 
pairs and ensured for the final analysis that the data used do not 
include any cases where a rinse is more concentrated than its bath.

[[Page 25695]]

e. Site-Specific Data Revisions for Survey Facilities
    EPA revised its questionnaire database to reflect detailed comments 
provided about specific facilities in EPA's questionnaire database. EPA 
uses information about facilities in the questionnaire database to 
estimate various costs and benefits (e.g., compliance costs, pollutant 
reductions, economic impacts, non-water quality environmental impacts). 
For example, in some cases facilities that did not provide flow or 
production data for certain wastestreams at the time they submitted 
their questionnaire provided such information in their comments on the 
proposal or NODA. In other cases, facilities provided updated 
information about their: (1) Unit operations (e.g., whether they 
currently have these UPs); (2) regulatory status (e.g., whether they 
were currently covered by parts 413 or 433 regulations); (3) wastewater 
discharge status (i.e., direct, indirect, or zero discharger); and (4) 
wastewater treatment technology.
    As noted in section 3 of the TDD, EPA conducted several surveys, 
with the two major surveys occurring in 1990 and 1996. For proposal and 
NODA analyses EPA used both 1990 and 1996 as reference years to 
estimate costs and benefits associated with the various regulatory 
options. These two survey efforts provided information about the MP&M 
industry at two different times (i.e., 1990 and 1996). Commentors 
suggested that EPA rely on more recent information and gave specific 
comments updating information concerning some facilities surveyed in 
the Phase I survey effort. EPA is using the later survey year, 1996, as 
the base year for the questionnaire database to more accurately reflect 
current conditions in the MP&M industry. EPA incorporated information 
about specific facilities from commentors into the questionnaire 
database when the information reflected facility conditions at or prior 
to 1996.
    EPA did not incorporate information from commentors into its 
questionnaire database when the information reflected facility 
conditions post-1996. When commentors provided post-1996 information, 
EPA did, however, use this information for a sensitivity analysis for 
all subcategories where it is promulgating limitations or new source 
standards to assess recent trends in the industry. See DCN 17843, 
section 24.6.2, of the record for results and discussion of this 
sensitivity analysis.
f. Site Discharge Destination
    EPA solicited comment in the NODA on its methodology for 
categorizing a facility as either a direct discharger (to surface 
water), an indirect discharger (to a POTW), or a zero or alternative 
discharger (no wastewater is discharged) based on its questionnaire 
database. Facilities that are zero or alternative dischargers do not 
incur costs to comply with the regulation. For the January 2001 
proposal and NODA, EPA identified direct dischargers as facilities that 
discharge any MP&M process wastewater to surface waters and calculated 
compliance costs and pollutant loadings and reductions for all MP&M 
process wastewaters as direct discharges. Commentors said that EPA 
should alter its methodology to allow facilities multiple discharge 
destinations rather than only assign a facility to a single category or 
discharge destination (i.e., allow facilities with some streams 
discharging to a POTW and other streams to surface waters). Commentors 
also noted that EPA had misclassified some indirect dischargers as 
direct dischargers and provided examples.
    EPA agrees with commentors that its methodology should address 
facilities with multiple wastewater discharge destinations. 
Consequently, EPA revised its methodology for the final rule to allow 
facilities that have multiple discharge destinations to be ``split.'' 
For the purposes of estimating compliance costs and pollutant 
reductions, ``splitting'' a site means that EPA runs only those process 
wastewater streams that are discharged to the POTW through the EPA Cost 
& Loadings Model for indirect dischargers and runs only those process 
wastewater (not stormwater) streams that are discharged directly to 
surface waters through the model for direct dischargers. In addition to 
those facilities identified by commentors, EPA reviewed survey 
questionnaires for all facilities with multiple discharge destinations 
to determine if they should be designated as direct, indirect, or split 
(see DCN 17825, section 24.6.2).
    In addition, in response to the comments that EPA incorrectly 
classified some facilities as direct dischargers, EPA also reviewed 
survey questionnaires for all facilities it had previously designated 
as direct to confirm their discharge status (see DCN 17826, section 
24.6.2). This review altered the discharge status of a number of 
facilities (see section 11 of the final TDD for additional discussion 
of EPA's review). EPA's databases for the final rule reflects these 
changes. EPA also reviewed all direct discharges to ensure that EPA did 
not consider stormwater as a MP&M process wastewater in its analysis of 
compliance costs and pollutant loadings.
g. Monitoring Costs
    EPA revised its monitoring cost estimate for today's final rule to 
reflect the final list of regulated pollutants and monitoring 
frequencies. For example, as discussed in section IV.B of the NODA (see 
67 FR 38767) and section 7 of the TDD, EPA is not regulating total 
sulfide, molybdenum, manganese, tin, or toxic organics. See section 11 
of the TDD for today's final rule for a detailed discussion of EPA's 
monitoring cost estimates for each subcategory.
2. Methodology for Determining Cost & Loadings for the 433 Upgrade 
Options
    In the NODA, EPA also discussed alternative options, ``413 to 433 
Upgrade Option'' and ``All to 433 Upgrade Option,'' and an associated 
simplified cost and loadings analysis for these upgrade options. EPA 
provided estimates of compliance costs, pollutant reductions, economic 
impacts and cost-effectiveness based on this simplified analysis. For 
today's final rule, EPA revised its upgrade option methodology and 
performed a more detailed analysis of compliance costs and pollutant 
reductions, incorporating many of the comments received on the NODA as 
previously discussed.
a. Determining Regulatory Status
    EPA reviewed the regulatory status for each survey questionnaire 
(i.e., to confirm whether a given facility was currently regulated by 
part 413, part 433, both, or neither). Based on the applicability 
section of part 413 and 433 (see 40 CFR 413.01 and 433.11(c) and (d)), 
EPA concluded that currently all surveyed facilities included in the 
database for the proposed Metal Finishing Job Shop and Printed Wiring 
Board subcategories are regulated by part 413 and/or part 433. EPA 
first used the date operations began at the facility (as reported in 
the survey questionnaire) to identify the appropriate regulation. EPA 
assumed a facility was subject to part 433 if it began operations after 
1982 because part 413 only applies to indirect discharging facilities 
operating before 1982. Next, EPA reviewed effluent discharge data from 
the remaining facilities to determine if the facility was discharging 
MP&M process wastewater. Finally, for facilities for which EPA does not 
have effluent discharge data, EPA called the site or its control 
authority to determine the regulatory status.

[[Page 25696]]

b. Revised Methodology for Estimating Pollutant Loadings and 
Reductions: Upgrade Options
    EPA developed a methodology to estimate the baseline pollutant 
loadings at facilities that would be affected by the upgrade: (1) 
facilities currently regulated by 413 only; and (2) facilities 
regulated by local limits or general pretreatment standards only (i.e., 
``local limits'' facilities). EPA also performed a sensitivity analyses 
on facilities regulated by both parts 413 and 433. Facilities 
``regulated by local limits and general pretreatment standards only'' 
also include facilities regulated by other effluent guidelines except 
parts 413 or 433. EPA notes that facilities currently regulated by only 
part 433 would not be affected by the upgrade and EPA did not project 
pollutant removals or compliance costs for them.
    EPA's pollutant loadings methodology also distinguishes between 
``small'' and ``large'' platers currently regulated by part 413. Part 
413 defines small platers as facilities discharging less than 10,000 
gallons/day of process wastewater. When the part 413 regulations were 
promulgated, EPA made provisions to accommodate the economic condition 
of ``small'' platers by reducing the numbers of regulated metals and 
allowing an alternative requirements for cyanide, as amenable to 
alkaline chlorination instead of total cyanide. Consequently, EPA 
adjusted its pollutant loadings methodology for the upgrade options to 
account for the additional parameters that small platers would need to 
treat (see section 9 of the final TDD for details on EPA's methodology 
for small platers).
    For treated streams at affected facilities, EPA revised methodology 
assumes the facilities operate their wastewater treatment systems to 
achieve the LTAs from part 413. This is consistent with EPA's guidance 
that facilities use LTAs (rather than limitations or standards) as a 
``target'' to design their treatment systems. For untreated streams at 
affected facilities, EPA used the 4-day average limit for part 413. As 
discussed in the NODA, EPA concludes this is appropriate because these 
facilities are complying with existing standards at the end-of-pipe. In 
estimating toxic pollutant reductions for the upgrade options, EPA 
compared the baseline loadings for affected facilities to the resulting 
loadings if these affected facilities treated their wastewater to 
achieve the long-term average concentrations (for existing sources) for 
part 433.
    For facilities in the General Metals subcategory that are not 
regulated by either part 413 or part 433 (i.e., ``local limits 
facilities''), EPA altered its NODA methodology to incorporate actual 
local limits data and to include analysis of other pollutant parameters 
(e.g., COD). Although EPA could not obtain actual local limits for all 
facilities, EPA gathered local limits data from 213 POTWs in 7 EPA 
Regions to develop national median local limit values. See DCN 17844, 
section 24.7, of the record for a listing of the data and the median 
value for each parameter. EPA used half the national median local limit 
values to approximate long-term average concentrations for all treated 
streams. EPA used the national median for all parameters regulated by 
part 413 in untreated streams. EPA applied the raw waste load based on 
the subcategory-specific unit operations data for all other parameters 
in untreated streams. EPA then estimated the pollutant loading 
reductions as described in the previous paragraph.
    In the NODA, EPA considered two different upgrade options for 
indirect dischargers in the General Metals, Printed Wiring Boards, and 
Metal Finishing Job Shop subcategories. The first option upgrades all 
facilities regulated by part 413 (including both large and small 
platers) to meet part 433 standards. The second option upgrades only 
large platers regulated by part 413 and facilities not regulated by 
parts 413 or 433 (regulated by local limits) to meet part 433 
standards. EPA rejected these upgrade options for existing indirect 
dischargers as: (1) Greater than 10% of existing indirect dischargers 
not covered by part 433 are projected to close at the upgrade option; 
or (2) the incremental compliance costs of the upgrade options were too 
great in terms of toxic removals (cost-effectiveness values (in 1981$) 
in excess of $420/PE). See section VI for further discussion on these 
upgrade options for the General Metals, Printed Wiring Boards, and 
Metal Finishing Job Shop subcategories.
    For direct dischargers, EPA also compared the baseline pollutant 
loadings from the pollutant loading model to available Discharge 
Monitoring Report (DMR) data reflecting the measured values for the 
permitted parameters. EPA obtained DMR data for eighteen surveyed 
direct discharging facilities in EPA's questionnaire database for the 
General Metals subcategory. The MP&M model approach utilizing the 
revised baseline method used for the final rule, calculates lower 
baseline loadings for twelve of these eighteen direct discharging 
facilities than the loadings reported in DMR data (see DCN 17851, 
section 24.7). Based on this analysis, EPA has concluded that the MP&M 
model approach utilizing the revised baseline method used for the final 
rule does not excessively over- or underestimate baseline pollutant 
loadings and EPA's use of this model approach for today's final rule is 
a reasonable and appropriate basis for today's regulatory 
determinations.
c. TIP Changes for Upgrade
    In evaluating the upgrade options analyzed for the final rule, EPA 
also provided TIP credit for hydroxide precipitation and clarification 
treatments for metal-bearing facilities that use dissolved air 
flotation (DAF) for metals removal (e.g., settling). However, EPA notes 
that TIP credit for hydroxide precipitation and clarification credit to 
metal-bearing facilities using DAF for metals removal was not provided 
in evaluating options to achieve the more stringent proposed MP&M 
limits. EPA is concerned that DAF alone would not achieve the long-term 
average concentrations associated with the limitations and standards 
considered for the subcategories discharging metal-bearing wastewaters. 
Therefore, EPA included costs associated with installing hydroxide 
precipitation and clarification at these facilities for the final rule.
d. Revised Compliance Cost Estimates for Upgrade Analyses
    Based on comments to the NODA and subsequent discussions with 
industry representatives, EPA revised its analysis for estimating the 
cost of compliance for upgrading facilities to meet the part 433 
existing source limitations and standards. Section 11 of the final TDD 
describes EPA's final methodology in detail. In addition to the costs 
included in the NODA analysis, EPA's final methodology also includes 
costs to:
    [sbull] Increase the size of the treatment train (e.g., holding 
tanks, clarifier, gravity thickening, filter press) to treat additional 
wastewater (which had pollutant concentrations below the part 413 
standards but not low enough to meet the option limits without 
treatment);
    [sbull] Increase the amount of treatment chemicals to account for 
treating additional wastewaters and more stringent LTAs;
    [sbull] Increase sludge handling and disposal costs due to the 
treatment of additional streams as well as the more stringent long-term 
averages in part 433;
    [sbull] Install and operate additional automated controls such as 
ORP meters and pH meters;
    [sbull] Provide additional operator training; and

[[Page 25697]]

    [sbull] Increase analytical monitoring costs for small platers to 
monitor for the additional pollutants covered by part 433.
3. Revisions to Economic & Benefits Methodologies
    For the final rule, EPA incorporated several important revisions to 
the economic impact and benefits methodologies from the NODA. Section V 
of the NODA provides a detailed discussion of all changes incorporated 
in the economic impact and benefits analyses after publication of the 
proposed MP&M rule (see 67 FR 38752). In addition, based on NODA 
comments the Agency further refined the moderate impact analysis. As 
previously discussed, the Economic, Environmental, and Benefits 
Analysis (EEBA) for the final rule provides a complete discussion of 
economic impact and benefits methodologies used in the final rule 
analyses.
a. Revisions Incorporated in the Economic Impact Methodology From the 
NODA
    The major changes to the economic impact analyses incorporated from 
the NODA include: (1) Use of sector-specific thresholds for the 
moderate impact analysis tests (redefined in part c of this section); 
(2) use of a single test, based on net present value, to assess the 
potential for closures (this test excludes consideration of liquidation 
values for all MP&M facilities, including the 219 facilities that 
reported them in their response to the MP&M survey); and (3) use of 
estimated baseline capital outlays in the calculation of cash flow for 
the net present value test. Other changes to the economic impact 
methodology include: (1) Use of revised cost pass-through coefficients; 
(2) use of sector-specific price indices in updating survey data; (3) 
adjusting labor costs for facilities that report abnormally high labor 
costs; and (4) limiting post-compliance tax shields to no greater than 
reported baseline taxes.
b. Using Multiple Years of Data To Estimate Sector-Specific Moderate 
Impact Threshold Values
    As part of its facility impact analysis, the Agency assesses 
whether facilities may incur moderate financial impacts--financial 
stress short of closure--from regulatory compliance. To assess the 
occurrence of moderate impacts, the Agency analyzes the change in two 
financial measures--(1) Pre-Tax Return on Assets (PTRA); and (2) 
Interest Coverage Ratio (ICR)--against threshold values (e.g., after-
tax compliance costs as a percentage of annual revenues) indicating 
weak, but still viable, financial performance.
    At proposal, EPA used single threshold values of the financial 
measures for all MP&M sectors. Commentors argued that EPA used 
thresholds without providing any supporting information regarding their 
predictive value, the threshold values chosen, or their applicability. 
EPA finds that using threshold values that vary by industry better 
reflects the differences in business risks and operating circumstances 
by industry, and will provide more robust analysis of moderate impacts. 
In response to comments, EPA revised this approach for the NODA to use 
threshold values that varied by MP&M sector. For the NODA, EPA also 
considered using an alternative financial measure--Pre-Tax Operating 
Margin--instead of PTRA for the moderate impact analysis. Since the 
NODA, EPA continued to review its moderate impact analysis methodology, 
and for the final rule analysis, decided to retain the financial impact 
measures used at proposal: PTRA and ICR. Pre-tax return on assets 
provides stronger insight into operating financial performance and is a 
better indicator of a business' ability to attract capital and remain 
viable than operating margin. However, in contrast to the NODA, EPA 
decided to use multiple years of data for developing the threshold 
values for the final rule. Using multiple years of data increases the 
number of observations on which the moderate impact thresholds are 
based and reduces the likelihood that threshold values will reflect 
anomalous conditions that could arise from using only a single year of 
data.
    EPA calculated the thresholds using income and financial structure 
information by 4-digit SIC code from the Risk Management Association 
(RMA) Annual Statement Studies for eight years from 1994 to 2001. The 
RMA data set provides quartile values derived from statements of 
commercial bank borrowers and loan applicants for firms having less 
than $250 million in total assets. EPA used the lowest 25 percentile 
values, by industry, from the RMA data set as the basis for the 
moderate impact thresholds. The RMA data set captures a limited 
industry segment, because the data set likely omits firms with too weak 
financial performance to seek bank loans and also omits firms that use 
the public securities markets or other non-bank sources to obtain 
capital. However, it is difficult to know what kind of bias, if any, is 
introduced into the analysis by these limitations. On balance, because 
EPA used impact thresholds based on the 25th percentile of values 
reported for borrowers and loan applicants, EPA estimates that the 
basis for the moderate impact thresholds is conservative--i.e., we are 
more likely to err in finding that a business is in moderate financial 
stress than in finding that a facility is not in moderate financial 
stress.
    EPA notes that RMA did not provide data for all 4-digit SIC codes 
associated with an MP&M sector. Therefore, for sectors with missing 
data for some 4-digit SIC codes, EPA calculated the weighted average of 
threshold values based only on those 4-digit SIC codes for which data 
were provided. This treatment assumes that the financial 
characteristics of the omitted SIC code segments are the same as the 
weighted average of SIC code segments that were included in the 
analysis for a given MP&M sector. See Chapter 5 of the EEBA for the 
final rule for a detailed discussion of the analysis of moderate 
impacts.
c. Revisions Incorporated in the Benefits Methodology from the NODA
    Major revisions to the benefits methodology incorporated from the 
NODA include: (1) Changes to the human health methodology; (2) use of a 
weight-of-evidence approach in evaluating national benefit estimates; 
and (3) use of revised models in the Ohio case study analysis. EPA also 
uses revised data on characteristics of POTWs receiving discharges from 
the sample MP&M facilities, as discussed in the NODA.
    Two revisions to the human health benefits methodology incorporated 
from the NODA include: (1) Use of revised assumptions and updated model 
parameters in the analysis of neurological effects from lead exposure 
in preschool children; and (2) use of a revised drinking water intake 
database for estimating human health effects from consumption of 
contaminated drinking water. The Agency did not incorporate cancer 
effects from exposure to lead in the final rule analysis because these 
effects appeared negligible.
    The use of the weight-of-evidence approach for estimating national 
benefits is one of the most important revisions to the benefits 
methodology incorporated from the NODA. As discussed in the NODA, EPA 
traditionally estimates national level costs and benefits by 
extrapolating analytic results from sample facilities to the national 
level using sample facility survey weights. These sample facility 
weights are based on sample facility characteristics only and do not 
account for characteristics of water bodies receiving discharges from 
the sample MP&M facilities or for the size of the

[[Page 25698]]

population residing in the vicinity of the sample MP&M facilities. 
These additional variables, however, are likely to affect the 
occurrence and size of benefits associated with reduced discharges from 
MP&M facilities. Omission of benefit-related characteristics in 
designing the original sample frame may lead to conditional bias in 
benefit estimates. To validate the general conclusions that EPA draws 
from its main analysis based on the traditional benefit estimation 
method, EPA also estimated national level benefits for the final rule 
using two alternative extrapolation methods. Detailed discussion of the 
alternative extrapolation methods can be found in the NODA (see 67 FR 
38752), section IX.E and F of this preamble, and in the EEBA for the 
final rule.
    As discussed in the NODA, EPA submitted its case study analysis of 
recreational benefits for an official peer review. The peer review was 
favorable and concluded that EPA had done a competent job. Peer 
reviewers, however, provided several suggestions for further 
improvements in the analysis. The Agency made most of the recommended 
changes to the Ohio model, as discussed in the NODA (see 67 FR 38752). 
This revised model is used in the analysis supporting today's final 
rule.
    However, EPA did not include multiple day trips in the benefit 
estimates from improvements in recreational opportunities due to 
reduced MP&M discharges, as it was suggested by the peer reviewers. The 
Ohio case study focuses on single day trips because data for single day 
trips are more complete and because the majority of recreational trips 
are single day trips. Thus, EPA estimated changes in per trip values 
from improved water quality for single day trips only. The Agency 
decided not to approximate welfare gain to participants in multi-day 
recreational trips based on the single-day trip values because multi-
day recreational trips are likely to differ from single day trips for a 
number of reasons: overnight trips may include multiple purposes and 
destinations; the individual chooses not only to take a trip and the 
trip's destination, but the length of the trip; and the length of stay 
has costs that are not connected to travel costs. The Agency 
acknowledges that excluding multiple day trips from this analysis is 
likely to result in understatement of benefits from water quality 
improvements. Detailed discussion of the Ohio case study can be found 
in the EEBA for the final rule.
    EPA did not incorporate changes to the recreational benefits 
methodology used in the national-level analysis from the NODA. In 
estimating benefits from improved boating and wildlife viewing 
opportunities for the final rule, EPA considers only individuals taking 
single day trips due to insufficient data on per multi-day trip 
benefits from water quality improvements. Both individuals taking 
single day trips and those who take multiple day trips to local water 
bodies were considered in the NODA analysis of recreational benefits. 
Similarly to the Ohio case study, excluding multiple day trips from the 
national analysis is likely to result in understatement of recreational 
benefits from water quality improvements.
d. POTW Administrative Cost and POTW Benefits Analyses
    EPA received several comments to the proposal on the use of EPA's 
1997 POTW survey in the analysis of POTW administrative costs and 
benefits from improved quality of sewage sludge. Commentors stated that 
EPA overestimated pollutant loadings, economic benefits, and 
environmental benefits associated with improved sludge quality. 
Commentors also stated that EPA underestimated the administrative costs 
associated with implementing the rule. They provided new information on 
POTW characteristics which EPA used to revise assumptions and its 
analysis of POTW administrative costs and benefits for the final rule. 
Specifically, the Association of Metropolitan Sewerage Agencies (AMSA) 
provided EPA with comments on the proposed MP&M rule and supplemented 
these comments with a spreadsheet database. The database contains data 
from an AMSA formulated survey and covers responses from 176 POTWs, 
representing 66 pretreatment programs. The AMSA survey was conducted to 
verify data from EPA's survey of POTWs, and therefore, included 
similar, although fewer, variables compared to EPA's survey.
    EPA used some of the data provided in AMSA's survey to revise its 
own analyses of POTW administrative costs of the proposed MP&M rule. 
Elements of the administrative cost analysis include: (1) The estimated 
number of indirect dischargers; and (2) the unit costs of certain 
permitting activities, including permit implementation, sampling, and 
sample analysis. EPA found that although AMSA estimates of the number 
of indirect dischargers and the unit costs of permitting activities are 
consistent with the EPA's estimates used for the proposed rule 
analysis, their estimate neglected to take into account that not all 
MP&M indirect discharging facilities would have been required to meet 
the proposed standards. DCN 37500, section 25.4.1, provides comparisons 
between AMSA's and EPA's estimates. EPA added to its analysis using the 
AMSA data include: (1) Screening costs for POTWs that do not currently 
operate under a pretreatment program; and (2) oversight costs 
associated with implementing various regulatory options. The revised 
methodology for POTW administrative costs analysis is presented in EEBA 
Appendix F.
    EPA also used the AMSA data to revise the POTW benefits 
methodology. Elements of the POTW benefits analysis EPA verified using 
the AMSA survey include: (1) Percentage of metal loadings contributed 
by MP&M facilities; and (2) the number of MP&M facilities served by 
POTWs.
    AMSA also provided additional information on the number of POTWs 
(and percentage of total annual dry metric tons of POTW biosolids) 
currently meeting metals limitations in the ``Standards for the Use or 
Disposal of Sewage Sludge,'' (40 CFR part 503), and reasons why POTWs 
may choose to not land apply biosolids. These nationally-applicable 
standards set the general requirements, management practices, 
operational standards and monitoring and reporting requirements for the 
final use and disposal of biosolids. AMSA's survey data includes the 
following reasons for not land applying qualifying biosolids: (1) Land 
was not available for application of sewage biosolids; (2) other 
biosolids use/disposal practices were less expensive than land 
application; (3) pathogen/vector reduction requirements could not be 
met at an acceptable cost; and (4) local regulations or opposition to 
land application. EPA revised the POTW benefits methodology according 
to the results of the joint analysis of the EPA and AMSA surveys. The 
revised methodology for POTW benefits analyses is presented in EEBA 
Chapter 16.
4. Determining POTW Percent Removal Estimates
    As discussed in the proposed rule, EPA solicited comment on 
potential changes to the methodology for estimating the pollutant 
reduction (i.e., percent removal) used in EPA's pass through analysis 
for identifying pollutants requiring pretreatment standards (see 66 FR 
476). For today's final rule, EPA has not changed the POTW pass-through 
analysis because EPA is not promulgating any new pretreatment standards 
for indirect dischargers.

[[Page 25699]]

V. Scope/Applicability of the Final Regulation

A. General Overview and Wastewaters Covered

    As previously explained, today's final rule only applies to 
directly discharged wastewaters generated from oily operations at 
existing or new industrial facilities (including Federal, State and 
local government facilities). These facilities are engaged in 
manufacturing, rebuilding, or maintenance of metal parts, products or 
machines to be used in one of the following industrial sectors:
    [sbull] Aerospace;
    [sbull] Aircraft;
    [sbull] Bus and Truck;
    [sbull] Electronic Equipment;
    [sbull] Hardware;
    [sbull] Household Equipment;
    [sbull] Instruments;
    [sbull] Miscellaneous Metal Products;
    [sbull] Mobile Industrial Equipment;
    [sbull] Motor Vehicle;
    [sbull] Office Machine;
    [sbull] Ordnance;
    [sbull] Precious Metals and Jewelry;
    [sbull] Railroad;
    [sbull] Ships and Boats; and
    [sbull] Stationary Industrial Equipment.
    EPA identified sixteen industrial sectors as comprising the MP&M 
category. These sectors manufacture, maintain and rebuild metal 
products under more than 200 different SIC codes (see the TDD for a 
listing of typical SIC codes and NAICs codes). EPA is not revising 
limitations and standards for three proposed industrial sectors (e.g., 
Job Shops, Printed Wiring Board, and Steel Forming & Finishing).
    Facilities in any one of the sixteen industrial sectors in the MP&M 
category are subject to this rule only if they directly discharge 
process wastewaters resulting from one or more of the following oily 
operations: Abrasive blasting; adhesive bonding; alkaline cleaning for 
oil removal; alkaline treatment without cyanide; aqueous degreasing; 
assembly/disassembly; burnishing; calibration; corrosion preventive 
coating (as specified at 40 CFR 438.2(c) and appendix B of part 438); 
electrical discharge machining; floor cleaning (in process area); 
grinding; heat treating; impact deformation; iron phosphate conversion 
coating; machining; painting-spray or brush (including water curtains); 
polishing; pressure deformation; solvent degreasing; steam cleaning; 
testing (e.g., hydrostatic, dye penetrant, ultrasonic, magnetic flux); 
thermal cutting; tumbling/barrel finishing/mass finishing/vibratory 
finishing; washing (finished products); welding; wet air pollution 
control for organic constituents; and numerous sub-operations within 
those listed in this paragraph. In addition, process wastewater also 
results from associated rinses that remove materials that the preceding 
processes deposit on the surface of the workpiece. These oily 
operations are defined in section 4 of the TDD and appendix B of 
today's final rule. In addition, today's final rule does not apply to 
direct discharges of wastewaters that are otherwise covered by other 
effluent limitations guidelines.
    As was the case at proposal, EPA defines process wastewater for the 
final rule to include wastewater discharges from the following 
activities: (1) Wastewater from air pollution control devices; and (2) 
washing vehicles only when it is a preparatory step prior to performing 
an oily operation (e.g., prior to disassembly to perform engine 
maintenance or rebuilding). EPA has adopted this approach for the final 
rule due to the potential of these unit operations to produce 
significant quantities of pollutants in wastewaters (see 66 FR 433 to 
434).
    Not subject to this final rule are non-process wastewater 
discharges which include the following: Sanitary wastewater, non-
contact cooling wastewater, laundering wastewater, and non-contact 
storm water. In addition, non-process wastewater also includes 
wastewater discharges from non-industrial sources such as residential 
housing, schools, churches, recreational parks, shopping centers, and 
wastewater discharges from gas stations, utility plants, and hospitals.
    In addition to non-process wastewater, the final rule does not 
apply to wastewater generated from: (1) Gravure cylinder and metallic 
platemaking conducted within or for printing and publishing facilities; 
(2) bilge water on ships afloat; (3) electroplating-type operations 
during semiconductor wafer manufacturing or wafer fabrication processes 
occurring in a ``clean room'' environment; (4) the washing of cars, 
aircraft or other vehicles when it is performed only for aesthetic/
cosmetic purposes; (5) MP&M operations at gasoline stations (SIC code 
5541) or vehicle rental facilities (SIC code 7514 or 7519); or (6) unit 
operations performed by drum reconditioners/refurbishers to prepare 
metal drums for reuse. The final rule does not include these non-
process wastewaters within the scope of the rule for the reasons 
explained in the preamble to the proposed rule (see 66 FR 433). EPA 
received no comments on the proposal or NODA that have caused the 
Agency to change its mind about the approach it proposed and has now 
adopted.
    EPA is also not promulgating limitations and standards for 
facilities in the Shipbuilding Dry Dock subcategory. Today's final rule 
does not cover wastewater generated on-board ships and boats when they 
are afloat (that is, not in dry docks or similar structures), flooding 
water, and dry dock ballast water (see 66 FR 445). For U.S. military 
ships, EPA is in the process of establishing standards to regulate 
discharges of wastewater generated on-board these ships when they are 
in U.S. waters and are afloat under the Uniform National Discharge 
Standards (UNDS) pursuant to section 312(n) of the CWA (see 64 FR 
25125, May 10, 1999).
    Finally, today's rule does not apply to maintenance or repair of 
metal parts, products, or machines that takes place only as ancillary 
activities at facilities not included in the sixteen MP&M industrial 
sectors. EPA estimates that these ancillary repair and maintenance 
activities would typically discharge de minimis quantities of process 
wastewater. For example, wastewater discharges from repair of metal 
parts at oil and gas extraction facilities are not subject to today's 
final rule. The Agency finds that permit writers will establish limits 
using best professional judgment (BPJ) to regulate wastewater 
discharges from ancillary waste streams for direct dischargers (see 66 
FR 433). EPA has not received any information during the rulemaking 
that would contradict this conclusion.

B. Subcategorization

    For today's final rule, EPA is subcategorizing the MP&M point 
source category based on the unit operations described in more detail 
in section 4 of the TDD, and is establishing limitations and standards 
for direct dischargers in the Oily Wastes subcategory (subpart A).
    The Oily Wastes subcategory applies to wastewaters generated from 
``oily operations'' that are not otherwise covered by other effluent 
limitations guidelines. EPA has previously defined ``oily operations'' 
in section V.A and at 40 CFR 438.2(f) and appendix B of today's final 
rule.
    Facilities engaged in the manufacture, overhaul or heavy 
maintenance of railroad engines, cars, car-wheel trucks, or similar 
parts or machines (``railroad overhaul or heavy maintenance 
facilities'') typically perform different unit operations than railroad 
line maintenance facilities. Railroad line maintenance facilities only 
perform one or more of the following unit operations including; 
Assembly/disassembly, floor

[[Page 25700]]

cleaning, maintenance machining (wheel truing), touch-up painting, and 
washing. Railroad overhaul or heavy maintenance facilities typically 
perform the following unit operations: Assembly/disassembly, floor 
cleaning, maintenance machining (wheel truing), touch-up painting, 
washing, abrasive blasting, alkaline cleaning, aqueous degreasing, 
corrosion preventive coating, electrical discharge machining, grinding, 
heat treating, impact deformation, painting, plasma arc machining, 
polishing, pressure deformation, soldering/brazing, stripping (paint), 
testing, thermal cutting, and welding. Wastewater discharges from 
railroad line maintenance facilities (as defined at 40 CFR 438.2(h)) 
are not subject to today's final rule. Wastewater discharges from 
railroad overhaul or heavy maintenance facilities (as defined at 40 CFR 
438.2(i)) may be covered by subpart A of this part, the Metal Finishing 
Point Source Category (40 CFR part 433), or by other effluent 
limitations guidelines, as applicable.

VI. The Final Regulation

    This section describes, by subcategory, the option(s) considered 
and selected for today's final rule. For each subcategory, EPA provides 
a discussion, as applicable, for the regulatory levels that EPA 
considered for regulation (i.e., BPT, BCT, BAT, NSPS, PSES, PSNS). For 
a detailed discussion of all technology options considered in the 
development of today's final rule, see the proposal (see 66 FR 447), 
the NODA (see 67 FR 38797) or section 9 of the TDD for today's final 
rule.
    Based on the record of information supporting the final MP&M rule, 
EPA has determined that the selected technology for the Oily Wastes 
subcategory is technically available. EPA used the appropriate 
technologies for developing today's limitations for existing direct 
dischargers (BPT and BCT) in one MP&M subcategory listed in the January 
2001 proposal (Oily Wastes). EPA has also determined that each 
technology it selected as the basis for the final limitations or 
standards has effluent reductions commensurate with compliance costs 
and is economically achievable for the applicable subcategory. EPA also 
considered the age, size, processes, and other engineering factors 
pertinent to facilities in the scope of the final regulation for the 
purpose of evaluating the technology options. None of these factors 
provides a basis for selecting different technologies from those EPA 
has selected as its technology options for today's rule (see section 6 
of the TDD for the final rule for further discussion of EPA's analyses 
of these factors).
    EPA considered the use of a low-flow cutoff as the principal means 
for reducing economic impacts on small businesses and administrative 
burden for control authorities associated with certain treatment 
technologies it considered. EPA did not identify any regulatory scheme 
incorporating a low-flow cutoff for direct dischargers that would 
assist EPA in meeting these objectives. EPA notes that all direct 
dischargers require a NPDES discharge permit regardless of wastewater 
discharge flow volume.
    The new source performance standards (NSPS) EPA is today 
establishing represent the greatest degree of effluent reduction 
achievable through the best available technology. In selecting its 
technology basis for today's new source standards (NSPS) for the Oily 
Wastes subcategory being promulgated today, EPA considered all of the 
factors specified in CWA section 306, including the cost of achieving 
effluent reductions. EPA used the appropriate technology option for 
developing today's standards for new direct dischargers in the Oily 
Wastes subcategory. The new source technology basis for the Oily Wastes 
subcategory is equivalent to the technology bases upon which EPA is 
setting BPT and BCT (see Chapter 9 of the EEBA). EPA has thoroughly 
reviewed the costs of such technologies and has concluded that such 
costs do not present a barrier to entry. The Agency also considered 
energy requirements and other non-water quality environmental impacts 
for the new source technology basis and found no basis for any 
different standards from those selected for NSPS. Therefore, EPA 
concluded that the NSPS technology basis chosen for the Oily Wastes 
subcategory constitute the best available demonstrated control 
technology. For a discussion on the compliance date for new sources, 
see section XI of today's final rule.
    EPA decided not to establish limitations for existing sources for 
seven subcategories listed in the January 2001 proposal (General 
Metals, Metal Finishing Job Shops, Printed Wiring Boards, Non-Chromium 
Anodizers, Steel Forming & Finishing, Railroad Line Maintenance, and 
Shipbuilding Dry Dock). EPA also decided not to establish standards for 
new sources for the same seven subcategories. Finally, EPA decided not 
to establish standards for new and existing indirect dischargers (PSES 
and PSNS) for all eight subcategories listed in the January 2001 
proposal. EPA's bases for not promulgating revised limitations and 
standards for these subcategories are explained in the following 
sections.

A. General Metals Subcategory

    EPA is not revising or establishing any limitations or standards 
for facilities that would have been subject to this subcategory. Such 
facilities will continue to be regulated by the General Pretreatment 
Standards (part 403), local limits, permit limits, and parts 413 and/or 
433, as applicable.
1. Best Practicable Control Technology Currently Available (BPT)
    EPA proposed to establish BPT limitations for existing direct 
dischargers in the General Metals subcategory based on the Option 2 
technology. EPA evaluated the cost of achieving effluent reductions, 
pollutant reductions, and the economic achievability of compliance with 
BPT limitations based on the Option 2 technology and the level of the 
pollutant reductions resulting from compliance with such limitations. 
EPA has decided not to establish BPT limitations for existing direct 
dischargers in the proposed General Metals subcategory. The 2001 
proposal also contains detailed discussions on why EPA rejected BPT 
limitations based on other BPT technology options (see 66 FR 452). The 
information in the record for today's final rule provides no basis for 
EPA to change this conclusion.
    EPA proposed Option 2 as a basis for establishing BPT limitations 
for the General Metals subcategory. Option 2 technology includes the 
following: (1) In-process flow control and pollution prevention; (2) 
segregation of wastewater streams; (3) preliminary treatment steps as 
necessary (including oils removal using chemical emulsion breaking and 
oil-water separation, alkaline chlorination for cyanide destruction, 
reduction of hexavalent chromium, and chelation breaking); (4) chemical 
precipitation using sodium hydroxide; (5) sedimentation using a 
clarifier; and (6) sludge removal (i.e., gravity thickening and filter 
press). See section 9 of the TDD for today's final rule for additional 
technical details on the Option 2 technology.
    Those facilities potentially regulated in the General Metals 
subcategory include facilities that are currently subject to effluent 
limitations guideline regulation under part 433 as well as facilities 
not currently subject to national regulation. Approximately 263 of the 
266 existing General Metals direct dischargers (estimated from survey 
weights for 31 surveyed facilities) are currently covered by the Metal

[[Page 25701]]

Finishing effluent guidelines at part 433. The remaining three 
facilities (estimated from a survey weight for one surveyed facility) 
are currently directly discharging metal-bearing wastewaters (e.g., 
salt bath descaling, UP-37) but are not covered by existing Metal 
Finishing effluent guidelines. EPA's review of discharge monitoring 
data and unit operations for this surveyed non-433 General Metals 
facility (with a survey weight of approximately three) indicates that 
this facility is already achieving part 433 limitations because this 
facility has discharges that closely mirror those required by part 433.
    The facilities that are currently subject to part 433 regulations 
and those facilities achieving part 433 discharge levels, in most 
cases, have already installed effective pollution control technology 
that includes many of the components of the Option 2 technology. 
Approximately 30 percent of the direct discharging facilities in the 
General Metals subcategory currently employ chemical precipitation 
followed by a clarifier. Further, EPA estimates that compliance with 
BPT limitations based on the Option 2 technology would result in no 
closures of the existing direct dischargers in the General Metals 
subcategory. EPA also notes that the adoption of this level of control 
would also represent a further reduction in pollutants discharged into 
the environment by facilities in this subcategory. For facilities in 
the General Metals subcategory at Option 2, EPA estimates an annual 
compliance cost of $23.7 million (2001$). Using the method described in 
Table IV-2 to estimate baseline pollutant loadings, EPA estimates 
Option 2 pollutant removals of 417,477 pounds of conventional 
pollutants and 33,716 pounds of priority metal and organic pollutants 
from current discharges into the Nation's waters.
    Evaluated under its traditional yardstick, EPA calculated that the 
effluent reductions are achieved at a cost of $18.1/pound-pollutant 
removed (2001$) for the General Metals subcategory at Option 2. To 
estimate all pounds of pollutant removed by Option 2 technology for 
direct dischargers in the General Metals subcategory, EPA used the 
method described in Table IV-2 to estimate baseline pollutant loadings, 
and the sum of Chemical Oxygen Demand (COD) pounds removed plus the sum 
of all metals pounds removed to measure the pollutant removal as 
compared to compliance costs. EPA used the combination of COD pounds 
removed plus the sum of all metals pounds removed to avoid any 
significant double counting of pollutants.
    As previously stated, EPA received many comments on its estimation 
of baseline pollutant loadings and reductions for the various options 
presented in the January 2001 proposal. In response to these comments, 
EPA solicited comment in the June 2002 NODA on alternative methods to 
estimate baseline pollutant loadings. Commentors on the NODA were 
generally supportive of EPA's alternative methods to estimate baseline 
pollutant loadings. In particular, commentors noted that more accurate 
estimates of baseline pollutant loadings could be achieved by using DMR 
data. In response to these NODA comments, EPA combined the alternative 
methods in the NODA into the EPA Cost & Loadings Model for the final 
rule (see Table IV-2).
    EPA also received comment on the parameter or parameters it should 
use for estimating total pounds removed by the selected technology 
option. EPA selected the sum of COD and all metals pounds removed for 
the final rule to compare effluent reductions and compliance costs. 
This approach avoided any significant double counting of pollutants and 
also provided a reasonable estimate of total pounds removed by Option 2 
for the General Metals subcategory. As more fully described in the TDD, 
Option 2 technology segregates wastewaters into at least five different 
waste streams, each of which have one or two treatment steps. For 
example, segregated oily wastewaters have two treatment steps under 
Option 2 technology as they are first treated by chemical emulsion 
breaking/oil water separation and then by chemical precipitation and 
sedimentation. These segregated wastestreams can be loosely grouped 
together as either oily wastewaters or metal-bearing wastewaters. EPA 
use of COD pounds removed for Option 2 technology generally represents 
the removal of pollutants from the segregated oily wastewaters. EPA use 
of total metals pounds removed for Option 2 technology generally 
represents the removal of pollutants from the segregated metal-bearing 
wastewaters.
    EPA also considered alternative parameters for calculating total 
pounds removed by Option 2 for the comparison of effluent reductions 
and compliance costs for the General Metals subcategory. In particular, 
EPA calculated a ratio of less than $14/pound-pollutant removed (2001$) 
for the General Metals subcategory at Option 2 when EPA used the 
highest set of pollutants removed per facility with no significant 
double counting of pollutants (i.e., highest per facility pollutant 
removals of: (1) COD plus total metals; (2) oil and grease (as HEM) 
plus total metals; or (3) oil and grease (as HEM) plus TSS). EPA used 
the highest per facility pollutant removals as a confirmation of its 
primary method for calculating baseline pollutant loadings (see Table 
IV-2) and Option 2 for General Metals subcategory.
    Based on the revisions and corrections to the EPA Cost & Loadings 
Model discussed in the NODA and in section IV.B.1 of today's final 
rule, EPA has decided not to adopt BPT limitations based on Option 2 
technology. A number of factors supports EPA's conclusion that BPT 
limitations based on Option 2 technology do not represent effluent 
reduction levels attainable by the best practicable technology 
currently available. As previously noted, a substantial number of 
facilities that would be subject to limitations as General Metals 
facilities are already regulated by BPT/BAT part 433 limitations and 
other facilities are de facto part 433 facilities if characterized by 
their discharges. Thus, establishing BPT limitations for a new General 
Metals subcategory would effectively revise existing BPT/BAT 
limitations with respect to those facilities. In the circumstances 
presented here where EPA, for a significant portion of an industry, is 
revising existing BPT/BAT limitations, further review of the character 
and cost of the effluent reductions achieved by Option 2 is warranted 
in deciding what is BPT technology. Such an examination shows that, 
while the Option 2 technology would remove additional pollutants at 
costs in the middle of the range EPA has traditionally determined are 
reasonable, the costs of the additional removals of toxic pollutants 
are substantially greater. EPA has now determined that, in the 
circumstances of this rulemaking, where a substantial portion of a 
subcategory is already subject to effluent limitations guidelines that 
achieve significant removal, it should not promulgate BPT limitations 
under consideration here because the limitations would achieve 
additional toxic removals at a cost ($1,000/PE in 1981$) substantially 
greater than that EPA has typically imposed for BAT technology in other 
industries (generally less than $200/PE in 1981$).
    EPA also considered transferring limitations from existing Metal 
Finishing effluent guidelines (40 CFR part 433) to the General Metals 
subcategory. The technology basis for part 433 includes the following: 
(1)

[[Page 25702]]

Segregation of wastewater streams; (2) preliminary treatment steps as 
necessary (including oils removal using chemical emulsion breaking and 
oil-water separation, alkaline chlorination for cyanide destruction, 
reduction of hexavalent chromium, and chelation breaking); (3) chemical 
precipitation using sodium hydroxide; (4) sedimentation using a 
clarifier; and (5) sludge removal (i.e., gravity thickening and filter 
press). See section 9 of the TDD for today's final rule for additional 
technical details on the part 433 technology basis.
    Approximately 99% of the existing direct dischargers in the General 
Metals subcategory are currently covered by existing Metal Finishing 
effluent guidelines. The remaining 1% (an estimated three facilities 
nationwide based on the survey weight associated with one surveyed 
facility) are currently permitted to discharge metal-bearing 
wastewaters but are not covered by existing Metal Finishing effluent 
guidelines. EPA's review of discharge monitoring data and unit 
operations for this surveyed non-433 General Metals facility (with a 
survey weight of approximately three) indicates that this facility is 
subject to permit limitations established on a BPJ basis that are 
equivalent or more stringent than part 433 limitations. Transferring 
limitations from existing Metal Finishing effluent guidelines would 
likely result in no additional pollutant load reductions. Therefore, 
based on the lack of additional pollutant removals that are estimated, 
EPA is not promulgating BPT limitations transferred from existing Metal 
Finishing effluent limitations guidelines for the General Metals 
subcategory.
    EPA is not revising or establishing BPT limitations for any 
facilities in this subcategory. Direct dischargers in the General 
Metals subcategory will remain regulated by permit limits and part 433, 
as applicable.
2. Best Conventional Pollutant Control Technology (BCT)
    In deciding whether to adopt more stringent limitations for BCT 
than BPT, EPA considers whether there are technologies that achieve 
greater removals of conventional pollutants than adopted for BPT, and 
whether those technologies are cost-reasonable under the standards 
established by the CWA. EPA generally refers to the decision criteria 
as the ``BCT cost test.'' For a more detailed description of the BCT 
cost test and details of EPA's analysis, see Chapter 4 of the EEBA.
    As EPA is not establishing any BPT limitations for the General 
Metals subcategory, EPA did not evaluate any technologies for the final 
rule that can achieve greater removals of conventional pollutants. 
Consequently, EPA is not establishing BCT limitations for the General 
Metals subcategory.
3. Best Available Technology Economically Achievable (BAT)
    EPA proposed to establish BAT limitations for existing direct 
dischargers in the General Metals subcategory based on the Option 2 
technology. As previously noted, EPA has decided not to establish BPT 
limitations based on Option 2 technology. The same reasons support not 
establishing BAT limitations based on the same technology. EPA 
evaluated the cost of effluent reductions, pollutant reductions, and 
the economic achievability of compliance with BAT limitations based on 
the Option 2 technology.
    Based on the revisions and corrections to the EPA Cost & Loadings 
Model discussed in the NODA and in section IV.B.1 of today's final 
rule, EPA determined that the costs of Option 2 are disproportionate to 
the toxic pollutant reductions (measured in pound-equivalents (PE)). 
The cost of achieving the effluent reduction (in 1981$) for Option 2 
for direct dischargers in the General Metals subcategory is over 
$1,000/PE removed (see the EEBA and DCN 37900, section 26.0, for a 
discussion of the cost-effectiveness analysis). The costs associated 
with this technology are, as previously noted, substantially greater 
than the level EPA has traditionally determined are associated with 
available toxic pollutant control technology. EPA has determined that 
Option 2 technology is not the best available technology economically 
achievable for existing direct dischargers in the General Metals 
subcategory. EPA is not revising or establishing BAT limitations for 
this subcategory based Option 2 technology.
    EPA also considered transferring BAT limitations from existing 
Metal Finishing effluent guidelines (40 CFR 433.14) to the General 
Metals subcategory. EPA's reviewed existing General Metals facilities 
and found that all are currently achieving part 433 BAT limitations. 
Transferring BAT limitations from existing Metal Finishing effluent 
guidelines would likely result in no additional pollutant load 
reductions and minimal incremental compliance costs (see section 
VI.A.1). Therefore, based on the lack of additional pollutant removals 
that are estimated, EPA is not promulgating BAT limitations transferred 
from existing Metal Finishing effluent limitations guidelines for the 
General Metals subcategory.
    EPA is not revising or establishing BAT limitations for any 
facilities in this subcategory. Direct dischargers in the General 
Metals subcategory will remain regulated by permit limits and part 433, 
as applicable.
4. New Source Performance Standards (NSPS)
    EPA proposed NSPS for the General Metals subcategory based on 
Option 4 technology. Option 4 technology is similar to Option 2 
(including Option 2 flow control and pollution prevention) but includes 
oils removal using ultrafiltration and solids separation by a 
microfilter (instead of a clarifier). Commentors stated that EPA had 
under-costed the Option 4 technology and that the compliance costs 
would be a barrier to entry for new facilities. In addition, commentors 
questioned the completeness of EPA's database on microfiltration, 
noting that EPA transferred standards for several pollutants from the 
Option 2 technology, based on lack of data. EPA reviewed its database 
for the Option 4 technology and agrees that its microfiltration 
database is insufficient to support a determination that the Option 4 
limitations are technically achievable.
    EPA also evaluated setting General Metals NSPS based on the Option 
2 technology and assessed the financial burden to new General Metals 
direct dischargers. Specifically, EPA's ``barrier to entry'' analysis 
identified whether General Metals NSPS based on the Option 2 technology 
would pose sufficient financial burden as to constitute a material 
barrier to entry of new General Metals establishments into the MP&M 
point source category. Additionally, EPA reviewed its database for 
establishing General Metals NSPS based on the Option 2 technology as 
commentors indicated the proposed standards were not technically 
achievable.
    In response to these comments, EPA reviewed all the information 
currently available on General Metals facilities employing the Option 2 
technology basis. This review demonstrated that process wastewaters at 
General Metals facilities contain a wide variety of metals in 
significant concentrations. Commentors stated that single stage 
precipitation and solids separation step may not achieve sufficient 
removals for wastewaters that contain significant concentrations of a 
wide variety of metals--especially if the metals preferentially 
precipitate at disparate

[[Page 25703]]

pH ranges. Consequently, to address concerns raised by commentors, EPA 
also costed new sources to operate two separate chemical precipitation 
and solids separation steps in series. Two-stage chemical precipitation 
and solids separation allows General Metals facilities with multiple 
metals to control metal discharges to concentrations lower than single-
stage chemical precipitation and solids separation over a wider pH 
range.
    Applying this revised costing approach, EPA projects a barrier to 
entry for General Metals NSPS based on the Option 2 technology as 14% 
of General Metals direct dischargers have after-tax compliance costs 
between 1 to 3% of revenue, 22% have after-tax compliance costs between 
3 to 5% of revenue, and 2% have after-tax compliance costs greater than 
5% of revenue. Consequently, based on the compliance costs of the 
modified Option 2 technology EPA is today rejecting Option 2 technology 
as the basis for NSPS in the General Metals subcategory. See section 11 
of the TDD for a description of how these new source compliance costs 
were developed and Chapter 9 of the EEBA for a description of the 
framework EPA used for the barrier to entry analysis and general 
discussion of the results.
    EPA also considered transferring NSPS from existing Metal Finishing 
effluent guidelines (40 CFR 433.16) to the General Metals subcategory. 
EPA reviewed existing General Metals direct dischargers and found that 
all are currently either covered by or have permits based on the Metal 
Finishing limitations at 40 CFR part 433. EPA has no basis to conclude 
that new General Metals facilities would have less stringent 
requirements than existing facilities, particularly since, in the 
absence of promulgated NSPS, it is likely that permit writers would 
consult the part 433 requirements to establish BPJ limits. In addition, 
those new facilities which meet the applicability criteria for part 433 
will be subject to the NSPS for that category. Therefore, transferring 
standards from these existing Metal Finishing effluent limitations 
guidelines would likely result in no additional pollutant load 
reductions.
    Therefore, based on the lack of additional pollutant removals that 
are estimated, EPA is not promulgating NSPS for the General Metals 
subcategory. EPA is not revising or establishing NSPS for any 
facilities in this subcategory. Direct dischargers in the General 
Metals subcategory will remain regulated by permit limits and part 433, 
as applicable.
5. Pretreatment Standards for Existing Sources (PSES)
    EPA proposed to establish PSES for existing indirect dischargers in 
the General Metals subcategory based on the Option 2 technology (i.e., 
the same technology basis that EPA considered for BPT/BCT/BAT for this 
subcategory) with a ``low-flow'' exclusion of 1 million gallons per 
year (MGY) to reduce economic impacts on small businesses and 
administrative burden for control authorities. Based on the revisions 
and corrections to the EPA Cost & Loadings Model discussed in the NODA 
and in section IV.B.1 of today's final rule, EPA rejected promulgating 
PSES for existing indirect dischargers in the General Metals 
subcategory based on the Option 2 technology for the following reasons: 
(1) Many General Metals indirect dischargers are currently regulated by 
existing effluent guidelines (parts 413 or 433 or both, as applicable); 
(2) EPA estimates that compliance with PSES based on the Option 2 
technology will result in the closure of approximately 4% of the 
existing indirect dischargers in this subcategory; and (3) EPA 
determined that the incremental toxic pollutant reductions are very 
expensive per pound removed (the cost-effectiveness value (in 1981$) 
for Option 2 for indirect dischargers in the General Metals subcategory 
is $432/PE).
    This suggests to EPA that the identified technology is not truly 
``available'' to this industry because it would remove a relatively 
small number of additional toxic pounds at a cost significantly greater 
than that EPA has typically determined is appropriate for other 
industries. EPA has determined that Option 2 technology is not the best 
available technology economically achievable for existing indirect 
dischargers in the General Metals subcategory. Therefore, EPA is not 
establishing PSES for this subcategory based on the Option 2 
technology.
    As discussed in the June 2002 NODA (see 67 FR 38798), EPA also 
considered a number of alternative options whose economic impacts would 
be less costly than Option 2 technology. These options potentially have 
compliance costs more closely aligned with toxic pollutant reductions. 
EPA considered the following alternative options for today's final 
rule:

Option A: No change in current regulation;
Option B: Option 2 with a higher low-flow exclusion;
Option C: Upgrading facilities currently covered by part 413 to the 
PSES of part 433; and
Option D: Upgrading all facilities covered by part 413, and those 
facilities covered by ``local limits only'' that discharge greater than 
a specified wastewater flow (e.g., 1, 3, or 6.25 MGY) of process 
wastewater to the part 433 pretreatment standards for existing sources. 
Note that facilities regulated by ``local limits only'' are also 
regulated by the General Pretreatment Regulations (40 CFR part 403).

    As discussed in section IV.B.1 of today's final rule, based on 
comments, EPA has revised its methodology for estimating compliance 
costs and pollutant loadings for Option 2, higher low-flow exclusions 
(Option B); and the ``upgrade'' options (Options C and D) previously 
described. Using information from this revised analysis, EPA concludes 
that all of these alternative options (Options B, C, and D) are either 
not available or not economically achievable. EPA rejected Options B, 
C, and D as: (1) Greater than 10% of existing indirect dischargers not 
covered by part 433 close at the upgrade option; or (2) toxic removals 
of the upgrade options are quite expensive (cost-effectiveness values 
(in 1981$) in excess of $420/PE), suggesting that these options are not 
truly available technologies for this industry segment. EPA 
consequently determined that none of the treatment options represented 
best available technology economically achievable. Therefore, EPA is 
not revising or establishing PSES for existing indirect dischargers in 
the General Metals subcategory (Option A). Wastewater discharges to 
POTWs from facilities in this subcategory will remain regulated by 
local limits, general pretreatment standards (part 403), and parts 413 
and/or 433, as applicable. EPA also notes that facilities regulated by 
parts 413 and/or 433 PSES must comply with part 433 PSNS if the changes 
to their facilities are determined to make them new sources.
6. Pretreatment Standards for New Sources (PSNS)
    In 2001, EPA proposed pretreatment standards for new sources based 
on the Option 4 technology basis. Option 4 technology is similar to 
Option 2 (including Option 2 flow control and pollution prevention) but 
includes oils removal using ultrafiltration and solids separation by a 
microfilter (instead of a clarifier). As explained in section VI.A.4, 
EPA concluded its database is insufficient to support a determination 
that the Option 4 standards are technically achievable. As a result, 
for the final rule EPA considered

[[Page 25704]]

establishing PSNS in the General Metals subcategory based on the Option 
2 technology (i.e., the same technology basis that was considered for 
BPT/BCT/BAT for this subcategory) along with the same ``low-flow'' 
exemption of 1 MGY considered for existing sources.
    For today's final rule EPA evaluated setting General Metals PSNS 
based on the Option 2 technology and assessed the financial burden to 
new General Metals indirect dischargers. Specifically, EPA's ``barrier 
to entry'' analysis identified whether General Metals PSNS based on the 
Option 2 technology would pose sufficient financial burden on new 
General Metals facilities to constitute a material barrier to entry 
into the MP&M point source category.
    EPA projects a barrier to entry for General Metals PSNS based on 
the Option 2 technology as 14% of General Metals indirect dischargers 
have after-tax compliance costs between 1 to 3% of revenue and 20% have 
after-tax compliance costs between 3 to 5% of revenue. Consequently, 
EPA is today rejecting Option 2 technology as the basis for PSNS in the 
General Metals subcategory. EPA has selected ``no further regulation'' 
for new General Metals indirect dischargers and is not revising PSNS 
for new General Metals indirect dischargers. Wastewater discharges to 
POTWs from facilities in this subcategory will remain regulated by 
local limits, general pretreatment standards (part 403), and part 433, 
as applicable. See section 11 of the TDD for a description of how these 
new source compliance costs were developed and Chapter 9 of the EEBA 
for a description of the framework EPA used for the barrier to entry 
analysis and general discussion of the results.

B. Metal Finishing Job Shops Subcategory

    EPA is not revising any limitations or standards for facilities 
that would have been subject to this subcategory. Such facilities will 
continue to be regulated by the General Pretreatment Standards (part 
403), local limits, permit limits, and parts 413 and/or 433, as 
applicable.
1. BPT/BCT/BAT
    EPA proposed to establish BPT/BCT/BAT for existing direct 
dischargers in the MFJS subcategory based on the Option 2 technology 
(see section VI.A for a description of Option 2). EPA evaluated the 
cost of effluent reductions, pollutant reductions, and the economic 
achievability of compliance with BPT/BCT/BAT limitations based on the 
Option 2 technology. Based on the revisions and corrections to the EPA 
Cost & Loadings Model discussed in the NODA and in section IV.B.1 of 
today's final rule, EPA determined that the compliance costs of the 
Option 2 technology are not economically achievable. EPA estimates that 
compliance with BPT/BCT/BAT limitations based on the Option 2 
technology will result in the closure of 50% of the existing direct 
dischargers in this subcategory (12 of 24 existing MFJS direct 
dischargers). Consequently, EPA concludes that for existing direct 
dischargers in the MFJS subcategory, Option 2 is not the best 
practicable control technology, best conventional pollutant control 
technology, or best available technology economically achievable. EPA 
has decided not to establish new BPT, BCT, or BAT limitations for 
existing MFJS direct dischargers based on the Option 2 technology, 
which will remain subject to part 433.
2. New Source Performance Standards (NSPS)
    EPA proposed to establish NSPS for new direct dischargers in the 
MFJS subcategory based on the Option 4 technology. Option 4 technology 
is similar to Option 2 (including Option 2 flow control and pollution 
prevention) but includes oils removal using ultrafiltration and solids 
separation by a microfilter (instead of a clarifier). As explained in 
section VI.A.4, EPA concluded its database is insufficient to support a 
determination that the Option 4 standards are technically achievable. 
Consequently, EPA rejected Option 4 technology as the basis for NSPS in 
the MFJS subcategory.
    For today's final rule EPA evaluated setting MFJS NSPS based on the 
Option 2 technology and assessed the financial burden to new MFJS 
direct dischargers. Specifically, EPA's ``barrier to entry'' analysis 
identified whether MFJS NSPS based on the Option 2 technology would 
pose sufficient financial burden so as to constitute a material barrier 
to entry into the MP&M point source category. Additionally, EPA 
reviewed its database for establishing MFJS NSPS based on the Option 2 
technology as commentors indicated the proposed standards were not 
technically achievable.
    In response to these comments, EPA reviewed all the information 
currently available on MFJS facilities employing the Option 2 
technology basis. This review demonstrated that process wastewaters at 
MFJS facilities contain a wide variety of metals in significant 
concentrations. Commentors stated that single stage precipitation and 
solids separation may not achieve sufficient removals for wastewaters 
that contain significant concentrations of a wide variety of metals--
especially if the metals preferentially precipitate at disparate pH 
ranges. Consequently, to address concerns raised by commentors, EPA 
also costed new sources to operate two separate chemical precipitation 
and solids separation steps in series. Two-stage chemical precipitation 
and solids separation allows MFJS facilities with multiple metals to 
control metal discharges to concentrations lower than single-stage 
chemical precipitation and solids separation over a wider pH range.
    Applying this revised costing approach, EPA projects a barrier to 
entry for MFJS NSPS based on the Option 2 technology as all MFJS direct 
dischargers have new source compliance costs that are greater than 5% 
of revenue. Consequently, EPA is today rejecting Option 2 technology as 
the basis for NSPS in the MFJS subcategory, and is not revising NSPS 
for new MFJS direct dischargers. Wastewater discharges from these 
facilities in this subcategory will remain regulated by local limits 
and part 433 NSPS as applicable. See section 11 of the TDD for a 
description of how these new source compliance costs were developed and 
Chapter 9 of the EEBA for a description of the framework EPA used for 
the barrier to entry analysis and general discussion of the results.
3. Pretreatment Standards for Existing Sources (PSES)
    EPA proposed to establish PSES for existing indirect dischargers in 
the MFJS subcategory based on the Option 2 technology. Based on the 
revisions and corrections to the EPA Cost & Loadings Model discussed in 
the NODA and in section IV.B.1 of today's final rule, EPA determined 
that the costs of Option 2 are not economically achievable for existing 
indirect dischargers in the MFJS subcategory. EPA estimates that 
compliance with PSES based on the Option 2 technology will result in 
the closure of 46% of the existing indirect dischargers in this 
subcategory (589 of 1,270 existing MFJS indirect dischargers), which 
EPA considers to be too high. EPA has determined that Option 2 
technology is not the best available technology economically achievable 
for existing indirect dischargers in the MFJS subcategory. Therefore, 
EPA is not establishing PSES for this subcategory based on the Option 2 
technology.
    As discussed in the January 2001 proposal (see 66 FR 551) and June 
2002 NODA (see 67 FR 38801), EPA also considered a number of 
alternative options whose economic impacts would be less costly than 
Option 2 technology.

[[Page 25705]]

These options potentially have compliance costs more closely aligned 
with toxic pollutant reductions. EPA considered the following 
alternative options for today's final rule:

Option A: No change in current regulation;
Option B: Option 2 with a low-flow exclusion; and
Option C: Upgrading facilities currently covered by part 413 to the 
PSES of part 433.
Option D: Pollution Prevention Option.

All facilities in the MFJS subcategory are currently subject to part 
413, part 433 or both.
    As discussed in section IV.B.1 of today's final rule, based on 
comments, EPA has revised its methodology for estimating compliance 
costs and pollutant loadings for Option 2, low-flow exclusions (Option 
B), and the ``upgrade'' option (Option C) previously described. Using 
information from this revised analysis, EPA concludes that neither of 
these alternative options (Options B or C) are economically achievable. 
EPA rejected Options B and C as greater than 10% of existing indirect 
dischargers not covered by part 433 close at the upgrade option.
    EPA also solicited comment in the January 2001 proposal on a 
pollution prevention alternative for indirect dischargers in this 
subcategory (Option D). Commentors supported option D and stated that 
the pollution prevention practices identified by EPA in the January 
2001 proposal represent environmentally sound practices for the metal 
finishing industry. The commentors also stated that Option D should, 
however, be implemented on a voluntary basis similar to the National 
Metal Finishing Strategic Goals Program (see 66 FR 511). Control 
authorities also commented that Option D may increase their 
administrative burden because of additional review of facility 
operations and compliance with the approved pollution prevention plan, 
and enforcement of Option D may be more difficult than other options 
considered. EPA is not promulgating Option D for facilities in the MFJS 
subcategory for the final rule due to the increased administrative 
burden on pretreatment control authorities and potential problems 
enforcing Option D. Section 15 of the TDD describes many of the 
pollution prevention practices that were considered for Option D. These 
pollution prevention practices may be useful in helping facilities 
lower operating costs, improve environmental performance, and foster 
other important benefits.
    EPA is not establishing PSES for existing indirect dischargers in 
the MFJS subcategory. Wastewater discharges to POTWs from facilities in 
this subcategory will remain regulated by general pretreatment 
standards (part 403), and parts 413 and/or 433, as applicable. EPA also 
notes that facilities regulated by parts 413 and/or 433 PSES must 
comply with part 433 PSNS if the changes to their facilities are 
determined to make them new sources.
4. Pretreatment Standards for New Sources (PSNS)
    EPA proposed to establish PSNS for indirect dischargers in the MFJS 
subcategory based on the Option 4 technology. Option 4 technology is 
similar to Option 2 (including Option 2 flow control and pollution 
prevention) but includes oils removal using ultrafiltration and solids 
separation by a microfilter (instead of a clarifier). As explained in 
section VI.A.4, EPA concluded its database is insufficient to support a 
determination that the Option 4 standards are technically achievable. 
Consequently, EPA is today rejecting Option 4 technology as the basis 
for PSNS in the MFJS subcategory.
    For today's final rule EPA evaluated setting MFJS PSNS based on the 
Option 2 technology and assessed the financial burden to new MFJS 
indirect dischargers. Specifically, EPA's `barrier to entry' analysis 
identified whether MFJS PSNS based on the Option 2 technology would 
pose sufficient financial burden on new MFJS facilities to constitute a 
material barrier to entry into the MP&M point source category.
    EPA projects a barrier to entry for MFJS PSNS based on the Option 2 
technology as 8% of MFJS indirect dischargers have after-tax compliance 
costs between 1-3% of revenue, 5% have after-tax compliance costs 
between 3-5% of revenue, and 6% have after-tax compliance costs greater 
than 5% of revenue. Consequently, EPA is today rejecting Option 2 
technology as the basis for PSNS in the MFJS subcategory, and is not 
revising PSNS for new MFJS indirect dischargers. Wastewater discharges 
to POTWs from facilities in this subcategory will remain regulated by 
local limits, general pretreatment standards (part 403), and part 433, 
as applicable. See section 11 of the TDD for a description of how these 
new source compliance costs were developed and Chapter 9 of the EEBA 
for a description of the framework EPA used for the barrier to entry 
analysis and general discussion of the results.

C. Printed Wiring Board Subcategory

    EPA is not revising any limitations or standards for facilities 
that would have been subject to this subcategory. Such facilities will 
continue to be regulated by the General Pretreatment Standards (part 
403), local limits, permit limits, and parts 413 and/or 433, as 
applicable.
1. BPT/BCT/BAT
    EPA proposed to establish BPT/BCT/BAT for direct dischargers in the 
PWB subcategory based on the Option 2 technology (see section VI.A for 
a description of Option 2). EPA evaluated the cost of effluent 
reductions, pollutant reductions, and the economic achievability of 
compliance with BPT/BCT/BAT limitations based on the Option 2 
technology. Based on revisions and corrections to the EPA Cost & 
Loadings Model discussed in the NODA and in section IV.B.1 of today's 
final rule, EPA has concluded that revision of the national regulation 
is not warranted for this subcategory.
    Based on MP&M survey information, EPA estimates that compliance 
with BPT/BCT/BAT limitations based on the Option 2 technology results 
in no closures of the existing eight direct dischargers in the PWB 
subcategory. However, EPA decided not to establish BPT/BAT limitations 
based on the Option 2 technology for the PWB subcategory for the 
following reasons: (1) EPA identified only eight existing PWB direct 
dischargers and all of these PWB direct dischargers are currently 
regulated by existing effluent guidelines (part 433); and (2) the costs 
of Option 2 are disproportionate to the estimated toxic pollutant 
reductions. EPA estimates compliance cost of $0.3 million (2001$) with 
only 186 toxic pound-equivalents (PE) being removed. This equates to a 
cost-effectiveness value (in 1981$) of approximately $900/PE. EPA 
concludes that for existing direct dischargers in the PWB subcategory, 
Option 2 is not the best practicable control technology, best 
conventional pollutant control technology, or best available technology 
economically achievable. EPA has decided not to establish new BPT, BCT, 
or BAT limitations for existing PWB direct dischargers based on the 
Option 2 technology, which will remain subject to part 433.
2. New Source Performance Standards (NSPS)
    EPA proposed to establish NSPS for new direct dischargers in the 
PWB subcategory based on the Option 4 technology. Option 4 technology 
is similar to Option 2 (including Option 2 flow control and pollution 
prevention) but includes oils removal using ultrafiltration and solids 
separation by a microfilter (instead of a clarifier). As explained in 
section VI.A.4, EPA

[[Page 25706]]

concluded its database is insufficient to support a determination that 
the Option 4 standards are technically achievable. Consequently, EPA is 
today rejecting Option 4 technology as the basis for NSPS in the PWB 
subcategory.
    For today's final rule EPA evaluated setting PWB NSPS based on the 
Option 2 technology. EPA reviewed its database for establishing PWB 
NSPS based on the Option 2 technology as commentors indicated the 
proposed standards were not technically achievable. In response to 
these comments, EPA reviewed all the information currently available on 
PWB facilities employing the Option 2 technology basis. EPA now 
concludes that the PWBs Option 2 database can only be used to establish 
limitations for copper, nickel, and tin. In order to assess the 
difference between current NSPS requirements (from part 433) for PWB 
facilities and those under consideration here, EPA estimated the 
incremental quantities of copper, nickel, and tin that would be reduced 
if a new PWB facility were required to meet NSPS based on the Option 2 
technology rather than NSPS based on 433. EPA analysis shows minimal 
amounts of pollutant reductions based on more stringent requirements on 
copper, nickel, and tin.
    Consequently, EPA is today rejecting Option 2 technology as the 
basis for NSPS in the PWB subcategory based on the small incremental 
quantity of toxic pollutants that would be reduced in relation to 
existing requirements. EPA is not establishing NSPS for new PWB direct 
dischargers and is not revising existing NSPS for new PWB direct 
dischargers. Wastewater discharges from these facilities in this 
subcategory will remain regulated by permit limits and part 433 as 
applicable. See section 11 of the TDD for a description of how these 
new source compliance costs were developed and Chapter 9 of the EEBA 
for a description of the framework EPA used for the barrier to entry 
analysis and general discussion of the results.
3. Pretreatment Standards for Existing Sources (PSES)
    EPA proposed to establish PSES for existing indirect dischargers in 
the PWB subcategory based on the Option 2 technology. Based on the 
revisions and corrections to the EPA Cost & Loadings Model discussed in 
the NODA and in section IV.B.1 of today's final rule, EPA rejected 
promulgating PSES for existing indirect dischargers in the PWB 
subcategory based on the Option 2 technology for the following reasons: 
(1) All PWB indirect dischargers are currently regulated by existing 
effluent guidelines (parts 413 or 433 or both, as applicable); (2) EPA 
estimates that compliance with PSES based on the Option 2 technology 
will result in the closure of 6.5% of the existing indirect dischargers 
in this subcategory (55 of 840 existing PWB indirect dischargers); and 
(3) EPA determined that the toxic pollutant reductions are very 
expensive per pound removed (the cost-effectiveness value (in 1981$) is 
$455/PE). EPA has determined that Option 2 technology is not the best 
available technology economically achievable for existing indirect 
dischargers in the PWB subcategory, therefore is not establishing PWB 
PSES based on the Option 2 technology.
    As discussed in the June 2002 NODA (see 67 FR 38802), EPA also 
considered a number of alternative options whose economic impacts would 
be less costly than Option 2 technology. These options potentially have 
compliance costs more closely aligned with toxic pollutant reductions. 
EPA considered the following alternative options for today's final 
rule:

Option A: No change in current regulation;
Option B: Option 2 with a higher low-flow exclusion; and
Option C: Upgrading facilities currently covered by part 413 to the 
PSES of part 433

EPA notes that all facilities in the PWB subcategory are currently 
subject to part 413, part 433 or both.
    As discussed in section IV.B.1 of today's final rule, based on 
comments, EPA has revised its methodology for estimating compliance 
costs and pollutant loadings for Option 2, higher low-flow exclusions 
(Option B); and the ``upgrade'' option (Options C) previously 
described. Using information from this revised analysis, EPA rejected 
Options B and C as: (1) Greater than 10% of existing indirect 
dischargers not covered by part 433 close at the upgrade option; or (2) 
the incremental compliance costs of the upgrade options were too great 
in terms of toxic removals (cost-effectiveness values (in 1981$) in 
excess of $833/PE). Therefore EPA is not revising PSES for existing 
indirect dischargers in the PWB subcategory. Wastewater discharges to 
POTWs from facilities in this subcategory will remain regulated by 
general pretreatment standards (part 403) and parts 413 and/or 433, as 
applicable. EPA also notes that facilities regulated by parts 413 and/
or 433 PSES must comply with part 433 PSNS if the changes to their 
facilities are determined to make them new sources.
4. Pretreatment Standards for New Sources (PSNS)
    EPA proposed to establish PSNS for indirect dischargers in the PWB 
subcategory based on the Option 4 technology. Option 4 technology is 
similar to Option 2 (including Option 2 flow control and pollution 
prevention) but includes oils removal using ultrafiltration and solids 
separation by a microfilter (instead of a clarifier). As explained in 
section VI.A.4, EPA concluded its database is insufficient to support a 
determination that the Option 4 standards are technically achievable. 
Consequently, EPA is today rejecting Option 4 technology as the basis 
for PSNS in the PWB subcategory.
    For today's final rule EPA evaluated setting PWB PSNS based on the 
Option 2 technology and assessed the financial burden to new PWB 
indirect dischargers. Specifically, EPA's `barrier to entry' analysis 
identified whether PWB PSNS based on the Option 2 technology would pose 
sufficient financial burden on new PWB facilities to constitute a 
material barrier to entry into the MP&M point source category.
    EPA projects a barrier to entry for PWB PSNS based on the Option 2 
technology as 3% of PWB indirect dischargers have after-tax compliance 
costs between 1 to 3% of revenue and 4% have after-tax compliance costs 
greater than 5% of revenue. Consequently, EPA is today rejecting Option 
2 technology as the basis for PSNS in the PWB subcategory. EPA has 
selected ``no further regulation'' for new PWB indirect dischargers and 
is not revising PSNS for new PWB indirect dischargers. Wastewater 
discharges to POTWs from facilities in this subcategory will remain 
regulated by local limits, general pretreatment standards (part 403), 
and part 433, as applicable. See section 11 of the TDD for a 
description of how these new source compliance costs were developed and 
Chapter 9 of the EEBA for a description of the framework EPA used for 
the barrier to entry analysis and general discussion of the results.

D. Non-Chromium Anodizing Subcategory

    EPA is not revising limitations or standards for any facilities 
that would have been subject to this subcategory. Such facilities will 
continue to be regulated by the General Pretreatment Standards (part 
403), local limits, permit limits, and parts 413 and/or 433, as 
applicable.
1. BPT/BCT/BAT
    As previously discussed, after publication of the June 2002 NODA 
EPA

[[Page 25707]]

conducted another review of all NCA facilities in the MP&M 
questionnaire database to determine the destination of discharged 
wastewater (i.e., either directly to surface waters or indirectly to 
POTWs or both) and the applicability of the final rule to discharged 
wastewaters. As a result of this review, EPA did not identify any NCA 
direct discharging facilities or NCA facilities that do not discharge 
wastewater (i.e., zero discharge or contract haulers) or do not use 
process water (dry facilities) in its rulemaking record. All of the NCA 
facilities in EPA's database are indirect dischargers. Therefore, EPA 
cannot evaluate treatment systems at direct dischargers. As a result, 
EPA transferred cost and pollutant loading data from the best 
performing indirect facilities in order to evaluate direct discharging 
limitations in this subcategory.
    In 2001, EPA proposed to establish BPT/BCT/BAT limitations for 
direct dischargers in the NCA subcategory based on the Option 2 
technology. EPA evaluated the cost of effluent reductions, quantity of 
pollutant reductions, and the economic achievability of compliance with 
BPT/BCT/BAT limitations based on the Option 2 technology. Based on the 
revisions and corrections to the EPA Cost & Loadings Model discussed in 
the NODA and in section IV.B.1 of today's final rule, the costs of the 
Option 2 technology were disproportionate to the projected toxic 
pollutants reductions (cost-effectiveness values (in 1981$) in excess 
of $1,925/PE).
    EPA decided not to establish BPT/BCT/BAT limitations based on the 
Option 2 technology for the NCA subcategory for following reasons: (1) 
EPA identified no NCA direct dischargers; and (2) the costs of Option 2 
are disproportionate to the estimated toxic pollutant reductions (i.e., 
$1,925/PE). EPA concludes that for existing direct dischargers in the 
NCA subcategory, Option 2 is not the best practicable control 
technology, best conventional pollutant control technology, or best 
available technology economically achievable. EPA has decided not to 
establish new BPT, BCT, or BAT limitations for existing NCA direct 
dischargers based on the Option 2 technology. EPA identified no NCA 
direct dischargers through its survey efforts. However, if such 
facilities do exist, they would be subject to part 433.
2. New Source Performance Standards (NSPS)
    EPA proposed to establish NSPS for direct dischargers in the NCA 
subcategory based on the Option 2 technology. For today's final rule 
EPA evaluated setting NCA NSPS based on the Option 2 technology and 
assessed the financial burden to new NCA direct dischargers. 
Specifically, EPA's `barrier to entry' analysis identified whether NCA 
NSPS based on the Option 2 technology would pose sufficient financial 
burden on new NCA facilities to constitute a material barrier to entry 
into the MP&M point source category.
    EPA projects a barrier to entry for NCA NSPS based on the Option 2 
technology as approximately 26% of NCA direct dischargers have new 
source compliance costs that are between 3% and 5% of revenue. 
Consequently, EPA is today rejecting Option 2 technology as the basis 
for NSPS in the NCA subcategory. EPA has selected ``no further 
regulation'' for new NCA direct dischargers and is not revising NSPS 
for new NCA direct dischargers, which will remain subject to part 433. 
See section 11 of the TDD for a description of how these new source 
compliance costs were developed and Chapter 9 of the EEBA for a 
description of the framework EPA used for the barrier to entry analysis 
and general discussion of the results.
3. Pretreatment Standards for Existing and New Sources (PSES/PSNS)
    EPA proposed ``no further regulation'' for existing and new 
indirect dischargers in the NCA subcategory. EPA based this decision on 
the economic impacts to indirect dischargers associated with Option 2 
and the small quantity of toxic pollutants discharged by facilities in 
this subcategory, even after a economically-achievable flow cutoff is 
applied (see 66 FR 467). For the reasons set out in the 2001 proposal, 
EPA has decided not to establish new regulations and is not 
establishing PSES or PSNS in the NCA subcategory. These facilities 
remain subject to parts 413 or 433, or both, as applicable. EPA also 
notes that facilities regulated by parts 413 and/or 433 PSES must 
comply with part 433 PSNS if the changes to their facilities are 
determined to make them new sources.

E. Steel Forming & Finishing Subcategory

    EPA is not revising limitations or standards for any facilities 
that would have been subject to this subcategory. Such facilities will 
continue to be regulated by the General Pretreatment Standards (part 
403), local limits, permit limits, and Iron & Steel effluent 
limitations guidelines (part 420) as applicable.
1. BPT/BCT/BAT
    EPA proposed to establish BPT/BCT/BAT for existing direct 
dischargers in the SFF subcategory in this part (40 CFR part 438) based 
on the Option 2 technology (see section VI.A for a description of 
Option 2). For the final rule, EPA evaluated the cost of effluent 
reductions, pollutant reductions, and the economic achievability of 
compliance with BPT/BCT/BAT limitations based on the Option 2 
technology. Based on the revisions and corrections to the EPA Cost & 
Loadings Model discussed in the NODA and in section IV.B.1 of today's 
final rule, EPA determined that the compliance costs of Option 2 are 
not economically achievable. EPA estimates that compliance with BPT/
BCT/BAT limitations based on the Option 2 technology will result in the 
closure of 17% of the existing direct dischargers in this subcategory 
(7 of 41 existing SFF direct dischargers). EPA concludes that for 
existing direct dischargers in the SFF subcategory, Option 2 is not the 
best practicable control technology, best conventional pollutant 
control technology, or best available technology economically 
achievable, and therefore, EPA is not establishing new BPT, BCT, or BAT 
limitations for existing SFF direct dischargers based on the Option 2 
technology. These facilities will remain subject to part 420.
2. New Source Performance Standards (NSPS)
    EPA proposed to establish NSPS for new direct dischargers in the 
SFF subcategory based on the Option 4 technology. Option 4 technology 
is similar to Option 2 (including Option 2 flow control and pollution 
prevention) but includes oils removal using ultrafiltration and solids 
separation by a microfilter (instead of a clarifier). As explained in 
section VI.A.4, EPA concluded its database is insufficient to support a 
determination that the Option 4 standards are technically achievable. 
Consequently, EPA is today rejecting Option 4 technology as the basis 
for NSPS in the SFF subcategory. EPA has selected ``no further 
regulation'' for new SFF direct dischargers and is not revising NSPS 
for new SFF direct dischargers, which will remain subject to part 420.
3. Pretreatment Standards for Existing Sources (PSES)
    EPA proposed to establish PSES for existing indirect dischargers in 
the SFF subcategory based on the Option 2 technology. Based on the 
revisions and corrections to the EPA Cost & Loadings

[[Page 25708]]

Model discussed in the NODA and in section IV.B.1 of today's final 
rule, EPA estimates that compliance with PSES based on the Option 2 
technology will result in the closure of 9% of the existing indirect 
dischargers in this subcategory (10 of 112 existing SFF indirect 
dischargers). Option 2 technology is not economically achievable.
    EPA has determined that Option 2 technology is not the best 
available technology economically achievable for existing indirect 
dischargers in the SFF subcategory, and therefore EPA is not revising 
PSES for this subcategory based on the Option 2 technology. Wastewater 
discharges to POTWs from these facilities will remain regulated by 
general pretreatment standards (part 403) and part 420.
4. Pretreatment Standards for New Sources (PSNS)
    EPA proposed to establish PSNS for indirect dischargers in the SFF 
subcategory based on the Option 4 technology. Option 4 technology is 
similar to Option 2 (including Option 2 flow control and pollution 
prevention) but includes oils removal using ultrafiltration and solids 
separation by a microfilter (instead of a clarifier). As explained in 
section VI.A.4, EPA concluded its database is insufficient to support a 
determination that the Option 4 standards are technically achievable. 
Consequently, EPA is today rejecting Option 4 technology as the basis 
for PSNS in the SFF subcategory. EPA has selected ``no further 
regulation'' for new SFF indirect dischargers and is not revising PSNS 
for new SFF indirect dischargers. These facilities will remain subject 
to part 420.

F. Oily Wastes Subcategory

    EPA is promulgating limitations and standards for existing and new 
direct dischargers in the Oily Wastes subcategory based on the proposed 
Option 6 technology (see section VI.F.1). EPA is not promulgating 
pretreatment standards for existing or new indirect dischargers in this 
subcategory.
1. Best Practicable Control Technology (BPT)
    EPA is establishing BPT pH limitations and daily maximum 
limitations for two pollutants, oil and grease as hexane extractable 
material (O&G (as HEM)) and total suspended solids (TSS), for direct 
dischargers in the Oily Wastes subcategory based on the proposed 
technology option (Option 6). Option 6 technology includes the 
following treatment measures: (1) in-process flow control and pollution 
prevention; and (2) chemical emulsion breaking followed by oil water 
separation (see section 9 of the TDD for today's final rule for 
additional details on the Option 6 technology).
    The Agency concluded that the Option 6 treatment technology 
represents the best practicable control technology currently available 
and should be the basis for the BPT Oily Wastes limitations for the 
following reasons. First, this technology is available technology 
readily applicable to all facilities in the Oily Wastes subcategory. 
Approximately 42% of the direct discharging facilities in the Oily 
Wastes subcategory currently employ the Option 6 technology. Second, 
the cost of compliance with these limitations in relation to the 
effluent reduction benefits is not wholly disproportionate. None of 
these wastewater discharges are currently subject to national effluent 
limitations guidelines and the final rule will control wastewater 
discharges from a significant number of facilities (2,382 facilities).
    EPA estimates that compliance with BPT limitations based on Option 
6 technology will result in no closures of the existing direct 
dischargers in the Oily Wastes subcategory. Moreover, the adoption of 
this level of control will represent a significant reduction in 
pollutants discharged into the environment by facilities in this 
subcategory. For facilities in the Oily Wastes subcategory at Option 6, 
EPA estimates an annual compliance cost of $13.8 million (pre-tax, 
2001$) and 480,325 pounds of conventional pollutants removed from 
current discharges into the Nation's waters at a cost of $28.73/pound-
pollutant removed (2001$) (see Table VII-1). EPA has, therefore, 
determined the total cost of effluent reductions employing the Option 6 
technology are reasonable in relation to the effluent reduction 
benefits. (In estimating the pounds of pollutant removed by 
implementing Option 6 technology for direct dischargers in the Oily 
Wastes subcategory, EPA used the sum of O&G (measured as HEM) and TSS 
pounds removed to avoid any significant double counting of pollutants).
    The 2001 proposal also contains detailed discussions explaining why 
EPA rejected BPT limitations based on other BPT technology options (see 
66 FR 457). The information in the record for today's final rule 
provides no basis for EPA to change this conclusion.
    In the 2001proposal, in addition to pH, O&G (as HEM), and TSS, EPA 
also proposed to regulate sulfide. In today's final rule, EPA has not 
established a sulfide limitation because it may serve as a treatment 
chemical (see TDD). EPA also proposed three alternatives to control 
discharges of toxic organics in MP&M process wastewaters: (1) Meet a 
numerical limit for the total sum of a list of specified organic 
pollutants (similar to the Total Toxic Organic (TTO) parameter used in 
the Metal Finishing Effluent Limitations Guidelines); (2) meet a 
numerical limit for Total Organic Carbon (TOC) as an indicator 
parameter; or (3) develop and certify the implementation of an organic 
chemicals management plan. EPA evaluated the analytical wastewater and 
treatment technology data from OWS facilities and concluded it should 
not establish a separate indicator parameter or control mechanism for 
toxic organics. Optimizing the separation of oil and grease from 
wastewater using the Option 6 technology will similarly optimize the 
removal of toxic organic pollutants amenable to this treatment 
technology. Consequently, EPA is effectively controlling toxic organics 
and other priority and non-conventional pollutant discharges in OWS 
process wastewaters by regulating O&G (as HEM).
    In its analyses, EPA estimated that facilities will monitor once 
per month for O&G (as HEM) and TSS. EPA expects that 12 data points for 
each pollutant per year will yield a meaningful basis for establishing 
compliance with the promulgated limitations through long-term trends 
and short-term variability in O&G (as HEM) and TSS pollutant discharge 
loading patterns.
    Although EPA is not changing the technology basis from that 
proposed, EPA is revising all of the proposed Oily Wastes subcategory 
BPT limitations. This is a result of a recalculation of the limitations 
after EPA revised the data sets used to calculate the promulgated 
limitations to reflect changes including corrections and additional 
data (see 67 FR 38754).
2. Best Conventional Pollutant Control Technology (BCT)
    In deciding whether to adopt more stringent limitations for BCT 
than BPT, EPA considered whether there are technologies that achieve 
greater removals of conventional pollutants than adopted for BPT, and 
whether those technologies are cost-reasonable under the standards 
established by the CWA. EPA generally refers to the decision criteria 
as the ``BCT cost test.'' EPA is promulgating effluent limitations for 
conventional parameters (e.g., pH, TSS, O&G) equivalent to BPT for this 
subcategory because it identified no technologies that can achieve 
greater removals of conventional pollutants

[[Page 25709]]

than the selected BPT technology basis that also pass the BCT cost 
test. EPA evaluated the addition of ultrafiltration technology to the 
BPT technology basis as a means to obtain further O&G reductions. 
However, this technology option failed the BCT cost test. For a more 
detailed description of the BCT cost test and details on EPA's 
analysis, see Chapter 4 of the EEBA.
3. Best Available Technology Economically Achievable (BAT)
    EPA proposed to control toxic and non-conventional pollutants by 
establishing BAT limitations based on Option 6 technology. EPA has now 
decided not to establish BAT toxic and non-conventional limitations 
based on the Option 6 technology. As described in section VI.F.1, the 
BPT technology basis is readily available, and the limitations are cost 
reasonable. However the additional costs associated with compliance 
with Option 6-generated BAT limitations are not warranted. EPA has 
determined that these costs--primarily monitoring costs--are not 
warranted in view of the small quantity of additional effluent 
reduction (if any) the BAT limitations would produce. As explained 
above, EPA has determined that, the BPT limitation on O&G (measured as 
HEM) will effectively control toxic and non-conventional discharges in 
OWS process wastewaters. EPA has not identified any more stringent 
economically-achievable treatment technology option beyond BPT 
technology (Option 6) which it considered to represent BAT level of 
control applicable to Oily Wastes subcategory facilities.
    For the reasons explained above, EPA has concluded that it should 
not establish BAT limitations for specific pollutant parameters for 
Oily Waste operations. EPA notes that permit writers retain the 
authority to establish, on a case-by-case basis under section 
301(b)(1)(C) of the CWA, toxic effluent limitations that are necessary 
to meet State water quality standards.
4. New Source Performance Standards (NSPS)
    EPA is promulgating NSPS that would control pH and the same 
conventional pollutants controlled at the BPT and BCT levels. The 
selected technology basis for NSPS for this subcategory for today's 
final rule is Option 6. This is unchanged from the proposal. EPA 
projects no barrier to entry for new source direct dischargers 
associated with Option 6 as: (1) Option 6 technology is currently used 
at existing direct dischargers (i.e., Option 6 technology is 
technically available); and (2) there is no barrier to entry for new 
sources.
    EPA evaluated the economic impacts for existing direct dischargers 
associated with compliance with limitations based on Option 6 and found 
Option 6 to be economically achievable (no closures projected). EPA 
expects compliance costs to be lower for new sources as new sources can 
use Option 6 technology without incurring retrofitting costs (as is 
required for some existing sources). Additionally, EPA projects no 
barrier to entry for OWS NSPS based on the Option 6 technology as 
approximately 97% of OWS direct dischargers have after-tax compliance 
costs less than 1% of revenue and 3% have after-tax compliance costs 
between 1 to 3% of revenue.
    Consequently, EPA selected Option 6 technology as the basis for 
NSPS in the OWS. See section 11 of the TDD for a description of how 
these new source compliance costs were developed and Chapter 9 of the 
EEBA for a description of the framework EPA used for the barrier to 
entry analysis and general discussion of the results.
    In addition, EPA also evaluated and rejected more stringent 
technology options for OWS NSPS (i.e., Options 8 and 10). EPA reviewed 
its database for the Option 8 and 10 technologies and found that the 
database for Option 8 and 10 technologies is insufficient (i.e., no 
available data) or the costs are not commensurate with the pollutant 
removals (see 66 FR 457). Since EPA's database did not contain Option 
10 treatability data from oily subcategory facilities, EPA considered 
transferring limitations for Option 10 from the Shipbuilding Dry Docks 
or Railroad Line Maintenance subcategories. EPA ultimately rejected 
this approach, however, because influent wastewaters in the 
Shipbuilding Dry Docks or Railroad Line Maintenance subcategories are 
generally less concentrated and contain less pollutants than 
wastewaters discharged by OWS facilities.
5. Pretreatment Standards for Existing Sources (PSES)
    EPA proposed to establish PSES for existing indirect dischargers in 
the Oily Wastes subcategory based on the Option 6 technology (i.e., the 
same technology basis that is being promulgated for BPT/BCT/NSPS for 
this subcategory) with a ``low-flow'' exclusion of 2 MGY to reduce 
economic impacts on small businesses and administrative burden for 
control authorities. Based on the revisions and corrections to the EPA 
Cost & Loadings Model discussed in the NODA and in section IV.B.1 of 
today's final rule, and previously discussed, EPA determined that the 
toxic pollutant reductions are very expensive in dollars per toxic 
pounds removed. The cost-effectiveness value (in 1981$) for Option 6 
for indirect dischargers in the Oily Wastes subcategory is in excess of 
$3,500/PE removed. This suggests that the technology is not truly 
``available.'' EPA has determined that Option 6 technology with a 2 MGY 
low-flow cutoff is not the best available technology economically 
achievable for existing indirect dischargers in the OWS. Therefore, EPA 
is not establishing PSES for this subcategory based on Option 6 
technology with a 2 MGY low-flow cutoff.
    As discussed in the June 2002 NODA (see 67 FR 38804), EPA also 
considered alternative options for which economic impacts could be less 
costly than Option 6 technology with a 2 MGY low-flow cutoff. These 
options potentially have compliance costs more closely align with toxic 
pollutant reductions. EPA considered the following alternative options 
for today's final rule:

Option A: No regulation;
Option B: Option 6 with a higher low-flow exclusion;

    As discussed in section IV.B.1 of today's final rule, based on 
comments, EPA has revised its methodology for estimating compliance 
costs and pollutant loadings for Option 6, and higher low-flow 
exclusions (Option B) previously described. Using information from this 
revised analysis, EPA concludes that none of the alternative low-flow 
exclusions (even as high as 6.25 MGY) represented ``available 
technology'' because the costs associated with these alternatives were 
not commensurate with the projected toxic pollutants reductions. 
Therefore, EPA is not establishing PSES for existing indirect 
dischargers in the Oily Wastes subcategory (Option A). Since EPA did 
not identify another technology basis that was more cost-effective, EPA 
is not promulgating PSES for existing indirect dischargers in the Oily 
Wastes subcategory. These facilities remain subject to the General 
Pretreatment regulations (40 CFR part 403) and local limits, as 
applicable.
6. Pretreatment Standards for New Sources (PSNS)
    EPA proposed to establish PSNS for indirect dischargers in the Oily 
Wastes subcategory based on the Option 6 technology (i.e., the same 
technology basis that is being promulgated for NSPS for this 
subcategory) with a ``low-flow'' exclusion of 2MGY to reduce economic 
impacts on small businesses

[[Page 25710]]

and reduce administrative burden to POTWs.
    For today's final rule EPA evaluated setting OWS PSNS based on 
Option 6 technology and assessed the financial burden of OWS PSNS based 
on Option 6 technology on new OWS indirect dischargers. Specifically, 
EPA's `barrier to entry' analysis identified whether OWS PSNS based on 
Option 6 technology would pose sufficient financial burden on new OWS 
facilities to constitute a material barrier to entry into the MP&M 
point source category.
    EPA projects a barrier to entry for OWS PSNS based on Option 6 
technology as approximately as 1% of OWS indirect dischargers have 
after-tax compliance costs between 1 to 3% of revenue and 5% have 
after-tax compliance costs between 3 to 5% of revenue. Consequently, 
EPA is today rejecting Option 6 technology as the basis for PSNS in the 
OWS. EPA has selected ``no further regulation'' for new OWS indirect 
dischargers and is not revising PSNS for new OWS indirect dischargers. 
Wastewater discharges to POTWs from facilities in this subcategory will 
remain regulated by local limits and general pretreatment standards 
(part 403), as applicable. See section 11 of the TDD for a description 
of how these new source compliance costs were developed and Chapter 9 
of the EEBA for a description of the framework EPA used for the barrier 
to entry analysis and general discussion of the results.

G. Railroad Line Maintenance Subcategory

    EPA is not establishing limitations or standards for any facilities 
that would have been subject to this subcategory. Permit writers and 
control authorities will establish controls using BPJ to regulate 
wastewater discharges from these facilities.
1. Best Practicable Control Technology (BPT)
    For today's final rule EPA evaluated setting BPT limitations for 
two pollutants, TSS and O&G (as HEM), for direct dischargers in the 
RRLM subcategory based on a different technology basis from that 
proposed in 2001. EPA proposed Option 10 technology (see section VI.H.1 
for a description) as the technology basis for BPT. However, as 
discussed in the NODA, EPA considered promulgating limitations for the 
final rule based on the Option 6 technology for the RRLM subcategory 
(see 67 FR 38804). Option 6 technology includes the following: (1) in-
process flow control and pollution prevention; and (2) chemical 
emulsion breaking followed by oil water separation (see section 9 of 
the TDD for today's final rule for additional details on the Option 6 
technology).
    For the RRLM subcategory, EPA changed the technology basis 
considered for the final rule and eliminated consideration of 
regulating BOD5 based on comments and data submitted by the 
American Association of Railroads (AAR). This organization is a trade 
association which currently represents all facilities in this 
subcategory. As discussed in the NODA (see 67 FR 38755), for each RRLM 
direct discharging facility known to them, AAR provided current permit 
limits, treatment-in-place, and summarized information on each 
facility's measured monthly average and daily maximum values. AAR also 
provided a year's worth of long-term monitoring data for each facility 
(see section 15.1 of the public record for the AAR surveys). This data 
shows that, contrary to EPA's initial findings in the 2001 proposal, 
most RRLM direct dischargers treat their wastewater by chemical 
emulsion breaking/oil water separation (Option 6). Based on this 
updated information, EPA is today rejecting Option 10 as the technology 
basis for BPT. The 2001 proposal also contains detailed discussions on 
why EPA rejected BPT limitations based on other BPT technology options 
(see 66 FR 451). The information in the record for today's final rule 
provides no basis for EPA to change this conclusion.
    As previously discussed, after publication of the June 2002 NODA 
EPA also conducted another review of all RRLM facilities in the MP&M 
questionnaire database to determine the destination of discharged 
wastewater (i.e., either directly to surface waters or indirectly to 
POTWs or both) and the applicability of the final rule to discharged 
wastewaters. As a result of this review, EPA determined its 
questionnaire database did not accurately represent direct dischargers 
in this subcategory. Consequently, for today's final rule EPA used the 
information supplied by AAR as a basis for its analyses and conclusions 
on direct dischargers in this subcategory.
    AAR provided information on 27 facilities. EPA reviewed the 
information on each of these facilities to ensure they were direct 
dischargers, discharged wastewaters resulting from operations subject 
to this final rule, and discharged ``process'' wastewaters as defined 
by the final rule. As a result of this review, EPA concluded 18 of the 
facilities for which AAR provided information do not directly discharge 
wastewaters exclusively from oily operations (see section V.A). 
Therefore, EPA's final database consists of 9 direct discharging RRLM 
facilities. EPA considered promulgating BPT limitations for these 9 
direct discharging RRLM facilities based on the Option 6 technology. 
The Agency made the following conclusions during its evaluation of 
Option 6 for this subcategory.
    First, this technology is readily applicable to all facilities in 
the RRLM subcategory. All direct discharging facilities in the RRLM 
subcategory currently employ wastewater treatment equivalent or better 
than chemical emulsion breaking/oil water separation (Option 6). 
Second, EPA estimates that compliance with BPT limitations based on 
Option 6 technology will result in no closures of the existing direct 
dischargers in the RRLM subcategory. Moreover, none of the facilities 
identified by AAR are small businesses as defined by the Small Business 
Administration (SBA). Third, most of the RRLM facilities identified by 
AAR have NPDES daily maximum permit limitations for O&G (as HEM) and 
TSS as 15 and 45 mg/L, respectively. Based on AAR survey information, 
EPA concludes that these O&G (as HEM) and TSS daily maximum limits 
represent the average of the best performances of facilities utilizing 
Option 6 technology.
    EPA evaluated the compliance costs and load reductions associated 
with establishing BPT daily maximum limitations equivalent to 15 and 45 
mg/L for O&G (as HEM) and TSS, respectively. EPA concluded that all of 
the facilities identified by AAR currently meet a daily maximum oil and 
grease limit of 15 mg/L and most currently monitor once per month. 
Therefore, EPA estimates no pollutant load reductions and minimal 
incremental annualized compliance costs for the monitoring associated 
with a BPT daily maximum limitation equivalent to 15 mg/L for O&G (as 
HEM). For TSS, with the exception of one facility, all RRLM facilities 
identified by AAR currently meet a daily maximum limit of 45 mg/L. For 
this one facility, EPA estimates the TSS pollutant loadings reductions 
associated with a BPT daily maximum limitation equivalent to 45 mg/L to 
be less than 1 pound of TSS per day. Given the fact that the few 
facilities in this subcategory are already essentially achieving the 
limitations under consideration, EPA has determined that additional 
national regulation is not warranted. As a result of this analysis, EPA 
concludes that it is more appropriate to address permits limitations 
for this industry on a case-by-case basis and that additional national 
regulation of direct discharges

[[Page 25711]]

in the RRLM subcategory at this time is unwarranted.
2. Best Conventional Pollutant Control Technology (BCT)
    In deciding whether to adopt more stringent limitations for BCT 
than BPT, EPA considers whether there are technologies that achieve 
greater removals of conventional pollutants than adopted for BPT, and 
whether those technologies are cost-reasonable under the standards 
established by the CWA. EPA generally refers to the decision criteria 
as the ``BCT cost test.'' For a more detailed description of the BCT 
cost test and details of EPA's analysis, see Chapter 4 of the EEBA.
    For the reasons discussed above, EPA is not establishing BCT 
limitations for the RRLM subcategory.
3. Best Available Technology Economically Achievable (BAT)
    As proposed, EPA is not establishing BAT regulations for the RRLM 
subcategory. EPA did not propose BAT regulations because the Agency 
concluded that facilities in this subcategory discharge very few pounds 
of toxic pollutants. EPA estimates that six facilities discharge 34 PE 
per year to surface waters, or about 6 PE per year per facility. The 
Agency based the loadings calculations on EPA sampling data, which 
found very few priority toxic pollutants at treatable levels in raw 
wastewater. EPA has received no data or information during the 
rulemaking that contradicts these conclusions. Therefore, nationally-
applicable regulations for toxic and nonconventional pollutants are 
unnecessary at this time and direct dischargers will remain subject to 
permit limitations for toxic and nonconventional pollutants established 
on a case-by-case basis using BPJ.
4. New Source Performance Standards (NSPS)
    EPA proposed setting NSPS based on Option 10 technology for this 
subcategory. For today's final rule EPA considered setting RRLM NSPS 
based on Option 10 technology and assessed the financial burden of RRLM 
NSPS based on Option 10 technology on new RRLM direct dischargers. 
Specifically, EPA's ``barrier to entry'' analysis identified whether 
RRLM NSPS based on Option 10 technology would pose sufficient financial 
burden as to constitute a material barrier to entry into the MP&M point 
source category.
    EPA projects no barrier to entry for RRLM NSPS based on Option 10 
technology as: (1) Option 10 technology is currently used at existing 
RRLM direct dischargers (i.e., Option 10 technology is technically 
available); and (2) all RRLM direct dischargers have new source 
compliance costs that are less than 1% of revenue. However, EPA is not 
promulgating RRLM NSPS based on the Option 10 technology as EPA 
concludes that it is more appropriate to address limitations for this 
industry on a case-by-case basis and that national regulation of direct 
discharges in the RRLM subcategory at this time is unwarranted. See 
section 11 of the TDD for a description of how these new source 
compliance costs were developed and Chapter 9 of the EEBA for a 
description of the framework EPA used for the barrier to entry analysis 
and general discussion of the results.
5. Pretreatment Standards for Existing and New Sources (PSES/PSNS)
    EPA proposed not to establish pretreatment standards for existing 
and new indirect dischargers in the RRLM subcategory based on the small 
quantity of toxic pollutants discharged to the environment (after POTW 
treatment) by facilities in this subcategory (i.e., approximately 2 PE 
removed annually per facility (see 66 FR 470-471)). For the same 
reasons set out in the 2001 proposal, EPA is not promulgating 
pretreatment standards for existing or new indirect dischargers in this 
subcategory. These facilities remain subject to the General 
Pretreatment regulations (40 CFR part 403) and local limits.

H. Shipbuilding Dry Dock Subcategory

    EPA is not establishing limitations or standards for any facilities 
that would have been subject to this subcategory. Permit writers and 
control authorities will establish controls using BPJ to regulate 
wastewater discharges from these facilities.
1. BPT/BCT/BAT/NSPS
    At the time of the 2001 proposal, EPA identified 6 direct 
discharging shipbuilding dry dock facilities with multiple discharges. 
Based on the information in the database at that time, discharges from 
these facilities contained minimal concentrations of toxic organic and 
metals pollutants (<9 PE/facility), but substantial quantities of 
conventional pollutants, particularly oil and grease. Consequently, EPA 
proposed to establish BPT limitations and NSPS for only two pollutants, 
TSS and O&G (as HEM), for direct dischargers in the SDD subcategory 
based on Option 10 technology. This technology includes the following: 
(1) in-process flow control and pollution prevention; and (2) oil-water 
separation by chemical emulsion breaking and oil-water separation by 
dissolved air flotation (see section 9 of the TDD for today's final 
rule for additional details on the Option 10 technology). EPA proposed 
this technology basis because some existing SDD facilities use this 
technology and it projected significant reductions in conventional 
pollutants and determined these reductions were cost reasonable.
    Following proposal, EPA received comments and supporting data 
indicating that its estimates of current pollutant discharges from this 
subcategory were overestimated. In particular, commentors claimed that 
current discharges of oil and grease were minimal and that national 
regulation was not warranted for this subcategory.
    For today's final rule, EPA incorporated the additional information 
provided by commentors into its analysis. EPA continues to conclude 
that there are six direct discharging shipbuilding dry dock facilities. 
However, EPA now concludes that direct discharges from these facilities 
generally contain minimal levels of all pollutants. In particular, 
EPA's database indicates that regulation of oil and grease in direct 
discharges from shipbuilding dry docks is unwarranted because current 
oil and grease discharges from these facilities are not detectable (<5 
mg/L) or nearly not detectable. EPA has similarly determined that it 
should not establish nationally applicable limitations and standards 
for TSS because TSS discharges are, on average, minimal. The data show 
that TSS discharges may increase episodically, particularly when the 
dry dock is performing abrasive blasting operations cleaning. However, 
EPA has concluded that these episodic discharges from six facilities do 
not warrant national regulation.
    Therefore, nationally-applicable regulations for new and existing 
SDD direct dischargers are unnecessary at this time and these 
facilities will remain subject to permit limitations established on a 
case-by-case basis using BPJ.
2. Pretreatment Standards for Existing and New Sources (PSES/PSNS)
    EPA proposed not to establish pretreatment standards for existing 
and new indirect dischargers in the SDD subcategory based on the small 
number of facilities in this subcategory and on the small quantity of 
toxic pollutants removed by the technology options evaluated by EPA at 
proposal (i.e., less than 26 PE removed annually per facility (see 66 
FR 471)). For the same reasons set out in the 2001 proposal,

[[Page 25712]]

EPA is not promulgating pretreatment standards for existing or new 
indirect dischargers in this subcategory. These facilities remain 
subject to the General Pretreatment regulations (40 CFR part 403) and 
local limits.

VII. Pollutant Reduction and Compliance Cost Estimates

A. Pollutant Reductions

    Presented in this section are the pollutant reductions obtainable 
through the application of Option 6 technology that form the basis of 
the effluent limitations guidelines for the Oily Wastes subcategory 
promulgated today. This section summarizes these estimated reductions. 
Section 12 of the TDD includes the estimated pollutant reductions for 
options considered but not promulgated, and discusses the loadings 
determination methodology in detail.
    Today's final rule does not establish PSES for any dischargers to 
POTWs in the MP&M point source category. Therefore, EPA does not 
project any pollutant reductions from POTWs as a result of today's 
rule. The following pollutant reductions are related to direct 
dischargers in the Oily Wastes subcategory.
1. Conventional Pollutant Reductions
    The Agency estimates that this regulation will reduce discharges of 
TSS and O&G (as HEM) by approximately 500,000 pounds per year (see 
Table VII-1).

     Table VII-1.--Reduction in Direct Discharge of Conventional Pollutants After Implementation of BPT/BCT
                                          Regulations Promulgated Today
----------------------------------------------------------------------------------------------------------------
                                                               Oil and                        Oil and grease and
                        Subcategory                            grease       Total suspended     total suspended
                                                             pounds/year  solids pounds/year  solids pounds/year
----------------------------------------------------------------------------------------------------------------
Oily Wastes...............................................      396,079              84,246             480,325
----------------------------------------------------------------------------------------------------------------

2. Priority and Non-conventional Pollutant Reductions
    The Agency did not estimate the reductions in priority and non-
conventional metals and organic pollutants because the Agency did not 
have sufficient COD or other non-conventional data to estimate baseline 
pollutant discharges. The Agency does expect some non-conventional 
pollutant removals at OWS facilities complying with limitations and 
standards based on Option 6 technology.

B. Regulatory Costs

    Presented in this section are the regulatory costs EPA projects 
through the application of Option 6 technology that form the basis of 
the effluent limitations guidelines for the Oily Wastes subcategory 
promulgated today. This section summarizes these estimated costs. 
Section 11 of the TDD includes the estimated regulatory costs for 
options considered but not promulgated, and discusses the costing 
methodology in detail.
    This preamble, TDD, and EEBA express all cost estimates in this 
section in terms of 2001 dollars. The cost components reported in this 
section represent estimates of the investment cost of purchasing and 
installing equipment, the annual operating and maintenance costs 
associated with that equipment, additional land requirement costs 
associated with new equipment, and additional costs for discharge 
monitoring.
1. Direct Discharge Facilities
    Table VII-2 shows the costs EPA estimated for existing direct 
dischargers in the Oily Wastes subcategory to comply with the BPT/BCT 
limitations promulgated today.

                                    Table VII-2.--Estimated Costs for BPT/BCT
----------------------------------------------------------------------------------------------------------------
                                                       Total capital and                          Annualized
              Subcategory                 Number of       land costs       Annual O&M costs    compliance costs
                                         facilities    (2001$, millions)   (2001$, millions)   (2001$, millions)
----------------------------------------------------------------------------------------------------------------
Oily Wastes...........................        2,382                 6.5                13.1                13.8
----------------------------------------------------------------------------------------------------------------

2. Indirect Discharge Facilities
    Because today's final rule does not establish PSES for any 
dischargers in the MP&M industry, EPA has not projected compliance 
costs for facilities that discharge indirectly to POTWs.

VIII. Economic Analyses

A. Introduction and Overview

    This section of the preamble presents EPA's estimates of the 
private and social costs of the regulation, and the expected economic 
impacts of compliance with the regulation. Measures of economic impact 
include facility closures and associated losses in employment, firm-
level impacts, impacts on government-owned facilities, local community 
impacts, and international trade. An analysis of impacts on small 
businesses supports EPA's compliance with the Regulatory Flexibility 
Act (RFA) as amended by the Small Business Regulatory Enforcement 
Fairness Act (SBREFA). Section XII.C of this preamble discusses RFA/
SBREFA issues. EPA's complete assessment of costs and economic impacts 
including results for the alternative regulatory options can be found 
in ``Economic, Environmental, & Benefit Analysis of the Final Metal 
Products & Machinery Rule'' (hereafter referred to as the ``EEBA'').
    EPA based its regulatory decisions for the final MP&M rule in part 
on the findings from the facility impact analyses reported in the EEBA 
and discussed in this section. The economic impact analyses assess how 
facilities will be affected financially by the final MP&M rule. Key 
outputs of the facility impact analysis include expected facility 
closures in the MP&M industries, associated losses in employment, and 
the number of facilities experiencing financial stress short of closure 
(``moderate impacts''). The findings from the facility impact analysis 
also provide the basis for the following analyses:

[[Page 25713]]

    [sbull] A firm-level analysis, which assesses the impact on the 
financial performance and condition of firms owning MP&M facilities;
    [sbull] An analysis of impacts on government-owned facilities, 
which assesses the impact on the financial performance and condition of 
government entities that own and operate at least one MP&M site;
    [sbull] An employment effects analysis, which assesses the increase 
in employment associated with compliance activities, the loss of 
employment due to facility closures, and the net effect on overall 
employment;
    [sbull] A community impact analysis, which assesses the potential 
impact of employment changes in communities where MP&M facilities are 
located; and
    [sbull] A foreign trade analysis, which assesses the effect of the 
regulation on the U.S. balance of trade.
    EPA performed economic impact analyses for three groups of 
facilities, using different methodologies to evaluate impacts on each 
group. The three groups are:
    [sbull] Privately-owned MP&M Facilities, including privately-owned 
facilities that do not perform railroad line maintenance and are not 
owned by governments. This major category includes privately-owned 
businesses in a wide range of sectors or industries, including the 
segment of facilities that manufacture and rebuild railroad equipment.
    [sbull] Railroad line maintenance facilities that maintain and 
repair railroad track, equipment and vehicles.
    [sbull] Government-owned MP&M facilities operated by 
municipalities, State agencies and other public sector entities such as 
State universities and Federal facilities. Many of these facilities 
repair, rebuild, and maintain buses, trucks, cars, utility vehicles 
(e.g., snow plows and street cleaners), and light machinery.
    The facility impact analysis starts with compliance cost estimates 
from the EPA engineering analysis and then calculates how these 
compliance costs would affect the financial condition of MP&M 
facilities. EPA made several changes to the facility impact methodology 
between proposal (see 66 FR 424) and final regulation. The NODA (see 67 
FR 38752) and section IV.B.3 of this preamble document these changes, 
which to a large degree address comments on the proposal impact 
methodology. The major changes to the economic impact analyses include: 
(1) Using sector-specific thresholds for the moderate impact analysis 
tests; (2) using a single financial test, based on net present value, 
to assess the potential for closures (this test excludes consideration 
of liquidation values for all MP&M facilities, including the 219 
facilities that reported them in their response to the MP&M survey); 
and (3) using estimated baseline capital outlays in the calculation of 
cash flow for the net present value test. Other changes to the economic 
impact methodology include: (1) Using revised cost pass-through 
coefficients; (2) using sector-specific price indices in updating 
survey data; and (3) limiting post-compliance tax shields to no greater 
than reported baseline taxes.
    In conducting the facility impact analysis, EPA first eliminated 
from the analysis those facilities showing materially inadequate 
financial performance in the baseline, that is, in the absence of the 
rule. EPA judged these facilities, which are referred to as baseline 
closures, to be at substantial risk of financial failure regardless of 
any financial burdens that may result from the MP&M rule. Second, for 
the remaining facilities, EPA evaluated how compliance costs would 
likely affect facility financial health. In this analysis of compliance 
cost impact, EPA accounted for potential price increases that may help 
facilities cover the cost of compliance. EPA based its estimate of 
potential price increases on a cost pass-through analysis that 
estimates how prices might change in response to regulation-induced 
production cost increases. 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 also identified facilities that would likely incur moderate 
impacts from the rule but that are not expected to close as a result of 
the rule. EPA used a different methodology to assess moderate impacts 
for each of three types of MP&M facilities: privately-owned MP&M 
facilities, railroad line maintenance facilities, and government-owned 
facilities. EPA established thresholds for two measures of financial 
performance--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 attributes 
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. EPA refers the reader 
to the full EEBA report for a detailed discussion of the economic 
impact methodology used for each of these types of MP&M facilities.

B. Economic Costs of Technology Options by Subcategory

    The TDD for the final rule presents EPA's engineering estimates of 
costs that will be incurred by facilities to comply with the final 
regulation, and the costs for other regulatory options. EPA adjusted 
the engineering costs from 1996 to 2001 dollars using the Engineering 
News-Record Construction Cost Index (CCI), and adjusted the costs to 
reflect the effect of taxes using a combined Federal/State corporate 
income tax rate of 39 percent. EPA calculated the annual equivalent of 
capital and other one-time costs by annualizing costs at a seven 
percent discount rate over an estimated 15-year equipment life.
    The compliance costs of the rule are the costs incurred by those 
facilities that EPA estimates will continue to operate in compliance 
with the rule. Aggregate compliance costs presented in this section 
differ from the costs presented in sections VI and VII because they 
exclude costs for facilities that are baseline closures or that close 
due to regulatory requirements (see section VIII.D for estimates of 
baseline and post-compliance closures). Therefore, they represent only 
the compliance outlays of facilities that are estimated to continue 
operations. Section VIII.I presents EPA's estimates of social costs, 
which include costs for regulatory closures. Table VIII-1 shows the 
total annualized compliance costs by subcategory for the 2,382 OWS 
direct dischargers that are: (1) Subject to requirements; (2) make the 
necessary investments to meet the requirements; and (3) continue 
operating under the regulation. Facilities in all other subcategories 
are excluded from the final rule and have no incremental compliance 
costs.
    Total annualized costs are the sum of the annual operating and 
maintenance costs and the annualized equivalent of capital and other 
one-time costs. Annualized pre-tax compliance costs in 2001 dollars are 
estimated at $13.8 million per year for the final rule.

 Table VIII-1.--Total Annualized Facility* Compliance Costs for the Oily
                           Wastes Subcategory
                        [pre-tax, million $2001]
------------------------------------------------------------------------
                                                                  Final
                          Subcategory                              rule
------------------------------------------------------------------------
Oily Wastes....................................................    $13.8

[[Page 25714]]

 
All Categories: Number of Facilities Operating in the             2,382
 Baseline**....................................................
------------------------------------------------------------------------
* This table includes facility compliance costs only. Section VIII.I
  discusses the social costs of the rule. The estimates in this table
  exclude baseline and regulatory closures.
** This estimate can be found in section VIII.B.

C. Facility Level Economic Impacts of the Final Rule by Subcategory

1. Baseline Closure Analysis
    Table VIII-2 summarizes the estimated baseline closures for direct 
dischargers. Based on its evaluation, EPA determined that 3,593 
facilities (or 8.2 percent) of the estimated 43,858 discharging 
facilities are baseline closures. The 3,593 baseline closures include 
3,511 indirect dischargers (97.7 percent) and 98 direct dischargers 
(2.7 percent). The total number of facilities classified as indirect 
and direct dischargers does not equal the total number of dischargers. 
Some facilities operate in more than one subcategory and have an 
indirect and direct discharging operation within the same facility. The 
facilities estimated to close in the baseline analysis are at 
substantial risk of financial failure independent of the regulation. 
These facilities were excluded from the post-compliance analysis of 
regulatory impacts. Data on facility start-ups and closures from the 
Census Statistics of U.S. Businesses indicate that between 6 and 12 
percent of facilities in the major metal products manufacturing 
industries close in any given year. Therefore, EPA's analysis of 
baseline closures is consistent with this data.

                                   Table VIII-2.--Summary of Baseline Closures
----------------------------------------------------------------------------------------------------------------
                                                                            Number of    Percent of
                      Subcategory                        Total number of     baseline     baseline    Operating
                                                           dischargers       closures   closures  %  in baseline
----------------------------------------------------------------------------------------------------------------
General Metals........................................             11,364          880          7.7       10,484
Metal Finishing Job Shops.............................              1,542           50          3.2        1,491
Non-Chromium Anodizer.................................                122           29         23.8           93
Oily Wastes...........................................             29,185        2,409          8.3       26,776
Printed Wiring Boards.................................                848          239         28.2          609
Railroad Line Maintenance.............................                826            0          0.0          831
Shipbuilding Dry Dock.................................                 14            0          0.0           14
All Subcategories*....................................             43,858        3,593          8.2      40,265
----------------------------------------------------------------------------------------------------------------
* Note: The reported total of facilities over all subcategories does not equal the sum of facilities by
  subcategory because some facilities operate in more than one subcategory and have an indirect and direct
  discharging operation within the same facility.

2. Facilities Subject to Regulatory Requirements
    Of the estimated 40,265 discharging facilities open in the 
baseline, EPA estimates that 37,880 facilities (or 94 percent) will not 
be subject to the rule's requirements due to subcategory exclusions. 
The subcategory exclusions exempt 37,652 indirect dischargers in all 
subcategories and 259 direct dischargers in seven subcategories from 
the final rule.

                             Table VIII-3.--Summary Facilities Subject to Final Rule
----------------------------------------------------------------------------------------------------------------
                                                                                                      Number of
                                                   Operating       Number of          Percent of      facilities
                   Subcategory                    in baseline      facilities         facilities      subject to
                                                                    excluded           excluded       final rule
----------------------------------------------------------------------------------------------------------------
General Metals..................................       10,484             10,484              100.0            0
Metal Finishing Job Shops.......................        1,491              1,491              100.0            0
Non-Chromium Anodizer...........................           93                 93              100.0            0
Oily Wastes.....................................       26,776             24,394               91.1        2,382
Printed Wiring Boards...........................          609                609              100.0            0
Railroad Line Maintenance.......................          829                829              100.0            0
Shipbuilding Dry Dock...........................           14                 14              100.0            0
All Subcategories*..............................       40,265             37,883               94.0       2,382
----------------------------------------------------------------------------------------------------------------
* Note: The reported total of facilities over all subcategories does not equal the sum of facilities by
  subcategory because some facilities operate in more than one subcategory and have an indirect and direct
  discharging operation within the same facility.

3. Post-Compliance Impact Analysis
    EPA estimates that none of the direct discharging facilities 
operating in the baseline regulation will close as a result of the MP&M 
rule. With no predicted facility closures, EPA expects no employment 
losses from the rule. EPA also expects that none of the 2,382 direct 
discharging facilities operating in the baseline and subject to 
regulatory requirements will experience moderate financial impacts due 
to the rule. Chapter 5 of the EEBA includes impact analysis results for 
alternative regulatory options that EPA considered in developing the 
final rule.
4. Summary of Facility Impacts
    Table VIII-4 summarizes the results of the economic impact analysis 
for the final rule. EPA estimates that no facilities will close or 
experience moderate financial impacts. The table presents the 
annualized compliance cost on both a pre-tax and after-tax basis. The 
after-tax value represents the cost that privately-owned firms would 
incur in complying with the regulation because some of the costs are 
borne by the general tax-paying public through

[[Page 25715]]

the tax deduction permitted on privately-owned firms' compliance 
outlays. EPA's after-tax analyses (1) use a combined Federal/State tax 
rate of 39 percent, and (2) limit tax offsets to compliance costs to 
not exceed facility-level tax payments as reported in facility 
questionnaire responses.

           Table VIII-4.--Facility Impacts for All Facilities
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Number of Facilities Operating in Baseline.....................   40,265
Number of facilities excluded from regulatory requirements.....   37,883
Number of facilities operating subject to regulatory               2,382
 requirements..................................................
Number of Closures (Severe Impacts)............................        0
Percent Closing (%)............................................      0.0
Number of Additional Facilities with Moderate Impacts..........        0
Percent with Moderate Impacts (%)..............................      0.0
Annualized Compliance Costs (pre-tax, million $2001)...........    $13.8
Annualized Compliance Costs (after tax, million $2001).........    $11.9
------------------------------------------------------------------------

D. Firm Level Impacts

    EPA examined the impacts of the final rule on firms that own MP&M 
facilities, as well as on the financial condition of the facilities 
themselves. A firm that owns multiple MP&M facilities could experience 
adverse financial impacts at the firm level if its facilities are among 
those that incur significant impacts at the facility level. EPA also 
uses the firm-level analysis to compare impacts on small versus large 
firms, as required by the Regulatory Flexibility Act and the Small 
Business Regulatory Enforcement Fairness Act. Section XII.C of this 
preamble discusses RFA/SBREFA issues.
    EPA compared compliance costs with revenue at the firm level as a 
measure of the relative burden of compliance costs. EPA applied this 
analysis only to MP&M facilities owned by privately-owned entities. 
(Section VIII.E discusses impacts on governments that own MP&M 
facilities.) EPA estimated firm-level compliance costs by summing costs 
for all facilities owned by the same firm that responded to the survey 
plus estimated compliance costs for additional facilities for which 
respondents submitted information.
    The Agency was not able to estimate precisely at the national level 
the number of firms that own MP&M facilities, because the sample 
weights based on the survey design represent numbers of facilities 
rather than firms. Most privately-owned MP&M facilities that remain 
open in the baseline are single-facility firms, however. These firms 
can be analyzed using the survey weights. In addition, 278 survey 
respondents report being owned by a firm that owns more than one MP&M 
facility. For the firm-level analysis, EPA assigned these facilities, 
and their owning firms, a sample weight of one, since it is not known 
how many firms these 278 sample facilities represent. Chapter 9 of the 
EEBA presents EPA's analysis of firm-level impacts.
    Table VIII-5 shows the results of the firm-level analysis. The 
results represent a total of 26,750 MP&M firms (26,472 + 278), owning 
37,424 facilities (26,472 owned by single-facility firms plus 10,953 
owned by multi-facility firms).

 Table VIII-5.--Firm Level After Tax Annual Compliance Costs as a Percent of Annual Revenues for Privately-owned
                                     Businesses: Selected Regulatory Option
----------------------------------------------------------------------------------------------------------------
                                             Number and percent with after tax annual compliance costs/annual
                                                                    revenues equal to:
                                         -----------------------------------------------------------------------
    Number of firms in the analysis*           Less than 1%               1 to 3%                 Over 3%
                                         -----------------------------------------------------------------------
                                            Number      Percent     Number      Percent     Number      Percent
----------------------------------------------------------------------------------------------------------------
26,750..................................     26,750       100.0           0         0.0           0        0.0
----------------------------------------------------------------------------------------------------------------
* Single-site firms whose only MP&M facilities close in the baseline are excluded from the firm count. To be
  conservative, EPA included compliance costs for facilities that are owned by multi-site firms but predicted to
  be baseline closures in the facility impact analysis.

    EPA's analysis shows that none of the firms in the analysis incur 
after-tax compliance costs equal to one percent or more of annual 
revenues. All firms incur compliance costs less than one percent of 
annual revenues.
    This analysis is likely to overstate costs at the firm level 
because it does not account for actions a multi-facility firm might 
take to reduce its compliance costs under the regulation. These include 
consolidating and/or transferring functions among facilities to 
consolidate wet processes and take advantage of scale economies in 
wastewater treatment. In some instances, such compliance responses may 
result in loss of employment in some facilities and possible increases 
in employment in others. As discussed in Chapter 5 of the EEBA report, 
EPA is unable to account for and analyze the full range of possible 
compliance actions that a firm may consider and implement in response 
to regulation.

E. Impacts on Government-Owned Facilities

    EPA surveyed government-owned MP&M facilities to assess the cost of 
the regulation on these facilities and the government entities that own 
them (see 66 FR 437). A government is judged to experience major 
budgetary impacts if it has: (1) One or more facilities with compliance 
costs exceeding one percent of the baseline cost of service; (2) total 
debt service costs (including costs to finance MP&M capital costs 
entirely with debt) exceeding 25 percent of baseline revenue; and (3) 
post-compliance total annualized pollution control costs per household 
exceeding one percent of median household income. EPA discusses the 
methodology for assessing impacts on government-owned facilities in 
more detail in Chapter 7 of the EEBA report (this methodology and the 
impact thresholds were also used to support EPA's analysis under the 
Unfunded Mandates Reform Act, discussed at section XII.D of this 
preamble). Table VIII-6 provides national estimates of the number of 
MP&M facilities operated by governments that are potentially subject to 
the regulation, by type and size of government.
    Table VIII-7 summarizes the status of government-owned facilities, 
their compliance costs and measures of impacts on government that own 
MP&M facilities.

[[Page 25716]]



           Table VIII-6.--Number of Government-Owned Facilities by Type and Size of Government Entity
----------------------------------------------------------------------------------------------------------------
                                      Municipal      State        County     Regional governmental
         Size of government           government   government   government         authority            Total
----------------------------------------------------------------------------------------------------------------
Large Governments (population 50,000)....................
Small Governments (population <=           1,750  ...........          212  .......................        1,962
 50,000)...........................
All Governments....................        2,368          377          993                       46        3,785
----------------------------------------------------------------------------------------------------------------


     Table VIII-7.--Number of Regulated Government-Owned Facilities,
       Compliance Costs and Budgetary Impacts by Regulatory Option
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Number of Government-Owned Facilities..........              3,785
Number of Facilities exempted by subcategory                       3,327
 exclusions..........................................
Number of Facilities subject to regulation...........                458
Compliance costs ($2001 million).....................              $8.99
Number of Facilities with compliance costs  one percent of baseline cost of service*........
Number of Governments failing the ``impact on                          0
 taxpayers'' criterion**.............................
Number of Governments failing the ``impacts on                         0
 government debt'' criterion ***.....................
Number of Governments failing all three impacts                       0
 criteria[dagger]....................................
------------------------------------------------------------------------
* Annualized compliance costs as a percent of total facility costs and
  expenditures, including operating, overhead and debt service costs and
  expenses.
** Based on comparison of compliance costs for all facilities owned by
  the government to the income of households that are served by the
  relevant government. A government is judged to experience impacts if
  the regulation results in a ratio of total annualized pollution
  control costs per household to median household income that exceeds
  one percent, post-compliance. Includes existing pollution control
  costs plus the compliance costs due to the MP&M rule.
*** Based on comparison of total debt service costs (including costs to
  finance MP&M capital costs entirely with debt) with baseline
  government revenue. A government is judged to experience impacts if
  the rule causes its total debt service payments to exceed 25% of
  baseline revenue.
[dagger] A government is judged to experience major budgetary impacts if
  it has one or more facilities with costs of compliance above 1% of
  baseline cost of service and fails both the taxpayers impact and
  government debt impact tests.

    Under the final rule, an estimated 162 government-owned facilities 
(4.3 percent of the total) would incur costs exceeding one percent of 
their baseline cost of service. The residual 95.7 percent of 
government-owned facilities incur no costs or incur costs so low as to 
be readily absorbed within existing budgets. None of the governments 
incur costs that cause them to exceed the thresholds for impacts on 
taxpayers or for government debt burden. EPA therefore concludes that 
the regulation will not impose major budgetary burdens on any of the 
governments that own MP&M facilities.

F. Community Level Impacts

    EPA considered the potential impacts of changes in employment due 
to the regulation on the communities where MP&M facilities are located. 
EPA does not expect any adverse community employment effects because it 
anticipates no rule-driven facility closures and accordingly no job 
losses from the rule.

G. Foreign Trade Impacts

    The foreign trade impacts analysis allocates the value of changes 
in output, for each facility that is projected to close, to exports, 
imports or domestic sales, based on the dominant source of competition 
in each market as reported in the surveys. EPA does not expect any 
material foreign trade impacts as a result of the final rule because no 
facility closures are expected. See Chapter 8 in the EEBA for a more 
detailed discussion of the foreign trade impact analysis and the 
resulting impacts of the alternative regulatory options on foreign 
trade.

H. Administrative Costs

    EPA also assessed the costs incurred by governments to administer 
the rule. The final rule only regulates direct dischargers; therefore, 
EPA does not expect increases in administrative costs because the 
National Pollution Discharge Elimination System (NPDES) permit program 
requires that these facilities already hold permits. However, EPA did 
estimate costs to POTWs for alternative options that would have 
regulated indirect dischargers. See Chapter 7 in the EEBA for a 
discussion of these estimates.

I. Social Costs

1. Components of Social Costs
    The social costs of regulatory actions are the opportunity costs to 
society of employing scarce resources in pollution control activity. 
The largest component of economic costs to society is the cost incurred 
by MP&M facilities for the labor, equipment, material, and other 
economic resources needed to comply with the regulation. EPA accounts 
for these costs on a pre-tax basis.
    Social costs may also include lost producers' and consumers' 
surplus that result when the quantity of goods and services produced 
decreases as a result of the rule. Lost producers' surplus is measured 
as the difference between revenues earned and the cost of production 
for the lost production. Lost consumers' surplus is the difference 
between the price paid by consumers for the lost production and the 
maximum amount they would have been willing to pay for those goods and 
services. To accurately calculate lost producers' and consumers' 
surplus requires knowledge of the characteristics of market supply and 
demand for each affected industry. EPA instead calculated an upper-
bound estimate of social compliance costs using the simplifying 
assumption that all facilities continue operating in compliance with 
the rule, and pay the associated compliance costs (i.e., assuming that 
there are no regulation-related closures.) This framework provides an 
upper-bound estimate of social costs, because, for facilities predicted 
to close, continuing to operate and to incur compliance costs is more 
costly than closing the facility with associated lost producers' and 
consumers' surplus. For the final regulation, EPA estimated that no 
facilities would close because of the rule. As a result, the potential 
effect of consumers' and producers' surplus should not be of 
consequence in assessing social costs.
    In addition to the resource costs to society associated with 
compliance, the estimated social cost also includes two other elements: 
the cost to local governments of implementing the rule

[[Page 25717]]

and the cost of any unemployment that may result from the regulation. 
The government administration costs include the costs to POTWs of 
permitting and compliance monitoring and enforcement activities. The 
unemployment-related costs include the cost of administering 
unemployment programs for workers who would lose employment, and an 
estimate of the amount that workers would be willing to pay to avoid 
involuntary unemployment.
2. Resource Cost of Compliance
    The resource costs of compliance are the value of society's 
productive resources--including labor, equipment, and materials--
consumed to achieve the reductions in effluent discharges required by 
the final rule. On the basis of a 7 percent discount rate, EPA 
estimates the annualized cost of compliance at $13.8 million (2001$). 
This value exceeds the cost that privately-owned firms would incur in 
complying with the regulation because: (1) Some of the costs are borne 
by the general tax-paying public through the tax deduction permitted on 
privately-owned firms' compliance outlays and (2) some costs are passed 
onto consumers in the form of price increases. Although these two 
categories of cost are not part of the financial burden on regulated 
industries, they are part of the regulation's overall cost to society. 
EPA also estimated the annualized cost of compliance using a 3 percent 
discount rate and, in conjunction, an assumed 3 percent opportunity 
cost of capital to society. At the 3 percent discount rate, EPA 
estimates the annualized cost of compliance at $13.7 million (2001$).
3. Cost of Administering the Regulation
    As discussed in section VIII.I of this preamble, since the final 
rule only regulates direct dischargers, EPA does not expect increases 
in administrative costs because all direct dischargers already hold 
permits.
4. Social Cost of Unemployment
    The loss of jobs associated with any facility closures would 
represent a social cost of the regulation. However, from its facility 
impact analysis, EPA estimates that no facilities will close as a 
result of the regulation. Accordingly, EPA estimates a zero cost of 
unemployment for the final regulation. The results of this analysis for 
alternative regulatory options where closures are predicted can be 
found in Chapter 6 of the EEBA.
5. Total Social Costs
    Summing across all social costs results in a total annualized 
social cost estimate of $13.8 million ($2001), at a 7 percent discount 
rate, and $13.7 million, at a 3 percent discount rate, as shown in 
Table VIII-8.

          Table VIII-8.--Annual Social Costs of the Regulation
                        [Pre-tax, million $2001]
------------------------------------------------------------------------
                                                  Annualized  Annualized
              Social cost  category                  @ 3%        @ 7%
------------------------------------------------------------------------
Resource Value of Compliance Costs (before-tax).       $13.7       $13.8
Government Administrative Costs.................          $0          $0
Social Costs of Unemployment....................          $0          $0
                                                 -------------
    Total Social Costs..........................       $13.7       $13.8
------------------------------------------------------------------------

J. Cost and Removal Comparison Analysis

    The Agency is promulgating BPT limitations for the Oily Wastes 
subcategory. Among the factors EPA must consider when promulgating BPT 
limitations, section 304(b)(1)(B) of the CWA directs EPA to consider 
the total incremental compliance costs of the BPT technology in 
relation to the effluent reductions achieved by the technology. This 
inquiry does not limit EPA's broad discretion to adopt BPT limitations 
based on available technology unless the required additional reductions 
are wholly out of proportion to the costs of achieving the additional 
effluent reduction.
    One cost and removal comparison ratio used by EPA is the average 
cost per pound of pollutant removed by a BPT regulatory option. EPA 
measures the cost component as pre-tax total annualized costs ($2001). 
For the Oily Wastes subcategory, EPA measures the effluent reduction 
benefits as the summation of O&G (as HEM) and TSS to avoid significant 
double counting of pollutants. EPA analyses show that OWS facilities 
largely discharge conventional pollutants. Table VIII-9 shows the 
incremental compliance costs, the incremental pollutant reductions, and 
the resulting cost and removal comparison ratio.

     Table VIII-9.--Cost and Removal Comparison for the Oily Wastes
                               Subcategory
                      [$2001/lb pollutant removed]
------------------------------------------------------------------------
                                                              Cost and
                                                 Annual        removal
                                 Annualized     pounds of    comparison
          Subcategory           cost ($2001)    pollutant     ($2001/lb
                                  (millions)     removed      pollutant
                                                              removed)
------------------------------------------------------------------------
Oily Wastes...................         13.8       480,325         28.73
------------------------------------------------------------------------

K. Cost-Effectiveness Analysis

    In the development of best available technology effluent 
limitations guidelines for removals of toxic pollutants, EPA evaluates 
the relative efficiency of alternative regulatory options in removing 
toxic pollutants from the effluent discharges to the nation's waters. 
Because EPA is today not promulgating Oily Wastes subcategory BAT 
limitations based on a more stringent technology than BPT technology, 
EPA is not providing a cost-effectiveness analysis for the final rule, 
which contains only BPT limitations (see section VIII.J for the cost 
and removal comparison analysis). EPA did perform a cost-effectiveness 
analysis for the alternative regulatory options that would have 
regulated indirect dischargers; the results of this analysis are 
reported in the EEBA and DCN 37900, section 26.0.

[[Page 25718]]

IX. Water Quality Analysis and Environmental Benefits

A. Introduction and Overview

    This section presents EPA's estimates of the national environmental 
benefits of the final MP&M effluent guidelines. The benefits occur due 
to the reduction in facility discharges described in section VII. The 
methodologies used in the estimation of benefits of the final rule are 
largely similar to those used for estimating benefits of the proposed 
rule (see 66 FR 424). The Notice of Data Availability (see 67 FR 38752) 
and section IV.B of today's final rule discuss revisions made to these 
methodologies after the publication of the proposed rule. The EEBA 
provides EPA's complete benefit assessment for the final rule.
    EPA estimated national benefits from the regulation on the basis of 
sample facility data. The Agency extrapolated findings from the sample 
facility analyses to the national level using two alternative 
extrapolation methods: (1) traditional extrapolation and (2) post-
stratification extrapolation. Section A.2 of today's final rule and 
Appendix G of the EEBA discuss the extrapolation methods used in the 
benefits analysis in detail.
    To supplement the national level analysis performed for the final 
MP&M regulation, EPA also conducted a detailed case study of the 
expected State-level costs and benefits of the MP&M rule in Ohio. For 
several important reasons, EPA judges that the Ohio case study is more 
robust than the national benefit analyses that EPA undertakes in 
support of effluent guideline development. These reasons include: (1) 
Use of more detailed data on MP&M facilities than is possible at the 
national level; (2) use of more detailed and accurate water quality 
data than are usually available; (3) more accurate accounting for the 
presence and effect of multiple discharges to the same reach; (4) 
inclusion of data on non-MP&M discharges in the baseline and post 
compliance; (5) use of a first-order decay model to estimate in-stream 
concentrations in downstream water bodies; and (6) inclusion of an 
additional recreational benefit category (swimming) in the analysis.
    Sections B through G of today's final rule discuss the national 
level benefits analyses; section H presents the Ohio case study. These 
sections include results only for the final rule; however, the EEBA 
presents results for additional options evaluated.
1. Benefit Overview
    Table IX-1 summarizes the benefits categories associated with the 
regulation and notes which categories EPA was able to quantify and 
monetize. The benefits include three broad classes: human health, 
ecological, and economic productivity benefits. Within these three 
broad classes, EPA was able to assess benefits with varying degrees of 
completeness and rigor. Where possible, EPA quantified the expected 
effects and estimated monetary values. Data limitations and limited 
understanding of how society values certain water quality changes 
prevented monetizing some benefit categories.

Table IX-1.--Benefit Categories Associated with Water Quality Improvements Resulting from the Metal Products and
                                          Machinery Effluent Guideline
----------------------------------------------------------------------------------------------------------------
                                                                                                  Nonquantified
                       Benefit Category                         Quantified and   Quantified and        and
                                                                  monetized       nonmonetized     nonmonetized
----------------------------------------------------------------------------------------------------------------
Human Health Benefits:
    Reduced cancer risk due to ingestion of chemically-                     X
     contaminated fish and unregulated pollutants in drinking
     water...................................................
    Reduced non-cancer adverse health effects (e.g.,           ...............               X
     reproductive, immunological, neurological, circulatory,
     or respiratory toxicity) due to ingestion of chemically-
     contaminated fish and unregulated pollutants in drinking
     water...................................................
    Reduced non-cancer adverse health effects from exposure                 X
     to lead from consumption of chemically-contaminated fish
    Reduced health hazards from exposure to contaminants in    ...............  ...............               X
     waters used recreationally (e.g., swimming).............
Ecological Benefits:
    Reduced risk to aquatic life.............................  ...............               X
    Enhanced water-based recreation, including fishing,                     X
     boating, and near-water (wildlife viewing) activities...
    Other enhanced water-based recreation, such as swimming,   ...............  ...............               X
     waterskiing, and white water rafting....................
    Increased aesthetic benefits, such as enhancement of       ...............  ...............               X
     adjoining site amenities (e.g., residing, working,
     traveling, and owning property near the water)..........
    Non-user value (i.e., existence, option, and bequest                    X
     value)..................................................
    Reduced contamination of sediments.......................  ...............  ...............               X
Economic Productivity Benefits: a
    Benefits to tourism industries from increased              ...............  ...............               X
     participation in water-based recreation.................
    Improved commercial fisheries yields.....................  ...............  ...............               X
    Reduced water treatment costs for municipal drinking       ...............  ...............               X
     water, irrigation water, and industrial process and
     cooling water...........................................
----------------------------------------------------------------------------------------------------------------
a The final rule regulates direct dischargers only. Therefore the selected option does not affect POTW
  operation. EPA, however, includes this benefit category when analyzing alternative options which considered
  the regulation of indirect dischargers (See Chapter 19 of the EEBA for the benefits analysis of alternative
  options).

2. Extrapolation Methods
    EPA traditionally estimates national level costs and benefits by 
extrapolating analytic results from sample facilities to the national 
level using sample facility weights. EPA's traditional sampling 
approach relies on information about the economic and technical 
characteristics of the regulated community. Although important for 
understanding the technical requirements and costs of a regulation, 
this sampling approach does not incorporate information that could 
significantly affect the occurrence and

[[Page 25719]]

distribution of regulatory benefits, such as characteristics of the 
receiving water body and the size of population that may benefit from 
reduced pollutant discharges. As a result, the traditional sampling 
approach likely yields benefit estimates that are less accurate than 
those that could be obtained by using a sampling framework that 
accounts for such benefit-receptor characteristics.
    EPA recognizes that using a traditional extrapolation method to 
estimate national level benefits may lead to a large degree of 
uncertainty in benefits estimates. Therefore, in addition to the 
traditional extrapolation method used in the proposed rule (see 66 FR 
424), EPA has estimated national level benefits for the final rule 
using an alternative extrapolation method as discussed in the NODA (see 
67 FR 38752).
    In this alternative extrapolation method, post-stratification 
sample weighting, EPA adjusted the original sample weights using two 
variables that are likely to affect the occurrence and size of benefits 
associated with reduced discharges from sample MP&M facilities: (1) 
receiving water body type and size; and (2) the size of the population 
residing in the vicinity of the sample facility. The Agency utilized a 
commonly used post-stratification method calling ``raking'' to adjust 
original sample weights to reflect these benefit pathway 
characteristics. EPA used data from three data sources--EPA's Permit 
Compliance System database (PCS), EPA's Reach File 1, and Census Data--
to develop the adjusted weights. Because of data limitations, EPA 
restricted the re-weighting effort only to direct dischargers and 
excluded indirect dischargers. Therefore, EPA performed this 
alternative analysis for only the selected option.
    EPA used the alternative benefit estimate to validate general 
conclusions that EPA drew from its main analysis based on the 
traditional extrapolation method. Appendix G of the EEBA provides 
detailed discussion of this alternative extrapolation method.
    In the NODA, EPA also sought public comment on a proposed second 
alternative extrapolation method. In this extrapolation method, EPA 
proposed the extrapolation of the Ohio case study results to the 
national level based on three key factors that affect the occurrence 
and magnitude of benefits: (1) The estimated change in MP&M pollutant 
loadings; (2) the level of recreational activities on the reaches 
affected by MP&M discharges; and (3) income of the affected population. 
The Agency recognizes that this method is not rigorous for 
extrapolation to the national level. Therefore, EPA used this method 
only as a sensitivity analysis.
    Sections IX.B through IX.E of this preamble present national level 
benefits that are estimated based on both sample facility weights used 
in the engineering and economic impact analysis (traditional 
extrapolation method) and sample facility weights adjusted by water 
body and population (post-stratification extrapolation). National level 
benefits estimated from the Ohio case study analysis are not presented 
in today's final rule. These estimates can be found in Appendix G of 
the EEBA report.

B. Reduced Human Health Risk

    EPA estimates that the final rule will prevent discharge of 18 
pounds per year of carcinogens and 119 pounds per year of lead. Also, 
the final rule will prevent discharge of an additional 6,900 pounds of 
76 pollutants of concern that are known to cause adverse non-cancer 
human health effects. These reduced pollutant discharges from MP&M 
facilities generate human health benefits in a number of ways. The most 
important human health benefits stem from reduced risk of illness from 
consumption of contaminated fish, shellfish, and water.
    EPA analyzed the following measures of human health-related 
benefits: reduced cancer risk from fish and water consumption; reduced 
risk of non-cancer adverse health effects from fish and water 
consumption; reduced lead-related adverse health effects in children 
and adults; and reduced occurrence of in-waterway pollutant 
concentrations in excess of levels of concern. The levels of concern 
include human health-based ambient water quality criteria (AWQC) or 
documented toxic effect levels for those chemicals not covered by AWQC. 
The Agency monetized only two of these health benefits: (1) Changes in 
the incidence of cancer resulting from reduced exposure to carcinogens 
in fish and drinking water and (2) changes in adverse non-cancer health 
effects in children and adults resulting from reduced exposure to lead 
in fish. EPA monetized human health benefits by estimating the change 
in the expected number of individuals experiencing adverse human health 
effects in the populations exposed to MP&M discharges. For carcinogens 
that have linear dose-response relationships, it is feasible to 
estimate the incremental cancer incidence in a population from the 
estimate of mean individual risk for the population and the number of 
individuals in the population. However, for health effects with non-
linear dose-response relationships and thresholds (e.g., non-cancer 
health effects), estimating population risk is computationally more 
complex and was not proposed (see Table IX-1).
    The national-level analysis of human health benefits finds 
negligible monetized benefits from the final rule. However, because of 
significant simplifications in the national level analysis, this 
finding should be recognized as potentially having substantial error 
and should therefore be interpreted with caution. In particular, the 
national-level analysis: (1) Is based only on limited information on 
MP&M facilities at the national level; (2) accounts in only a very 
limited way for the presence and effect of joint discharges on the same 
reach; (3) omits data on non-MP&M discharges in the baseline and post 
compliance; and (4) omits consideration of the downstream effects of 
pollutant discharges.
    In contrast to the national-level analysis, and as discussed in 
section IX.A. of today's final rule and Chapter 21 of the EEBA report, 
the methods and data used for the Ohio case study address a number of 
these analytic weaknesses. This more site-specific and detailed 
analysis finds that the final regulation would achieve $0.5 million 
(2001$) in health-related benefits in the State of Ohio alone. EPA 
estimates that this analysis provides a more accurate, albeit lower-
bound, estimate of health-related benefits than indicated by the 
simpler national-level analysis. Moreover, given (1) that Ohio 
represents only about 6 percent of the total MP&M facility population 
and (2) that a substantial share of the total MP&M facility population 
is located in other States with similar water body and population 
characteristics (e.g., the States of Illinois, Indiana, Michigan, 
Pennsylvania), it is reasonable to expect that additional human health 
benefits would be estimated for the remainder of the country if EPA 
were able to apply this more rigorous approach at the national level. 
Accordingly, EPA judges that the final rule's human health benefits are 
higher than its social costs.
1. Benefits From Reduced Incidence of Cancer
    EPA assessed changes in the incidence of cancer cases from 
consumption of MP&M pollutants in fish tissue and drinking water. The 
Agency valued changes in incidence of cancer cases using a willingness-
to-pay (WTP) of $6.5 million (2001$) for avoiding premature mortality. 
This estimate of the value of a statistical life saved is recommended 
in EPA's Guidelines for Preparing Economic Analysis. This estimate does 
not include

[[Page 25720]]

estimates of WTP to avoid morbidity prior to death.
    EPA estimated aggregate cancer risk from contaminated drinking 
water for populations served by drinking water intakes on water bodies 
to which MP&M facilities discharge. EPA based this analysis on six 
carcinogenic pollutants for which drinking water criteria have not been 
published. This analysis excludes seven carcinogens for which drinking 
water criteria have been published. EPA assumed that public drinking 
water treatment systems will remove these seven pollutants from the 
public water supply. To the extent that treatment for these seven 
pollutants may cause incidental removals of the six pollutants without 
criteria, the analysis may overstate cancer-related benefits.
    Calculated in-stream concentrations serve as a basis for estimating 
changes in cancer risk for populations served by affected drinking 
water intakes. EPA estimates that baseline MP&M discharges from in-
scope facilities are associated with virtually zero annual cancer 
cases. The national-level analysis finds that the final regulation 
would lead to a marginal reduction in these cancer cases resulting from 
consumption of contaminated drinking water; correspondingly, monetary 
benefits estimated from reduced consumption of contaminated drinking 
water are essentially zero.
    EPA also estimated cancer risk from the consumption of contaminated 
fish for recreational and subsistence anglers and their families. EPA 
based this analysis on thirteen carcinogenic pollutants found in MP&M 
effluent discharges. Estimated contaminant concentrations in fish 
tissue are a function of predicted in-stream pollutant concentrations 
and pollutant bioconcentration factors. EPA used data on numbers of 
licensed fishermen by state and county, presence of fish consumption 
advisories, number of fishing trips per person per year, and average 
household size to estimate the affected population of recreational and 
subsistence anglers and their families. The analysis uses different 
fish consumption rates for recreational and subsistence anglers to 
estimate the change in cancer risk among these populations.
    EPA estimated that baseline MP&M discharges from in-scope 
facilities are associated with 0.03 annual cancer cases. The national-
level analysis shows that final option would lead to a marginal 
reduction in cancer cases among recreational and subsistence angler 
populations. The monetary benefits estimated from consumption of less 
contaminated fish by these populations are essentially negligible.
    The previous findings from the national analysis of changes in 
cancer risk associated with the final rule differ from the Ohio case 
study results. Based on the Ohio case study, the final option is 
expected to eliminate less than 0.01 cancer cases annually in the State 
of Ohio (see section IX.H of today's final rule for a detail). This 
reduction translates into approximately $14,500 (2001$) in annual 
benefits due to reduced cancer risk from consumption of contaminated 
fish tissue and drinking water. The difference in the findings of the 
national- and Ohio analyses results primarily from more comprehensive 
information on MP&M and non-MP&M facility discharges used in the Ohio 
case study analysis (see section IX.A. of today's final rule for 
additional details). The national-level analysis accounts only for the 
pollutant exposures from MP&M sample facilities. In contrast, the Ohio 
case study approach accounts for a broader baseline of pollutant 
exposure, including more thorough and detailed coverage of discharges 
from MP&M facilities and also estimated exposures from non-MP&M 
sources. As a result, this analysis more accurately reflects baseline 
health risk conditions.
2. Reductions in Non-Cancer Adverse Human Health Effects Other Than 
Those Related to Lead Exposure
    The final rule can potentially generate non-cancer human health 
benefits (e.g., reduction in systemic effects, reproductive toxicity, 
and developmental toxicity) from reduced contamination of fish tissue 
and drinking water sources. The common approach for assessing the risk 
of non-cancer health effects from the ingestion of a pollutant is to 
calculate a hazard quotient by dividing an individual's oral exposure 
to the pollutant, expressed as a pollutant dose in milligrams per 
kilogram body weight per day (mg/kg-day), by the pollutant's oral 
reference dose (RfD). An RfD is defined as an estimate (with 
uncertainty spanning perhaps an order of magnitude) of a daily oral 
exposure that likely would not result in the occurrence of adverse 
health effects in humans, including sensitive individuals, during a 
lifetime. Toxicologists typically establish an RfD by applying 
uncertainty factors to the lowest-or no-observed-adverse-effect level 
for the critical toxic effect of a pollutant.\1\ A hazard quotient less 
than one means that the pollutant dose to which an individual is 
exposed is less than the RfD, and, therefore, presumed to be without 
appreciable risk of adverse human health effects. A hazard quotient 
greater than one means that the pollutant dose is greater than the RfD. 
Further, EPA guidance for assessing exposures to mixtures of pollutants 
recommends calculating a hazard index (HI) by summing the individual 
hazard quotients for those pollutants in the mixture that affect the 
same target organ or system (e.g., the kidneys, the respiratory 
system).\2\ HI values are interpreted similarly to hazard quotients; 
values below one are generally considered to suggest that exposures are 
not likely to result in appreciable risk of adverse health effects 
during a lifetime, and values above one are generally cause for 
concern, although an HI greater than one does not necessarily suggest a 
likelihood of adverse effects.
---------------------------------------------------------------------------

    \1\ U.S. EPA, 1993, ``Reference Dose (RfD): Description and Use 
in Health Risk Assessments, Background Document 1A,'' http://www/
epa.gov/iris/rfd.htm.
    \2\ ``Supplementary Guidance for Conducting Health Risk 
Assessment of Chemical Mixtures. Risk Assessment Forum Technical 
Panel,'' EPA/630/R-00/002. U.S. EPA, August 2000. http://
www.epa.gov/nceawww1/pdfs/chem mix/chem mix 08 2001.pdf.
---------------------------------------------------------------------------

    To evaluate the potential benefits of reducing the in-stream 
concentrations of 76 pollutants that cause non-cancer health effects, 
EPA estimated target organ-specific HIs for drinking water and fish 
ingestion exposures in both the baseline and post-compliance scenarios. 
Specifically, EPA calculated target-organ specific HIs for pollutants 
predicted in each MP&M discharge reach, such that one HI was calculated 
for each target organ/exposure pathway (fish consumption and drinking 
water)/reach combination. EPA then combined estimates of the numbers of 
individuals in the exposed populations with the HIs for the populations 
to determine how many individuals might be expected to realize reduced 
risk of non-cancer health effects in the post-compliance scenario. This 
analysis was limited in two primary ways. First, hazard indices 
estimated in this analysis may understate the actual potential for 
adverse health effects because possible additional sources of 
pollutants, such as background pollutants and MP&M pollutants from 
upstream dischargers, were not considered in the analysis. Second, EPA 
used mean individual exposure parameters and not the distribution of 
exposure parameters to estimate hazard indices for the populations 
affected by MP&M discharges.
    The results of EPA's analysis suggest that hazard indices for 
individuals in the exposed populations may decrease

[[Page 25721]]

after facilities comply with today's rule. Increases in the percentage 
of exposed populations that would be exposed to no risk of non-cancer 
adverse human health effects due to the MP&M discharges occur in both 
the fish and drinking water analyses. The shift to lower hazard indices 
should be considered in conjunction with the finding that the hazard 
indices for incremental exposures to pollutants discharged by MP&M 
facilities (for which reference doses are available) are less than one 
in the baseline analysis for the entire population associated with 
sample facilities. Whether the incremental shifts in hazard indices are 
significant in reducing absolute risks of non-cancer adverse human 
health effects is uncertain and will depend on the magnitude of 
contaminant exposures for a given population from risk sources not 
accounted for in this analysis.
3. Benefits From Reduced Exposure to Lead
    EPA performed a separate analysis of benefits from reduced exposure 
to lead. This analysis differs from the analysis of non-cancer adverse 
human health effects from exposure to other MP&M pollutants because it 
is based on dose-response functions tied to specific health endpoints 
to which monetary values can be applied.
    Many lead-related adverse health effects are relatively common and 
are chronic in nature. These effects include, but are not limited to, 
hypertension, coronary heart disease, and impaired cognitive function. 
Lead is harmful to individuals of all ages, but the effects of lead on 
children are of particular concern. Children's rapid rate of 
development makes them more susceptible to neurobehavioral effects from 
lead exposure. The neurobehavioral effects on children from lead 
exposure include hyperactivity, behavioral and attention difficulties, 
delayed mental development, and motor and perceptual skill deficits.
    This analysis assessed benefits of reduced lead exposure from 
consumption of contaminated fish tissue to three sensitive populations: 
(1) Preschool age children; (2) pregnant women; and (3) adult men and 
women. This analysis uses blood-lead levels as a biomarker of lead 
exposure. EPA estimated baseline and post-compliance blood lead levels 
in the exposed populations and then used changes in these levels to 
estimate benefits in the form of avoided health damages.
    EPA assessed neurobehavioral effects on children based on a dose 
response relationship for IQ decrements. Avoided neurological and 
cognitive damages are expressed as changes in overall IQ levels, 
including reduced incidence of extremely low IQ scores (<70, or two 
standard deviations below the mean) and reduced incidence of blood-lead 
levels above 20 [mu]g/dL. The analysis uses the value of compensatory 
education that an individual would otherwise need and the impact of an 
additional IQ point on individuals' future earnings to value the 
avoided neurological and cognitive damages. The national-level analyses 
shows that implementation of the final option would not result in any 
changes in IQ loss across all exposed children. The final option does 
not reduce occurrences of extremely low IQ scores (<70) or incidences 
of blood-lead levels above 20 [mu]g/dL.
    Prenatal exposure to lead is an important route of exposure. Fetal 
exposure to lead in utero due to maternal blood-lead levels may result 
in several adverse health effects, including decreased gestational age, 
reduced birth weight, late fetal death, neurobehavioral deficits in 
infants, and increased infant mortality. To assess benefits to pregnant 
women, EPA estimated changes in the risk of infant mortality due to 
changes in maternal blood-lead levels during pregnancy. The national-
level analysis shows that the final option does not result in changes 
in maternal blood lead levels during pregnancy and as a result does not 
reduce neonatal mortality.
    The national-level analysis finds no benefits to children from 
reduced exposure to lead. However, as for the cancer risk analysis 
previously discussed, these findings differ from the more comprehensive 
analysis used in the Ohio case study. Using the case study approach, 
EPA estimates that the final regulation will yield annual lead-related 
benefits for children in Ohio of $422,113 (2001$). This benefit value 
includes three components. First, reduced lead exposure is estimated to 
reduce neonatal mortality by 0.024 cases annually with an annual value 
of $162,094 (2001$). Second, reduced lead exposure will avoid the loss 
of an estimated 26.96 IQ points among preschool children in Ohio, which 
translates into $253,934 (2001$) per year in benefits. Third, the 
annually avoided costs of compensatory education from incidence of IQ 
below 70 and blood-lead levels above 20 [mu]g/dL among children amounts 
to approximately $5,345 (2001$).
    Lead exposure has been shown to have adverse effects on the health 
of adults as well as children. The health effects in adults that EPA 
quantified all derive from lead's effects on blood pressure. Quantified 
health effects include increased incidence of hypertension (estimated 
for males only), initial coronary heart disease (CHD), strokes (initial 
cerebrovascular accidents and atherothrombotic brain infarctions), and 
premature mortality. This analysis does not include other health 
effects associated with elevated blood pressure and other adult health 
effects of lead, including nervous system disorders in adults, anemia, 
and possible cancer effects. EPA used cost of illness estimates (i.e., 
medical costs and lost work time) to estimate monetary value of reduced 
incidence of hypertension, initial CHD, and strokes. EPA then used the 
value of a statistical life saved to value changes in risk of premature 
mortality. The national level analysis finds that the final rule will 
achieve no lead-related health benefits among adults.
    Again, the national analysis results differ from the Ohio case 
study results. Using the case study approach, EPA estimates that the 
final regulation will achieve total lead-related benefits among Ohio 
adults of $117,393 (2001$). This value includes benefits from reduced 
hypertension among adult males: a reduction of an estimated 9.4 cases 
annually, with benefits of approximately $10,670 (2001$). In addition, 
reducing the incidence of initial CHD, strokes, and premature mortality 
among adult males and females in Ohio would result in estimated 
benefits of $963, $2,115, and $103,645, respectively.
    Based on the national-level benefits analysis, EPA found that total 
benefits from reduced exposure to lead, for both children and adults, 
are negligible under the final rule. However, based on the Ohio case 
study findings, benefits for children and adults from reduced lead-
related health effects to the final rule are estimated to total 
approximately $0.5 million (2001$) annually in the State of Ohio alone 
(see section H of today's final rule for detail). As in the cancer risk 
analysis, the difference in the national and Ohio-based results is 
primarily due to more comprehensive information on MP&M and non-MP&M 
facility discharges used in Ohio.
4. Reduced Exceedances of Health-Based AWQC
    EPA also estimated the effect of MP&M facility discharges on the 
occurrence of pollutant concentrations in affected waterways that 
exceed human health-based AWQCs. In a conceptual sense, this analysis 
and its findings are not additive to the preceding analyses of change 
in cancer or lead-related health risks but are

[[Page 25722]]

another way of quantitatively characterizing the same possible benefit 
categories. This analysis compares the estimated baseline and post 
compliance in-stream pollutant concentrations in affected waterways to 
ambient water criteria for protection of human health. The comparison 
included AWQC for protection of human health through consumption of 
organisms and for consumption of organisms and water. Pollutant 
concentrations in excess of these values indicate potential risks to 
human health. Table IX-2 presents results of this analysis.

  Table IX-2.--Estimated MP&M Discharge Reaches With MP&M Pollutant Concentrations in Excess of AWQC Limits for
                                           Protection of Human Health
----------------------------------------------------------------------------------------------------------------
                                     Number of reaches with              Number of benefitting reaches
                                         MP&M pollutant      ---------------------------------------------------
                                    concentrations exceeding    All AWQC exceedances         Number of AWQC
                                     human health-based AWQC         eliminated            exceedances reduced
                                             limits          ---------------------------------------------------
         Regulatory status         --------------------------
                                        For          For          For          For          For          For
                                    consumption  consumption  consumption  consumption  consumption  consumption
                                      of water        of        of water        of        of water        of
                                        and       organisms       and       organisms       and       organisms
                                     organisms       only      organisms       only      organisms       only
----------------------------------------------------------------------------------------------------------------
                                   Selected Option: Traditional Extrapolation
----------------------------------------------------------------------------------------------------------------
Baseline..........................           78           21          N/A          N/A          N/A          N/A
Post-Compliance...................           78           21            0            0            0            0
-----------------------------------
                               Selected Option: Post-Stratification Extrapolation
----------------------------------------------------------------------------------------------------------------
Baseline..........................          112           21          N/A          N/A          N/A          N/A
Post-Compliance...................          112           21            0            0            0           0
----------------------------------------------------------------------------------------------------------------
Source: U.S. Environmental Protection Agency.

    EPA estimates that in-stream concentrations of 4 pollutants (i.e., 
arsenic, iron, manganese, and n-nitrosodimethylamine) will exceed human 
health criteria for consumption of water and organisms in 78 receiving 
reaches nationwide as the result of baseline MP&M pollutant discharges. 
EPA estimates that there are human health AWQC exceedances caused by n-
nitrosodimethylamine (NDMA). However EPA did not consider NDMA 
pollutant reductions in its national benefits analyses because of the 
low number of detected values for that pollutant (See Chapter 7 of the 
TDD). EPA estimates that the final rule will not eliminate the 
occurrence of pollutant concentrations in excess of human health 
criteria for consumption of water and organisms and for consumption of 
organisms on any of the reaches on which baseline discharges are 
estimated to cause pollutant concentrations in excess of AWQC values.
5. Uncertainties and Assumptions of the Human Health Benefits Analysis
    Because of the uncertainties and assumptions of EPA's analysis, the 
estimates of benefits presented in this section may either overstate or 
understate the benefits to recreational fishers, subsistence fishers, 
and members of the general population who consume drinking water 
obtained from intakes located downstream of MP&M discharges. Some of 
the major uncertainties and assumptions of EPA's analysis include the 
following:
    [sbull] In estimating cancer risks and evaluating the risk of non-
cancer health effects other than those related to lead exposure, EPA 
did not consider the potential for interactions between pollutants. EPA 
estimated cancer risk or non-cancer hazard attributable to each 
pollutant and summed the pollutant-specific estimates as appropriate 
(that is, EPA summed all pollutant-specific cancer risk estimates for 
each pathway of exposure, and summed pollutant-specific hazard 
quotients across target organs for each pathway of exposure). This 
approach does not account for the possibility that pollutants may 
interact synergistically or antagonistically such that the cancer 
potency or non-cancer hazard of the mixture of the pollutants is more 
or less than that calculated from the cancer potencies or RfDs of the 
individual pollutants.
    [sbull] Population risk for cancer is based on mean exposure. Using 
mean exposure parameters for non-cancer could either over- or under-
estimate HI exceedences.
    [sbull] EPA's estimates of cancer cases were calculated using 
cancer potency factors that are upper bound estimates of cancer 
potency, potentially leading to overestimation of cancer risk.
    [sbull] The analysis benefits from reduced incidence of cancer did 
not account for a cessation-lag, the time between when exposures are 
reduced and when reduction in risk occurs. Ignoring a cessation lag may 
lead to overestimation of cancer-related benefits.
    [sbull] EPA assumed that the number of subsistence fishers would be 
an additional 5% of the licensed fishing population. This could be 
either an overestimate or underestimate of the actual number of 
subsistence fishers.
    [sbull] Hazard indices estimated in this analysis may understate 
actual health risk because possible additional sources of pollutants, 
such as background pollutants and MP&M pollutants from upstream 
dischargers, were not considered in the analysis.
    Additional details on methodology and the uncertainties and 
limitations of EPA's analysis of human health risk from the final 
effluent guidelines, particularly assumptions related to exposure 
parameters, are presented in Chapter 13 and Chapter 14 of the EEBA 
report.

C. Improved Ecological Conditions and Recreational Uses

    EPA expects the final regulation to provide ecological benefits by 
improving the habitats or ecosystems (aquatic and terrestrial) affected 
by the MP&M industry's effluent discharges. Benefits associated with 
changes in aquatic life may include restoration of sensitive species, 
recovery of diseased species, changes in taste- and odor-producing 
algae, changes in dissolved oxygen (DO), increased assimilative 
capacity of affected waterways, and improved related recreational 
activities. These activities include swimming,

[[Page 25723]]

fishing, boating and wildlife observation that may be enhanced when 
risks to aquatic life are reduced and where perceivable water quality 
efforts associated with MP&M pollutants, such as turbidity, are 
reduced. Among these ecological benefits, EPA was able to estimate 
dollar values for improved recreational opportunities and for non-user 
benefits.
    EPA expects the MP&M rule to improve aquatic species habitats by 
reducing concentrations of toxic contaminants such as aluminum, 
cadmium, copper, lead, mercury, silver, and zinc in water. These 
improvements may enhance the quality and value of water-based 
recreation, such as fishing, swimming, wildlife viewing, camping, 
waterfowl hunting, and boating. The benefits from improved water-based 
recreation would be seen as increases in the increased value 
participants derive from a day of recreation and the increased number 
of days that consumers of water-based recreation choose to visit the 
cleaner waterways. This analysis measures the economic benefit to 
society from water quality improvements based on the increased monetary 
value of recreational opportunities resulting from those improvements.
    EPA assessed recreational benefits of reduced occurrence of 
pollutant concentrations exceeding aquatic life and human health AWQC 
values. EPA estimates that baseline in-stream concentrations of 9 
pollutants (i.e., aluminum, cadmium, copper, lead, manganese, mercury, 
nickel, silver, and zinc) will exceed the acute and chronic criterion 
for aquatic life in 353 reaches nationwide. The final rule eliminates 
concentrations in excess of aquatic life-based AWQCs on nine of these 
reaches. Section IX.4 of this preamble presents EPA's analysis of the 
effect of MP&M discharges on occurrence of pollutant concentrations in 
affected waterways in excess of human health-based AWQCs.
    The analysis of recreational benefits combined the findings from 
the aquatic life benefits analysis and the human health AWQC exceedance 
analysis described previously. These analyses found that 394 stream 
reaches exceed chronic or acute aquatic life AWQC and/or human health 
AWQC values at the baseline discharge levels (see Table IX-3). EPA 
expects the final rule will eliminate exceedances on nine of these 
discharge reaches.

   Table IX-3.--Estimated MP&M Discharge Reaches With MP&M Pollutant Concentrations in Excess of AWQC Limits for Protection of Human Health or Aquatic
                                                                         Species
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Number of reaches with MP&M pollutant concentrations exceeding    Number of benefitting
                                                                                         AWQC limits                                     reaches
                                                              ------------------------------------------------------------------------------------------
                      Regulatory status                              Aquatic life              Human health
                                                              ----------------------------------------------------                All AWQC       AWQC
                                                                                           H2O and     Organisms      Total     exceedances  exceedances
                                                                 Chronic       Acute      organisms       only                   eliminated    reduced
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Selected Option: Traditional Extrapolation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.....................................................          353           18           78           21          394          N/A          N/A
Post-Compliance..............................................          344            9           78           21          386            9            0
--------------------------------------------------------------
                                                   Selected Option: Post-Stratification Extrapolation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.....................................................          350           15          112           21          426          N/A          N/A
Post-Compliance..............................................          344            9          112           21          420            6            0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Removing water quality impairments would increase services provided 
by water resources to recreational users. EPA expects potential 
recreational users to benefit from improved recreational opportunities, 
including an increased number of available choices of recreational 
sites. For example, some of the streams that were not usable for 
recreation under the baseline discharge conditions may be newly 
included in the site choice set for recreational users from nearby 
counties. Streams that have been used for recreation under the baseline 
conditions can become more attractive for users making recreational 
trips more enjoyable. Individuals may also take trips more frequently 
if they enjoy their recreational activities more.
    EPA attached a monetary value to these reduced exceedances based on 
increased values for three water-based recreation activities--fishing, 
boating, and wildlife viewing--and for non-user values. Because most 
benefitting reaches are close to densely populated areas, potential 
recreational users may also benefit from lower travel costs to the 
recreational sites in the vicinity of their home towns that were not 
previously suitable to water-based recreation. EPA applied a benefits 
transfer approach to estimate the total WTP, including both use and 
non-use values, for improvements in surface water quality. This 
approach builds upon a review and analysis of the surface water 
valuation literature.
    EPA first estimated the baseline value of each recreational 
activity (i.e., fishing, boating, and wildlife viewing) corresponding 
to the benefitting reach by multiplying the estimated annual person-
days per reach by the estimated per-day values of water-based 
recreation. The baseline per-day values of water-based recreation are 
based on studies by Walsh et. al (1992) and Bergstrom and Cordell 
(1991) (see DCN 20444 and DCN 20427, section 8.5.2.4). The studies 
provide values per recreation day for a wide range of water-based 
activities, including fishing, boating, wildlife viewing, waterfowl 
hunting, camping, and picnicking. The mean values per recreational 
fishing, boating, and wildlife viewing day used in this analysis are 
$42.12, $48.30 and $26.28 (2001$) respectively. Applying facility 
weights and assuming over all benefitting reaches provides a total 
baseline value for a given recreational activity for MP&M reaches 
expected to benefit from the elimination of pollutant concentrations in 
excess of AWQC limits.
    EPA then applied the percentage change in the recreational value of 
water resources implied by surface water valuation studies to estimate 
changes in values for all MP&M reaches in which the regulation 
eliminates AWQC exceedances by one or more MP&M pollutants. The Agency 
selected eight of the most comparable studies and calculated the 
changes in recreation values from water quality improvements (as 
percentage of the baseline) implied

[[Page 25724]]

by those studies. Sources of estimates included Lyke (1993), Jakus et 
al. (1997), Montgomery and Needleman (1997), Paneuf et al. (1998), 
Desvousges et al. (1987), Lant and Roberts (1990), Farber and Griner 
(2000), and Tudor et al. (2000) (see section 8.5.2.4 of the rulemaking 
record). EPA's reasoning for selecting each study is discussed in 
detail in Chapter 15 of the EEBA report. EPA took a simple mean of 
point estimates from all applicable studies to derive a central 
tendency value for percentage change in the water resource values due 
to water quality improvements. These studies yielded estimates of 
increased recreational value from water quality improvements expected 
from reduced MP&M discharges of 12, 9, and 18 percent for fishing, 
boating, and wildlife-viewing respectively. Using all possible 
applicable valuation studies in developing a benefit transfer approach 
to valuing changes in the recreational value of water resources from 
reduced MP&M discharges, makes unit values more likely to be nationally 
representative, and avoids the potential bias inherent in using a 
single study to make estimates at the national level.
    Table IX-4 presents the estimated national recreational benefits of 
the final rule (2001$). See EEBA Chapter 15 for estimated recreational 
benefits for alternative regulatory options. The estimated increased 
value of recreational activities to users of water-based recreation is 
$537,197, $202,691, and $259,949 annually for fishing, boating, and 
wildlife viewing respectively. The recreational activities considered 
in this analysis are stochastically independent; EPA calculated the 
total user value of enhanced water-based recreation opportunities by 
summing over the three recreation categories. The estimated increase in 
the total user value is $999,838 annually.
    EPA also estimated non-market non-user benefits. These non-market 
non-user benefits are not associated with current use of the affected 
ecosystem or habitat; instead, they arise from the value society places 
on improved water quality independent of planned uses or based on 
expected future use. Past studies have shown that non-user values are a 
sizable component of the total economic value of water resources. EPA 
estimated average changes in non-user value to equal one-half of the 
recreational use benefits (see Fisher, A. and R. Raucher, 1984; DCN 
20431, section 8.5.2.4). The estimated increase in non-use value is 
$499,919 (2001$).
    A recent literature review finds that non-use benefits are, on 
average, 1.9 to 2.5 times all use values, rather than 0.5 times 
recreational benefits alone as EPA has traditionally assumed for its 
non-use benefit estimates (see T. Brown, 1993; DCN 20426, section 
8.5.2.4). EPA's method for estimating non-use benefits from water 
quality improvements resulting from reduced MP&M dischargers is 
therefore likely to understate the true value of non-use benefits.

  Table IX-4.--Estimated Recreational and Non-Use Benefits From Reduced
                             MP&M Discharges
                          [Thousands of 2001$]
------------------------------------------------------------------------
                                                               Post-
               Benefit type                 Traditional   stratification
                                           extrapolation   extrapolation
------------------------------------------------------------------------
Recreational Fishing.....................      $537.20         $349.98
Recreational Boating.....................      $202.69         $132.05
Recreational Wildlife Viewing............      $259.95         $169.36
Non-Use Benefits (\1/2\ Recreational           $499.92         $325.70
 Benefits)...............................
                                          ----------------
    Total Recreational Benefits..........    $1,499.76        $977.09
------------------------------------------------------------------------
Note: Categories may not sum to totals due to rounding of individual
  estimates for presentation purposes.

    EPA calculated the total value of enhanced water-based recreation 
opportunities by summing over the three recreation categories and non-
user value. The resulting increase in value of water resources to 
consumers of water-based recreation and non-users is $1,449,756 (2001$) 
annually.
    Findings from the Ohio-case study analysis suggest that the 
benefits to consumers of water-based recreation may be substantially 
underestimated at the national level. EPA estimates recreational and 
non-use benefits to Ohio residents alone are $376,400 (2001$) annually. 
See section IX.H of today's final rule and Chapter 21 of the EEBA for a 
detailed discussion of the case study of recreational benefits in Ohio. 
Given that the in-scope MP&M facilities located in the State of Ohio 
account only for six percent of the total number of in-scope 
facilities, it is reasonable to expect that the benefits to Ohio 
residents do not account for such a large proportion of recreational 
benefits from the final rule nationwide. In addition to more accurately 
account for the presence and effect of MP&M and non-MP&M dischargers in 
Ohio, the following factors are likely to result in more comprehensive 
estimates of recreational benefits under the case study approach: (1) 
Use of an original travel cost study to value four recreational 
activities affected by the regulation: fishing, swimming, boating, and 
wild life viewing; (2) use of a first-order decay model to estimate in-
stream concentrations in downstream water bodies; (3) ability to 
estimate welfare gain to recreational users from reduced discharges of 
nutrients such as Total Kjeldahl Nitrogen (TKN).

D. Effect on POTW Operations

    The final rule only regulates direct dischargers. Therefore, the 
selected option does not affect POTW operation. For the alternative 
policy options that consider both direct and indirect dischargers, EPA 
evaluated two productivity measures associated with MP&M pollutants. 
The first measure is the reduction in pollutant interference at 
publicly-owned treatment works (POTWs). The second measure is pass-
through of pollutants into the sludge, which limits options for POTW 
disposal of sewage sludge. These analyses are presented in EEBA Chapter 
16.

E. Summary of Benefits

    Using the national-level analysis approach, EPA estimates total 
benefits for the five monetized categories of approximately $1,500,000 
(2001$) annually (see Table IX-5). EPA's complete benefit assessment 
can be found in EEBA for the final rule. The monetized benefits of the 
rule likely underestimates the total benefits of the rule because they 
omit various sources of benefits to society from reduced MP&M effluent 
discharges. Examples of benefit categories not reflected in these 
estimates include non-cancer health benefits other than benefits from 
reduced exposure to lead; other water-dependent recreational benefits, 
such as swimming and waterskiing benefits to recreational users from 
reduced concentration of conventional pollutants and nonconventional 
pollutants such as TKN; and reduced cost of drinking water treatment 
for the pollutants with drinking water criteria. In addition, as noted 
in the prior discussion, although the national-level benefits analysis 
finds negligible benefits from reduced health risk, the more rigorous 
analytic approach used for the Ohio case study found more benefits--
approximately $0.5 million.

[[Page 25725]]



      Table IX-5.--Estimated Benefits from Reduced MP&M Discharges
                  [Annual Benefits--Thousands of 2001$]
------------------------------------------------------------------------
                                                               Post-
             Benefit category               Traditional   stratification
                                           extrapolation   extrapolation
------------------------------------------------------------------------
1. Reduced Cancer Risk:
    Fish Consumption.....................        $0.09           $0.13
    Water Consumption....................           $0              $0
2. Reduced Risk from Exposure to Lead:
    Children.............................           $0              $0
    Adults...............................           $0              $0
3. Avoided Sewage Sludge Disposal Costs            N/A             N/A
 \a\.....................................
4. Enhanced Fishing......................      $537.20         $349.98
5. Enhanced Boating......................      $202.69         $132.05
6. Enhanced Wildlife Viewing.............      $259.95         $169.36
7. Non-Use benefits (\1/2\ of                  $499.92         $325.70
 Recreational Use Benefits)..............
                                          ----------------
    Total monetized benefits.............    $1,499.85        $977.22
------------------------------------------------------------------------
\a\ Not applicable to the final rule.

F. National Cost-Benefit Comparison

    The comparison of costs and benefits for the final rule is 
inevitably incomplete because EPA cannot value all of the benefits 
resulting from the final rule in dollar terms. A comparison of costs 
and benefits is thus limited by the lack of a comprehensive benefits 
valuation and also by uncertainties in the estimates. Bearing these 
limitations in mind, EPA presents a summary comparison of costs and 
benefits for the final rule in Table IX-6. The estimated social cost of 
the final rule is $13.8 million annually (2001$). The total benefits 
that can be valued in dollar terms in the categories traditionally 
analyzed for effluent guidelines range from around $977,000 to 
$1,500,000 annually (2001$), based on the alternative extrapolation 
methods.
    As previously noted, EPA used more detailed information and a more 
comprehensive analytic method to estimate expected benefits of the 
final rule for the State of Ohio. This more rigorous analysis was 
undertaken to address certain issues in the national-level analysis and 
to supplement the national-level analysis performed for the final rule. 
The following section presents this analysis. The Ohio case study 
showed that the more rigorous analytic approach leads to a different 
conclusion from that found in the simpler, national-level analysis 
approach--in particular, that the estimated State-level benefits exceed 
the estimated State-level cost. As previously discussed, given (1) that 
Ohio accounts for only about 6 percent of total MP&M facilities, and 
(2) that other States with substantial numbers of MP&M facilities have 
similar population and water body characteristics to Ohio, EPA believes 
that use of the more rigorous approach nationally would yield a higher 
estimate of national benefits. On this basis, the Agency estimates that 
national benefits from the final rule may be comparable to its social 
costs.

        Table IX-6.--Cost-Benefit Comparison [Thousands of 2001$]
------------------------------------------------------------------------
                                                             Post-
             Category                  Traditional       stratification
                                      extrapolation      extrapolation*
------------------------------------------------------------------------
Social Cost of Regulation.........        $13,824.56         $13,824.56
Monetized Benefits................         $1,499.85            $977.22
Net Benefits......................      (-$12,324.72)      (-$12,847.34) 
------------------------------------------------------------------------
* Post-Stratification extrapolation is applied to benefits estimates
  only.

G. Ohio Case Study

1. Overview
    The Ohio Case Study Report presents a detailed case study of the 
expected State-level costs and benefits of the MP&M rule in Ohio. The 
case study assesses the costs and benefits of the final rule for 
facilities and water bodies located in Ohio. Ohio is among the ten 
States with the largest numbers of MP&M facilities. The State has a 
diverse water resource base and a more extensive water quality 
ecological database than many other States. EPA gathered data on MP&M 
facilities and on Ohio's baseline water quality conditions and water-
based recreation activities to support the case study analysis. These 
data characterize current water quality conditions, water quality 
changes expected from the regulation, and the expected welfare changes 
from water quality improvements at water bodies affected by MP&M 
discharges. The case study also estimates the social costs of the final 
rule for facilities in Ohio and compares estimated social costs and 
benefits for the State.
    The case study analysis supplements the national level analysis 
performed for the final MP&M regulation in two important ways. First, 
the analysis used improved data and methods to determine MP&M pollutant 
discharges from both MP&M facilities and other sources. In particular, 
EPA administered 1,600 screener questionnaires to augment information 
on the Ohio's MP&M facilities. The Agency also used information from 
the sampled MP&M facilities to estimate discharge characteristics of 
non-sampled MP&M facilities, as described in Appendix H of the EEBA 
report. The Agency assigned discharge characteristics to all non-MP&M 
industrial direct discharges based on the information provided in PCS. 
Second, the analysis used an original travel cost study to value four 
recreational uses of water resources affected by the regulation: 
swimming, fishing, boating, and near-water activities. The added detail 
provides a more complete and reliable analysis of water quality changes 
from reduced MP&M discharges. The study provides more complete 
estimates of changes in human welfare resulting from reduced health 
risk, enhanced recreational opportunities, and improved economic 
productivity.
    EPA estimated human health benefits from reduced MP&M dischargers 
in Ohio using similar methodologies to those used for the national-
level analysis. Section IX.B of this preamble summarizes these 
methodologies. Uncertainties and assumptions of EPA's

[[Page 25726]]

analysis of human health benefits are presented in section IX.B.5. 
Additional details on methodology and the uncertainties and limitations 
of EPA's analysis of reduced human health risk from the final effluent 
guidelines are presented in Chapter 13 and 14 of the EEBA report.
    The case study analysis of recreational benefits combines water 
quality modeling with a random utility model (RUM) to assess how 
changes in water quality from the regulation will affect consumers' 
valuation of water resources. The RUM analysis addresses a wide range 
of pollutant types and effects, including water quality measures not 
often addressed in past recreational benefits studies. In particular, 
the model supports a more complete analysis of recreational benefits 
from reductions in nutrients and toxic pollutants (i.e., priority 
pollutants and nonconventional pollutants with toxic effects).
    EPA subjected this study to a formal peer review by experts in the 
natural resource valuation field. The peer review concluded that EPA 
had done a competent job, especially given the available data. As 
requested by the Agency, peer reviewers provided suggestions for 
further improvements in the analysis. Since the proposed rule analysis, 
the Agency made changes to the Ohio model and conducted additional 
sensitivity analyses suggested by the reviewers. The peer review report 
and EPA's response to peer reviewers' comments, along with the revised 
model, are in the docket for the rule.
2. Benefits for Ohio Case Study
    The use of an original RUM in this case study allows the Agency to 
address limitations inherent in benefits transfer used in the analysis 
of recreational benefits at the national level. The use of benefits 
transfer often requires additional assumptions because water quality 
changes evaluated in the available recreation demand studies are only 
roughly comparable with the water quality measures evaluated for a 
particular rule. The RUM model estimates the effects of the specific 
water quality characteristics analyzed for the final MP&M regulation, 
such as presence of AWQC exceedances and concentrations of the 
nonconventional pollutant Total Kjeldahl Nitrogen (TKN). EPA estimates 
that this direct link between the water quality characteristics 
analyzed for the rule and the characteristics valued in the RUM 
analysis reduces uncertainty in benefit estimates and makes the 
analysis of recreational benefits more robust.
    The final MP&M regulation affects a broad range of pollutants, some 
of which are toxic to human and aquatic life but are not directly 
observable (i.e., priority and non-conventional pollutants). These 
unobservable toxic pollutants may degrade aquatic habitats, decrease 
the size and abundance of fish and other aquatic species, increase fish 
deformities, and change watershed species composition. Changes in toxic 
pollutant concentrations may therefore affect recreationists' valuation 
of water resources, even if consumers are unaware of changes in ambient 
pollutant concentrations.
    The study used data from the National Demand Survey for Water-Based 
Recreation (NDS), conducted by U.S. EPA and the National Forest 
Service, to examine the effects of in-stream pollutant concentrations 
on consumers' decisions to visit a particular water body. The analysis 
estimated baseline and post-compliance water quality at recreation 
sites actually visited by the surveyed consumers and at all other sites 
within the consumers' choice set, visited or not. The RUM analysis of 
consumer behavior then estimated the effect of ambient water quality 
and other site characteristics on the total number of trips taken for 
different water-based recreation activities and the allocation of these 
trips among particular recreational sites. The RUM analysis is a travel 
cost model, in which the cost to travel to a particular recreational 
site represents the ``price'' of a visit.
    EPA modeled two consumer decisions: (1) How many water-based 
recreational trips to take during the recreational season (the trip 
participation model); and (2) which recreation site to choose (the site 
choice model). Combining the trip frequency model's prediction of trips 
under the baseline and post-compliance scenarios and the site choice 
model's per-trip welfare measure provides a measure of total welfare. 
EPA calculated each individual's seasonal welfare gain for each 
recreation activity from post-compliance water quality changes, and 
then used Census data to aggregate the estimated welfare change to the 
State level. The sum of estimated welfare changes over the four 
recreation activities yielded estimates of total welfare gain.
    EPA estimated other components of benefits in Ohio using similar 
methodologies to those used for the national-level analysis. In 
addition to the RUM study of recreational benefits, other analytical 
improvements included the following: (1) Use of more detailed data on 
MP&M facilities, obtained from the 1,600 additional surveys; (2) use of 
data on non-MP&M discharges to estimate current baseline conditions in 
the State; and (3) use of a first-order decay model to estimate in-
stream concentrations in the Ohio water bodies in the baseline and 
post-compliance.
    Appendix H of the EEBA Report describes the water quality model 
used in this analysis and the approach and data sources used to 
estimate total pollutant loadings from all industrial and municipal 
sources to Ohio's water bodies. The Agency has concluded that the added 
level of detail results in more robust benefit estimates.
    Summing the monetary values over all benefit categories yields 
total monetized benefits of $930,400 (2001$) annually for the final 
rule, as shown in Table IX-7. Although more comprehensive than the 
national benefits analysis, the case study benefit estimates still omit 
important mechanisms by which society is likely to benefit from the 
final rule. Examples of benefit categories not reflected in the 
monetized benefits include non-cancer health benefits (other than lead-
related benefits) and reduced costs of drinking water treatment.

 Table IX-7.--Estimated Benefits from Reduced MP&M Discharges From Ohio
                               Facilities
                  [Annual benefits--thousands of 2001$]
------------------------------------------------------------------------
                                                                Selected
                       Benefit category                          option
------------------------------------------------------------------------
1. Reduced Cancer Risk:
  Fish Consumption:..........................................      $14.5
  Water Consumption:.........................................      $0.00
2. Reduced Risk from Exposure to Lead:
  Children:..................................................    $422.11
  Adults:....................................................    $117.39
3. Avoided Sewage Sludge Disposal Costs......................      $0.00
4. Enhanced Fishing..........................................    $153.10
5. Enhanced Swimming.........................................      $9.78
6. Enhanced Boating..........................................      $0.00
7. Enhanced Wildlife Viewing.................................     $88.05
8. Non-Use benefits (\1/2\ of Recreational Use Benefits).....    $125.47
                                                              ----------
  Total Monetized Benefits...................................     $930.4
------------------------------------------------------------------------

3. Social Costs for Ohio Case Study
    EPA also estimated the social costs of the final rule for MP&M 
facilities in Ohio. EPA relied on the results of the national analysis 
to predict the number of Ohio facilities that would close in the 
baseline and due to the final rule.
    The MP&M regulations will not affect facilities that are baseline 
closures. Predicting the number of regulatory closures is necessary to 
estimate the costs and impacts of the regulation on industry and water 
quality. The screener

[[Page 25727]]

data collected for Ohio facilities did not provide financial data to 
perform facility financial impact analyses, as was done in the national 
analysis. EPA therefore used data from the national analysis to 
estimate the percentage of facilities that would close in the baseline 
and post-compliance. EPA assumed the ratio of facilities that close in 
the national analysis with the same discharge status, subcategory, and 
flow category would be comparable to closures for facilities in Ohio. 
For example, two percent of direct Oily Waste facilities discharging 
less than one MGY close in the baseline in the national data set.
    EPA developed engineering estimates of compliance costs for each 
Ohio facility and annualized costs using a seven percent discount rate 
over a 15-year period. As in the national social cost analysis, EPA 
included compliance costs for facilities that close due to the rule and 
costs for facilities that continue to operate subject to the final 
regulation. Including costs for regulatory closures in effect 
calculates the social costs of compliance that would be incurred if 
every facility continued to operate post-regulation. In fact, some 
facilities may find it more economical to close, and calculating costs 
as if all facilities continue operating provides an upper bound 
estimate of social costs.
    EPA used the same methods as used in the national social cost 
analysis to estimate other components of social costs for the Ohio case 
study. Section VIII of this preamble and Chapter 11 of the EEBA 
describe the methods used to estimate government administrative costs 
and the social costs of unemployment.
    Table IX-8 shows the total estimated social costs of the final rule 
for Ohio facilities.

  Table IX-8.--Annual Social Costs for Ohio Facilities: Proposed Option
                [Thousands 2001$, costs annualized at 7%]
------------------------------------------------------------------------
                                                                Selected
                  Component of social costs                      option
------------------------------------------------------------------------
Resource value of compliance costs...........................     $62.23
Government administrative costs..............................      $0.00
Social cost of unemployment..................................      $0.00
                                                              ----------
    Total social cost........................................     $62.23
------------------------------------------------------------------------

4. Comparison of Monetized Benefits and Costs for Ohio Case Study
    The Ohio case study shows substantial net positive benefits 
associated with the MP&M regulation. EPA estimates the social cost in 
Ohio of the final regulation to be $62,232 annually (2001$). The sum 
total of benefits that can be valued in dollar terms is $930,408 
annually (2001$). Comparing the midpoint estimate of social costs 
($62,232) with the midpoint estimate of monetizable benefits ($930,408) 
results in a net social benefit of $868,178. This represents a partial 
cost-benefit comparison because not all of the benefits resulting from 
the regulation can be valued in dollar terms (e.g., changes in systemic 
health risk).
    For the reasons previously discussed, EPA judges that the analytic 
approach and detailed data used for the Ohio case study provide a more 
robust and accurate benefits estimate than the data and approach used 
for the national-level analysis.

X. Non-Water Quality Environmental Impacts

    Sections 304(b) and 306 of the Act require EPA to consider non-
water quality environmental impacts (including energy requirements) 
associated with effluent limitations guidelines and standards. In 
accordance with these requirements, EPA has considered the potential 
impact of today's final regulation on air emissions, solid waste 
generation, and energy consumption.
    While it is difficult to balance environmental impacts across all 
media and energy use, the Agency has determined that the benefits 
associated with compliance with the limitations and standards justify 
the multi-media impacts identified in this section (see section IX for 
a discussion on the environmental benefits associated with this 
regulation). For additional information on non-water quality impacts 
associated with today's regulation, see section 13 of the TDD.

A. Air Pollution

    MP&M facilities generate wastewater that contain organic compounds. 
These organic compounds may be volatile organic compounds (VOCs), which 
contribute to the formation of ambient ozone, or hazardous air 
pollutants (HAPs) listed in section 112(b) of the Clean Air Act (CAA). 
These wastewaters often pass through a series of collection and 
treatment units that are open to the atmosphere and allow wastewater 
containing organic compounds to contact ambient air. Atmospheric 
exposure of the organic-containing wastewaters may result in the 
release of VOCs or organic HAPs from the wastewater.
    The use of halogenated hazardous air pollutant solvent (methylene 
chloride, perchloroethylene, trichloroethylene, 1,1,1 trichloroethane, 
carbon tetrachloride and chloroform) for cleaning in the MP&M industry 
can create hazardous air pollutant emissions. The Agency has concluded 
that this regulation will not affect the use of halogenated hazardous 
air pollutant solvent in the MP&M industry. This regulation neither 
requires nor discourages the use of aqueous cleaners in lieu of 
halogenated hazardous air pollutant solvent.
    Because today's final rule would not allow any less stringent 
control of VOCs or organic HAPs than is currently in place at MP&M 
facilities, EPA does not predict any net increase in air emissions from 
volatilization of organic pollutants due to today's action. As such, 
EPA expects no adverse air impacts are expected to occur as a result of 
today's regulation.
    The Agency notes that it is developing National Emission Standards 
for Hazardous Air Pollutants (NESHAPs) under section 112 of the CAA to 
address air emissions of HAPs. Current and upcoming NESHAPs that may 
potentially affect HAP emitting activities at MP&M facilities 
considered during the development of this rule include:
    [sbull] Chromium Emissions from Hard and Decorative Chromium 
Electroplating and Chromium Anodizing Tanks;
    [sbull] Halogenated Solvent Cleaning;
    [sbull] Aerospace Manufacturing;
    [sbull] Shipbuilding and Ship Repair (Surface Coating);
    [sbull] Large Appliances (Surface Coating);
    [sbull] Metal Furniture (Surface Coating);
    [sbull] Automobile and Light-Duty Truck Manufacturing (Surface 
Coating); and
    [sbull] Miscellaneous Metal Parts and Products (Surface Coating).
    Finally, EPA notes that the energy requirements discussed in this 
section may result in increased emissions of combustion byproducts 
associated with energy production. Given the relatively small projected 
increases in energy use, EPA does not anticipate that this effect would 
be significant.

B. Solid Waste

    As shown in Table X-1, EPA anticipates that waste oil generation 
will increase as a result of today's rule. The estimated increase of 
waste oil generation as a result of today's rule reflects better 
removal of oil and grease by the selected technology than is currently 
achieved.

[[Page 25728]]



      Table X-1.--Waste Oil Generation for Oily Wastes Subcategory
------------------------------------------------------------------------
                                                              Waste Oil
                                                              Generated
                           Option                              (million
                                                               gallons/
                                                                year)
------------------------------------------------------------------------
Baseline (or current) Technology 1.........................         13.5
Option 6 Technology........................................        15.9
------------------------------------------------------------------------
Source: U.S. Environmental Protection Agency.
1 EPA calculated the baseline sludge and waste oil generation using
  responses to the 1989 MP&M Phase I Questionnaire and the 1996 MP&M
  Phase II Detailed Questionnaires.

    MP&M facilities usually either recycle waste oil on-site or off-
site, or contract haul it for disposal as either a hazardous or 
nonhazardous waste. However, EPA notes that the inclusion of water 
conservation and pollution prevention in the technology basis for the 
Oily Wastes subcategory results in the generation of less waste oil 
than a technology basis that did not incorporate pollution prevention. 
EPA finds the overall increase in waste oil generation as acceptable.

C. Energy Requirements

    EPA estimates that compliance with this regulation will result in a 
net increase in energy consumption at MP&M facilities. EPA presents the 
estimates of energy usage for the selected option in Table X-2.

                Table X-2.--Energy Requirements by Option
------------------------------------------------------------------------
                                                                Energy
                                                               required
                           Option                             (kilowatt
                                                               hrs/yr)
------------------------------------------------------------------------
Baseline 1.................................................    6,883,774
Selected Options...........................................   7,234,450
------------------------------------------------------------------------
Source: U.S. Environmental Protection Agency.
1 EPA calculated the baseline sludge and waste oil generation using
  responses to the 1989 MP&M Phase I Questionnaire and the 1996 MP&M
  Phase II Detailed Questionnaires. The final regulation does not
  include indirect discharging facilities.

    By comparison, electric power generation facilities generated 3,123 
billion kilowatt hours of electric power in the United States in 1997 
(The Energy Information Administration, Electric Power Annual 1998 
Volume 1, Table A1). Additional energy requirements for EPA's selected 
options are trivial (i.e., significantly less than 0.01 percent of 
national requirements).

XI. Regulatory Implementation

    The purpose of this section is to provide assistance and direction 
to permit writers and MP&M facilities to aid in their implementation of 
this regulation. This section also discusses the relationship of upset 
and bypass provisions, and variances and modification to the final 
limitations and standards. For additional implementation information, 
see section 15 of the TDD for today's final rule.

A. Implementation of the Limitations and Standards for Direct 
Dischargers

    Effluent limitations and new source performance standards act as 
one of the primary mechanisms to control the discharges of pollutants 
to waters of the United States. Authorized States may also set permit 
limitations based on the capabilities of the treatment installed to 
ensure proper operation and maintenance of the treatment technology. 
These limitations and standards are applied to individual facilities 
through NPDES permits issued by the EPA or authorized States under 
section 402 of the Act.
    In specific cases, the NPDES permitting authority may elect to 
establish permit limits for pollutants not covered by this regulation 
based on the capabilities of on-site treatment technologies. In 
addition, if State water quality standards or other provisions of State 
or Federal law require limits on pollutants not covered by this 
regulation (or require more stringent limits or standards on covered 
pollutants in order to achieve compliance), the permitting authority 
must apply those limitations or standards. See CWA section 
301(b)(1)(C).
1. Compliance Dates for Existing and New Sources
    New and reissued Federal and State NPDES permits to direct 
dischargers must include the effluent limitations promulgated today. 
The permits must require immediate compliance with such limitations. If 
the permitting authority wishes to provide a compliance schedule, it 
must do so through an enforcement mechanism.
    New sources must comply with the new source standards (NSPS) of the 
MP&M rule at the time they commence discharging MP&M process 
wastewater. Because the final rule was not promulgated within 120 days 
of the proposed rule, the Agency considers a discharger a new source if 
its construction commences after June 12, 2003.
2. Applicability
    In section V of this preamble and section 15 of the TDD, EPA 
provides details information on the applicability of this rule to 
various operations. Permit writers should closely examine all metal 
products and machinery operations and compare these operations against 
the applicability statement for today's rule (see 40 CFR 438.1) and 
section 1 of the TDD to determine if they are subject to the provisions 
of this rule.
3. Implementation for Facilities Subject to Multiple Effluent 
Limitations Guidelines
    The regulations in today's final rule do not apply to wastewater 
discharges which are subject to the limitations and standards of other 
effluent limitations guidelines (e.g., Metal Finishing (40 CFR part 
433) or Iron and Steel Manufacturing (40 CFR part 420)).
4. Waiver for Pollutants Not Present
    In May 2000, EPA promulgated a regulation to streamline the NPDES 
regulations (``Amendments to Streamline the National Pollutant 
Discharge Elimination System Program Regulations: Round Two'' (see 65 
FR 30886; May 15, 2000)) which includes a monitoring waiver for direct 
dischargers subject to effluent guidelines. Direct discharge facilities 
may forego sampling of a guideline-limited pollutant if that discharger 
``has demonstrated through sampling and other technical factors that 
the pollutant is not present in the discharge or is present only at 
background levels from intake water and without any increase in the 
pollutant due to activities of the discharger,'' (see 65 FR 30908; 40 
CFR 122.44). EPA noted in the preamble to the final NPDES streamlining 
rule that it is providing a waiver from monitoring requirements, but 
not a waiver from the limit. In addition, the revision does not waive 
monitoring for any pollutants for which there are limits based on water 
quality standards. The waiver for direct dischargers lasts for the term 
of the NPDES permit and is not available during the term of the first 
permit issued to a discharger. Any request for this waiver must be 
submitted when applying for a reissued permit or modification of a 
reissued permit. Therefore, EPA is not including a monitoring waiver in 
today's final regulations for direct dischargers. When authorized by 
their permit writer, direct discharge facilities covered by any 
effluent guidelines (including today's rule) will be able to use the 
monitoring waiver contained in the NPDES streamlining final rule.
5. Compliance with the Limitations and Standards
    The same basic procedures apply to the calculation of all 
limitations and standards for the OWS, regardless of whether the 
control level is BPT, BCT,

[[Page 25729]]

or NSPS. For simplicity, the following discussion refers only to 
effluent limitations guidelines; however, the discussion also applies 
to new source standards.
a. Definitions
    The limitations for pollutants for the OWS, as presented in today's 
final rule, are provided as maximum daily discharge limitations. 
Definitions provided at 40 CFR 122.2 state that the ``maximum daily 
discharge limitation'' is the ``highest allowable `daily discharge.' '' 
Daily discharge is defined as the `` `discharge of a pollutant' 
measured during a calendar day or any 24-hour period that reasonably 
represents the calendar day for purposes of sampling.'' Section 10 of 
the TDD describes the data selection and calculations used to develop 
today's limitations.
b. Percentile Basis for Limits, Not Compliance
    EPA promulgates limitations that facilities are capable of 
complying with at all times by properly operating and maintaining their 
processes and treatment technologies. EPA established these limitations 
on the basis of percentiles estimated using data from facilities with 
well-operated and controlled processes and treatment systems. However, 
because EPA uses a percentile basis, the issue of exceedances (i.e., 
values that exceed the limitations) or excursions is often raised in 
public comments on limitations. For example, comments often suggest 
that EPA include a provision that allows a facility to be considered in 
compliance with permit limitations if its discharge exceeds the 
specified daily maximum limitations one day out of 100. As explained in 
section 10.4 of the TDD, these limitations were never intended to have 
the rigid probabilistic interpretation implied by such comments. The 
following discussion provides a brief overview of EPA's position on 
this issue.
    EPA expects that all facilities subject to the limitations will 
design and operate their treatment systems to achieve the long-term 
average performance level on a consistent basis because facilities with 
well-designed and operated model technologies have demonstrated that 
this can be done. Facilities that are designed and operated to achieve 
the long-term average effluent levels used in developing the 
limitations should be capable of compliance with the limitations at all 
times, because the limitations incorporate an allowance for variability 
in effluent levels about the long-term average. The allowance for 
variability is based on control of treatment variability demonstrated 
in normal operations.
    EPA recognizes that, as a result of today's rule, some dischargers 
may need to improve treatment systems, process controls, and/or 
treatment system operations in order to consistently meet limitations 
and standards in the final MP&M effluent guidelines. EPA finds that 
this consequence is consistent with the Clean Water Act statutory 
framework, which requires that discharge limitations reflect best 
practicable control technology currently available (BPT).
c. Limitations
    EPA did not establish monthly average limitations for O&G (as HEM) 
and TSS because a monthly average limitation would be based on the 
assumption that a facility would be required to monitor more frequently 
than once a month. For the reasons set forth in section VI.F.1, EPA 
estimates that one monthly monitoring event is sufficient; however, if 
permitting authorities choose to require more frequent monitoring for 
O&G (as HEM) and TSS, they may set monthly average limitations and 
standards based on their BPJ (see 40 CFR 430.24(a)(1), footnote b).
d. Requirements of Laboratory Analysis
    The permittee is responsible for communicating the requirements of 
the analysis to the laboratory, including the sensitivity required to 
meet the regulatory limits associated with each analyte of interest. In 
turn, the laboratory is responsible for employing the appropriate set 
of method options and a calibration range in which the concentration of 
the lowest non-zero standard represents a sample concentration lower 
than the regulatory limit for each analyte. It is the responsibility of 
the permittee to convey to the laboratory the required sensitivity to 
comply with the limitations (see Sierra Club v. Union Oil, 813 F.2d 
1480, page 1492 (9th Cir. 1987)).

B. Upset and Bypass Provisions

    A ``bypass'' is an intentional diversion of the streams from any 
portion of a treatment facility. An ``upset'' is an exceptional 
incident in which there is unintentional and temporary noncompliance 
with technology-based permit effluent limitations because of factors 
beyond the reasonable control of the permittee. EPA's regulations 
concerning bypasses and upsets for direct dischargers are set forth at 
40 CFR 122.41(m) and (n) and for indirect dischargers at 40 CFR 403.16 
and 403.17.

C. Variances and Modifications

    The CWA requires application of effluent limitations established 
pursuant to section 301 to all direct dischargers. However, the statute 
provides for the modification of these national requirements in a 
limited number of circumstances. Moreover, the Agency has established 
administrative mechanisms to provide an opportunity for relief from the 
application of the national effluent limitations guidelines for 
categories of existing sources for toxic, conventional, and 
nonconventional pollutants.
1. Fundamentally Different Factors Variances
    EPA will develop effluent limitations or standards different from 
the otherwise applicable requirements if an individual discharging 
facility is fundamentally different with respect to factors considered 
in establishing the limitation of standards applicable to the 
individual facility. Such a modification is known as a ``fundamentally 
different factors'' (FDF) variance.
    Early on, EPA, by regulation provided for the FDF modifications 
from the BPT effluent limitations, BAT limitations for toxic and 
nonconventional pollutants and BPT limitations for conventional 
pollutants for direct dischargers. For indirect dischargers, EPA 
provided for modifications from pretreatment standards. FDF variances 
for toxic pollutants were challenged judicially and ultimately 
sustained by the Supreme Court. (Chemical Manufacturers Assn v. NRDC, 
479 U.S. 116 (1985)).
    Subsequently, in the Water Quality Act of 1987, Congress added a 
new section 301(n) explicitly authorizing modifications of the 
otherwise applicable BAT effluent limitations or categorical 
pretreatment standards for existing sources if a facility is 
fundamentally different with respect to the factors specified at 
section 304 (other than costs) considered by EPA in establishing the 
effluent limitations or pretreatment standards. Section 301(n) also 
defined the conditions under which EPA may establish alternative 
requirements. Under section 301(n), an application for approval of FDF 
variance must be based solely on: (1) Information submitted during 
rulemaking raising the factors that are fundamentally different; or (2) 
information the applicant did not have an opportunity to submit. The 
alternate limitation or standard must be no less stringent than 
justified by the difference and must not result in

[[Page 25730]]

markedly more adverse non-water quality environmental impacts than the 
national limitation or standard.
    EPA regulations at 40 CFR part 125 subpart D, authorizing the 
Regional Administrators to establish alternative limitations and 
standards, further detail the substantive criteria used to evaluate FDF 
variance requests for direct dischargers. Thus, 40 CFR 125.31(d) 
identifies six factors (e.g., volume of process wastewater, age and 
size of a discharger's facility) that may be considered in determining 
if a facility is fundamentally different. The Agency must determine 
whether, on the basis of one or more of these factors, the facility in 
question is fundamentally different from the facilities and factors 
considered by EPA in developing the nationally applicable effluent 
guidelines. The regulation also lists four other factors (e.g., 
infeasibility of installation within the time allowed or a discharger's 
ability to pay) that may not provide a basis for an FDF variance. In 
addition, under 40 CFR 125.31(b)(3), a request for limitations less 
stringent than the national limitation may be approved only if 
compliance with the national limitations would result in either: (a) A 
removal cost wholly out of proportion to the removal cost considered 
during development of the national limitations; or (b) a non-water 
quality environmental impact (including energy requirements) 
fundamentally more adverse than the impact considered during 
development of the national limits. The conditions for approval of a 
request to modify applicable pretreatment standards and factors 
considered are the same as those for direct dischargers.
    The legislative history of section 301(n) underscores the necessity 
for the FDF variance applicant to establish eligibility for the 
variance. EPA's regulations at 40 CFR 125.32(b)(1) are explicit in 
imposing this burden upon the applicant. The applicant must show that 
the factors relating to the discharge controlled by the applicant's 
permit which are claimed to be fundamentally different are, in fact, 
fundamentally different from those factors considered by the EPA in 
establishing the applicable guidelines. The pretreatment regulations 
incorporate a similar requirement at 40 CFR 403.13(h)(9).
    Facilities must submit all FDF variance applications to the 
appropriate Director (as defined at 40 CFR 122.2) no later than 180 
days from the date the limitations or standards are established or 
revised (see CWA Sec.  301(n)(2) and 40 CFR 122.21(m)(1)(i)(B)(2)). EPA 
regulations clarify that effluent limitations guidelines are 
``established'' or ``revised'' on the date those effluent limitations 
guidelines are published in the Federal Register (see 40 CFR 
122.21(m)(1)(i)(B)(2)). Therefore all facilities requesting FDF 
variances from the effluent limitations guidelines in today's final 
rule must submit all FDF variance applications to their Director (as 
defined at 40 CFR 122.2) no later than November 10, 2003.
    An FDF variance is not available to a new source subject to NSPS.
2. Water Quality Variances
    Section 301(g) of the CWA authorizes a variance from BAT effluent 
guidelines for certain non-conventional pollutants due to localized 
environmental factors so long as the discharge does not violate any 
water quality-based effluent limitations. These pollutants include 
ammonia, chlorine, color, iron, and phenols (as measured by the 
colorimetric 4-aminoantipyrine (4AAP) method). Dischargers subject to 
new or revised BAT limitations promulgated today for those pollutants 
may be eligible for a section 301(g) variance. Please note that section 
301(g)(4)(c) requires the filing of section 301(g) variance 
applications pertaining to the new or revised limits not later than 
February 9, 2004. Existing section 301(g) variances for limitations not 
being revised today are not affected by today's action. This variance 
is not applicable to today's final rule as none of these parameters are 
regulated by today's final rule.
3. Permit Modifications
    Even after EPA (or an authorized State) has issued a final permit 
to a direct discharger, the permit may still be modified under certain 
conditions. (When a permit modification is under consideration, 
however, all other permit conditions remain in effect.) A permit 
modification may be triggered in several circumstances. These could 
include a regulatory inspection or information submitted by the 
permittee which reveals the need for modification. Any interested 
person may request that a permit modification be made. There are two 
classifications of modifications: Major and minor. From a procedural 
standpoint, they differ primarily with respect to the public notice 
requirements. Major modifications require public notice while minor 
modifications do not. Virtually any modification that results in less 
stringent conditions is treated as a major modifications, with 
provisions for public notice and comment. Conditions that would 
necessitate a major modification of a permit are described at 40 CFR 
part 122.62. Minor modifications are generally non-substantive changes. 
The conditions for minor modification are described at 40 CFR part 
122.63.

XII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (see 58 FR 51735 (October 4, 1993)) 
the Agency must determine whether the regulatory action is 
``significant'' and therefore subject to OMB review and the 
requirements of the Executive Order. The Order defines ``significant 
regulatory action'' as one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
This rule merely establishes technology-based discharge limitations and 
standards.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of

[[Page 25731]]

information; and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed at 40 CFR part 9 and 48 CFR chapter 15.

C. Regulatory Flexibility Act

    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.
    For assessing the impacts of today's rule on small entities, a 
small entity is defined as: (1) A small business according to the 
regulations of the Small Business Administration (SBA) at 13 CFR part 
121.201, which define small businesses for Standard Industrial 
Classification (SIC) codes; (2) a small governmental jurisdiction that 
is a government of a city, county, town, school district or special 
district with a population of less than 50,000; and (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.
    To assess the potential economic impact of today's rule on small 
entities, EPA drew on: (1) A comparison of compliance costs to revenue; 
and (2) the firm and facility impact analyses discussed in section VIII 
of this preamble. First, EPA performed an analysis comparing annualized 
compliance costs to revenue for small entities at the firm level. EPA 
found that none of the small firms are estimated to incur compliance 
costs equaling or exceeding one percent of annual revenue. Second, EPA 
drew on the facility impact analysis, which estimated facility closures 
and other adverse changes to financial condition (referred to as 
``moderate impacts''). See section VIII.D of today's rule for details 
of EPA's analysis of closures and moderate impacts for privately-owned 
businesses. This analysis indicated that the final rule would cause no 
regulated facilities owned by small entities to close or to incur 
moderate impacts. From these analyses, EPA determined that the final 
rule will not have a significant economic impact on a substantial 
number of small entities. See Chapter 10 of the final rule EEBA for a 
more detailed discussion of the economic impacts on small entities.
    After considering the economic impacts of today's final rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities.
    In accordance with section 603 of the RFA, EPA prepared an initial 
regulatory flexibility analysis (IRFA) for the proposed rule and 
convened a Small Business Advocacy Review Panel to obtain advice and 
recommendations of representatives of the regulated small entities in 
accordance with section 609(b) of the RFA (see 66 FR 519). The January 
2001 proposed rule (see 66 FR 523) presents a summary of the Panel's 
recommendations and the full Panel Report (see DCN 16127, section 11.2) 
presents a detailed discussion of the Panel's advice and 
recommendations.

D. Unfunded Mandates Reform Act

1. UMRA Requirements
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under UMRA section 202, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year.
    Before promulgating an EPA rule for which a written statement is 
needed, UMRA section 205 generally requires EPA to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the rule. The provisions of section 205 do 
not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted.
    EPA is required by UMRA section 203 to develop a small government 
agency plan before it establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments. The plan must provide for notifying potentially affected 
small governments, enabling officials of affected small governments to 
have meaningful and timely input in the development of EPA regulatory 
proposals with significant Federal intergovernmental mandates, and 
informing, educating, and advising small governments on compliance with 
the regulatory requirements.
    EPA determined that this rule does not contain 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. The estimated total annualized before-tax costs of 
compliance are $13.8 million ($2001). On an after-tax basis the costs 
total $11.9 million ($2001), of which the private sector incurs $3.0 
million ($2001) and state and local governments that perform MP&M 
activities incur $9.0 million ($2001). Thus, today's rule is not 
subject to the requirements of UMRA sections 202 and 205.
    EPA also determined that this rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments. The final regulation imposes no new administrative costs 
on small governments owning POTWs because the regulations does not 
establish pretreatment standards for POTWs with indirectly discharging 
government-owned facilities. With respect to the 280 small government-
owned facilities, EPA determined that the costs of the final rule are 
not significant for small governments. Of these facilities, 140 incur 
no compliance costs under the final rule and the remaining 140 incur 
annualized costs that average approximately $25,000 per facility. The 
total compliance cost for all the small government-owned facilities 
incurring costs under the regulation is $3.5 million. EPA concluded 
that these compliance costs will have no significant budgetary impacts 
for any of the governments owning these facilities. In addition, EPA 
concluded that the final rule does not uniquely affect small 
governments because small and large governments are affected by the 
rule in the same way. Thus, today's rule is not subject to the 
requirements of UMRA section 203.
    Although today's final rule does not contain a Federal mandate 
under UMRA, EPA did undertake an assessment of the impacts of the final 
rule on State and local governments as part of its decision-making 
process. The following section discusses some of the results of EPA's 
review. More detail may be found in the EEBA.
2. Analysis of Impacts on Government Entities
    EPA estimates that the costs to government-owned facilities to 
comply

[[Page 25732]]

with today's final rule are approximately $9.0 million annually 
($2001), which is below the threshold specified in Sec.  202. EPA, 
nevertheless, assessed the impacts on State and local governments 
during the course of development of the rule. Generally, governments 
may incur two types of costs as a result of the proposed regulation: 
(1) Direct costs to comply with the rule for facilities owned by 
government entities; and (2) administrative costs to implement the 
regulation. Both types of costs are discussed below.
a. Compliance Costs for Government-Owned MP&M Facilities
    As previously explained, EPA surveyed government-owned facilities 
to assess the cost of the regulation on these facilities and the 
government entities that own them. The survey responses support EPA's 
analysis of the budgetary impacts of the regulation. Survey information 
includes: The size and income of the populations served by the affected 
government entities; the government's current revenues by source, 
taxable property, debt, pollution control spending, and bond rating; 
and the costs, funding sources, and other characteristics of the MP&M 
facilities owned by each government entity. Table XII-1 provides 
national estimates of the government entities that operate MP&M 
facilities potentially subject to the regulation by size.
    Table XII-2 summarizes the annualized compliance costs incurred by 
government entities by size.

            Table XII-1.--Number of Government-Owned Facilities by Type and Size of Government Entity
----------------------------------------------------------------------------------------------------------------
                                                                                          Regional
   Size of government and status under final      Municipal      State        County     government     Total
                     option                       government   government   government   authority
----------------------------------------------------------------------------------------------------------------
                                Large Governments (population 50,000)
----------------------------------------------------------------------------------------------------------------
Number of regulated government entities........           26          129           23            0          178
Number of government entities with exclusions..          592          248          758           46        1,645
------------------------------------------------
                                     Small Governments (population <=50,000)
----------------------------------------------------------------------------------------------------------------
Number of regulated government entities........          280            0            0            0          280
Number of government entities with exclusions..        1,470            0          212            0        1,682
------------------------------------------------
                                                 All Governments
----------------------------------------------------------------------------------------------------------------
Number of regulated government entities........          306          129           23            0          458
Number of government entities with exclusions..        2,062          248          970           46        3,327
                                                --------------
    Total......................................        2,368          377          993           46        3,785
----------------------------------------------------------------------------------------------------------------


    Table XII-2.--Number of Regulated Government-Owned Facilities and
                 Compliance Costs by Size of Government
                            [million, 2001$]
------------------------------------------------------------------------
                                        Number of
                                        facilities           Costs
------------------------------------------------------------------------
Regulated Facilities Owned by                     178               $5.5
 Large Governments................
Regulated Facilities Owned by                     280               $3.5
 Small Governments................
All Regulated Government-Owned                    458               $9.0
 Facilities.......................
------------------------------------------------------------------------

    The table shows that 280 regulated facilities (or 61 percent) of 
the regulated government entities are owned by small governments. These 
facilities incur $3.5 million annually in compliance costs with an 
average cost of $12,575 per facility. Larger governmental entities own 
the remaining 178 regulated facilities (or 39 percent). EPA estimates 
that facilities owned by the larger governmental entities incur $5.5 
million in annual compliance costs with an average cost of $30,700 per 
facility.
    EPA used the analysis described in Section VIII.E to estimate the 
impacts on government owned facilities. EPA judged a government to 
experience significant budgetary impacts if: (1) One or more facilities 
incur compliance costs exceeding 1% of the baseline cost of service, 
(2) total debt service costs--post-compliance, and including costs to 
finance MP&M capital costs entirely with debt--exceed 25% of baseline 
revenue, and (3) total annualized pollution control costs per 
household, post-compliance, exceed one percent of median household 
income. EPA estimated no significant impacts for any of these 
facilities, based on these budgetary criteria. Thus, EPA concluded that 
none of the affected governments are expected to incur significant 
budgetary impacts as a result of the regulation. However, EPA also 
considered whether the MP&M regulation may significantly or uniquely 
affect small governments.
b. Small Government Impacts
    EPA estimates that small governments (i.e., governments with a 
population of less than 50,000) own 1,962 MP&M facilities. The decision 
not to regulate indirect facilities will exclude 1,682 small 
government-owned MP&M facilities from additional requirements. Thus, 
the final regulation covers 280 small government-owned facilities. Of 
these facilities, 140 incur no compliance costs under the final rule, 
and the remaining 140 incur annualized costs that average approximately 
$25,000 per facility. The total compliance cost for all the small 
government-owned facilities incurring costs under this regulation is 
$3.5 million. Of the 280 facilities owned by small governments, 140 
have costs greater than 1 percent of baseline cost of

[[Page 25733]]

service (measured as total facility costs and expenditures, including 
operating, overhead and debt service costs and expenses). None of the 
affected governments incur costs that cause them to exceed the 
thresholds for impacts on taxpayers or for government debt burden. EPA 
therefore estimated no significant budgetary impacts for any of the 
governments owning these facilities. In accordance with this finding, 
EPA determined that this rule contains no regulatory requirements that 
might significantly or uniquely affect small governments.
c. POTW Administrative Costs
    Since all indirect dischargers are excluded from the final rule, 
EPA expects the rule to impose no new POTW administrative costs.
3. Consultation
    In addition to private industry, stakeholders affected by this rule 
include State and local government regulators. During development of 
the proposed and final rule, EPA consulted with all of these 
stakeholder groups on topics such as options development, cost models, 
pollutants to be regulated, cost of the regulation, and compliance 
alternatives. Some stakeholders provided helpful comments on the cost 
models, technology options, pollution prevention techniques, and 
monitoring alternatives.
    Because many MP&M facilities in the proposed rule were indirect 
dischargers, the Agency involved POTWs as they would have had to 
implement the rule. EPA consulted with POTWs individually and through 
the Association of Municipal Sewerage Agencies (AMSA). In addition, EPA 
consulted with Regional pretreatment coordinators and State and local 
regulators. However, EPA is not promulgating new or revised 
pretreatment standards in today's final rule. See the proposed rule 
preamble (see 66 FR 519) for a summary of these consultation 
activities.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (see 64 FR 43255, 
August 10, 1999), requires Federal agencies to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.''
    This final 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. The rule establishes effluent 
limitations imposing requirements that apply to metal product and 
machinery facilities, as defined by this final rule, when they 
discharge wastewater. The rule applies to States and localities if they 
own and operate in-scope MP&M facilities that discharge directly to 
surface waters. EPA estimates that 458 facilities subject to the 
regulation are owned and operated by state and local governments. EPA 
estimates that these facilities will experience an impact of $0 to 
$125,000, with an average impact of $20,000 per year ($2001).
    In addition, the final rule will affect State governments 
responsible for administering CWA permitting programs. The final rule, 
at most, imposes minimal administrative costs on States that have an 
authorized NPDES program. (These States must incorporate the new 
limitations and standards in new and reissued NPDES permits). This rule 
does not change the current status of this administrative burden 
because this rule does not impose any further regulation on any 
indirect dischargers. The total cost of today's final rule to state and 
local governments is $9.0 million ($2001). Thus, Executive Order 13132 
does not apply to this rule.
    Although Executive Order 13132 does not apply to this rule, EPA did 
consult with State and local government representatives in developing 
this rule. See 66 FR 525 for a discussion of consultation activities.

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

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (see 65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This final rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
Based on the information collection efforts for this industry category, 
EPA does not expect any Indian tribal governments to own or operate in-
scope MP&M facilities. In addition, EPA estimates few, if any, new 
facilities subject to the rule will be owned by tribal governments. 
Thus, Executive Order 13175 does not apply to this rule.

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

1. Executive Order 13045 Requirements
    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (see 62 FR 19885, April 23, 1997) 
applies to any rule that: (1) is determined to be ``economically 
significant'' as defined under Executive Order 12866; and (2) concerns 
an environmental health or safety risk that EPA has reason to believe 
may have a disproportionate affect on children. If the regulatory 
action meets both criteria, the Agency must evaluate the environmental 
health or safety effects of the planned rule on children, and explain 
why the planned regulation is preferable to other potentially effective 
and reasonably feasible alternatives considered by the Agency.
    This final rule is not subject to Executive Order 13045 because it 
is not economically significant as defined in Executive Order 12866. 
Nevertheless, since the final rule is expected to reduce numerous 
pollutants, including lead, in fish tissue and drinking water that 
exceed human health criteria, EPA performed an analysis of children's 
health impacts reduced by the final rule.
2. Analysis of Children's Health Impacts
    EPA assessed whether the final regulation will benefit children, 
including reducing health risk from exposure to MP&M pollutants from 
consumption of contaminated fish tissue and drinking water and 
improving recreational opportunities. The Agency was able to quantify 
only one category of benefits specific to children: avoided health 
damages to

[[Page 25734]]

pre-school age children from reduced exposure to lead. This analysis 
considered several measures of children's health benefits associated 
with lead exposure for children up to age six. Avoided neurological and 
cognitive damages were expressed as changes in three metrics: (1) 
Overall IQ levels; (2) the incidence of low IQ scores (<70); and (3) 
the incidence of blood-lead levels above 20 [mu]g/dL. The Agency also 
assessed changes in the incidence of neonatal mortality from reduced 
maternal exposure to lead. EPA's methodology for assessing lead-related 
benefits to children is presented in the EEBA, Chapter 14. The Ohio 
case study analysis showed that the final rule is expected to yield 
$422,000 (2001$) in annual benefits to children in the State of Ohio 
from reduced neurological and cognitive damages and reduced incidence 
of neonatal mortality. On the other hand, the national-level analysis 
shows that benefits to children from reduced lead discharges are 
negligible nationwide. As noted in section IX of today's final rule, 
different findings from these two analyses are likely to be due to 
insufficient data and a more simplistic approach used in the national 
level analysis.
    Children over age seven are also likely to benefit from reduced 
neurological and cognitive damages from reduced exposure to lead. Giedd 
et al. (1999) studied brain development among 10- to 18-year-old 
children and found substantial growth in brain development, mainly in 
the early teenage years (see DCN 20385, section 8.5.2.3). This research 
suggests that older children may be hypersensitive to lead exposure, as 
are children aged 0 to 7.
    Additional benefits to children from reduced exposure to lead not 
quantified in this analysis may include prevention of the following 
adverse health effects: slowed or delayed growth, delinquent and anti-
social behavior, metabolic effects, impaired heme synthesis, anemia, 
impaired hearing, and cancer (see DCN 20416, section 8.5.2.3).

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

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (see May 22, 2001; 66 FR 28355) because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    As noted in the proposed rule, section 12(d) of the National 
Technology Transfer and Advancement Act of 1995 (``NTTAA''), Public Law 
104-113, section 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. The NTTAA directs EPA to provide Congress, through 
OMB, explanations when the Agency decides not to use available and 
applicable voluntary consensus standards.
    Today's final rule does not establish any technical standards, thus 
NTTAA does not apply to this rule. It should be noted, however, that 
this rulemaking requires direct dischargers to monitor for pH, TSS, and 
O&G (as HEM). All of these analytes can be measured by EPA methods that 
are specified in the tables at 40 CFR part 136.3.

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

1. Executive Order 12898 Requirements
    Executive Order 12898 requires that, to the greatest extent 
practicable and permitted by law, each Federal agency must make 
achieving environmental justice part of its mission. Executive Order 
12898 requires that each Federal agency conduct its programs, policies, 
and activities that substantially affect human health or the 
environment in a manner that ensures that such programs, policies, and 
activities do not exclude persons (including populations) from 
participation in, deny persons (including populations) the benefits of, 
or subject persons (including populations) to discrimination under, 
such programs, policies, and activities because of their race, color, 
or national origin.
2. Environmental Justice Analysis
    EPA examined whether the final regulation will promote 
environmental justice in the areas affected by MP&M discharges. EPA 
analyzed the demographic characteristics of the populations residing in 
the counties affected by MP&M discharges to determine whether minority 
and or low-income populations are subject to disproportionally high 
environmental impacts. This analysis is based on information on the 
race, national origin, and income level of populations residing in 
counties traversed by reaches receiving discharges from the 32 sample 
MP&M facilities. EPA performed this analysis at the sample level only. 
The 32 sample facilities discharge to 32 unique reaches and are located 
in 46 counties in 12 States.
    EPA compared demographic data from the 1990 Census for counties 
traversed by sample MP&M reaches with corresponding State-level data. 
The demographic characteristics that EPA analyzed include: percent 
African Americans, percent Native American, Eskimo, or Aleut, percent 
Asian of Pacific Islander, the percent of the population below the 
poverty level, and median income. This analysis shows that the 
socioeconomic characteristics of populations residing in counties 
abutting MP&M discharge reaches reflect corresponding State averages. 
As a result, EPA expects that environmental benefits resulting from the 
MP&M rule will not accrue to populations disproportionally based on 
race or national origin, and therefore will neither promote nor 
discourage environmental justice.
    EPA also analyzed the human health impacts of the final regulation, 
including changes in cancer and systemic health risk to subsistence 
anglers. EPA determined that the reductions in these health risks 
resulting from the final regulation are negligible (see Chapter 17 of 
the EEBA for a detailed discussion of environmental justice analyses 
and alternative regulatory options).

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective after June 12, 2003.

[[Page 25735]]

Appendix A To The Preamble: Abbreviations, Acronyms, and Other Terms 
Used in Today's Final Rule

Act--The Clean Water Act
Agency--U.S. Environmental Protection Agency
AWQC--Ambient Water Quality Criteria
BAT--Best available technology economically achievable, as defined 
by section 304(b)(2)(B) of the Act.
BCT--Best conventional pollutant control technology, as defined by 
section 304(b)(4) of the Act.
BMP--Best management practices, as defined by section 304(e) of the 
Act.
BPJ--Best professional judgment
BPT--Best practicable control technology currently available, as 
defined by section 304(b)(1) of the Act.
CAA--Clean Air Act (42 U.S.C. 7401 et seq., as amended)
CBI--Confidential Business Information
CWA--Clean Water Act (33 U.S.C 1251 et seq., as amended)
Conventional Pollutants--Constituents of wastewater as determined by 
section 304(a)(4) of the Act and the regulations thereunder 40 CFR 
401.16, including pollutants classified as biochemical oxygen 
demand, suspended solids, oil and grease, fecal coliform, and pH.
CE--Cost-effectiveness (ratio of compliance costs (in 1981$) to the 
toxic pounds of pollutants removed (in terms of pound-equivalents 
(PE))
DAF--Dissolved Air Flotation
Direct Discharger--An industrial discharger that introduces 
wastewater to a water of the United States with or without treatment 
by the discharger.
EEBA--Economic, Environmental, and Benefits Analysis of the Final 
Metal Products & Machinery Rule (EPA-821-B-03-002)
Effluent Limitation--A maximum amount, per unit of time, production, 
volume or other unit, of each specific constituent of the effluent 
from an existing point source that is subject to limitation. 
Effluent limitations may be expressed as a mass loading or as a 
concentration in milligrams of pollutant per liter discharged.
End-of-Pipe Treatment--Refers to those processes that treat a plant 
waste stream for pollutant removal prior to discharge.
FTE--Full Time Equivalents (related to the number of employees)
HAP--Hazardous Air Pollutant
HEM--Hexane Extractable Material
Indirect Discharger--An industrial discharger that introduces 
wastewater into a publicly owned treatment works.
MACT--Maximum Achievable Control Technology (applicable to NESHAPs)
MFJS--Metal Finishing Job Shops subcategory
MGY--Million gallons per year
MP&M--Metal Products and Machinery point source category
NAICS--North American Industry Classification System
NCA--Non-Chromium Anodizers subcategory
NCEPI--EPA's National Center for Environmental Publications
NESHAP--National Emission Standards for Hazardous Air Pollutants
NODA--Notice of Data Availability (June 5, 2002; 67 FR 38752)
NRMRL--EPA's National Risk Management Research Laboratory (formerly 
RREL--EPA's Risk Reduction Engineering Laboratory)
Nonconventional Pollutants--Pollutants that have not been designated 
as either conventional pollutants or priority pollutants
NPDES--National Pollutant Discharge Elimination system, a Federal 
Program requiring industry dischargers, including municipalities, to 
obtain permits to discharge pollutants to the nation's water, under 
section 402 of the Act
OCPSF--Organic chemicals, plastics, and synthetic fibers 
manufacturing point source category (40 CFR part 414)
OMB--Office of Management and Budget
ORP--Oxidation-Reduction Potential
OWS--Oily Wastes subcategory
PE--Pound-equivalents (the units used to weight toxic pollutants)
POTW--Publicly owned treatment works
Priority Pollutants--The 126 pollutants listed at 40 CFR part 423, 
appendix A
PPA--Pollutant Prevention Act of 1990 (42 U.S.C. 13101 et seq., 
Public Law 101-508, November 5, 1990)
PSES--Pretreatment Standards for existing sources of indirect 
discharges, under section 307(b) of the Act
PSNS--Pretreatment standards for new sources of indirect discharges, 
under sections 307(b) and (c) of the Act
PWB--Printed Wiring Board subcategory
RRLM--Railroad Line Maintenance subcategory
SBA--U.S. Small Business Administration
SIC--Standards Industrial Classification, a numerical categorization 
scheme used by the U.S. Department of Commerce to denote segments of 
industry
SFF--Steel Forming & Finishing subcategory
SGT--HEM--Silica Gel Treated--Hexane Extractable Material refers to 
the freon-free oil and grease method (EPA Method 1664) used to 
measure the portion of oil and grease that is similar to total 
petroleum hydrocarbons
SDD--Shipbuilding Dry Dock subcategory
SIU--Significant Industrial User as defined in the General 
Pretreatment Regulations (40 CFR part 403)
TDD--Development Document for the Final Effluent Limitations 
Guidelines and Standards for the Metal Products & Machinery Point 
Source Category (EPA-821-B-03-001)
TOC--Total Organic Carbon (EPA Method 415.1)
TOP--Total Organics Parameter
TRI--Toxic Release Inventory
TTO--Total Toxic Organics
TWF--Toxic Weighting Factor
VOC--Volatile Organic Compound

List of Subjects in 40 CFR Part 438

    Environmental protection; Metal products and machinery; Waste 
treatment and disposal; Water pollution control.

    Dated: February 14, 2003.
Christine Todd Whitman,
Administrator.

0
For the reasons set forth in this preamble, title 40, chapter I of the 
Code of Federal Regulations is amended as follows:
0
1. A new part 438 is added to read as follows:

PART 438--METAL PRODUCTS AND MACHINERY POINT SOURCE CATEGORY

Sec.
438.1 General applicability.
438.2 General definitions.
Subpart A--Oily Wastes
438.10 Applicability.
438.12 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
438.13 Effluent limitations attainable by application of the best 
control technology for conventional pollutants (BCT).
438.15 New source performance standards (NSPS).

Appendix A to part 438--Typical Products in Metal Products & Machinery 
Sectors

Appendix B to part 438--Oily Operations Definitions

Appendix C to part 438--Metal-Bearing Operations Definitions

    Authority:  33 U.S.C. 1311, 1314, 1316, 1317, 1318, 1342 and 
1361.


Sec.  438.1  General applicability.

    (a) As defined more specifically in subpart A, except as provided 
in paragraphs (b) through (e) of this section, this part applies to 
process wastewater discharges from oily operations (as defined at Sec.  
438.2(f) and appendix B of this part) to surface waters from existing 
or new industrial facilities (including facilities owned and operated 
by Federal, State, or local governments) engaged in manufacturing, 
rebuilding, or maintenance of metal parts, products, or machines for 
use in the Metal Product & Machinery (MP&M) industrial sectors listed 
in this section. The MP&M industrial sectors consist of the following:

Aerospace;
Aircraft;
Bus and Truck;
Electronic Equipment;
Hardware;
Household Equipment;
Instruments;
Miscellaneous Metal Products;
Mobile Industrial Equipment;
Motor Vehicle;
Office Machine;

[[Page 25736]]

Ordnance;
Precious Metals and Jewelry;
Railroad;
Ships and Boats; or
Stationary Industrial Equipment.

    (b) The regulations in this part do not apply to process 
wastewaters from metal-bearing operations (as defined at Sec.  438.2(d) 
and appendix C of this part) or process wastewaters which are subject 
to the limitations and standards of other effluent limitations 
guidelines (e.g., Metal Finishing (40 CFR part 433) or Iron and Steel 
Manufacturing (40 CFR part 420)). The regulations in this part also do 
not apply to process wastewaters from oily operations (as defined at 
Sec.  438.2(f) and appendix B of this part) commingled with process 
wastewaters already covered by other effluent limitations guidelines or 
with process wastewaters from metal-bearing operations. This provision 
must be examined for each point source discharge at a given facility.
    (c) Wastewater discharges resulting from the washing of cars, 
aircraft or other vehicles, when performed only for aesthetic or 
cosmetic purposes, are not subject to this part. Direct discharges 
resulting from the washing of cars, aircraft or other vehicles, when 
performed as a preparatory step prior to one or more successive 
manufacturing, rebuilding, or maintenance operations, are subject to 
this part.
    (d) Wastewater discharges from railroad line maintenance facilities 
(as defined at Sec.  438.2(h)) are not subject to this part. Wastewater 
discharges from railroad overhaul or heavy maintenance facilities (as 
defined at Sec.  438.2(i)) may be covered by subpart A of this part, 
the Metal Finishing Point Source Category (40 CFR part 433), or by 
other effluent limitations guidelines, as applicable.
    (e) The following wastewater discharges are not subject to this 
part:
    (1) Non-process wastewater as defined at Sec.  438.2(e).
    (2) Wastewater discharges introduced into a Publicly Owned 
Treatment Works (POTW) or a Federally owned and operated Treatment 
Works Treating Domestic Sewage (TWTDS), as defined at 40 CFR 122.2.
    (3) Process wastewater generated by maintenance and repair 
activities at gasoline service stations, passenger car rental 
facilities, or utility trailer and recreational vehicle rental 
facilities.
    (4) Wastewater discharges generated from gravure cylinder 
preparation or metallic platemaking conducted within or for printing 
and publishing facilities.
    (5) Wastewater discharges in or on dry docks and similar 
structures, such as graving docks, building ways, marine railways, lift 
barges at shipbuilding facilities (or shipyards), and ships that are 
afloat.
    (6) Wastewater generated by facilities primarily performing drum 
reconditioning and cleaning to prepare metal drums for resale, reuse, 
or disposal.


Sec.  438.2  General definitions.

    As used in this part:
    (a) The general definitions and abbreviations at 40 CFR part 401 
shall apply.
    (b) The regulated parameters are listed with approved methods of 
analysis in Table 1B at 40 CFR 136.3, and are defined as follows:
    (1) O&G (as HEM) means total recoverable oil and grease measured as 
n-hexane extractable material.
    (2) TSS means total suspended solids.
    (c) Corrosion preventive coating means the application of removable 
oily or organic solutions to protect metal surfaces against corrosive 
environments. Corrosion preventive coatings include, but are not 
limited to: petrolatum compounds, oils, hard dry-film compounds, 
solvent-cutback petroleum-based compounds, emulsions, water-displacing 
polar compounds, and fingerprint removers and neutralizers. Corrosion 
preventive coating does not include electroplating, or chemical 
conversion coating operations.
    (d) Metal-bearing operations means one or more of the following: 
abrasive jet machining; acid pickling neutralization; acid treatment 
with chromium; acid treatment without chromium; alcohol cleaning; 
alkaline cleaning neutralization; alkaline treatment with cyanide; 
anodizing with chromium; anodizing without chromium; carbon black 
deposition; catalyst acid pre-dip; chemical conversion coating without 
chromium; chemical milling (or chemical machining); chromate conversion 
coating (or chromating); chromium drag-out destruction; cyanide drag-
out destruction; cyaniding rinse; electrochemical machining; 
electroless catalyst solution; electroless plating; electrolytic 
cleaning; electroplating with chromium; electroplating with cyanide; 
electroplating without chromium or cyanide; electropolishing; 
galvanizing/hot dip coating; hot dip coating; kerfing; laminating; 
mechanical and vapor plating; metallic fiber cloth manufacturing; metal 
spraying (including water curtain); painting-immersion (including 
electrophoretic, ``E-coat''); photo imaging; photo image developing; 
photoresist application; photoresist strip; phosphor deposition; 
physical vapor deposition; plasma arc machining; plastic wire 
extrusion; salt bath descaling; shot tower--lead shot manufacturing; 
soldering; solder flux cleaning; solder fusing; solder masking; 
sputtering; stripping (paint); stripping (metallic coating); thermal 
infusion; ultrasonic machining; vacuum impregnation; vacuum plating; 
water shedder; wet air pollution control; wire galvanizing flux; and 
numerous sub-operations within those listed in this paragraph. In 
addition, process wastewater also results from associated rinses that 
remove materials that the preceding processes deposit on the surface of 
the workpiece. These metal-bearing operations are defined in appendix C 
of this part.
    (e) Non-process wastewater means sanitary wastewater, non-contact 
cooling water, water from laundering, and non-contact storm water. Non-
process wastewater for this part also includes wastewater discharges 
from non-industrial sources such as residential housing, schools, 
churches, recreational parks, shopping centers as well as wastewater 
discharges from gas stations, utility plants, and hospitals.
    (f) Oily operations means one or more of the following: abrasive 
blasting; adhesive bonding; alkaline cleaning for oil removal; alkaline 
treatment without cyanide; aqueous degreasing; assembly/disassembly; 
burnishing; calibration; corrosion preventive coating (as defined in 
paragraph (c) of this section); electrical discharge machining; floor 
cleaning (in process area); grinding; heat treating; impact 
deformation; iron phosphate conversion coating; machining; painting-
spray or brush (including water curtains); polishing; pressure 
deformation; solvent degreasing; steam cleaning; testing (e.g., 
hydrostatic, dye penetrant, ultrasonic, magnetic flux); thermal 
cutting; tumbling/barrel finishing/mass finishing/vibratory finishing; 
washing (finished products); welding; wet air pollution control for 
organic constituents; and numerous sub-operations within those listed 
in this paragraph. In addition, process wastewater also results from 
associated rinses that remove materials that the preceding processes 
deposit on the surface of the workpiece. These oily operations are 
defined in appendix B of this part.
    (g) Process wastewater means wastewater as defined at 40 CFR parts 
122 and 401, and includes wastewater from air pollution control 
devices.
    (h) Railroad line maintenance facilities means facilities specified 
at Sec.  438.1 that only perform routine cleaning and light maintenance 
on railroad engines, cars, car-wheel trucks,

[[Page 25737]]

or similar parts or machines, and discharge wastewater exclusively from 
oily operations (as defined in paragraph (f) of this section and 
appendix B of this part). These facilities only perform one or more of 
the following operations: assembly/disassembly, floor cleaning, 
maintenance machining (wheel truing), touch-up painting, and washing.
    (i) Railroad overhaul or heavy maintenance facilities means 
facilities engaged in the manufacture, overhaul, or heavy maintenance 
of railroad engines, cars, car-wheel trucks, or similar parts or 
machines. These facilities typically perform one or more of the 
operations in paragraph (h) of this section and one or more of the 
following operations: abrasive blasting, alkaline cleaning, aqueous 
degreasing, corrosion preventive coating, electrical discharge 
machining, grinding, heat treating, impact deformation, painting, 
plasma arc machining, polishing, pressure deformation, soldering/
brazing, stripping (paint), testing, thermal cutting, and welding.

Subpart A--Oily Wastes


Sec.  438.10  Applicability.

    (a) This subpart applies to process wastewater directly discharged 
from facilities specified at Sec.  438.1.
    (b) This subpart applies to process wastewater discharges from oily 
operations (as defined at Sec.  438.2(f) and appendix B of this part).
    (c) This subpart does not apply to process wastewater discharges 
from metal-bearing operations (as defined at Sec.  438.2(d) and 
appendix C of this part).


Sec.  438.12  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided at 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT. Discharges 
must remain within the pH range 6 to 9 and must not exceed the 
following:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                                Maximum
                     Regulated parameter                       daily \1\
------------------------------------------------------------------------
1. TSS.......................................................         62
2. O&G (as HEM)..............................................        46
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  438.13  Effluent limitations attainable by application of the 
best control technology for conventional pollutants (BCT).

    Except as provided at 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitation representing the application of BCT: Limitations 
for TSS, O&G (as HEM) and pH are the same as the corresponding 
limitation specified at Sec.  438.12.


Sec.  438.15  New source performance standards (NSPS).

    New point sources subject to this subpart must achieve the new 
source performance standards (NSPS) for TSS, O&G (as HEM), and pH, 
which are the same as the corresponding limitation specified at Sec.  
438.12. The performance standards apply with respect to each new point 
source that commences discharge after June 12, 2003.

Appendix A to Part 438--Typical Products in Metal Products and 
Machinery Sectors

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
              AEROSPACE                             AIRCRAFT                             BUS & TRUCK
Guided Missiles & Space Vehicle       Aircraft Engines & Engine Parts       Bus Terminal & Service Facilities
Guided Missile & Space Vehicle Prop   Aircraft Frames Manufacturing         Courier Services, Except by Air
Other Space Vehicle & Missile Parts   Aircraft Parts & Equipment             Freight Truck Terminals, W/ or W/O
                                      Airports, Flying Fields, & Services    Maintenance.
                                                                            Intercity & Rural Highways
                                                                             (Buslines)
                                                                            Local & Suburban Transit (Bus &
                                                                             subway)
                                                                            Local Passenger. Trans. (Lim., Amb.,
                                                                             Sight See)
                                                                            Local Trucking With Storage
                                                                            Local Trucking Without Storage
                                                                            Motor Vehicle Parts & Accessories
                                                                            School Buses
                                                                            Trucking
                                                                            Truck & Bus Bodies
                                                                            Truck Trailers
 

[[Page 25738]]

 
        ELECTRONIC EQUIPMENT                        HARDWARE                         HOUSEHOLD EQUIPMENT
Communications Equipment              Architectural & Ornamental Metal      Commercial, Ind. & Inst. Elec.
Connectors for Electronic              Work                                  Lighting Fixtures
 Applications                         Bolts, Nuts, Screws, Rivets &         Current-Carrying Wiring Devices
Electric Lamps                         Washers                              Electirc Housewares & Fans
Electron Tubes                        Crowns & Closures                     Electric Lamps
Electronic Capacitors                 Cutlery                               Farm Freezers
Electronic Coils & Transformers       Fabricated Metal Products             Household Appliances
Electronic Components                 Fabricated Pipe & Fabricated Pipe     Household Cooking Equipment
Radio & TV Communications Equipment    Fittings                             Household Refrig. & Home & Farm
Telephone & Telegraph Apparatus       Fabricated Plate Work (Boiler Shops)   Freezers
                                      Fabricated Structural Metal           Household Laundry Equipment
                                      Fasteners, Buttons, Needles & Pins    Household Vacuum Cleaners
                                      Fluid Power Values & Hose Fittings    Lighting Equipment
                                      Hand & Edge Tools                     Noncurrent-Carrying Wiring Devices
                                      Hand Saws & Saw Blades                Radio & Television Repair Shops
                                      Hardware                              Radio & Television Sets Except
                                      Heating Equipment, Except Electric     Commn. Types
                                      Industrial Furnaces & Ovens           Refrig. & Air Cond. Serv. & Repair
                                      Iron & Steel Forgings                  Shops
                                      Machine Tool Accessories & Measuring  Residential Electrical Lighting
                                       Devices                               Fixtures
                                      Machine Tools, Metal Cutting Types
                                      Machine Tools, Metal Forming Types
                                      Metal Shipping Barrels, Drums, Kegs,
                                       Pails
                                      Metal Stampings
                                      Power Driven Hand Tools
                                      Prefabricated Metal Buildings &
                                       Components
                                      Screw Machine Products
                                      Sheet Metal Work
                                      Special Dies & Tools, Die Sets,
                                       Jigs, Etc.
                                      Steel Springs
                                      Valves & Pipe Fittings
                                      Wire Springs
 
             INSTRUMENTS                   MOBILE INDUSTRIAL EQUIPMENT                  MOTOR VEHICLE
Analytical Instruments                Construction Machinery & Equipment    Auto Exhaust System Repair Shops
Automatic Environmental Controls      Farm Machinery & Equipment            Automobile Dealers (new & used)
Coating, Engraving, & Allied          Garden Tractors & Lawn & Garden       Auto. Dealers (Dunebuggy, Go-cart,
 Services                              Equipment                             Snowmobile)
Dental Equipment & Supplies           Hoist, Industrial Cranes & Monorails  Automobile Service (includes Diag. &
Ophthalmic Goods                      Industrial Trucks, Tractors,           Insp. Cntrs.)
Fluid Meters & Counting Devices        Trailers, Tanks & Tank Components    Automotive Equipment
Instruments to Measure Electricity    Mining machinery & equipment, except  Automotive Glass Replacement Shops
Laboratory Apparatus & Furniture       oil field                            Automotive Repairs Shops
 Manufacturing Industries                                                   Automotive Stampings
Measuring & Controlling Devices                                             Automotive Transmission Repair Shops
Optical Instruments & Lenses                                                Carburetors, Pistons Rings, Values
Orthopedic, Prosthetic, & Surgical                                          Electrical Equipment for Motor
 Supplies                                                                   General Automotive Repair Shops
Pens, Mechanical Pencils, & Parts                                           Mobile Homes
Process Control Instruments                                                 Motor Vehicle & Automotive Bodies
Search & Navigation Equipment                                               Motor Vehicle Parts & Accessories
Surgical & Medical Instruments &                                            Motorcycle Dealers
 Apparatus                                                                  Motorcycles
Watches, Clocks, Associated Devices                                         Passenger Car Leasing
 & Parts                                                                    Recreational & Utility Trailer
                                                                             Dealers
                                                                            Taxicabs
                                                                            Top & Body Repair & Paint Shops
                                                                            Travel Trailers & Campers
                                                                            Vehicles
                                                                            Vehicular Lighting Equipment
                                                                            Welding Shops (includes Automotive)
 
     INSTRUMENTS OFFICE MACHINE                     ORDNANCE                      PRECIOUS METALS & JEWELRY
Calculating & Accounting Equipment    Ammunition                            Costume Jewelry
Computer Maintenance & Repair         Ordnance & Accessories                Jewelers' Materials & Lapidary Work
Computer Peripheral Equipment         Small Arms                            Jewelry, Precious Metal
Computer Related Services             Small Arms Ammunition                 Musical Instruments
Computer Rental & Leasing                                                   Silverware, Plated Ware, & Stainless
Computer Storage Devices
Computer Terminals
Electrical & Electronic Repair
Electronic Computers
Office Machines
Photographic Equipment & Supplies
 

[[Page 25739]]

 
              RAILROAD                            SHIPS & BOATS                STATIONARY INDUSTRIAL EQUIPMENT
Line-Haul Railroads                   Boat Building & Repairing             Air & Gas Compressors
Railcars, Railway Systems             Deep Sea Domestic Transportation of   Automatic Vending Machines
Switching & Terminal Stations          Freight                              Ball & Roller Bearings
                                      Deep Sea Passenger Transportation,    Blowers & Exhaust & Ventilation Fans
                                       Except by Ferry                      Commercial Laundry Equipment
                                      Freight Transportation on the Great   Conveyors & Conveying Equipment
                                       Lakes Marinas                        Electric Industrial Apparatus
                                      Ship Building & Repairing             Elevators & Moving Stairways
                                      Towing & Tugboat Service              Equipment Rental & Leasing
                                      Water Passenger Transportation        Food Product Machinery
                                       Ferries                              Fluid Power Cylinders & Actuators
                                      Water Transportation of Freight       Fluid Power Pumps & Motors
                                      Water Transportation Services         General Industrial Machinery
                                                                            Heavy Construction Equipment Rental
                                                                            Industrial Machinery
                                                                            Industrial Patterns
                                                                            Industrial Process Furnaces & Ovens
                                                                            Internal Combustion Engines
                                                                            Measuring & Dispensing Pumps
                                                                            Mechanical Power Transmission
                                                                             Equipment
                                                                            Metal Working Machinery
                                                                            Motors & Generators
                                                                            Oil Field Machinery & Equipment
                                                                            Packaging Machinery
                                                                            Paper Industries Machinery
                                                                            Printing Trades Machinery &
                                                                             Equipment
                                                                            Pumps & Pumping Equipment
                                                                            Refrigeration & Air & Heating
                                                                             Equipment
                                                                            Relays & Industrial Controls
                                                                            Rolling Mill Machinery & Equipment
                                                                            Scales & Balances, Except Laboratory
                                                                            Service Industry Machines
                                                                            Special Industry Machinery
                                                                            Speed Changers, High Speed Drivers &
                                                                             Gears
                                                                            Steam, Gas, Hydraulic Turbines,
                                                                             Generator Units
                                                                            Switchgear & Switchboard Apparatus
                                                                            Textile Machinery
                                                                            Transformers
                                                                            Welding Apparatus
                                                                            Woodworking Machinery
    MISCELLANEOUS METAL PRODUCTS
Miscellaneous Fabricated Wire
 Products
Miscellaneous Metal Work
Miscellaneous Repair Shops & Related
 Services
Miscellaneous Transportation
 Equipment
----------------------------------------------------------------------------------------------------------------

Appendix B to Part 438--Oily Operations Definitions

    Note: The definitions in this appendix shall not be used to 
differentiate between the six ``core'' metal finishing operations 
(i.e., Electroplating, Electroless Plating, Anodizing, Coating 
(chromating, phosphating, and coloring), Chemical Etching and 
Milling, and Printed Circuit Board Manufacture) and forty 
``ancillary'' process operations listed at 40 CFR 433.10(a).

    Abrasive Blasting involves removing surface film from a part by 
using abrasive directed at high velocity against the part. Abrasive 
blasting includes bead, grit, shot, and sand blasting, and may be 
performed either dry or with water. The primary applications of wet 
abrasive blasting include: Removing burrs on precision parts; 
producing satin or matte finishes; removing fine tool marks; and 
removing light mill scale, surface oxide, or welding scale. Wet 
blasting can be used to finish fragile items such as electronic 
components. Also, some aluminum parts are wet blasted to achieve a 
fine-grained matte finish for decorative purposes. In abrasive 
blasting, the water and abrasive typically are reused until the 
particle size diminishes due to impacting and fracture.
    Adhesive Bonding involves joining parts using an adhesive 
material. Typically, an organic bonding compound is used as the 
adhesive. This operation usually is dry; however, aqueous solutions 
may be used as bonding agents or to contain residual organic bonding 
materials.
    Alkaline Cleaning for Oil Removal is a general term for the 
application of an alkaline cleaning agent to a metal part to remove 
oil and grease during the manufacture, maintenance, or rebuilding of 
a metal product. This unit operation does not include washing of the 
finished products after routine use (as defined in ``Washing 
(Finished Products)'' in this appendix), or applying an alkaline 
cleaning agent to remove nonoily contaminants such as dirt and scale 
(as defined in ``Alkaline Treatment Without Cyanide'' in this 
appendix and ``Alkaline Treatment With Cyanide'' in appendix C of 
this part). Wastewater generated includes spent cleaning solutions 
and rinse waters.
    (1) Alkaline cleaning is performed to remove foreign 
contaminants from parts. This operation usually is done prior to 
finishing (e.g., electroplating).
    (2) Emulsion cleaning is an alkaline cleaning operation that 
uses either complex chemical enzymes or common organic solvents 
(e.g., kerosene, mineral oil, glycols, and benzene) dispersed in 
water with the aid of an emulsifying agent. The pH of the solvent 
usually is between 7 and 9, and, depending on the solvent used, 
cleaning is performed at temperatures from room temperature to 82 
[deg]C (180 [deg]F). This operation often is used as a replacement 
for vapor degreasing.

[[Page 25740]]

    Alkaline Treatment Without Cyanide is a general term used to 
describe the application of an alkaline solution not containing 
cyanide to a metal surface to clean the metal surface or prepare the 
metal surface for further surface finishing.
    Aqueous Degreasing involves cleaning metal parts using aqueous-
based cleaning chemicals primarily to remove residual oils and 
greases from the part. Residual oils can be from previous operations 
(e.g., machine coolants), oil from product use in a dirty 
environment, or oil coatings used to inhibit corrosion. Wastewater 
generated by this operation includes spent cleaning solutions and 
rinse waters.
    Assembly/Disassembly involves fitting together previously 
manufactured or rebuilt parts or components into a complete metal 
product or machine or taking a complete metal product or machine 
apart. Assembly/disassembly operations are typically dry; however, 
special circumstances can require water for cooling or buoyancy. 
Also, rinsing may be necessary under some conditions.
    Burnishing involves finish sizing or smooth finishing a part 
(previously machined or ground) by displacing, rather than removing, 
minute surface irregularities with smooth point or line-contact, 
fixed or rotating tools. Lubricants or soap solutions can be used to 
cool the tools used in burnishing operations. Wastewater generated 
during burnishing include process solutions and rinse water.
    Calibration is performed to provide reference points for the use 
of a product. This unit operation typically is dry, although water 
may be used in some cases (e.g., pumping water for calibration of a 
pump). Water used in this unit operation usually does not contain 
additives.
    Corrosion Preventive Coating involves applying removable oily or 
organic solutions to protect metal surfaces against corrosive 
environments. Corrosion preventive coatings include, but are not 
limited to: Petrolatum compounds, oils, hard dry-film compounds, 
solvent-cutback petroleum-based compounds, emulsions, water-
displacing polar compounds, and fingerprint removers and 
neutralizers. Corrosion preventive coating does not include 
electroplating, or chemical conversion coating operations. Many 
corrosion preventive materials also are formulated to function as 
lubricants or as a base for paint. Typical applications include: 
Assembled machinery or equipment in standby storage; finished parts 
in stock or spare parts for replacement; tools such as drills, taps, 
dies, and gauges; and mill products such as sheet, strip, rod and 
bar. Wastewater generated during corrosion preventive coating 
includes spent process solutions and rinses. Process solutions are 
discharged when they become contaminated with impurities or are 
depleted of constituents. Corrosion preventive coatings typically do 
not require an associated rinse, but parts are sometimes rinsed to 
remove the coating before further processing.
    Electrical Discharge Machining involves removing metals by a 
rapid spark discharge between different polarity electrodes, one the 
part and the other the tool, separated by a small gap. The gap may 
be filled with air or a dielectric fluid. This operation is used 
primarily to cut tool alloys, hard nonferrous alloys, and other 
hard-to-machine materials. Most electrical discharge machining 
processes are operated dry; however, in some cases, the process uses 
water and generates wastewater containing dielectric fluid.
    Floor Cleaning (in Process Area) removes dirt, debris, and 
process solution spills from process area floors. Floors can be 
cleaned using wet or dry methods, such as vacuuming, mopping, dry 
sweeping, and hose rinsing. Non-process area floor cleaning in 
offices and other similar non-process areas is not included in this 
unit operation.
    Grinding involves removing stock from a part by using abrasive 
grains held by a rigid or semirigid binder. Grinding shapes or 
deburrs the part. The grinding tool usually is a disk (the basic 
shape of grinding wheels), but can also be a cylinder, ring, cup, 
stick, strip, or belt. The most commonly used abrasives are aluminum 
oxide, silicon carbide, and diamond. The process may use a grinding 
fluid to cool the part and remove debris or metal fines. Wastewater 
generated during grinding includes spent coolants and rinses. Metal-
working fluids become spent for a number of reasons, including 
increased biological activity (i.e., the fluids become rancid) or 
decomposition of the coolant additives. Rinse waters typically are 
assimilated into the working fluid or treated on site.
    Heat Treating involves modifying the physical properties of a 
part by applying controlled heating and cooling cycles. This 
operation includes tempering, carburizing, cyaniding, nitriding, 
annealing, aging, normalizing, austenitizing, austempering, 
siliconizing, martempering, and malleablizing. Parts are heated in 
furnaces or molten salt baths, and then may be cooled by quenching 
in aqueous solutions (e.g., brine solutions), neat oils (pure oils 
with little or no impurities), or oil/water emulsions. Heat treating 
typically is a dry operation, but is considered a wet operation if 
aqueous quenching solutions are used. Wastewater includes spent 
quench water and rinse water.
    Impact Deformation involves applying impact force to a part to 
permanently deform or shape it. Impact deformation may include 
mechanical processes such as hammer forging, shot peening, peening, 
coining, high-energy-rate forming, heading, or stamping. Natural and 
synthetic oils, light greases, and pigmented lubricants are used in 
impact deformation operations. Pigmented lubricants include whiting, 
lithapone, mica, zinc oxide, molybdenum disulfide, bentonite, flour, 
graphite, white lead, and soap-like materials. These operations 
typically are dry, but wastewater can be generated from lubricant 
discharge and from rinsing operations associated with the operation.
    Iron Phosphate Conversion Coating is the process of applying a 
protective coating on the surface of a metal using a bath consisting 
of a phosphoric acid solution containing no metals (e.g., manganese, 
nickel, or zinc) or a phosphate salt solution (i.e., sodium or 
potassium salts of phosphoric acid solutions) containing no metals 
(e.g., manganese, nickel, or zinc) other than sodium or potassium. 
Any metal concentrations in the bath are from the substrate.
    Machining involves removing stock from a part (as chips) by 
forcing a cutting tool against the part. This includes machining 
processes such as turning, milling, drilling, boring, tapping, 
planing, broaching, sawing, shaving, shearing, threading, reaming, 
shaping, slotting, hobbing, and chamfering. Machining processes use 
various types of metal-working fluids, the choice of which depends 
on the type of machining being performed and the preference of the 
machine shop. The fluids can be categorized into four groups: 
Straight oil (neat oils), synthetic, semisynthetic, and water-
soluble oil. Machining operations generate wastewater from working 
fluid or rinse water discharge. Metal-working fluids periodically 
are discarded because of reduced performance or development of a 
rancid odor. After machining, parts are sometimes rinsed to remove 
coolant and metal chips. The coolant reservoir is sometimes rinsed, 
and the rinse water is added to the working fluid.
    Painting-Spray or Brush (Including Water Curtains) involves 
applying an organic coating to a part. Coatings such as paint, 
varnish, lacquer, shellac, and plastics are applied by spraying, 
brushing, roll coating, lithographing, powder coating, and wiping. 
Water is used in painting operations as a solvent (water-borne 
formulations) for rinsing, for cleanup, and for water-wash (or 
curtain) type spray booths. Paint spray booths typically use most of 
the water in this unit operation. Spray booths capture overspray 
(i.e., paint that misses the product during application), and 
control the introduction of pollutants into the workplace and 
environment.
    Polishing involves removing stock from a part using loose or 
loosely held abrasive grains carried to the part by a flexible 
support. Usually, the objective is to achieve a desired surface 
finish or appearance rather then to remove a specified amount of 
stock. Buffing is included in this unit operation, and usually is 
performed using a revolving cloth or sisal buffing wheel, which is 
coated with a suitable compound. Liquid buffing compounds are used 
extensively for large-volume production on semiautomated or 
automated buffing equipment. Polishing operations typically are dry, 
although liquid compounds and associated rinses are used in some 
polishing processes.
    Pressure Deformation involves applying force (other than impact 
force) to permanently deform or shape a part. Pressure deformation 
may include rolling, drawing, bending, embossing, sizing, extruding, 
squeezing, spinning, necking, forming, crimping or flaring. These 
operations use natural and synthetic oils, light greases, and 
pigmented lubricants. Pigmented lubricants include whiting, 
lithapone, mica, zinc oxide, molybdenum disulfide, bentonite, flour, 
graphite, white lead, and soap-like materials. Pressure deformation 
typically is dry, but wastewater is sometimes generated from the 
discharge of lubricants or from rinsing associated with the process.
    Solvent Degreasing removes oils and grease from the surface of a 
part using organic solvents, including aliphatic petroleum (e.g., 
kerosene, naphtha), aromatics (e.g., benzene, toluene), oxygenated 
hydrocarbons (e.g.,

[[Page 25741]]

ketones, alcohol, ether), and halogenated hydrocarbons (e.g., 1,1,1-
trichloroethane, trichloroethylene, methylene chloride). Solvent 
cleaning takes place in either the liquid or vapor phase. Solvent 
vapor degreasing normally is quicker than solvent liquid degreasing. 
However, ultrasonic vibration is sometimes used with liquid solvents 
to decrease the required immersion time of complex shapes. Solvent 
cleaning often is used as a precleaning operation prior to alkaline 
cleaning, as a final cleaning of precision parts, or as surface 
preparation for some painting operations. Solvent degreasing 
operations typically are not followed by rinsing, although rinsing 
is performed in some cases.
    Steam Cleaning removes residual dirt, oil, and grease from parts 
after processing though other unit operations. Typically, additives 
are not used in this operation; the hot steam removes the 
pollutants. Wastewater is generated when the cleaned parts are 
rinsed.
    Testing (e.g., hydrostatic, dye penetrant, ultrasonic, magnetic 
flux) involves applying thermal, electrical, mechanical, hydraulic, 
or other energy to determine the suitability or functionality of a 
part, assembly, or complete unit. Testing also may include applying 
surface penetrant dyes to detect surface imperfections. Other 
examples of tests frequently performed include electrical testing, 
performance testing, and ultrasonic testing; these tests typically 
are dry but may generate wastewater under certain circumstances. 
Testing usually is performed to replicate some aspect of the working 
environment. Wastewater generated during testing includes spent 
process solutions and rinses.
    Thermal Cutting involves cutting, slotting, or piercing a part 
using an oxy-acetylene oxygen lance, electric arc cutting tool, or 
laser. Thermal cutting typically is a dry process, except for the 
use of contact cooling waters and rinses.
    Tumbling/Barrel Finishing/Mass Finishing/Vibratory Finishing 
involves polishing or deburring a part using a rotating or vibrating 
container and abrasive media or other polishing materials to achieve 
a desired surface appearance. Parts to be finished are placed in a 
rotating barrel or vibrating unit with an abrasive media (e.g., 
ceramic chips, pebbles), water, and chemical additives (e.g., 
alkaline detergents). As the barrel rotates, the upper layer of the 
part slides toward the lower side of the barrel, causing the 
abrading or polishing. Similar results can be achieved in a 
vibrating unit, where the entire contents of the container are in 
constant motion, or in a centrifugal unit, which compacts the load 
of media and parts as the unit spins and generates up to 50 times 
the force of gravity. Spindle finishing is a similar process, where 
parts to be finished are mounted on fixtures and exposed to a 
rapidly moving abrasive slurry. Wastewater generated during barrel 
finishing includes spent process solutions and rinses. Following the 
finishing process, the contents of the barrel are unloaded. Process 
wastewater is either discharged continuously during the process, 
discharged after finishing, or collected and reused. The parts are 
sometimes given a final rinse to remove particles of abrasive media.
    Washing (Finished Products) involves cleaning finished metal 
products after use or storage using fresh water or water containing 
a mild cleaning solution. This unit operation applies only to the 
finished products that do not require maintenance or rebuilding.
    Welding involves joining two or more pieces of material by 
applying heat, pressure, or both, with or without filler material, 
to produce a metallurgical bond through fusion or recrystallization 
across the interface. This includes gas welding, resistance welding, 
arc welding, cold welding, electron beam welding, and laser beam 
welding. Welding typically is a dry process, except for the 
occasional use of contact cooling waters or rinses.
    Wet Air Pollution Control for Organic Constituents involves 
using water to remove organic constituents that are entrained in air 
streams exhausted from process tanks or production areas. Most 
frequently, wet air pollution control devices are used with cleaning 
and coating processes. A common type of wet air pollution control is 
the wet packed scrubber consisting of a spray chamber that is filled 
with packing material. Water is continuously sprayed onto the 
packing and the air stream is pulled through the packing by a fan. 
Pollutants in the air stream are absorbed by the water droplets and 
the air is released to the atmosphere. A single scrubber often 
serves numerous process tanks.

Appendix C to Part 438--Metal-Bearing Operations Definitions

    Note: The definitions in this appendix shall not be used to 
differentiate between the six ``core'' metal finishing operations 
(i.e., Electroplating, Electroless Plating, Anodizing, Coating 
(chromating, phosphating, and coloring), Chemical Etching and 
Milling, and Printed Circuit Board Manufacture) and forty 
``ancillary'' process operations listed at 40 CFR 433.10(a).

    Abrasive Jet Machining includes removing stock material from a 
part by a high-speed stream of abrasive particles carried by a 
liquid or gas from a nozzle. Abrasive jet machining is used for 
deburring, drilling, and cutting thin sections of metal or composite 
material. Unlike abrasive blasting, this process operates at 
pressures of thousands of pounds per square inch. The liquid streams 
typically are alkaline or emulsified oil solutions, although water 
also can be used.
    Acid Pickling Neutralization involves using a dilute alkaline 
solution to raise the pH of acid pickling rinse water that remains 
on the part after pickling. The wastewater from this operation is 
the acid pickling neutralization rinse water.
    Acid Treatment With Chromium is a general term used to describe 
any application of an acid solution containing chromium to a metal 
surface. Acid cleaning, chemical etching, and pickling are types of 
acid treatment. Chromic acid is used occasionally to clean cast 
iron, stainless steel, cadmium and aluminum, and bright dipping of 
copper and copper alloys. Also, chromic acid solutions can be used 
for the final step in acid cleaning phosphate conversion coating 
systems. Chemical conversion coatings formulated with chromic acid 
are defined at ``Chromate Conversion Coating (or Chromating)'' in 
this appendix. Wastewater generated during acid treatment includes 
spent solutions and rinse waters. Spent solutions typically are 
batch discharged and treated or disposed of off site. Most acid 
treatment operations are followed by a water rinse to remove 
residual acid.
    Acid Treatment Without Chromium is a general term used to 
describe any application of an acid solution not containing chromium 
to a metal surface. Acid cleaning, chemical etching, and pickling 
are types of acid treatment. Wastewater generated during acid 
treatment includes spent solutions and rinse waters. Spent solutions 
typically are batch discharged and treated or disposed of off site. 
Most acid treatment operations are followed by a water rinse to 
remove residual acid.
    Alcohol Cleaning involves removing dirt and residue material 
from a part using alcohol.
    Alkaline Cleaning Neutralization involves using a dilute acid 
solution to lower the pH of alkaline cleaning rinse water that 
remains on the part after alkaline cleaning. Wastewater from this 
operation is the alkaline cleaning neutralization rinse water.
    Alkaline Treatment With Cyanide is the cleaning of a metal 
surface with an alkaline solution containing cyanide. Wastewater 
generated during alkaline treatment includes spent solutions and 
rinse waters. Alkaline treatment solutions become contaminated from 
the introduction of soils and dissolution of the base metal. They 
usually are treated and disposed of on a batch basis. Alkaline 
treatment typically is followed by a water rinse that is discharged 
to a treatment system.
    Anodizing With Chromium involves producing a protective oxide 
film on aluminum, magnesium, or other light metal, usually by 
passing an electric current through an electrolyte bath in which the 
metal is immersed. Anodizing may be followed by a sealant operation. 
Chromic acid anodic coatings have a relatively thick boundary layer 
and are more protective than are sulfuric acid coatings. For these 
reasons, chromic acid is sometimes used when the part cannot be 
rinsed completely. These oxide coatings provide corrosion 
protection, decorative surfaces, a base for painting and other 
coating processes, and special electrical and mechanical properties. 
Wastewaters generated during anodizing include spent anodizing 
solutions, sealants, and rinse waters. Because of the anodic nature 
of the process, anodizing solutions become contaminated with the 
base metal being processed. These solutions eventually reach an 
intolerable concentration of dissolved metal and require treatment 
or disposal. Rinse water following anodizing, coloring, and sealing 
typically is discharged to a treatment system.
    Anodizing Without Chromium involves applying a protective oxide 
film to aluminum, magnesium, or other light metal, usually by 
passing an electric current through an electrolyte bath in which the 
metal is immersed. Phosphoric acid, sulfuric acid, and boric acid 
are used in anodizing. Anodizing also may include sealant baths. 
These oxide coatings provide corrosion protection, decorative 
surfaces, a base for

[[Page 25742]]

painting and other coating processes, and special electrical and 
mechanical properties. Wastewater generated during anodizing 
includes spent anodizing solutions, sealants, and rinse waters. 
Because of the anodic nature of the process, anodizing solutions 
become contaminated with the base metal being processed. These 
solutions eventually reach an intolerable concentration of dissolved 
metal and require treatment or disposal. Rinse water following 
anodizing, coloring, and sealing steps typically is discharged to a 
treatment systems.
    Carbon Black Deposition involves coating the inside of printed 
circuit board holes by dipping the circuit board into a tank that 
contains carbon black and potassium hydroxide. After excess solution 
dips from the circuit boards, they are heated to allow the carbon 
black to adhere to the board.
    Catalyst Acid Pre-Dip uses rinse water to remove residual 
solution from a part after the part is processed in an acid bath. 
The wastewater generated in this unit operation is the rinse water.
    Chemical Conversion Coating without Chromium is the process of 
applying a protective coating on the surface of a metal without 
using chromium. Such coatings are applied through phosphate 
conversion (except for ``Iron Phosphate Conversion Coating,'' see 
appendix B of this part), metal coloring, or passivation. Coatings 
are applied to a base metal or previously deposited metal to 
increase corrosion protection and lubricity, prepare the surface for 
additional coatings, or formulate a special surface appearance. This 
unit process includes sealant operations that use additives other 
than chromium.
    (1) In phosphate conversion, coatings are applied for one or 
more of the following reasons: to provide a base for paints and 
other organic coatings; to condition surfaces for cold forming 
operations by providing a base for drawing compounds and lubricants; 
to impart corrosion resistance to the metal surface; or to provide a 
suitable base for corrosion-resistant oils or waxes. Phosphate 
conversion coatings are formed by immersing a metal part in a dilute 
solution of phosphoric acid, phosphate salts, and other reagents.
    (2) Metal coloring by chemical conversion coating produces a 
large group of decorative finishes. Metal coloring includes the 
formation of oxide conversion coatings. In this operation, the metal 
surface is converted into an oxide or similar metallic compound, 
giving the part the desired color. The most common colored finishes 
are used on copper, steel, zinc, and cadmium.
    (3) Passivation forms a protective coating on metals, 
particularly stainless steel, by immersing the part in an acid 
solution. Stainless steel is passivated to dissolve embedded iron 
particles and to form a thin oxide film on the surface of the metal. 
Wastewater generated during chemical conversion coating includes 
spent solutions and rinses (i.e., both the chemical conversion 
coating solutions and post-treatment sealant solutions). These 
solutions commonly are discharged to a treatment system when 
contaminated with the base metal or other impurities. Rinsing 
normally follows each process step, except when a sealant dries on 
the part surface.
    Chemical Milling (or Chemical Machining) involves removing metal 
from a part by controlled chemical attack, or etching, to produce 
desired shapes and dimensions. In chemical machining, a masking 
agent typically is applied to cover a portion of the part's surface; 
the exposed (unmasked) surface is then treated with the chemical 
machining solution. Wastewater generated during chemical machining 
includes spent solutions and rinses. Process solutions typically are 
discharged after becoming contaminated with the base metal. Rinsing 
normally follows chemical machining.
    Chromate Conversion Coating (or Chromating) involves forming a 
conversion coating (protective coating) on a metal by immersing or 
spraying the metal with a hexavalent chromium compound solution to 
produce a hexavalent or trivalent chromium compound coating. This 
also is known as chromate treatment, and is most often applied to 
aluminum, zinc, cadmium or magnesium surfaces. Sealant operations 
using chromium also are included in this unit operation. Chromate 
solutions include two types: (1) those that deposit substantial 
chromate films on the substrate metal and are complete treatments 
themselves, and (2) those that seal or supplement oxide, phosphate, 
or other types of protective coatings. Wastewater generated during 
chromate conversion coating includes spent process solutions (i.e., 
both the chromate conversion coating solutions and post-treatment 
sealant solutions) and rinses. These solutions typically are 
discharged to a treatment system when contaminated with the base 
metal or other impurities. Also, chromium-based solutions, which are 
typically formulated with hexavalent chromium, lose operating 
strength when the hexavalent chromium reduces to trivalent chromium 
during use. Rinsing normally follows each process step, except for 
sealants that dry on the surface of the part.
    Chromium Drag-out Destruction is a unit operation performed 
following chromium-bearing operations to reduce hexavalent chromium 
that is ``dragged out'' of the process bath. Parts are dipped in a 
solution of a chromium-reducing chemical (e.g., sodium 
metabisulfite) to prevent the hexavalent chromium from contaminating 
subsequent process baths. This operation typically is performed in a 
stagnant drag-out rinse tank that contains concentrated chromium-
bearing wastewater.
    Cyanide Drag-out Destruction involves dipping part in a cyanide 
oxidation solution (e.g., sodium hypochloride) to prevent cyanide 
that is ``dragged out'' of a process bath from contaminating 
subsequent process baths. This operation typically is performed in a 
stagnant drag-out rinse tank.
    Cyaniding Rinse is generated during cyaniding hardening of a 
part. The part is heated in a molten salt solution containing 
cyanide. Wastewater is generated when excess cyanide salt solution 
is removed from the part in rinse water.
    Electrochemical Machining is a process in which the part becomes 
the anode and a shaped cathode is the cutting tool. By pumping 
electrolyte between the electrodes and applying a current, metal is 
rapidly but selectively dissolved from the part. Wastewater 
generated during electrochemical machining includes spent 
electrolytes and rinses.
    Electroless Catalyst Solution involves adding a catalyst just 
prior to an electroless plating operation to accelerate the plating 
operation.
    Electroless Plating involves applying a metallic coating to a 
part using a chemical reduction process in the presence of a 
catalysis. An electric current is not used in this operations. The 
metal to be plated onto a part typically is held in solution at high 
concentrations using a chelating agent. This plates all areas of the 
part to a uniform thickness regardless of the configuration of the 
part. Also, an electroless-plated surface is dense and virtually 
nonporous. Copper and nickel electroless plating operations are the 
most common. Sealant operations (i.e., other than hot water dips) 
following electroless plating are considered separate unit 
operations if they include any additives. Wastewater generated 
during electroless plating includes spent process solutions and 
rinses. The wastewater contains chelated metals, which require 
separate preliminary treatment to break the metal chelates prior to 
conventional chemical precipitation. Rinsing follows most 
electroless plating processes to remove residual plating solution 
and prevent contamination of subsequent process baths.
    Electrolytic Cleaning involves removing soil, scale, or surface 
oxides from a part by electrolysis. The part is one of the 
electrodes and the electrolyte is usually alkaline. Electrolytic 
alkaline cleaning and electrolytic acid cleaning are the two types 
of electrolytic cleaning.
    (1) Electrolytic alkaline cleaning produces a cleaner surface 
than do nonelectrolytic methods of alkaline cleaning. This operation 
uses strong agitation, gas evolution in the solution, and oxidation-
reduction reactions that occur during electrolysis. In addition, 
dirt particles become electrically charged and are repelled from the 
part surface.
    (2) Electrolytic acid cleaning sometimes is used as a final 
cleaning before electroplating. Sulfuric acid is most frequently 
used as the electrolyte. As with electrolytic alkaline cleaning, the 
mechanical scrubbing effect from the evolution of gas enhances the 
effectiveness of the process.
    Wastewater generated during electrolytic cleaning includes spent 
process solutions and rinses. Electrolytic cleaning solutions become 
contaminated during use due to the dissolution of the base metal and 
the introduction of pollutants. The solutions typically are batch 
discharged for treatment or disposal after they weaken. Rinsing 
following electrolytic cleaning removes residual cleaner to prevent 
contamination of subsequent process baths.
    Electroplating with Chromium involves producing a chromium metal 
coating on a surface by electrodeposition. Electroplating provides 
corrosion protection, wear or erosion resistance, lubricity, 
electrical conductivity, or decoration. In electroplating, metal 
ions in acid, alkaline, or neutral solutions are reduced on the 
cathodic

[[Page 25743]]

surfaces of the parts being plated. Metal salts or oxides typically 
are added to replenish the solutions. Chromium trioxide often is 
added as a source of chromium. In addition to water and the metal 
being deposited, electroplating solutions often contain agents that 
form complexes with the metal being deposited, stabilizers to 
prevent hydrolysis, buffers for pH control, catalysts to assist in 
deposition, chemical aids to dissolve anodes, and miscellaneous 
ingredients that modify the process to attain specific properties. 
Sealant operations performed after this operation are considered 
separate unit operations if they include any additives (i.e., other 
than hot water dips). Wastewater generated during electroplating 
includes spent process solutions and rinses. Electroplating 
solutions occasionally become contaminated during use due to the 
base metal dissolving and the introduction of other pollutants, 
diminishing the effectiveness of the electroplating solutions 
diminishes. Spent concentrated solutions typically are treated to 
remove pollutants and reused, processed in a wastewater treatment 
system, or disposed of off site. Rinse waters, including some drag-
out rinse tank solutions, typically are treated on site.
    Electroplating with Cyanide involves producing metal coatings on 
a surface by electrodeposition using cyanide. Electroplating 
provides corrosion protection, wear or erosion resistance, 
electrical conductivity, or decoration. In electroplating, metal 
ions in acid, alkaline, or neutral solutions are reduced on the 
cathodic surfaces of the parts being plated. The metal ions in 
solution typically are replenished by dissolving metal from anodes 
contained in inert wire or metal baskets. Sealant operations 
performed after this operation are considered separate unit 
operations if they include any additives (i.e., any sealant 
operations other than hot water dips). In addition to water and the 
metal being deposited, electroplating solutions often contain agents 
that form complexes with the metal being deposited, stabilizers to 
prevent hydrolysis, buffers to control pH, catalysts to assist in 
deposition, chemical aids to dissolve anodes, and miscellaneous 
ingredients that modify the process to attain specific properties. 
Cyanide, usually in the form of sodium or potassium cyanide, 
frequently is used as a complexing agent for zinc, cadmium, copper, 
and precious metal baths. Wastewater generated during electroplating 
includes spent process solutions and rinses. Electroplating 
solutions occasionally become contaminated during use due to 
dissolution of the base metal and the introduction of other 
pollutants, diminishing the performance of the electroplating 
solutions. Spent concentrated solutions typically are treated to 
remove pollutants and reused, processed in a wastewater treatment 
system, or disposed of off site. Rinse waters, including some drag-
out rinse tank solutions, typically are treated on site.
    Electroplating without Chromium or Cyanide involves the 
production of metal coatings on a surface by electrodeposition, 
without using chromium or cyanide. Commonly electroplated metals 
include nickel, copper, tin/lead, gold, and zinc. Electroplating 
provides corrosion protection, wear or erosion resistance, 
lubricity, electrical conductivity, or decoration. In 
electroplating, metal ions in acid, alkaline, or neutral solutions 
are reduced on the cathodic surfaces of the parts being plated. The 
metal ions in solution typically are replenished by dissolving metal 
from anodes contained in inert wire or metal baskets. Sealant 
operations performed after this operation are considered separate 
unit operations if they include any additives (i.e., any sealant 
operations other than hot water dips). In addition to water and the 
metal being deposited, electroplating solutions often contain agents 
that form complexes with the metal being deposited, stabilizers to 
prevent hydrolysis, buffers to control pH, catalysts to assist in 
deposition, chemical aids to dissolve anodes, and miscellaneous 
ingredients that modify the process to attain specific properties. 
Wastewater generated during electroplating without chromium or 
cyanide includes spent process solutions and rinses. Electroplating 
solutions occasionally become contaminated during use due to 
dissolution of the base metal and the introduction of other 
pollutants, diminishing the effectiveness of the electroplating 
solutions. Spent concentrated solutions typically are treated for 
pollutant removal and reused, processed in a wastewater treatment 
system, or disposed of off site. Rinse waters, including some drag-
out rinse tank solutions, typically are treated on site.
    Electropolishing involves producing a highly polished surface on 
a part using reversed electrodeposition in which the anode (part) 
releases some metal ions into the electrolyte to reduce surface 
roughness. When current is applied, a polarized film forms on the 
metal surface, through which metal ions diffuse. In this operation, 
areas of surface roughness on parts serve as high-current density 
areas and are dissolved at rates greater than the rates for smoother 
portions of the metal surface. Metals are electropolished to improve 
appearance, reflectivity, and corrosion resistance. Base metals 
processed by electropolishing include aluminum, copper, zinc, low-
alloy steel, and stainless steel. Common electrolytes include sodium 
hydroxide and combinations of sulfuric acid, phosphoric acid, and 
chromic acid. Wastewater generated during electropolishing includes 
spent process solutions and rinses. Eventually, the concentration of 
dissolved metals increases to the point where the process becomes 
ineffective. Typically, a portion of the bath is decanted and either 
fresh chemicals are added or the entire solution is discharged to 
treatment and replaced with fresh chemicals. Rinsing can involve 
several steps and can include hot immersion or spray rinses.
    Galvanizing/Hot Dip Coating involves using various processes to 
coat an iron or steel surface with zinc. In hot dipping, a base 
metal is coated by dipping it into a tank that contains a molten 
metal.
    Hot Dip Coating involves applying a metal coating (usually zinc) 
to the surface of a part by dipping the part in a molten metal bath. 
Wastewater is generated in this operation when residual metal 
coating solution is removed from the part in rinse water.
    Kerfing uses a tool to remove small amounts of metal from a 
product surface. Water and synthetic coolants may be used to 
lubricate the area between the tool and the metal, to maintain the 
temperature of the cutting tool, and to remove metal fines from the 
surface of the part. This operation generates oily wastewater that 
contains metal fines and dust.
    Laminating involves applying a material to a substrate using 
heat and pressure.
    Mechanical and Vapor Plating involves applying a metallic 
coating to a part. For mechanical plating, the part is rotated in a 
drum containing a water-based solution, glass beads, and metal 
powder. In vapor plating, a metallic coating is applied by atomizing 
the metal and applying an electric charge to the part, which causes 
the atomized (vapor phase) metal to adhere to the part. Wastewater 
generated in this operation includes spent solutions from the 
process bath and rinse water. Typically, the wastewater contains 
high concentrations of the applied metal.
    Metallic Fiber Cloth Manufacturing involves weaving thin 
metallic fibers to create a mesh cloth.
    Metal Spraying (Including Water Curtain) involves applying a 
metallic coating to a part by projecting molten or semimolten metal 
particles onto a substrate. Coatings can be sprayed from rod or wire 
stock or from powdered material. The process involves feeding the 
material (e.g., wire) into a flame where it is melted. The molten 
stock then is stripped from the end of the wire and atomized by a 
high-velocity stream of compressed air or other gas that propels the 
material onto a prepared substrate or part. Metal spraying coatings 
are used in a wide range of special applications, including: 
insulating layers in applications such as induction heating coils; 
electromagnetic interference shielding; thermal barriers for rocket 
engines; nuclear moderators; films for hot isostatic pressing; and 
dimensional restoration of worn parts. Metal spraying is sometimes 
performed in front of a ``water curtain'' (a circulated water stream 
used to trap overspray) or a dry filter exhaust hood that captures 
the overspray and fumes. With water curtain systems, water is 
recirculated from a sump or tank. Wastewater is generated when the 
sump or tank is discharged periodically. Metal spraying typically is 
not followed by rinsing.
    Painting-Immersion (Including Electrophoretic, ``E-coat'') 
involves applying an organic coating to a part using processes such 
autophoretic and electrophoretic painting.
    (1) Autophoretic Painting involves applying an organic paint 
film by electrophoresis when a part is immersed in a suitable 
aqueous bath.
    (2) Electrophoretic Painting is coating a part by making it 
either anodic or cathodic in a bath that is generally an aqueous 
emulsion of the organic coating material.
    (3) Other Immersion Painting includes all other types of 
immersion painting such as dip painting.
    Water is used in immersion paint operations as a carrier for 
paint particles and to rinse the part. Aqueous painting solutions

[[Page 25744]]

and rinses typically are treated through an ultrafiltration system. 
The concentrate is returned to the painting solution, and the 
permeate is reused as rinse water. Sites typically discharge a bleed 
stream to treatment. The painting solution and rinses are batch 
discharged periodically to treatment.
    Photo Imaging is the process of exposing a photoresist-laden 
printed wiring board to light to impact the circuitry design to the 
board. Water is not used in this operation.
    Photo Image Developing is an operation in which a water-based 
solution is used to develop the exposed circuitry in a photoresist-
laden printed wiring board. Wastewater generated in this operation 
includes spent process solution and rinse water.
    Photoresist Application is an operation that uses heat and 
pressure to apply a photoresist coating to a printed wiring board. 
Water is not used in this operation.
    Photoresist Strip involves removing organic photoresist material 
from a printed wiring board using an acid solution.
    Phosphor Deposition is the application of a phosphorescent 
coating to a part. Wastewater generated in this unit operation 
includes water used to keep the parts clean and wet while the 
coating is applied, and rinse water used to remove excess 
phosphorescent coating from the part.
    Physical Vapor Deposition involves physically removing a 
material from a source through evaporation or sputtering, using the 
energy of the vapor particles in a vacuum or partial vacuum to 
transport the removed material, and condensing the removed material 
as a film onto the surface of a part or other substrate.
    Plasma Arc Machining involves removing material or shaping a 
part by a high-velocity jet of high-temperature, ionized gas. A gas 
(nitrogen, argon, or hydrogen) is passed through an electric arc, 
causing the gas to become ionized, and heated to temperatures 
exceeding 16,650 [deg]C (30,000 [deg]F). The relatively narrow 
plasma jet melts and displaces the material in its path. Because 
plasma arc machining does not depend on a chemical reaction between 
the gas and the part, and because plasma temperatures are extremely 
high, the process can be used on almost any metal, including those 
that are resistant to oxygen-fuel gas cutting. The method is used 
mainly for profile cutting of stainless steel and aluminum alloys. 
Although plasma arc machining typically is a dry process, water is 
used for water injection plasma arc torches. In these cases, a 
constricted swirling flow of water surrounds the cutting arc. This 
operations also may be performed immersed in a water bath. In both 
cases, water is used to stabilize the arc, to cool the part, and to 
contain smoke and fumes.
    Plastic Wire Extrusion involves applying a plastic material to a 
metal wire through an extrusion process.
    Salt Bath Descaling involves removing surface oxides or scale 
from a part by immersing the part in a molten salt bath or hot salt 
solution. Salt bath descaling solutions can contain molten salts, 
caustic soda, sodium hydride, and chemical additives. Molten salt 
baths are used in a salt bath-water quench-acid dip sequence to 
remove oxides from stainless steel and other corrosion-resistant 
alloys. In this process, the part typically is immersed in the 
molten salt, quenched with water, and then dipped in acid. 
Oxidizing, reducing, or electrolytic salt baths can be used 
depending on the oxide to be removed. Wastewater generated during 
salt bath descaling includes spent process solutions, quenches, and 
rinses.
    Shot Tower--Lead Shot Manufacturing involves dropping molten 
lead from a platform on the top of a tower through a sieve-like 
device and into a vat of cold water.
    Soldering involves joining metals by inserting a thin (capillary 
thickness) layer of nonferrous filler metal into the space between 
them. Bonding results from the intimate contact produced by the 
metallic bond formed between the substrate metal and the solder 
alloy. The term soldering is used where the melting temperature of 
the filler is below 425 [deg]C (800 [deg]F). Some soldering 
operations use a solder flux, which is an aqueous or nonaqueous 
material used to dissolve, remove, or prevent the formation of 
surface oxides on the part. Except for the use of aqueous fluxes, 
soldering typically is a dry operation; however, a quench or rinse 
sometimes follows soldering to cool the part or remove excess flux 
or other foreign material from its surface. Recent developments in 
soldering technology have focused on fluxless solders and fluxes 
that can be cleaned off with water.
    Solder Flux Cleaning involves removing residual solder flux from 
a printed circuit board using either an alkaline or alcohol cleaning 
solution.
    Solder Fusing involves coating a tin-lead plated circuit board 
with a solder flux and then passing the board through a hot oil. The 
hot oil fuses the tin-lead to the board and creates a solder-like 
finish on the board.
    Solder Masking involves applying a resistive coating to certain 
areas of a circuit board to protect the areas during subsequent 
processing.
    Sputtering is a vacuum evaporation process in which portions of 
a coating material are physically removed from a substrate and 
deposited a thin film onto a different substrate.
    Stripping (Paint) involves removing a paint (or other organic) 
coating from a metal basis material. Stripping commonly is performed 
as part of the manufacturing process to recover parts that have been 
improperly coated or as part of maintenance and rebuilding to 
restore parts to a usable condition. Organic coatings (including 
paint) are stripped using thermal, mechanical, and chemical means. 
Thermal methods include burn-off ovens, fluidized beds of sand, and 
molten salt baths. Mechanical methods include scraping and abrasive 
blasting (as defined in ``Abrasive Blasting'' in appendix B of this 
part). Chemical paint strippers include alkali solutions, acid 
solutions, and solvents (e.g., methylene chloride). Wastewater 
generated during organic coating stripping includes process 
solutions (limited mostly to chemical paint strippers and rinses).
    Stripping (Metallic Coating) involves removing a metallic 
coating from a metal basis material. Stripping is commonly part of 
the manufacturing process to recover parts that have been improperly 
coated or as part of maintenance and rebuilding to restore parts to 
a usable condition. Metallic coating stripping most often uses 
chemical baths, although mechanical means (e.g., grinding, abrasive 
blasting) also are used. Chemical stripping frequently is performed 
as an aqueous electrolytic process. Wastewater generated during 
metallic coating stripping includes process solutions and rinses. 
Stripping solutions become contaminated from dissolution of the base 
metal. Typically, the entire solution is discharged to treatment. 
Rinsing is used to remove the corrosive film remaining on the parts.
    Thermal Infusion uses heat to infuse metal powder or dust onto 
the surface of a part. Typically, thermal infusion is a dry 
operation. In some cases, however, water may be used to remove 
excess metal powder, metal dust, or molten metal.
    Ultrasonic Machining involves forcing an abrasive liquid between 
a vibrating tool and a part. Particles in the abrasive liquid strike 
the part, removing any microscopic flakes on the part.
    Vacuum Impregnation is used to reduce the porosity of the part. 
A filler material (usually organic) is applied to the surface of the 
part and polymerized under pressure and heat. Wastewater is 
generated in this unit operation when rinse water is used to remove 
residual organic coating from the part.
    Vacuum Plating involves applying a thin layer of metal oxide 
onto a part using molten metal in a vacuum chamber.
    Water Shedder involves applying a dilute water-based chemical 
compound to a part to accelerate drying. This operation typically is 
used to prevent a part from streaking when excess water remains on 
the part.
    Wet Air Pollution Control involves using water to remove 
chemicals, fumes, or dusts that are entrained in air streams 
exhausted from process tanks or production areas. Most frequently, 
wet air pollution control devices are used with electroplating, 
cleaning, and coating processes. A common type of wet air pollution 
control is the wet packed scrubber consisting of a spray chamber 
that is filled with packing material. Water is continuously sprayed 
onto the packing and the air stream is pulled through the packing by 
a fan. Pollutants in the air stream are absorbed by the water 
droplets and the air is released to the atmosphere. A single 
scrubber often serves numerous process tanks; however, the air 
streams typically are segregated by source into chromium, cyanide, 
and acid/alkaline sources. Wet air pollution control can be divided 
into several suboperations, including:
    (1) Wet Air Pollution Control for Acid Alkaline Baths;
    (2) Wet Air Pollution Control for Cyanide Baths;
    (3) Wet Air Pollution Control for Chromium-Bearing Baths; and
    (4) Wet Air Pollution Control for Fumes and Dusts.
    Wire Galvanizing Flux involves using flux to remove rust and 
oxide from the surface of steel wire prior to galvanizing. This 
provides

[[Page 25745]]

long-term corrosion protection for the steel wire.

[FR Doc. 03-4258 Filed 5-12-03; 8:45 am]
BILLING CODE 6560-50-P