[Federal Register Volume 79, Number 158 (Friday, August 15, 2014)]
[Rules and Regulations]
[Pages 48299-48439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-12164]



[[Page 48299]]

Vol. 79

Friday,

No. 158

August 15, 2014

Part II





Environmental Protection Agency





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40 CFR Parts 122 and 125





National Pollutant Discharge Elimination System--Final Regulations To 
Establish Requirements for Cooling Water Intake Structures at Existing 
Facilities and Amend Requirements at Phase I Facilities; Final Rule

Federal Register / Vol. 79 , No. 158 / Friday, August 15, 2014 / 
Rules and Regulations

[[Page 48300]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 122 and 125

[EPA-HQ-OW-2008-0667, FRL-9817-3]
RIN 2040-AE95


National Pollutant Discharge Elimination System--Final 
Regulations To Establish Requirements for Cooling Water Intake 
Structures at Existing Facilities and Amend Requirements at Phase I 
Facilities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The purpose of this action is to reduce impingement and 
entrainment of fish and other aquatic organisms at cooling water intake 
structures used by certain existing power generation and manufacturing 
facilities for the withdrawal of cooling water from waters of the 
United States. This rule establishes requirements under section 316(b) 
of the Clean Water Act (CWA) for existing power generating facilities 
and existing manufacturing and industrial facilities that are designed 
to withdraw more than 2 million gallons per day (mgd) of water from 
waters of the United States and use at least 25 percent of the water 
they withdraw exclusively for cooling purposes. These national 
requirements, which will be implemented through National Pollutant 
Discharge Elimination System (NPDES) permits, apply to the location, 
design, construction, and capacity of cooling water intake structures 
(CWIS) at regulated facilities and provide requirements that reflect 
the best technology available (BTA) for minimizing adverse 
environmental impact. On April 20, 2011, EPA published a proposed rule 
that included several options for addressing these impacts. 
Subsequently, EPA published two Notices of Data Availability (NODA), on 
June 11, 2012 and June 12, 2012, that further clarified EPA's proposed 
approach. This final rule also responds to judicial remand of aspects 
of the previously promulgated Phase II and Phase III section 316(b) 
rules. In addition, EPA is also responding to an earlier judicial 
decision by removing from the previously promulgated Phase I new 
facility rule a restoration-based compliance alternative and the 
associated monitoring and demonstration requirements.

DATES: This regulation is effective October 14, 2014. For judicial 
review purposes, this final rule is promulgated as of 1 p.m. EDT 
(Eastern Daylight Time) on August 29, 2014 as provided in 40 CFR 23.2.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OW-2008-0667. All documents in the docket are listed on the 
www.regulations.gov Web site. Although listed in the index, some 
information is not publicly available, e.g., CBI (confidential business 
information) or other information whose disclosure is restricted by 
statute. Certain other material, such as copyrighted material, is not 
placed on the internet and will be publicly available only in hardcopy 
form. Publicly available docket materials are available either 
electronically through www.regulations.gov or in hardcopy at the Water 
Docket in the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 
Constitution Avenue NW., Washington, DC. The Public Reading Room is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The telephone number for the Public Reading Room is 
202-566-1744, and the telephone number for the Water Docket is 202-566-
2426.

FOR FURTHER INFORMATION CONTACT: For additional biological information, 
contact Tom Born at 202-566-1001; email: born.tom@epa.gov. For 
additional economic information, contact Wendy Hoffman at 202-564-8794; 
email: hoffman.wendy@epa.gov. For additional technical information, 
contact Paul Shriner at 202-566-1076; email: shriner.paul@epa.gov.

SUPPLEMENTARY INFORMATION:

What facilities are regulated by this action?

    This final rule applies to existing facilities that use cooling 
water intake structures to withdraw water from waters of the United 
States and have or require an NPDES (National Pollutant Discharge 
Elimination System) permit issued under section 402 of the CWA (Clean 
Water Act). Existing facilities subject to this regulation include 
those with a design intake flow (DIF) greater than 2 mgd. If a facility 
meets these conditions, it is subject to today's final regulations. If 
a facility has or requires an NPDES permit but does not meet the 2 mgd 
intake flow threshold, it is subject to permit conditions implementing 
CWA section 316(b), developed by the NPDES Permit Director on a case-
by-case basis using BPJ (best professional judgment) under 40 CFR 
125.90(b). This final rule defines the term cooling water intake 
structure to mean the total physical structure and any associated 
constructed waterways used to withdraw cooling water from waters of the 
United States. The cooling water intake structure extends from the 
point at which water is first withdrawn from waters of the United 
States source up to, and including, the intake pumps. Generally, 
facilities that meet these criteria fall into two major groups: steam 
electric generating facilities and manufacturing facilities. The final 
rule also makes limited changes to the requirements for Phase I 
facilities (i.e., new facilities).
    Exhibit 1 lists industry sectors of facilities subject to this 
final rule. This table is not intended to be exhaustive; facilities in 
other industries not listed in Exhibit 1 could also be regulated. The 
4-digit NAICS industry sectors may include 6-digit NAICS industry sub-
sectors with operations that are not dependent on cooling water.

[[Page 48301]]



                      Exhibit 1--Industry Sectors With Facilities Subject to the Final Rule
----------------------------------------------------------------------------------------------------------------
                                                              4-Digit NAICS industry
                         Category                                    sectors                NAICS definition
----------------------------------------------------------------------------------------------------------------
            Federal, State and Local Government              Electric Power Industry
----------------------------------------------------------------------------------------------------------------
                                                                                 2211  Electric Power
                                                                                        Generation, Transmission
                                                                                        and Distribution.
----------------------------------------------------------------------------------------------------------------
                         Industry                            Electric Power Industry
----------------------------------------------------------------------------------------------------------------
                                                                                 2211  Electric Power
                                                                                        Generation, Transmission
                                                                                        and Distribution.
----------------------------------------------------------------------------------------------------------------
                         Industry                             Primary Manufacturing
                                                                    Industries
----------------------------------------------------------------------------------------------------------------
                                                                                 3112  Grain and Oilseed
                                                                                        Milling.
                                                                                 3113  Sugar and Confectionery
                                                                                        Product Manufacturing.
                                                                                 3121  Beverage Manufacturing.
                                                                                 3221  Pulp, Paper, and
                                                                                        Paperboard Mills.
                                                                                 3222  Converted Paper Product
                                                                                        Manufacturing.
                                                                                 3241  Petroleum and Coal
                                                                                        Products Manufacturing.
                                                                                 3251  Basic Chemical
                                                                                        Manufacturing.
                                                                                 3252  Resin, Synthetic Rubber,
                                                                                        and Artificial Synthetic
                                                                                        Fibers and Filaments
                                                                                        Manufacturing.
                                                                                 3253  Pesticide, Fertilizer,
                                                                                        and Other Agricultural
                                                                                        Chemical Manufacturing.
                                                                                 3254  Pharmaceutical and
                                                                                        Medicine Manufacturing.
                                                                                 3256  Soap, Cleaning Compound,
                                                                                        and Toilet Preparation
                                                                                        Manufacturing.
                                                                                 3259  Other Chemical Product
                                                                                        and Preparation
                                                                                        Manufacturing.
                                                                                 3311  Iron and Steel Mills and
                                                                                        Ferroalloy
                                                                                        Manufacturing.
                                                                                 3312  Steel Product
                                                                                        Manufacturing from
                                                                                        Purchased Steel.
                                                                                 3313  Alumina and Aluminum
                                                                                        Production and
                                                                                        Processing.
----------------------------------------------------------------------------------------------------------------
                         Industry                                Other Industries
----------------------------------------------------------------------------------------------------------------
                                                                                 1119  Other Crop Farming.
                                                                                 2122  Metal Ore Mining.
                                                                                 3133  Textile and Fabric
                                                                                        Finishing and Fabric
                                                                                        Coating Mills.
                                                                                 3211  Sawmills and Wood
                                                                                        Preservation.
                                                                                 3314  Nonferrous Metal (except
                                                                                        Aluminum) Production and
                                                                                        Processing.
                                                                                 3322  Cutlery and Handtool
                                                                                        Manufacturing.
                                                                                 3329  Other Fabricated Metal
                                                                                        Product Manufacturing.
                                                                                 3364  Aerospace Product and
                                                                                        Parts Manufacturing.
                                                                                 3391  Medical Equipment and
                                                                                        Supplies Manufacturing.
----------------------------------------------------------------------------------------------------------------

    To determine whether a facility could be regulated by this action, 
one should carefully examine the applicability criteria in Sec.  125.91 
of the final rule. For information regarding the applicability of this 
action to an entity, consult the persons listed for technical 
information in FOR FURTHER INFORMATION CONTACT.

Supporting Documentation

1. Docket

    EPA has established an official public docket for this action under 
Docket ID EPA-HQ-OW-2008-0667. The official public docket consists of 
the documents specifically referenced in this action, any public 
comments received, and other information related to this action. 
Although a part of the official docket, the public docket does not 
include information claimed as Confidential Business Information (CBI) 
or other information, the disclosure of which, is restricted by 
statute. For information on how to access materials in the docket, see 
ADDRESSES above. To view docket materials, call ahead to schedule an 
appointment. Every user is entitled to copy 266 pages per day before 
incurring a charge. The Docket Center may charge $0.15 for each page 
over the 266-page limit, plus an administrative fee of $25.00.

2. Electronic Access

    You may access this Federal Register document and the docket 
electronically through the Web site http://www.regulations.gov by 
searching for Docket ID EPA-HQ-OW-2008-0667. For additional information 
about the public docket, visit the EPA Docket Center home page at 
http://www.epa.gov/epahome/dockets.htm.

3. Technical Support Documents

    The final regulation is supported by three major documents:
     Economic Analysis for the Final Section 316(b) Existing 
Facilities Rule (EPA-821-R-14-001), referred to as the EA throughout. 
This document presents the analysis of compliance costs, economic 
impacts, energy supply effects, and a summary of benefits associated 
with the final rule.
     Benefits Analysis for the Final Section 316(b) Existing 
Facilities Rule (EPA-821-R-14-005), referred to as the BA throughout. 
This document examines cooling water intake structure impacts and 
regulatory benefits at the regional and national levels.
     Technical Development Document for the Final Section 
316(b) Existing Facilities Rule (EPA-821-R-14-002), referred to as the 
TDD throughout. This document presents detailed information on the 
methods used to develop unit costs and describes the set of 
technologies that may be used to meet the final rule requirements.

Table of Contents

I. Executive Summary and Scope of Today's Rulemaking
    A. Executive Summary
    B. Scope of Today's Rulemaking
    C. General Applicability

[[Page 48302]]

    D. What is an ``existing facility'' for purposes of the final 
rule?
    E. What is ``cooling water'' and what is a ``cooling water 
intake structure?''
    F. Would my facility be covered only if it is a point source 
discharger?
    G. Would my facility be covered if it withdraws water from 
waters of the united states? What if my facility obtains cooling 
water from an independent supplier?
    H. What intake flow thresholds result in an existing facility 
being subject to the final rule?
    I. What are the requirements for existing offshore oil and gas 
facilities, offshore seafood processing facilities or LNG terminals 
BTA requirements under the final rule?
    J. What is a ``new unit'' and how are new units addressed under 
the final rule?
    K. Amendments related to the phase I rule
II. Legal Authority for and Background of the Final Regulation
    A. Legal Authority
    B. Purpose of the Regulation
    C. Background
III. Environmental Effects Associated With Cooling Water Intake 
Structures
    A. Introduction
    B. Major Anthropogenic Stressors in Aquatic Ecosystems
    C. Effects of CWIS on Aquatic Ecosystems
    D. Community--Level or Indirect Effects of CWIS
    E. Cumulative Effects of Multiple Facilities
IV. Summary Description of the Final Rule
    A. BTA Standard for Impingement Mortality for Existing Units at 
Existing Facilities
    B. BTA Standard for Entrainment for Existing Units at Existing 
Facilities
    C. BTA Standard for Impingement Mortality and Entrainment for 
New Units at Existing Facilities
    D. Other Provisions
V. Summary of Data Updates and Revisions to the Proposed Rule
    A. Data Updates
    B. Regulatory Approach and Compliance
    C. New Units
VI. Basis for the Final Regulation
    A. EPA's Approach to BTA
    B. Overview of Final Rule Requirements
    C. Technologies Considered To Minimize Impingement and 
Entrainment
    D. Technology Basis for Today's Final Rule
    E. Option Selection
    F. Other Options Considered for Today's Final Regulation
    G. Final Rule BTA Performance Standards
    H. Economic and Benefit Analysis for the Final Rule
    I. Site-Specific Consideration of Entrainment Controls
VII. Response to Major Comments on the Proposed Rule and Notices of 
Data Availability (NODAs)
    A. Scope and Applicability
    B. Proposed Amendments Related to Phase I Rule
    C. Environmental Impact Associated With Cooling Water Intake 
Structures
    D. EPA's Approach to BTA
    E. BTA Performance Standards
    F. Implementation
    G. Costs
    H. Monitoring and Reporting
    I. Endangered Species Act
VIII. Implementation
    A. When does the final rule become effective and how are the 
requirements sequenced in an orderly way?
    B. How does the final rule reduce biological monitoring 
requirements?
    C. What information will I be required to submit to the director 
when I apply for my NPDES permit?
    D. When are permit application studies due?
    E. How will the director determine the best technology available 
for minimizing adverse environmental impacts?
    F. What are example permit conditions and compliance monitoring 
for impingement mortality?
    G. What monitoring is required for entrainment?
    H. What reports am I required to submit?
    I. What records will I be required to keep?
    J. What are the respective Federal, State, and Tribal roles?
    K. Protection of Endangered and Threatened Species and 
Designated Critical Habitat
    L. Permits for Existing Facilities are Subject to Requirements 
under Other Federal Statutes
IX. Cost Development and Economic Impact Analysis
    A. Overview of Costs to Regulated Facilities and Federal and 
State Governments
    B. Development of Compliance Costs
    C. Social Costs
    D. Economic Impacts
    E. Employment Effects
X. Benefits Analysis
    A. Introduction
    B. Regional Study Design
    C. Physical Impacts of Impingement Mortality and Entrainment
    D. National Benefits of the Final Rule and Options Considered
XI. Related Acts of Congress, Executive Orders, and Agency 
Initiatives
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Executive Order 13158: Marine Protected Areas
    L. Congressional Review Act

I. Executive Summary and Scope of Today's Rulemaking

A. Executive Summary

1. Summary of the Major Provisions of the Regulatory Action
    This rule establishes requirements under section 316(b) of the 
Clean Water Act (CWA) for existing power generating facilities and 
existing manufacturing and industrial facilities that withdraw more 
than 2 million gallons per day (mgd) of water from waters of the United 
States and use at least 25 percent of the water they withdraw 
exclusively for cooling purposes. These national requirements, which 
will be implemented through National Pollutant Discharge Elimination 
System (NPDES) permits, apply to the location, design, construction, 
and capacity of cooling water intake structures (CWIS) at regulated 
facilities by setting requirements that reflect the best technology 
available (BTA) for minimizing adverse environmental impact.\1\ On 
April 20, 2011, EPA published a proposed rule that included several 
options for addressing these impacts. EPA published two Notices of Data 
Availability (NODA), on June 11, 2012 and June 12, 2012, that further 
clarified EPA's approach. This final rule constitutes EPA's response to 
the remand of the Phase II and Phase III rules. In addition, EPA is 
also responding to the decision in Riverkeeper I to remove from the 
Phase I new facility rule the restoration-based compliance alternative 
and the associated monitoring and demonstration requirements.
---------------------------------------------------------------------------

    \1\ As noted here, the term BTA means ``best technology 
available for minimizing adverse environmental impact.'' In the 
interests of brevity, the acronym will frequently be used in the 
preamble to reflect the entire definition.
---------------------------------------------------------------------------

2. Need for the Rule
    Cooling water is withdrawn for the purpose of dissipating waste 
heat from industrial processes. Over half of all water withdrawn in the 
United States each year is for cooling purposes. By far, the largest 
industrial use of cooling water is for thermoelectric generation, but 
cooling water is also used in the manufacture of aluminum, chemicals 
and allied products, food and kindred products, pulp and paper, refined 
petroleum products, and steel, as well as in other industries. Although 
newer designs are more efficient, the long life of the capital 
equipment in these industries suggests that the adverse environmental 
impacts could continue for decades. Electric generators, for

[[Page 48303]]

example, typically convert 30 to 40 percent of the heat content of 
their fuel to electricity, depending on their fuel source, age of their 
facility, and capacity utilization (see TDD 5.1). The purpose of 
cooling water withdrawals is to dissipate that portion of the heat that 
is a by-product of industrial processes that facilities have not used 
and therefore view as waste heat.
    The withdrawal of cooling water by existing facilities removes and 
kills hundreds of billions of aquatic organisms from waters of the 
United States each year, including plankton (small aquatic animals, 
including fish eggs and larvae), fish, crustaceans, shellfish, sea 
turtles, marine mammals, and many other forms of aquatic life. Most 
impacts are to early life stages of fish and shellfish. Aquatic 
organisms drawn into CWIS are either impinged (I) on components of the 
intake structure or entrained (E) in the cooling water system itself. 
In CWA section 316(b) and in this rulemaking, these impacts are 
referred to as adverse environmental impact (AEI). Rates of I&E depend 
on species characteristics, the facility's environmental setting, and 
the location, design, construction and capacity of the facility's CWIS. 
In addition to direct losses of aquatic organisms from I&E, a number of 
indirect, ecosystem-level effects may also occur, including (1) 
disruption of aquatic food webs resulting from the loss of impinged and 
entrained organisms that provide food for other species, (2) disruption 
of nutrient cycling and other biochemical processes, (3) alteration of 
species composition and overall levels of biodiversity, and (4) 
degradation of the overall aquatic environment. In addition to the 
impacts of a single CWIS on currents and other local habitat features, 
environmental degradation can result from the cumulative impact of 
multiple intake structures operating in the same watershed or intakes 
located within an area where intake effects interact with other 
environmental stressors. Finally, although it is difficult to measure, 
the compensatory ability of an aquatic population, which is the 
capacity for a species to increase survival, growth, or reproduction 
rates in response to decreased population, is likely compromised by I&E 
and the cumulative impact of other stressors in the environment over 
extended periods of time.
    The beneficiaries of fish protection at cooling water intakes 
include fisherman, both recreational and commercial, and people 
interested in well-functioning and healthy aquatic ecosystems. While 
most people consume electricity, they consume electricity in differing 
amounts, and may not be uniformly interested in, or willing to pay for, 
fish protection. Thus, there is imperfect overlap between those who 
could be required to pay for fish protection and those who would 
benefit from fish protection. Those who desire more fish protection 
have extremely limited opportunities in which they can express their 
willingness to pay for fish protection in market transactions that 
result in fish protection. In addition, deregulation in the electric 
industry has made it more difficult for merchant power producers to 
both remain competitive and pass along to consumers costs associated 
with fish protection, relative to rate-regulated electric utilities 
that are vertically integrated.
    Fish protection at cooling water intakes is also variable, based on 
species and their migrations, waterbody, size of a cooling water 
intake, presence of multiple facilities on a waterbody, and many more 
variables that are highly site specific. In addition, given the history 
of litigation around this section of the Clean Water Act, states have, 
in some instances, administratively continued permits while awaiting 
final Federal action, and thus fish protection has been delayed, in 
some instances for decades.
    Promulgation of today's final rule will complete EPA's regulations 
under section 316(b) of the Clean Water Act. This rule includes a 
national performance standard as the BTA to address impingement 
mortality (IM) at existing CWIS. This national standard for impingement 
reflects EPA's assessment that impingement reduction technology is 
available, feasible and demonstrated, and thus BTA for existing 
facilities. The impingement mortality standard is based on modified 
traveling screens with fish returns and includes a performance standard 
as one compliance alternative, but also offers six other compliance 
alternatives that are equivalent or better in performance. With regard 
to entrainment, this rule contains a national BTA standard that is a 
process for a site-specific determination of entrainment mitigation 
requirements at existing CWIS. The entrainment provision reflects EPA's 
assessment that there is no single technology basis that is BTA for 
entrainment at existing facilities, but instead a number of factors 
that are best accounted for on a site-specific basis. Site-specific 
decision making may lead to a determination by the NPDES permitting 
authority that entrainment requirements should be based on variable 
speed pumps, water reuse, fine mesh screens, a closed-cycle 
recirculating system, or some combination of technologies that 
constitutes BTA for the individual site. The site-specific decision-
making may also lead to no additional technologies being required.
    In addition to the above provisions, which apply to existing units 
at existing facilities, the rule establishes a BTA standard, for both 
impingement mortality and entrainment, for new units at existing 
facilities. Under this standard, new units at existing facilities will 
be subject to requirements similar to the section 316(b) requirements 
for new facilities subject to the previously promulgated Phase I rule.
    In addition, there is a need to regulate even those facilities that 
adopt the most effective technology. Closed-cycle cooling is a 
technology that recirculates cooling water, reducing withdrawals from 
surface waters. Closed-cycle cooling can reduce water withdrawals by at 
least 95 percent, compared to once-through cooling, but is itself 
capital intensive. Facilities that retrofit to closed-cycle cooling 
without also modifying their condenser may not be able to operate at 
full capacity during summer peak periods of electricity demand 
(replacing the condenser would require longer outages). Operators who 
retrofit closed-cycle cooling systems have a financial incentive not to 
run their system in closed-cycle mode during summer months. Thus, 
decision making at facilities that use cooling water may not take 
society's preferences for fish protection into account in their 
actions.
    EPA notes that some facilities have installed, and some NPDES 
permits require, controls that protect aquatic organisms from 
impingement and entrainment. Facilities may have adopted controls as 
good stewards. Directors may have required controls to meet state water 
quality standards, particularly with regard to temperature. Based on 
our evaluation of available evidence, these actions have not been 
widespread enough to discourage cooling water withdrawals from waters 
where they have the greatest impact on aquatic organisms.
3. Costs and Benefits
    As presented in Exhibit I-1, EPA assessed the expected costs to 
society for complying with the final rule, accounting for both the 
existing CWIS unit provision and the new unit provision, as $275 
million and $297 million per year at the 3 percent and 7 percent 
discount rates, respectively. These costs reflect permit applications, 
studies, recordkeeping, monitoring, and reporting required by the rule. 
The costs also include costs of technologies for

[[Page 48304]]

complying with the BTA for IM. The cost of additional technologies that 
may be required to meet the site-specific BTA for entrainment are not 
included in this analysis because, as explained in Section VII, EPA 
cannot estimate, with any level of certainty, what site-specific 
determinations will be made based on the analyses that will be 
generated as a result of the national BTA standard for entrainment 
decision-making established by today's rule.
    EPA estimates that today's final rule--including standards for both 
existing units and new units at existing facilities--will achieve 
monetized benefits to society of $33 million and $29 million annually, 
again depending on the discount rate. This estimate of benefits omits 
important categories of benefits that EPA expects the rule will 
achieve, such as most of the benefits associated with fish other than 
commercially and recreationally harvested fish. As a result, these 
estimates are likely to understate substantially the rule's expected 
benefits to society. In estimating the benefits of today's rule, EPA 
did not rely on the results of the stated preference survey conducted 
by the Agency and described in the June 12, 2012 Notice of Data 
Availability (77 FR 34927 (June 12, 2012)). Included in the monetized 
benefits is EPA's estimate that the final rule will reduce greenhouse 
gas (GHG) emissions by 9.3 million tons of CO2-equivalent 
emissions over the 40-year compliance period for this analysis. Based 
on this reduction in GHG emissions, EPA estimates benefits to society 
(based on social cost of carbon (DCN \2\ 12-4853)) ranging from $12 
million to $13 million annually (see Section 9 of the BA), depending on 
the discount rate and other assumptions in the social cost of carbon 
analysis.
---------------------------------------------------------------------------

    \2\ DCN refers to a document control number. An index of DCNs 
can be found in the docket for this action.

  Exhibit I-1--Total Annualized Social Costs and Benefits for the Final
                                  Rule
                       [in millions, 2011 dollars]
------------------------------------------------------------------------
                                     Existing
                                      units      New units      Total
------------------------------------------------------------------------
Using 3 percent discount rate:
    Social Costs.................       $272.4         $2.5       $274.9
    Social Benefits..............         33.0         -0.2         32.8
Using 7 percent discount rate:
    Social Costs.................        295.3          2.0        297.3
    Social Benefits..............         28.7         -0.1         28.6
------------------------------------------------------------------------

    EPA expects that the final rule will have relatively minor economic 
impacts on the regulated facilities, the entities that own them, and 
the overall electric power sector, which is the industry most affected 
by today's rule. Under the rule's existing unit provisions, EPA 
estimates that a substantial majority (86 percent) of electric 
generators will incur compliance costs of less than 1 percent of 
revenue, indicating the minor impact of the rule on these facilities.
    EPA also expects very small impacts on the non-power sector 
component of regulated facilities. EPA estimates that 504 out of 509 
facilities will incur costs less than one percent of revenue, five will 
incur costs between one and three percent, and none will incur costs 
greater than 3 percent. In addition, EPA estimates that no 
manufacturing facilities will close as a result of today's rule, and 
that only 12 facilities in the non-power sector component will 
experience moderate financial stress short of closure. These 12 
facilities represent approximately 3 percent of the estimated total 
regulated facilities in the non-power sector component.
    At the level of the entities that own regulated facilities, EPA 
estimates that 91 to 94 percent of entities owning regulated facilities 
in the electric power sector will incur compliance costs of less than 1 
percent of revenue under the rule's existing unit provisions. Likewise, 
for the non-power sector component of regulated facilities, EPA 
estimates that 90 to 95 percent of entities owning regulated facilities 
will incur compliance costs of less than 1 percent of revenue under the 
rule's existing unit provisions.
    Finally, EPA estimates that today's rule will have a minor impact 
on the overall electric power sector and electricity consumers. EPA 
estimates that the rule will not affect national or regional 
electricity markets on a long-term basis. In addition, EPA expects 
there to be no effects of the final rule on the reliability of 
electricity generation, transmission and distribution. In terms of 
consumer impacts, EPA estimates, on average, across the United States, 
that the final rule will increase electricity production costs by 0.009 
cents per kWh, causing an estimated 0.1 percent increase in average 
electricity prices. The corresponding annual increase in electricity 
costs is approximately $1.03 per household.

B. Scope of Today's Rulemaking

    Today's final rule represents the last stage in EPA's efforts to 
implement section 316(b) of the CWA. In the course of their operations, 
electric power facilities and certain manufacturing facilities use 
large amounts of water either for cooling purposes or in their 
manufacturing processes. Such facilities typically remove water from 
nearby sources using ``cooling water intake structures.'' The 
structures associated with water removal pose a number of threats to 
the environment. Principally, aquatic organisms are squashed against 
intake screens--impingement--or drawn into the cooling system--
entrainment. Section 316(b) requires EPA to develop standards for 
cooling water intakes structures.
    Today's final rule establishes national requirements applicable to 
the location, design, construction, and capacity of cooling water 
intake structures at existing facilities that reflect the BTA for 
minimizing the adverse environmental impacts- impingement and 
entrainment--associated with the use of these structures. It represents 
the culmination of EPA's efforts to implement section 316(b) and, as 
such, fulfills EPA's obligation under a settlement agreement entered in 
the United States District Court for the Southern District of New York 
in Riverkeeper Inc., et al. v. Jackson, No. 93 Civ. 0314 (AGS). (For a 
more detailed discussion of the settlement agreement, see Section 
II.C.)
    This final rule establishes requirements for all existing 
facilities with a DIF (design intake flow) of more

[[Page 48305]]

than 2 mgd. EPA estimates that a total of 1,065 facilities will be 
subject to the final rule, including 544 Electric Generators, 509 
Manufacturers in six Primary Manufacturing Industries, and 12 
Manufacturers in Other Industries. The rule also clarifies the 
definition and requirements for new units at existing facilities. The 
applicable requirements are summarized in Exhibits I-2 and I-3.

         Exhibit I-2--Applicability by Phase of the 316(b) Rules
------------------------------------------------------------------------
   Facility characteristic                  Applicable rule
------------------------------------------------------------------------
New power-generating or        Phase I rule.
 manufacturing facility.
New offshore oil and gas       Phase III rule.
 facility.
New unit at an existing power- This rule.
 generating or manufacturing
 facility.
Existing power-generating or   This rule.
 manufacturing facility.
Existing offshore oil and gas  This rule (site-specific, BPJ).
 facility and offshore
 seafood processing
 facilities.
------------------------------------------------------------------------


    Exhibit I-3--Applicable Requirements of Today's Rule for Existing
                               Facilities
------------------------------------------------------------------------
        Facility characteristic              Applicable requirements
------------------------------------------------------------------------
Existing facility with a DIF greater     Impingement mortality standards
 than 2 mgd and an AIF (actual intake     at Sec.   125.94(c) and site-
 flow) greater than 125 mgd.              specific entrainment
                                          requirements under the
                                          entrainment standards at Sec.
                                           125.94(d) (Additional study
                                          requirements at Sec.
                                          122.21(r)(1)(ii)(B)).
Existing facility with a DIF greater     Impingement mortality standards
 than 2 mgd but AIF not greater than      at Sec.   125.94(c) and site-
 125 mgd.                                 specific entrainment
                                          requirements under the
                                          entrainment standards at Sec.
                                           125.94(d).
New unit at an existing facility where   Impingement mortality and
 the facility has a DIF greater than 2    entrainment standards for new
 mgd.                                     units at Sec.   125.94(e).
Other existing facility with a DIF of 2  Case-by-case BPJ permitting per
 mgd or smaller or that has an intake     Sec.   125.90(b).
 structure that withdraws less than 25
 percent of the water for cooling
 purposes on an actual intake flow
 basis.
------------------------------------------------------------------------

    At an early stage in the development of section 316(b) 
requirements, EPA divided its rulemaking effort into three phases. The 
first addressed new facilities, the second, large existing electricity 
utility facilities and the third, the remaining electric generating 
facilities not addressed in the earlier phases as well as existing 
manufacturing operations. As EPA's analysis progressed, however, it 
became clear that it could address in one rulemaking cooling water 
intake structures at both existing steam electric generating and 
manufacturing facilities. From a biological perspective, the effect of 
intake structures on impingement and entrainment \3\ does not differ 
depending on whether an intake structure is associated with a power 
plant or a manufacturer. In 2009, following judicial challenge of the 
Phase II rule, EPA asked the U.S. Court of Appeals for the Second 
Circuit to remand the rule to the Agency for further action consistent 
with a decision by the U.S. Supreme Court in Entergy Corp. v. 
Riverkeeper, Inc. and the Second Circuit's decision on the Phase II 
rule in Riverkeeper, Inc. v. EPA, 475 F.3d 83 (2d cir. 2007). In 2009, 
EPA also asked the U.S. Court of Appeals for the Fifth Circuit to 
remand certain aspects of EPA's Phase III rule that were before it in a 
petition for review. Today's rule responds to these remands as well to 
the Second Circuit's remand of limited aspects of the Phase I section 
316(b) rule in Riverkeeper Inc. v. Johnson, 358 F.3d 174 (2nd Cir. 
2004). EPA has here consolidated the universe of potentially regulated 
facilities from the remanded 2004 Phase II rule with the existing 
facilities in the remanded 2006 Phase III rule for establishing 
requirements in a single proceeding.
---------------------------------------------------------------------------

    \3\ Throughout the preamble and support documents, the terms 
``entrainment'' and ``entrainment mortality'' may be used 
interchangeably. As described below, EPA continues to assume that, 
in most instances, entrainment mortality is 100 percent, leaving 
little distinction between the two terms.
---------------------------------------------------------------------------

C. General Applicability

    This rule applies to owners and operators of existing facilities 
\4\ that meet all following criteria:
---------------------------------------------------------------------------

    \4\ Throughout the preamble, the terms ``owner or operator of a 
facility'' and ``facility'' may be used interchangeably. In cases 
where the preamble may state that a facility is required to do a 
given activity, it should be interpreted as the owner or operator of 
the facility is required to do the activity.
---------------------------------------------------------------------------

     The facility is a point source that uses or, in the case 
of new units at an existing facility, proposes to use cooling water 
from one or more cooling water intake structures, including a cooling 
water intake structure operated by an independent supplier not 
otherwise subject to 316(b) requirements that withdraws water from 
waters of the United States and provides cooling water to the facility 
by any sort of contract or other arrangement;
     The facility-wide DIF for all cooling water intake 
structures at the facility is greater than 2 mgd;
     The cooling water intake structure withdraws cooling water 
from waters of the United States; and
     At least 25 percent of the water actually withdrawn--
actual intake flow (AIF)--is used exclusively for cooling purposes.
    A facility may choose to demonstrate compliance with the final rule 
for the entire facility, or for each individual cooling water intake 
structure.
    EPA is adopting provisions that promote the reuse of water from 
certain sources for cooling and that ensure that the rule does not 
discourage the reuse of cooling water for other uses such as process 
water. For example, the final rule at Sec.  125.91(c) specifies that 
obtaining cooling water from a public water system, using reclaimed 
water from wastewater treatment facilities or desalination plants, or 
recycling treated process wastewater effluent (such as wastewater 
treatment plant ``gray'' water) does not constitute use of a cooling 
water intake structure for purposes of this rule. In addition, the 
definition of cooling water at Sec.  125.92 provides that cooling water 
obtained from a public water system, reclaimed water from wastewater 
treatment facilities or desalination plants, treated effluent from a 
manufacturing facility, or cooling water that is used in a 
manufacturing process either before or

[[Page 48306]]

after it is used for cooling as process water is not considered cooling 
water for the purposes of calculating the percentage of a facility's 
intake flow that is used for cooling purposes. Therefore, water used 
for both cooling and non-cooling purposes does not count toward the 25 
percent threshold. Examples of water withdrawn for non-cooling purposes 
includes water withdrawn for warming by LNG (liquefied natural gas) 
facilities and water withdrawn for public water systems by 
desalinization facilities.
    Today's rule focuses on those facilities that are significant users 
of cooling water. The rule provides that only those facilities that use 
25 percent or more of the water withdrawn exclusively for cooling 
purposes (on an actual intake flow basis) are subject to the rule. EPA 
previously considered a number of cut-points or approaches for focusing 
the applicability of the rule (66 FR 28854, May 25, 2001 and 66 FR 
65288, December 18, 2001). EPA used the 25 percent threshold in each of 
the Phase I, II, and III rules. For this rule, EPA did not receive any 
new data supporting a different threshold or identify new approaches to 
the applicability of the rule. Consequently, EPA is adopting 25 percent 
as the threshold for the percent of flow used for cooling purposes to 
ensure that a large majority of cooling water withdrawn from waters of 
the United States are subject to the rule's requirements for minimizing 
adverse environmental impact. Because power-generating facilities 
typically use far more than 25 percent of the water they withdraw 
exclusively for cooling purposes, the 25 percent threshold will ensure 
that intake structures accounting for nearly all cooling water used by 
the power sector are addressed by today's rule requirements. While 
manufacturing facilities often withdraw water for more purposes than 
cooling, the majority of the water is withdrawn from a single intake 
structure. Once water passes through the intake, water can be 
apportioned to any desired use, including uses that are not related to 
cooling. However, as long as at least 25 percent of the water is used 
exclusively for cooling purposes, the intake is subject to the 
requirements of today's rule. EPA estimates that approximately 70 
percent of manufacturers and 87 percent of power-generating facilities 
that meet the first three criteria for applicability outlined above 
also use 25 percent or more of intake water for cooling and thus are 
subject to today's rule. (See 66 FR 65288, December 18, 2001.)
    For facilities that are below any of the applicability thresholds 
in today's rule--for example, a facility that withdraws less than 25 
percent of the intake flow for cooling purposes--the Director must set 
appropriate requirements on a case-by-case basis, using BPJ, based on 
Sec.  125.90(b). Today's rule is not intended to constrain permit 
writers at the Federal, State, or Tribal level, from addressing such 
cooling water intake structures. Also, EPA decided to adopt for the 
final rule the proposed provision that requires the owners and 
operators for certain categories of facilities (existing offshore oil 
and gas facilities, existing offshore seafood processing facilities and 
offshore LNG terminals) to meet case-by-case BTA impingement and 
entrainment requirements, established by the Director. Such facilities 
are subject to permit conditions implementing CWA section 316(b) if the 
facility is a point source that uses a cooling water intake structure 
and has, or is required to have, an NPDES permit.

D. What is an ``existing facility'' for purposes of the final rule?

    In today's rule, EPA is defining the term ``existing facility'' to 
include any facility subject to section 316(b) that is not a ``new 
facility'' as defined in 40 CFR 125.83 (the Phase I rule).
    A point source discharger would be subject to Phase I or today's 
rule even if the cooling water intake structure it uses is not located 
at the facility.\5\ In addition, modifications or additions to the 
cooling water intake structure (or even the total replacement of an 
existing cooling water intake structure with a new one) does not 
convert an otherwise unchanged existing facility into a new facility, 
regardless of the purpose of such changes (e.g., to comply with today's 
rule or to increase capacity). Rather, the determination as to whether 
a facility is new (Phase I) or existing (today's rule) focuses on 
whether or not it is a greenfield or stand-alone facility whose 
processes are substantially independent of an existing facility, and 
whether or not there are changes to the cooling water intake. New 
facility does not include new units that are added to a facility for 
purposes of the same general industrial operation. For example, a new 
peaking unit at an existing electrical generating station is not a new 
facility (40 CFR 125.83). The distinction between an existing facility 
and a new facility is separate from the distinction between an existing 
unit at an existing facility and a new unit at an existing facility, 
which is discussed at greater length in Section J below.
---------------------------------------------------------------------------

    \5\ For example, a facility might purchase its cooling water 
from a nearby facility that owns and operates a cooling water intake 
structure.
---------------------------------------------------------------------------

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

    EPA has slightly revised the definition of cooling water intake 
structure from proposal for today's rule. In today's final rule, a 
cooling water intake structure is defined as the total physical 
structure and any associated constructed waterways used to withdraw 
cooling water from waters of the United States. Under the definition in 
today's rule, the cooling water intake structure extends from the point 
at which water is first withdrawn from Waters of the United States up 
to, and including, the intake pumps. The final rule at Sec.  125.91(c) 
also specifies that obtaining cooling water from a public water system, 
using reclaimed water from wastewater treatment facilities (such as 
wastewater treatment plant ``gray'' water) or desalination plants, or 
recycling treated process wastewater effluent does not constitute use 
of a cooling water intake structure for purposes of applicability of 
this rule. As a point of clarification, facilities subject to today's 
rule may choose to use another entity's treated wastewater as a source 
of cooling water, thereby reducing cooling water withdrawals and 
associated impingement and entrainment. EPA notes that because the 
entity providing the wastewater for cooling has already treated it to 
meet any applicable discharge requirements (e.g., otherwise applicable 
effluent limitations guidelines and standards, water quality standards, 
etc.), EPA is not concerned that this provision will lead to pollutant 
discharges that would not have occurred if the treated effluent had 
been discharged by the other entity.
    Today's rule adopts the new facility rule's definition of cooling 
water as water used for contact or noncontact cooling, including water 
used for equipment cooling, evaporative cooling tower makeup, and 
dilution of effluent heat content. The definition specifies that the 
intended use of cooling water is to absorb waste heat [not being 
efficiently used or recaptured for production and thus] rejected from 
the process or processes used or from auxiliary operations on the 
facility's premises. The definition also indicates that cooling water 
obtained from a public water system, reclaimed water from wastewater 
treatment facilities or desalination plants, treated effluent from a 
manufacturing facility, or cooling water that is used in a 
manufacturing process either before or after it is used for cooling as 
process water would not

[[Page 48307]]

be considered cooling water for the purposes of determining whether 25 
percent or more of the actual intake flow is cooling water. This 
clarification is necessary because cooling water intake structures 
typically bring water into a facility for numerous purposes, including 
industrial processes; use as circulating water, service water, or 
evaporative cooling tower makeup water; dilution of effluent heat 
content; equipment cooling; and air conditioning. Note, however, that 
all intake water (including cooling and non-cooling process) is 
included in the determination as to whether the 2 mgd DIF threshold for 
covered intake structures is met.

F. Would my facility be covered only if it is a point source 
discharger?

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

G. Would my facility be covered if it withdraws water from waters of 
the united states? what if my facility obtains cooling water from an 
independent supplier?

    The requirements in today's rule apply to cooling water intake 
structures that have the design capacity to withdraw amounts of water 
greater than 2 mgd from waters of the United States. Waters of the 
United States include the broad range of surface waters that meet the 
regulatory definition at 40 CFR 122.2 and 40 CFR 230.3, which includes 
lakes, ponds, reservoirs, nontidal rivers or streams, tidal rivers, 
estuaries, fjords, oceans, bays, and coves. These potential sources of 
cooling water can be adversely affected by impingement and entrainment.
    Some facilities use an impoundment such as a man-made pond or 
reservoir as part of a cooling system. Cooling water is withdrawn from 
the pond or reservoir at one point and heated water is discharged to a 
different point, using mixing and evaporative processes. As explained 
above, section 316(b) and today's final rule apply only to withdrawals 
of cooling water from waters of the United States; accordingly, to the 
extent a facility withdraws cooling water from a pond or reservoir that 
is not itself a water of the United States and does not withdraw any 
make-up water from waters of the U.S., the requirements of today's rule 
do not apply to such systems. Impoundments that are not constructed 
from a waters of the U.S. but do withdraw make-up water from waters of 
the U.S. can be closed-cycle recirculating systems subject to the 
requirements of today's rule, provided that withdrawal for make-up 
water is minimized.
    Facilities that withdraw cooling water from impoundments that are 
in whole or in part waters of the United States and that meet the other 
criteria for coverage (including the requirement that the facility has 
or will be required to obtain an NPDES permit) are subject to today's 
rule. In today's rule, the agency is defining the term closed-cycle 
recirculating system to include, at Sec.  125.92(c)(2), a system with 
impoundments of waters of the U.S. where the impoundment was lawfully 
created \6\ for the purpose of serving as part of the cooling water 
system. In determining whether an impoundment qualifies as a closed-
cycle recirculating system, the Director will determine whether the 
make-up water withdrawals for such a system have been minimized. In 
many cases, EPA expects that such make-up water withdrawals are 
commensurate with the flows of a closed-cycle cooling tower. Some of 
these impoundments may qualify for the waste treatment exclusion found 
in the definition of a waste treatment system at 40 CFR 122.2, and this 
rule does not affect the applicability of that exclusion.
---------------------------------------------------------------------------

    \6\ The owner or operator of the facility would provide 
documentation such as the project purpose statement for the Clean 
Water Act section 404 permit obtained to construct the impoundment. 
If the impoundment was created prior to the CWA requirement to 
obtain a section 404 permit, the owner or operator would provide any 
other license or permit obtained to lawfully construct the 
impoundment for the purposes of a cooling water system.
---------------------------------------------------------------------------

    EPA does not intend for this rule to change the regulatory status 
of impoundments. Impoundments are addressed in the definition of waters 
of the United States at 40 CFR 122.2 and 40 CFR 230.3. The 
determination whether an impoundment is a water of the United States is 
to be made by the Director on a site-specific basis. The EPA and the 
U.S. Army Corps of Engineers have jointly issued jurisdictional 
guidance concerning the term waters of the United States in light of 
the Supreme Court's decision in Solid Waste Agency of Northern Cook 
County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). A 
copy of that guidance was published as an Appendix to an Advanced 
Notice of Proposed Rulemaking on the definition of the phrase waters of 
the United States, see 68 FR 1991, January 15, 2003, which is at http://www.epa.gov/owow/wetlands/pdf/ANPRM-FR.pdf. The agencies additionally 
published guidance in 2008 regarding the term waters of the United 
States in light of both the SWANCC and subsequent Rapanos case (Rapanos 
v. United States, 547 U.S. 715 (2006)). The EPA published a proposed 
revision to the definition of ``Waters of the United States'' under the 
Clean Water Act on April 21, 2014 (see 79 FR 22188).
    EPA recognizes that some impoundments may be man-made waterbodies 
that support artificially managed and stocked fish populations. As a 
result, EPA has included a provision in today's final rule to allow the 
Director to waive certain permit application requirements for such 
facilities. Note, however, that these facilities are still subject to 
the final rule.
    EPA acknowledges that the point of compliance for facilities 
located on

[[Page 48308]]

impoundments may also vary depending on where the facility withdraws 
from a water of the United States. Again, only cooling water systems 
with withdrawals of cooling water from waters of the United States are 
covered by section 316(b) and today's rule. Because a facility may 
withdraw cooling water from a water of the United States either 
directly or as makeup water for a closed-cycle cooling system, the 
Director may determine where within a facility's cooling water intake 
structure is or are the facility's point or points of compliance.
    The Agency recognizes that some facilities that have or are 
required to have an NPDES permit might not own and operate the intake 
structure that supplies their facility with cooling water. In 
addressing facilities that have or are required to have an NPDES permit 
that do not directly control the intake structure that supplies their 
facility with cooling water, Sec.  125.91 provides (similar to the new 
facility rule) that facilities that obtain cooling water from a public 
water system, use reclaimed water from a wastewater treatment facility 
or desalinization plant, or use treated effluent are not deemed to be 
using a cooling water intake structure for purposes of this rule. 
However, obtaining water from another entity that is withdrawing water 
from a water of the United States will be counted as using a cooling 
water intake structure for purposes of determining whether an entity 
meets the threshold requirements of the rule. For example, facilities 
operated by separate entities might be located on the same, adjacent, 
or nearby property. One of these facilities might take in cooling water 
and then transfer it to other facilities that discharge to a water of 
the United States. Section 125.91(b) specifies that use of a cooling 
water intake structure includes obtaining cooling water by any sort of 
contract or arrangement with one or more independent suppliers of 
cooling water if the supplier or suppliers withdraw water from waters 
of the United States but that is not itself a new or existing facility 
subject to CWA section 316(b), except if it is a public water system, a 
wastewater treatment facility or desalination plant providing reclaimed 
water, or a facility providing treated effluent for reuse as cooling 
water pursuant to Sec.  125.91(c).
    As a practical matter, the existing facilities subject to this rule 
are the largest users of cooling water and therefore typically withdraw 
volumes of water for cooling that warrant owning the cooling water 
intake structures. In some cases, such as at nuclear power plants or 
critical baseload facilities, the need for cooling water includes 
safety and reliability reasons that would likely preclude any 
independent supplier arrangements. Therefore, EPA expects this 
provision will have only limited applicability. EPA is nevertheless 
retaining the provision to prevent facilities from circumventing the 
requirements of today's rule by creating arrangements to receive 
cooling water from an entity that is not itself subject to today's rule 
and that is not otherwise explicitly exempt from today's rule (such as 
drinking water or treatment plant discharges reused as cooling water).

H. What intake flow thresholds result in an existing facility being 
subject to the final rule?

    EPA determines the cooling water flow at a facility in two ways. 
The first is based on the DIF, which reflects the maximum intake flow 
the facility is capable of withdrawing. While this normally is limited 
by the capacity of the cooling water intake pumps, other parts of the 
cooling water intake system could impose physical limitations on the 
maximum intake flow the facility is capable of withdrawing. The second 
method for determining cooling water flow is based on the AIF, which 
reflects the actual volume of water withdrawn by the facility. EPA has 
defined AIF to be the average water withdrawn each year over the 
preceding three years.\7\ Both of these methods are used in today's 
rule.
---------------------------------------------------------------------------

    \7\ For permit terms subsequent to the first permit issued under 
today's rule, the rule defines AIF as the average flows over the 
previous 5 years.
---------------------------------------------------------------------------

    Today's final rule applies to facilities that have a total DIF of 
greater than 2 mgd (see Sec.  125.91).\8\ At a threshold of 2 mgd, 
today's rule covers 99.8 percent of the total water withdrawals by 
utilities and other industrial sources (if the other criteria for 
coverage are met), which includes 70 percent of manufacturing 
facilities and 87 percent of electric generators. EPA also chose the 
greater than 2 mgd threshold because it was consistent with the 
applicability criteria in the Phase I rule.\9\
---------------------------------------------------------------------------

    \8\ The 2004 Phase II rule would have applied to existing power-
generating facilities with a design intake flow of 50 mgd or 
greater. Facilities potentially regulated by the Phase III rule had 
a DIF of greater than 2 mgd.
    \9\ For more information, see 65 FR 49067, August 10, 2000.
---------------------------------------------------------------------------

    There are substantial environmental benefits that will accrue with 
a threshold of 2 mgd. For example, EPA's analysis indicates that 
greater than 82 percent of impinged fish mortality across all 
facilities would be prevented by this rule at this threshold. EPA also 
considered a threshold of 50 mgd. The record includes 38 studies 
documenting IM at more than 40 facilities with flows lower than 50 mgd. 
Further, the industry questionnaire demonstrates that such facilities 
are twice as likely to have no controls in place for impingement or 
entrainment than are facilities with intake flows greater than 50 mgd. 
In addition, lower intake flow facilities can have similar impacts to 
those of larger flow facilities as sizable numbers of fish are impinged 
by lower flow facilities. Moreover, site-specific impacts of lower flow 
facilities may be significant, particularly where threatened or 
endangered species are present.
    Although smaller flow facilities (those less than 50 mgd) 
constitute a large proportion of the total number of the facilities 
regulated (476 of 1,065), the total compliance cost for these smaller 
facilities are only a small portion of the total compliance cost of the 
rule ($23 million of $275 million). Thus any perceived aggregate cost 
savings from setting the threshold higher than 2 mgd would be minimal.
    There is no appreciable difference in the cost effectiveness of the 
rule with a higher applicability threshold. For example, the cost 
effectiveness of the rule with a threshold of 2 mgd is $0.42 per age-
one equivalent losses (A1E). At a threshold of 50 mgd the cost 
effectiveness would be $0.41 per A1E. In addition, the incremental cost 
of the 2 mgd threshold relative to a 50 mgd threshold is negligible for 
the electric power industry at less than 0.1 percent of annual 
electricity sector revenue, which exceeds $126 billion. The facility-
level impacts are negligible to zero at either 2 or 50 mgd threshold. 
At the 2 mgd threshold, only 5 (1 percent) of the manufacturing 
facilities have a cost-to revenue ratio exceeding 1 percent (but less 
than 3 percent). While this drops to zero facilities at the 50 mgd 
threshold, the difference of 5 facilities out of 509 facilities is not 
significant. Costs for lower flow facilities are so small that the 
average annual household utility bill would not measurably decrease by 
changing the threshold from 2 to 50 mgd. While 58 percent of the small 
facilities affected by the final rule are below 50 mgd, 40 percent of 
them already meet one of the compliance alternatives for impingement 
mortality of the rule and likely would not need to install any 
additional compliance technologies. And small businesses account for 
only 17 percent of facilities at or below 50 mgd, demonstrating that 
there would

[[Page 48309]]

not be a disproportionate impact on small businesses at a 2 mgd 
threshold.
    Thus, EPA concluded that the threshold of 2 mgd ensures that the 
users of cooling water causing the most adverse environmental impact 
are subject to the rule. Raising the threshold for applicability of the 
rule's impingement and entrainment requirements to 50 mgd as some 
commenters suggested was not supportable given the statistics and 
information described above.
    Raising the applicability threshold to 50 mgd would have meant that 
476 facilities, almost half of the 1,065 facilities subject to the 
national standards set by today's rule, would not be subject to the 
rule. Ignoring so many facilities when setting national standards fails 
to apply the common sense approaches set forth in this rule for 
minimizing adverse environmental impacts from cooling water intake 
structures.
    Excluding such a large number of facilities from this rule would 
create regulatory uncertainty for those facilities since they would 
remain subject to CWA permitting requirements, but without the benefits 
of the structure of this rule. Directors would have an obligation to 
establish controls on a case-by-case basis for these lower flow 
facilities using a BPJ analysis instead of using the more 
straightforward and transparent provisions of setting controls based on 
national standards contained in this rule. Such BPJ analyses can be 
uncertain, and can be time consuming and complex to develop for both 
Directors and owners and operators of facilities. Case-by-case BPJ 
permits (instead of permits based on the national standards in today's 
rule) would likely increase the time and costs to states for such 
permits to be developed, further delaying the minimization of adverse 
environmental impacts called for by CWA section 316(b). Maintaining an 
applicability threshold of 2 mgd DIF best combines the shared goals of 
minimizing adverse environmental impacts as required by the CWA, and 
the predictability and flexibility contained in the rule.
    EPA acknowledges that there may be circumstances where flexibility 
in the application of the rule may be called for and the rule so 
provides. For example, some low flow facilities that withdraw a small 
proportion of the mean annual flow of a river may warrant special 
consideration by the Director. As an illustration, if a facility 
withdraws less than 50 mgd AIF, withdraws less than 5 percent of mean 
annual flow of the river on which it is located (if on a river or 
stream), and is not co-located with other facilities with CWISs such 
that it contributes to a larger share of mean annual flow, the Director 
may determine that the facility is a candidate for consideration under 
the de minimis provisions contained at Sec.  125.94(c)(11). In the case 
of facilities on lakes and reservoirs, co-location would be better 
determined by multiple CWIS facilities on the same waterbody, rather 
than distance.
    In either case, the flexibilities contained in the rule for the 
Director to consider the site-specific characteristics of each intake 
structure within the national standard provide a useful mechanism for 
facilities with lower intake flows and low impacts to be considered.
    EPA is continuing to base applicability on DIF as opposed to AIF 
for several reasons. In contrast to AIF, DIF is a fixed value based on 
the design of the facility's operating system and the capacity of the 
circulating and other water intake pumps. This provides clarity because 
the DIF does not vary with facility operations, except in limited 
circumstances, such as when a facility undergoes major modifications. 
On the other hand, actual flows can vary significantly over sometimes 
short periods. For example, a peaking power plant might have an AIF 
close to the DIF during times of full energy production, but an AIF of 
zero during lengthy periods of standby. Use of DIF provides clarity as 
to regulatory status, is indicative of the potential magnitude of 
environmental impact, and avoids the need for monitoring to confirm a 
facility's status. For more information about these thresholds, see 69 
FR 41611, July 9, 2004.
    Under this rule, all facilities with a DIF of greater than 2 mgd, 
that meet the other three criteria for applicability of today's rule, 
must submit basic information describing the facility, Source Water 
Physical Data, Source Water Biological Characterization Data, and 
Cooling Water Intake System Data. In addition, these facilities must 
submit additional facility-specific information including the selected 
impingement compliance option, and operational status of each of the 
facility's units.\10\ Certain facilities withdrawing the largest 
volumes of water for cooling purposes have additional information and 
study requirements such as relevant biological survival studies and the 
entrainment study as described below.
---------------------------------------------------------------------------

    \10\ The final rule allows the Director to waive certain 
information submission requirements for facilities that already 
employ closed-cycle cooling.
---------------------------------------------------------------------------

    The final rule uses AIF rather than DIF for purposes of determining 
which facilities must provide the information required in Sec.  
122.21(r)(9) through (13), referred to as the entrainment study. Thus, 
the rule provides that any facility subject to the rule with actual 
flows in excess of 125 mgd must provide an entrainment study with its 
permit application (which includes the Entrainment Characterization 
Study at Sec.  122.21(r)(9)).\11\ Adverse environmental impacts from 
entrainment result from actual water withdrawals, and not the maximum 
designed level of withdrawal. Further, using actual flow might 
encourage some facilities to adopt operational practices to reduce 
their flows below 125 mgd AIF to avoid collecting supplemental data and 
submitting the additional entrainment study. Furthermore, any facility 
that has DIF greater than 2 mgd, that meets the other three criteria 
for applicability of today's rule, is required to submit basic 
information that will allow the Director to verify its determination of 
whether it meets the 125 mgd AIF threshold.
---------------------------------------------------------------------------

    \11\ For impoundments constructed in uplands or not in waters of 
the United States, the point of compliance for measuring AIF to 
determine if it is greater than 125 mgd is the intake into the 
impoundment from the waters of the United States.
---------------------------------------------------------------------------

    EPA has selected an administrative threshold of 125 mgd AIF for 
submission of the entrainment study because this threshold will capture 
90 percent of the actual flows but will apply to only 30 percent of 
existing facilities. Further, based on EPA's data there are no closed-
cycle recirculating systems in use above this threshold. The 125 mgd 
AIF threshold will significantly limit facility burden at more than 
two-thirds of the potentially affected facilities while focusing the 
Director on major cooling water withdrawals. Contrary to a number of 
public comments, however, EPA is not implying or concluding that the 
125 mgd threshold is an indicator that facilities withdrawing less than 
125 mgd are (1) not causing any adverse impacts or (2) automatically 
qualify as meeting BTA. In other words, the threshold, while justified 
on a technical basis, does not result in exemptions from the rule. 
Instead, EPA is making a policy decision as to which facilities must 
provide a certain level and type of information. The Director, of 
course, will retain the discretion to require reasonable information to 
make informed decisions at the smaller facilities. The 125 mgd 
threshold focuses on the facilities with the highest intake flows and 
the highest likelihood of causing adverse impacts; it is not an

[[Page 48310]]

indicator that facilities under that threshold are no longer of concern 
in the final rule.
    In today's rule, EPA seeks to clarify that for some facilities, the 
DIF is not necessarily the maximum flow associated with the intake 
pumps. For example, a power plant might have redundant circulating 
pumps, or might have pumps with a name plate rating that exceeds the 
maximum water throughput of the associated piping. EPA intends for the 
DIF to reflect the maximum rate at which a facility can physically 
withdraw water from a source waterbody (usually normalized to a daily 
rate in mgd). This also means that a facility that has permanently 
taken a pump out of service should be able to consider such constraints 
when reporting its DIF, as the facility's capacity to withdraw water 
may have fundamentally changed. Additionally, if a facility's flow is 
limited by constrictions in the piping or other physical limitations 
(e.g., a given portion of its cooling system that can only safely 
handle a given amount of flow) and that flow is lower than the DIF for 
the pumps, the facility should be able to consider such constraints 
when reporting its DIF, because it is not capable of withdrawing its 
full pumping DIF without compromising the cooling system.

I. What are the requirements for existing offshore oil and gas 
facilities, offshore seafood processing facilities or LNG terminals BTA 
requirements under the final rule?

    Under today's rule, existing offshore oil and gas facilities, 
existing offshore seafood processing facilities and existing LNG 
terminals will be subject to section 316(b) requirements on a BPJ 
basis. In the Phase III rule, EPA studied offshore oil and gas 
facilities and offshore seafood processing facilities \12\ and could 
not identify any technologies (beyond the protective screens already in 
use) that are technically feasible for reducing impingement or 
entrainment in such existing facilities.\13\ As discussed in the Phase 
III rule, known technologies that could further reduce impingement or 
entrainment would result in unacceptable changes in the envelope of 
existing platforms, drilling rigs, mobile offshore drilling units, 
offshore seafood processing facilities, and similar facilities as the 
technologies would project out from the hull, potentially decrease the 
seaworthiness, and potentially interfere with structural components of 
the hull. It is also EPA's view that for many of these facilities, the 
cooling water withdrawals are most substantial when the facilities are 
operating far out at sea and, therefore, not withdrawing from a water 
of the United States. EPA is aware that LNG facilities may withdraw 
hundreds of million gallons per day of seawater for warming (re-
gasification). However, some existing LNG facilities might still 
withdraw water where 25 percent or more of the water is used for 
cooling purposes on an actual intake flow basis. EPA has not identified 
a uniformly applicable and available technology for minimizing 
impingement mortality and entrainment at these facilities. However, 
technologies might be available for some existing LNG facilities. LNG 
facilities that withdraw any volume of water for cooling purposes will 
be subject to site-specific, BPJ determinations of BTA.
---------------------------------------------------------------------------

    \12\ EPA studied naval vessels and cruise ships as part of its 
developing a general NPDES permit for discharges from oceangoing 
vessels. (For more information, see http://cfpub.epa.gov/npdes/home.cfm?program_id=350.) EPA studied offshore seafood processing 
facilities and oil and gas exploration facilities in the 316(b) 
Phase III rule.
    \13\ As discussed in today's preamble, requirements for new 
offshore facilities that were set forth in the Phase III rule remain 
in effect.
---------------------------------------------------------------------------

    EPA has not identified any new data or approaches that would result 
in a different determination. Therefore, EPA has adopted the approach 
of the proposed rule and is requiring that NPDES Permit Directors, on a 
case-by-case basis using BPJ, determine BTA for existing offshore oil 
and gas extraction facilities, existing offshore seafood processing 
facilities, and existing LNG terminals.

J. What is a ``new unit'' and how are new units addressed under the 
final rule?

    Today's rule establishes requirements for new units at an existing 
facility that are different than those applicable to existing units at 
an existing facility. The requirements for new units at existing 
facilities are modeled after the requirements for a new facility in the 
Phase I rule. Under today's rule, a new unit means a newly built, 
stand-alone unit, whose construction begins after the effective date of 
the rule. EPA is also clarifying that while Phase I does not include 
units newly constructed at an existing facility for the same general 
industrial operation, such units do constitute a new unit at existing 
facilities and, as such, are subject to today's final rule.
    On the basis of the public comments received on how to define ``new 
unit,'' EPA provides a clear definition for this term in the final 
rule. The definition for a new unit at an existing facility establishes 
a clear regulatory framework for both affected facilities and 
Directors. This definition captures facilities that are undergoing 
major construction projects involving the construction of a new stand-
alone unit, while not discouraging upgrades. For example, a nuclear 
facility conducting a measurement uncertainty capture or a stretch 
power uprate, or a fossil-fuel facility repowering an existing 
generating unit, would not be considered to result in the relevant unit 
becoming a new unit. As another example, under this definition placing 
an offshore facility or vessel into a dry dock for maintenance or 
repair does not result in either the offshore facility, vessel, or the 
dry dock as being defined as a new unit.
    Section VI discusses EPA's rationale for establishing the 
definitions for new units at existing facilities described below.
1. Electric Generators
    The final rule defines a new unit at an existing facility as a 
newly built, stand-alone unit that is constructed at an existing 
facility and that does not meet the definition of a new facility. An 
existing unit that is repowered or undergoes significant modifications 
(such as where the turbine and condenser are replaced) is not 
considered a new unit. Exhibit I-4 below provides several examples and 
whether these hypothetical units will be defined as new or existing 
units.

  Exhibit I-4--Examples of New and Existing Units at Existing Electric
                          Generation Facilities
------------------------------------------------------------------------
  Examples of new units at an existing
                facility                    Examples of existing units
------------------------------------------------------------------------
A unit that is constructed at a stand-   A unit that is repowered or
 alone location at an existing facility   undergoes significant
 regardless of any plans to retire any    modifications.
 other unit at the facility in the
 future.
                                         A retrofitted with a new boiler
                                          or fuel type.
------------------------------------------------------------------------


[[Page 48311]]

2. Manufacturers
    At manufacturing facilities that generate electricity onsite, the 
previous discussion of how to define new units at existing electric 
generating facilities generally applies. Some manufacturers employ 
different industrial processes than an electric generator and therefore 
have different industrial equipment (including cooling systems). In 
particular, manufacturers may not use a steam condenser or steam 
turbine for their industrial processes, making the definition for 
``repowering'' above inappropriate for manufacturing facilities. 
However, manufacturers may have opportunities to reuse cooling water 
that power plants do not, and in site visits, EPA found many 
manufacturers have conducted energy and water audits resulting in 
significant reductions in water withdrawals. The final rule provides 
for manufacturers to receive credit for such reductions in fresh water 
withdrawals.
    It is not as easy to identify a similar conceptual approach for 
defining new manufacturing units at existing manufacturing facilities 
because waste heat can be generated from a variety of sources including 
exothermic processes, product heating and cooling, and the processing, 
handling, treating, or disposal of feed streams, waste streams, by-
products, and recycled components. Sources may include direct cooling 
transferred across an inert material (e.g., heat exchanger, steam 
condenser), indirect cooling using a working fluid (e.g., chillers, 
refrigeration), or contact cooling where cooling water comes into 
direct contact with a product or process stream.\14\ Unlike electric 
generating units where the majority of cooling water comes from a 
single process source (the steam condenser), manufacturing units may 
include many separate non-contact or contact cooling water sources 
dispersed throughout the production processes and the facility. Thus, a 
definition for manufacturing units must take into consideration a 
broader category of cooling water sources.
---------------------------------------------------------------------------

    \14\ Note that EPA did not include the contact cooling category 
as part of its analysis of possible closed-cycle recirculating 
system requirements but contact cooling water does nonetheless fall 
within the definition of cooling water at Sec.  125.92.
---------------------------------------------------------------------------

    For power generators, the term ``generating unit'' is quite clear 
since there is only one product (electricity), the non-contact cooling 
water predominantly comes from one source, and the application of the 
term is well understood in the industry. But for some manufacturing 
facilities, it may be unclear what constitutes a ``unit'' since 
manufacturing processes can involve numerous vertically integrated 
processes or production steps that may involve intermediate products. 
For example, a unit could encompass an entire series of production 
steps (start to finish) or simply the individual steps. Also, there may 
be ancillary support equipment that serves various functions and it is 
not clear whether this will be considered a unit or part of a unit. For 
example, a petroleum refiner will typically include various processes 
such as distillation, cracking, hydrotreating, coking, reforming, and 
different types of various products. Various intermediate products from 
these processes may be directly transported (piped) from one process to 
another or stored and some may be sold. And because various 
intermediate and final process products may be blended into different 
products, differentiating units on a product or intermediate product 
basis may not provide clear distinctions.
    For these reasons EPA has defined new unit to simply mean a new 
stand-alone unit. A new unit may include one or more distinct 
production lines that are added to increase product output and operate 
parallel to and independently of existing production equipment. A new 
unit does not include the replacement or rebuilding of one or more 
distinct production lines or distinct processes involving the 
replacement of the majority of the waste heat producing equipment that 
serves as sources of non-contact cooling water and the majority of the 
heat exchanging equipment that contributes heat to the non-contact 
cooling water. Such modifications alone do not render the unit a new 
unit. A unit undergoing such modifications would continue to be 
considered an existing unit and would be regulated under the existing 
unit provisions of this rule. This definition therefore does not impose 
any disincentives for the replacement/upgrade of individual components 
or ancillary equipment alone.
    Exhibit I-5 below provides several examples of whether these 
hypothetical units are defined as new or existing units. As noted 
above, the Director has broad discretion to assess the scope of any 
modifications at the manufacturing facility and to determine whether 
the new construction comprises a stand-alone unit. For the purposes of 
today's final rule, the Director does not need to address whether the 
stand-alone unit is for the same general industrial purposes, or 
whether the new unit is a replacement unit. The key factors in 
assessing whether a unit will be defined as new lies with whether the 
construction results in a stand-alone unit.

    Exhibit I-5--Examples of New and Existing Units at Manufacturers
------------------------------------------------------------------------
  Examples of new units at an existing    Examples of existing units at
                facility                       an existing facility
------------------------------------------------------------------------
A unit that is constructed at a stand-   A unit where only the waste
 alone location at an existing facility   heat generating process
 (either adjacent to existing units or    equipment or the cooling
 on newly acquired or developed           system equipment is replaced.
 property) regardless of any plans to
 retire any other unit at the facility
 in the future.
A unit that is constructed adjacent to   A unit where modifications are
 an existing unit for the same            made to the waste heat
 industrial activity (such as expanding   generating process equipment
 the production output by building a      or the cooling system (e.g.,
 second unit as a stand-alone unit next   optimization, repairs,
 to the existing unit).                   upgrades to operational
                                          elements).
                                         Replacement or upgrade of
                                          ancillary equipment (e.g.,
                                          pumps, motors, HVAC, etc.).
------------------------------------------------------------------------

K. Amendments Related to the Phase I Rule

    EPA is making limited changes to the Phase I rule at 40 CFR Part 
125 Subpart I. The changes fall into two categories. The first is 
deleting the provision in the Phase I rule that would allow a facility 
to demonstrate compliance with the Phase I BTA requirements in whole or 
in part through restoration measures. This change responds to the 
decision of the U.S. Court of Appeals for the Second Circuit, which 
remanded these provisions to EPA because it concluded that the statute 
did not authorize

[[Page 48312]]

restoration measures to comply with CWA section 316(b) requirements. 
The second category of changes reflects technical corrections or errors 
that do not change the substance of the Phase I rule. EPA has not 
reopened any other aspects of the Phase I rule other than the 
provisions specifically noted here.
1. Restoration Provisions Not Authorized
    The Phase I final rule established two compliance tracks. Track I 
requires facilities to restrict intake flow and velocity. Track II 
gives a facility the option of demonstrating to the Director that the 
control measures it employs will reduce the level of adverse 
environmental impact to a comparable level to what would be achieved by 
meeting the Track I requirements. As part of this demonstration, Track 
II originally allowed a facility to make use of restoration measures. 
The Comprehensive Demonstration Study allowed a quantitative or 
qualitative demonstration that restoration measures would meet, in 
whole or in part, the performance levels of Track I. Similarly, the 
Verification Monitoring Plan could be tailored to verify that the 
restoration measures would maintain the fish and shellfish in the 
waterbody at a substantially similar level to that which would be 
achieved under Track I. See 66 FR 65280-65281, December 18, 2001.
    Upon legal challenge, the Second Circuit Court concluded that EPA 
exceeded its authority by allowing new facilities to comply with CWA 
section 316(b) through restoration measures, and remanded that aspect 
of the rule to EPA. The Supreme Court did not grant the petitions for 
writs of certiorari concerning restoration provisions. Today's final 
rule amends Phase I to remove those provisions in Sec. Sec.  125.84(d) 
and 125.89(b)(1)(ii) authorizing restoration measures in conformance 
with the Second's Circuit's decision. Today's rule also specifically 
deletes permit application requirements contained in the Comprehensive 
Demonstration Study at Sec.  125.86(c)(2)(ii); evaluation of proposed 
restoration measures at Sec.  125.86(c)(2)(iv)(C); and verification 
monitoring requirements at Sec.  125.86(c)(2)(iv)(D)(2) that are 
specific to restoration. EPA acknowledges these changes might reduce 
the alternatives available to some Phase I facilities. EPA notes, 
however, that the deletion of restoration measures does not otherwise 
alter the availability of Track II. In any event, EPA's determination 
of BTA for Phase I did not presume reliance on the restoration 
provisions, and the deletion of restoration measures in no way alters 
the Agency's BTA determination for Phase I facilities.
2. Corrections to Subpart I
    Today's final rule changes the applicability of the technical 
requirements at Sec.  125.84 and permit application requirements at 
Sec.  125.86 statement to match the applicability statement at Sec.  
125.81(a)(3). The applicability in all three instances should specify 
DIF or withdrawals ``greater'' than the specified value of 2 mgd. See 
Basis for the Final Regulation at 66 FR 65270, December 18, 2001.
    Today's rule also corrects the source waterbody flow information 
submission requirements. Track I requirements at Sec.  125.84(b)(3) 
apply to new facilities that withdraw equal to or greater than 10 mgd. 
Track I requirements at Sec.  125.84(c)(2) apply to facilities that 
withdraw less than 10 mgd. The source waterbody flow information under 
Sec.  125.86(b)(3) requires a facility to demonstrate it has met the 
flow requirements of both Sec. Sec.  125.84(b)(3) ``and'' 125.84(c)(2). 
However, a facility cannot be subject to both Sec. Sec.  125.84(b)(3) 
and 125.84(c)(2) at the same time. Accordingly, the word ``and'' should 
read as ``or'' in Sec.  125.86(b)(3).
    In addition, today's final rule corrects the permit application 
requirement for the Source Water Biological Characterization at Sec.  
122.21(r)(4). Accordingly, references to the Source Water Biological 
Characterization should read as (r)(4). However, the references to the 
Source Water Biological Characterization at Sec.  125.86(b)(4)(iii), at 
Sec.  125.87(a), and at Sec.  125.87(a)(2) incorrectly refer to Sec.  
122.21(r)(3) and are thus being corrected.

II. Legal Authority for and Background of the Final Regulation

A. Legal Authority

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

B. Purpose of the Regulation

    The purpose of today's rule is to reduce impingement and 
entrainment of fish, shellfish and other aquatic organisms at cooling 
water intake structures. Today's rule establishes national requirements 
for cooling water intake structures at existing facilities under 
section 316(b) of the CWA. That section provides that any standard 
established pursuant to CWA sections 301 or 306 and applicable to a 
point source must require that the location, design, construction, and 
capacity of cooling water intake structures reflect the BTA for 
minimizing adverse environmental impact. Today's rule establishes 
requirements applicable to all existing power-generating facilities and 
existing manufacturing and industrial facilities that are point 
sources, that have a DIF of greater than 2 mgd from waters of the 
United States, and use at least 25 percent of the water they withdraw 
exclusively for cooling purposes on an actual intake flow basis. In 
addition, EPA is today also making minor changes to its earlier rule 
establishing section 316(b) requirements for new facilities. 
Specifically, EPA is removing a provision that would have allowed a 
restoration-based alternative for complying with performance standards 
as well as the associated monitoring and other requirements for 
demonstrating compliance.

C. Background

1. The Clean Water Act
a. General
    The Federal Water Pollution Control Act, also known as the CWA, 33 
U.S.C. 1251 et seq., seeks to ``restore and maintain the chemical, 
physical, and biological integrity of the nation's waters.'' 33 U.S.C. 
1251(a). Among the goals of the Act is, wherever attainable, an interim 
goal of water quality which provides for the protection and propagation 
of fish, shellfish, and wildlife and provides for recreation in and on 
the water. 33 U.S.C. 1251(a)(2).
    In furtherance of these objectives, the CWA establishes a 
comprehensive regulatory program, key elements of which are (1) a 
prohibition on the discharge of pollutants from point sources to waters 
of the United States, except in compliance with the statute and (2) 
authority for EPA or authorized States or Tribes to issue NPDES permits 
that authorize and regulate the discharge of pollutants.
    CWA section 402 authorizes EPA (or an authorized State or Tribe) to 
issue an NPDES permit to any person discharging any pollutant or 
combination of pollutants from a point source into waters of the United 
States. Forty-six States and one U.S. territory are authorized under 
section 402(b) to administer the NPDES permitting program. NPDES 
permits restrict the types and amounts of pollutants, including heat, 
that may be discharged from various industrial, commercial, and other 
sources of wastewater. These permits control the discharge of 
pollutants by requiring dischargers to meet technology-based and 
possibly water-quality-based effluent limitations.

[[Page 48313]]

Under section 316(b), NPDES permits are required to contain conditions 
to implement the requirements of section 316(b).
    CWA section 510 provides that, except as provided in the CWA, 
nothing will preclude or deny the right of any State (or political 
subdivision thereof) to adopt or enforce any requirement respecting 
control or abatement of pollution; except that if a limitation, 
prohibition or standard of performance is in effect under the CWA, such 
State may not adopt any other limitation, prohibition, or standard of 
performance which is less stringent than the limitation, prohibition, 
or standard of performance under the Act. EPA interprets this to 
reserve for the States authority to implement requirements that are 
more stringent than the Federal requirements under state law. PUD No. 1 
of Jefferson County v. Washington Dep't of Ecology, 511 U.S. 700, 705 
(1994). New York and California have enacted State requirements that 
are at least as stringent as those of the final rule, and therefore, 
EPA has analyzed facilities in those States that are subject to those 
State requirements as already complying with the final rule.\15\ Those 
facilities still must comply with the administrative requirements of 
the final rule.
---------------------------------------------------------------------------

    \15\ For example, California policy addressing 19 coastal power 
plants would not affect the compliance costs of inland facilities.
---------------------------------------------------------------------------

    CWA sections 301, 304, and 306 require that EPA develop technology-
based effluent limitations guidelines and new source performance 
standards that are used as the basis for discharge requirements in 
wastewater discharge permits. EPA develops these effluent limitations 
guidelines and standards for categories of industrial dischargers on 
the basis of the pollutants of concern discharged by the industry, the 
degree of control that can be attained using various levels of 
pollution control technology appropriate for each industrial process or 
subcategory, consideration of various economic tests implemented under 
the authority of the CWA for each level of control, and other factors 
identified in CWA sections 304 and 306 (such as non-water quality 
environmental impacts including energy impacts). EPA has promulgated 
regulations setting effluent limitations guidelines and standards under 
CWA sections 301, 304, and 306 for 57 industry categories. See 40 CFR 
parts 405 through 471. EPA has established effluent limitations 
guidelines and standards that apply to the industry categories that are 
the largest users of cooling water (e.g., steam electric power 
generation, paper and allied products, petroleum refining, iron and 
steel manufacturing, and chemicals and allied products), as well as 
many other industrial categories that may include facilities subject to 
this final rule.
b. Section 316(b)
    Section 316(b) states, in full,

    Any standard established pursuant to section 301 or section 306 
of [the Clean Water] Act and applicable to a point source shall 
require that the location, design, construction, and capacity of 
cooling water intake structures reflect the best technology 
available for minimizing adverse environmental impact.

    33 U.S.C. 1326(b). This provision is unique among CWA provisions 
because it addresses the adverse environmental impact caused 
specifically by the intake of cooling water, in contrast to other 
provisions of the Act that regulate the discharge of pollutants into 
waters of the United States.
    The CWA does not further define the substantive standard specified 
in section 316(b)--``best technology available for minimizing adverse 
environmental impact'' (BTA). 33 U.S.C. 1326(b). The standard that 
cooling water intake structures must achieve under section 316(b)--
BTA--is a different standard from those prescribed under sections 301 
and 306 of the Act. Riverkeeper, Inc. v. EPA, 358 F.3d 174 (2d Cir. 
2004). Moreover, unlike sections 304 and 306, section 316(b) does not 
set forth the specific factors that the EPA must consider in 
determining BTA. BTA is ``the only substantive statutory requirement 
explicitly applicable to the intake structure regulations.'' Id. at 
186. Unlike other provisions of the Act, section 316(b) standards are 
not subject to a ``host'' of other requirements or limitations. Ibid. 
There is no ``elucidating language applicable to the BTA test.'' 
Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 221 (2009).\16\
---------------------------------------------------------------------------

    \16\ Included in an appendix to the decision is a table 
comparing CWA statutory standards under 301, 306 and 316(b), the 
table. In the column headed ``Statutorily Mandated Factors,'' for 
section 316(b), the table states ``N/A.''
---------------------------------------------------------------------------

    Section 316(b) does, however, cross-reference sections 301 and 306 
of the CWA by stating that any standards established pursuant to those 
sections also require that cooling water intake structures reflect BTA. 
Ibid. This cross reference, in the view of the Second Circuit, is an 
invitation, not a straitjacket. EPA ``may'' look to the referenced 
sections in discerning what factors Congress intended EPA to consider 
in determining BTA.

    Because section 316(b) refers to sections 301 and 306 but 
provides a different standard (``best technology available for 
minimizing adverse environmental impact'' instead of, for example, 
``best available demonstrated control technology'') and does not 
explicitly provide that regulations pursuant to section 316(b) are 
subject to the requirements of sections 301 and 306, we think it is 
permissible for the EPA to look to those sections for guidance but 
to decide that not every statutory directive contained therein is 
applicable to the Rule.

    The terse statutory description of BTA and the absence of any 
prescribed statutory factors for consideration in determining BTA 
suggest that Congress delegated EPA significant rulemaking discretion 
in this area.\17\
---------------------------------------------------------------------------

    \17\ The Second Circuit has noted the limited legislative 
history for section 316(b). ``This paucity of legislative history, 
when measured against the volumes of drafts and speeches devoted to 
other aspects of the 1972 amendments, and when combined with the 
brevity of the provision itself, counsels against imputing much 
specific intent to Congress beyond the section's words themselves. 
To the extent the provision is silent on issues to which other 
sections speak, we hesitate to draw the negative inference that the 
brevity of section 316(b) reflects an intention to limit the EPA's 
authority rather than a desire to delegate significant rulemaking 
authority to the Agency.'' Id. at 187.
---------------------------------------------------------------------------

    As noted, in contrast to effluent limitations guidelines and 
standards, the CWA does not describe the factors to be considered in 
establishing section 316(b) substantive performance requirements that 
reflect the ``best technology available for minimizing adverse 
environmental impact'' nor does it require that EPA develop uniform 
nationally applicable performance requirements through rule making.
    The U.S. Supreme Court has, however, recently provided guidance, in 
Entergy Corp. v. Riverkeeper, Inc., in interpreting section 316(b) and 
what factors EPA may consider in its standard-setting. That decision 
addressed the question of whether CWA section 316(b) authorizes EPA to 
compare costs and benefits of various technologies when setting 
national performance standards for cooling water intake structures 
under CWA section 316(b). In overturning EPA's earlier rule to 
establish section 316(b) requirements for existing facilities, the 
Second Circuit held that balancing costs and benefits was an 
impermissible factor for standard setting under section 316(b). The 
Supreme Court reversed and remanded the Second Circuit ruling in a 6-3 
opinion authored by Justice Scalia. The Court held that it is 
permissible for EPA to consider a cost-benefit analysis in setting 
national performance standards for cooling water intake structures 
under section 316(b).

[[Page 48314]]

The Court held that EPA has the discretion to consider costs and 
benefits under section 316(b) but is not required to do so. 556 U.S. 
208, 222-23.
    The Court's discussion of the language of section 316(b)--section 
316(b) is ``unencumbered by specified statutory factors''--and its 
critique of the Second Circuit's decision affirms EPA's broad 
discretion to consider a number of factors in standard setting under 
section 316(b). While the Supreme Court's decision is limited to 
whether or not EPA may properly consider one factor (cost/benefit 
analysis) under section 316(b), the language also indicates that EPA 
has wide discretion in considering other factors that it deems relevant 
to 316(b) standard setting. 556 U.S. 208, 222 (2009). (``It is 
eminently reasonable to conclude that Sec.  1326b's silence is meant to 
convey nothing more than a refusal to tie the agency's hands as to 
whether cost-benefit analysis should be used, and if so to what 
degree.'').
    Regarding the other factors EPA may, but is not mandated to, 
consider, as noted above, section 316(b) cross references CWA sections 
301 and 306 by requiring that any standards established pursuant to 
those sections also must require that the location, design, 
construction and capacity of intake structures reflect BTA. Following 
the decisions of the Second Circuit in reviewing both the Phase I and 
Phase II rules, EPA has interpreted the cross reference as authorizing 
consideration of the factors considered under those provisions to help 
guide section 316(b) rulemaking without determining that each of those 
factors is applicable to this rule. Thus, for example, section 306 
directs EPA to establish performance standards for new sources based on 
the BADT (best available demonstrated control technology). 33 U.S.C. 
1316(a)(1). In establishing BADT, EPA ``shall take into consideration 
the cost of achieving such effluent reduction, and any non-water 
quality environmental impact and energy requirements.'' 33 U.S.C. 
1316(b)(2)(B).
    Similarly, CWA section 301 requires EPA, in establishing standards 
known as effluent limitations guidelines, to consider specified 
factors. For a complete discussion of factors considered in 
establishing section 301 effluent limits, see 76 FR 22178-22179, April 
20, 2011. But, EPA in establishing section 316(b) standards is not 
constrained in what factors it considers or bound by any statutorily 
prescribed tests as is the case with sections 301 and 306. 
Consequently, while section 316(b) expressly refers to section 301 and 
306, and, while it shares some of the same words used in sections 
301(b) and 306, its language is different.\18\ These differences in the 
statutory descriptions, coupled with the brevity of section 316(b) 
itself, prompt EPA to examine the factors described in section 301, 306 
and, ultimately, section 304 where relevant in EPA's determination of 
the ``best technology available to minimize adverse environmental 
impact'' of cooling water for intake structures for existing 
facilities.
---------------------------------------------------------------------------

    \18\ Compare ``best technology available for minimizing adverse 
environmental impacts'' with ``best practicable control technology 
currently available'' (301(b)(1)A)), ``best conventional pollutant 
control technology (301(b)(2)(E)), ``best available technology 
economically achievable'' (301(b)(2)(A)), and best available 
demonstrated control technology, (306(b)(1)(B)). Section 316(b), 
section 301(b)(1)(A)--the BPT provision--section 301(b)(2)(E)--the 
BCT provision--section 301(b)(1)(B)--the BAT provision--and section 
306(b)(2)(E). All include the terms ``best,'' ``technology,'' and 
``available,'' but none also include the modifying phrase ``for 
minimizing adverse environmental impacts,'' found in section 316(b). 
See 33 U.S.C. 1311(b)(1)(A) and (2)(A).
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    As noted above, there are significant differences between section 
316(b) and sections 301, 304 and 306. See Riverkeeper, Inc. v. United 
States Environmental Protection Agency (2nd Cir. Feb. 3, 2004) (``not 
every statutory directive contained [in sections 301 and 306] is 
applicable'' to a section 316(b) rulemaking). Moreover, as the Supreme 
Court recognized, while the provisions governing the discharge of toxic 
pollutants must require the elimination of discharges if technically 
and economically achievable, section 316(b) has the less ambitious goal 
of ``minimizing adverse environmental impact.'' 556 U.S. at 219. In 
contrast to the effluent limitations provisions, the object of the best 
technology available is explicitly articulated by reference to the 
receiving water: To minimize adverse environmental impact in the waters 
from which cooling water is withdrawn. This difference is reflected in 
EPA's past practices in implementing sections 301, 304, as contrasted 
with 316(b). For example, EPA has established BAT effluent limitations 
guidelines and new source performance standards on the basis of the 
efficacy of one or more technologies to reduce pollutants in wastewater 
in relation to their costs without necessarily considering the impact 
on the receiving waters. This contrasts to 316(b) requirements which 
historically have been developed on a site-specific basis, where EPA 
has considered the costs of technologies in relation to the benefits of 
minimizing adverse environmental impact in establishing 316(b) 
requirements. In Re Public Service Co. of New Hampshire, 10 ERC 1257 
(June 17, 1977); In Re Public Service Co. of New Hampshire, 1 EBAD 455 
(Aug. 4, 1978); Seacoast Anti-Pollution League v. Costle, 597 F. 2d 306 
(1st Cir. 1979). EPA concluded that, because both section 301 and 306 
are expressly cross-referenced in section 316(b), EPA could reasonably 
interpret section 316(b) as authorizing consideration, where 
appropriate, of the same factors, including costs. EPA stresses that it 
may therefore consider some of the same factors, even if it is not 
legally required to consider them in the same way.
2. Early Litigation History
    On January 19, 1993, a group of individuals and environmental 
organizations \19\ filed, under CWA section 505(a)(2), 33 U.S.C. 
1365(a)(2), a complaint in Cronin, et. al. v. Reilly, 93 Civ. 314 (LTS) 
(S.D.N.Y.). The plaintiffs alleged that EPA had failed to perform a 
nondiscretionary duty to issue regulations implementing CWA section 
316(b), 33 U.S.C. 1326(b). In 1995, EPA and the plaintiffs executed a 
consent decree in the case. As amended, it provided for EPA to 
implement CWA section 316(b) by prescribed dates in the three separate 
rule-making proceedings. Phase I concerned cooling water intake 
structures at new facilities, Phase II existing power plants using 
large volumes of cooling water and Phase III for existing smaller-flow 
power plants and factories in at least four industrial sectors (pulp 
and paper making, petroleum and coal products manufacturing, chemical 
and allied manufacturing, and primary metal manufacturing). EPA 
promulgated the Phase I rule in December, 2001, the Phase II rule in 
July, 2004 and the Phase III rule in June, 2006.
---------------------------------------------------------------------------

    \19\ The plaintiffs are the following: Riverkeeper, Inc.; Alex 
Matthiessen, a/k/a The Hudson Riverkeeper; Maya K. Van Rossum, a/k/a 
The Delaware Riverkeeper; Terrance E. Backer, a/k/a The Soundkeeper; 
John Torgan, a/k/a The Narragansett BayKeeper; Joseph E. Payne, a/k/
a The Casco BayKeeper; Leo O'Brien, a/k/a the San Francisco 
BayKeeper; Sue Joerger, a/k/a The Puget Soundkeeper; Steven E. 
Fleischli, a/k/a The Santa Monica BayKeeper; Andrew Willner, a/k/a 
The New York/New Jersey Baykeeper; The Long Island Soundkeeper Fund, 
Inc.; The New York Coastal Fishermen's Association, Inc.; and The 
American Littoral Society, Inc.
---------------------------------------------------------------------------

    On November 17, 2006, some of the same environmental organizations 
in the Cronin case filed a second complaint, amended on January 19, 
2007, in Riverkeeper, et al. v. EPA, 06 Civ. 12987 (S.D.N.Y.) asserting 
that EPA's Phase III rule failed to discharge EPA's duty under CWA 
section 316(b).
    On August 14, 2008, EPA filed a motion to terminate the Cronin 
proceeding because it had discharged its

[[Page 48315]]

obligations (to take final action) under the decree with respect to the 
2004 Phase II and 2006 Phase III rulemakings. Subsequently, EPA entered 
into a settlement with the plaintiffs in both lawsuits. Under the 
settlement agreement, EPA agreed to sign a notice of a proposed 
rulemaking implementing CWA section 316(b) at existing facilities no 
later than March 14, 2011, and to sign a notice taking final action on 
the proposed rule no later than July 27, 2012. Plaintiffs agreed to 
seek dismissal of both their suits, subject to a request to reopen the 
Cronin proceeding if EPA failed to meet the agreed deadlines. The 
district courts have now entered orders of dismissal. On March 11, 
2011, the parties agreed to an amendment to the settlement agreement to 
extend the date for proposal to March 28, 2011. On July 17, 2012, the 
parties agreed to an amendment to the settlement agreement to extend 
the date for the final rule to June 27, 2013. On June 21, 2013, the 
parties agreed to extend the date to November 4, 2013, to accommodate 
completion of formal consultation under the Endangered Species Act. In 
part due to the government shutdown, on November 12, 2013, the parties 
agreed to extend the date to January 14, 2014. On February 10, 2014, to 
continue progress on the Endangered Species Act (ESA) consultation 
process, the parties agreed to extend the date to April 17, 2014. 
Finally, on April 23 2014, in a conference with the court EPA informed 
the judge that the EPA and the Services would complete the ESA 
consultation, so that the EPA would sign the rule by May 16, 2014. The 
court entered an order provisionally reinstating the case if EPA failed 
to inform the court by May 19, 2014 that it had taken the contemplated 
action. On May 19, 2014, the Administrator signed this notice for 
publication in the Federal Register.
3. Prior EPA Actions To Address Cooling Water Intake Structures
a. 1976 Rulemaking
    In April 1976, EPA promulgated regulations under section 316(b) 
that addressed cooling water intake structures. 41 FR 17387, April 26, 
1976. The rule added a new Sec.  401.14 to 40 CFR Chapter I that 
reiterated the requirements of CWA section 316(b). It also added a new 
part 402, which included three sections: (1) Sec.  402.10 
(Applicability), (2) Sec.  402.11 (Specialized definitions), and (3) 
Sec.  402.12 (Best technology available for cooling water intake 
structures). Section 402.10 stated that the provisions of part 402 
applied to ``cooling water intake structures for point sources for 
which effluent limitations are established pursuant to section 301 or 
standards of performance are established pursuant to section 306 of the 
Act.'' Section 402.11 defined the terms cooling water intake structure, 
location, design, construction, capacity, and Development Document. 
Section 402.12 included the following language:

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

    In 1977, electric utility companies challenged those regulations, 
arguing that EPA had failed to comply with the requirements of the 
Administrative Procedure Act in promulgating the rule. Specifically, 
the utilities argued that EPA had violated the Administrative Procedure 
Act in promulgating regulations mandating consideration of the 
information in the Development Document in establishing 316(b) 
conditions in individual NPDES permits because EPA had neither 
published the Development Document in the Federal Register nor properly 
incorporated the document into the rule by reference. The U.S. Court of 
Appeals for the Fourth Circuit agreed. The court determined that the 
information in the Development Document was part of the substance of a 
regulation imposing specific obligations in mandatory terms. As such, 
the information must either be published in the Federal Register in its 
entirety or to be reasonably available and properly incorporated by 
reference under Federal Register requirements. The court explained it 
did not object to site-specific implementation of the section 316(b) 
requirements (``[w]hile we emphasize we do not fault EPA for its point 
source by point source application''), it did require EPA to ``devise a 
less uncertain method of advising those affected of the conditions by 
which they are to be bound.'' Appalachian Power Co. v. Train, 566 F.2d 
451, 457 (4th Cir. 1977). Without reaching the merits of the 
regulations themselves, the court remanded the rule. EPA later withdrew 
part 402. (See 44 FR 32956, June 7, 1979.) Section 402.10, however, now 
codified at Sec.  401.14, remains in effect.
    Following the Fourth Circuit remand of EPA's section 316(b) 
regulations in 1977, NPDES permit authorities have made decisions 
implementing CWA section 316(b) and Sec.  401.14 without the direction 
of a national rule. EPA published draft guidance addressing section 
316(b) implementation in 1977. See Draft Guidance for Evaluating the 
Adverse Impact of Cooling Water Intake Structures on the Aquatic 
Environment: Section 316(b) Public Law 92-500 (U.S. EPA 1977). That 
draft guidance describes the studies recommended for evaluating the 
impact of cooling water intake structures on the aquatic environment 
and recommends a basis for determining the BTA for minimizing adverse 
environmental impact. The 1977 section 316(b) draft guidance states, 
``[t]he environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake 
design, location, construction, and capacity must be made on a case-by-
case basis'' (Section 316(b) Draft Guidance, U.S. EPA 1977, p. 4). This 
site-specific approach was also consistent with the approach described 
in the 1976 Development Document referenced in the remanded regulation. 
(See DCN 1-1056-TC from the Phase I docket.) The 1977 section 316(b) 
draft guidance suggested a general process for developing information 
needed to support section 316(b) decisions and presenting that 
information to the Director. The process involved developing a site-
specific study of the environmental effects associated with each 
facility that uses one or more cooling water intake structures, and 
consideration of that study by the Director in determining whether the 
facility must make any changes for minimizing adverse environmental 
impact. Under this framework, the Director determined whether 
appropriate studies have been performed, whether a given facility has 
minimized adverse environmental impact, and what, if any, technologies 
may be required.
b. Phase I--New Facility Rule
i. Rulemaking
    On November 9, 2001, EPA took final action on regulations governing 
cooling water intake structures at new facilities. See 66 FR 65255, 
December 18, 2001. On December 26, 2002, EPA made minor changes to the 
Phase I regulations. 67 FR 78947. The final Phase I new facility rule 
(40 CFR part 125, Subpart I) establishes requirements applicable to the 
location, design, construction, and capacity of cooling water intake 
structures at new facilities that have a design capacity to withdraw 
greater than 2 mgd and use at least 25 percent of the water they 
withdraw solely for cooling purposes on an actual intake flow basis.
    In the new facility rule, EPA adopted a two-track approach. Under 
Track I, facilities that withdraw equal to or

[[Page 48316]]

greater than 10 mgd were required to meet three requirements. First, 
the intake flow of the cooling water intake structure is restricted, at 
a minimum, to a level commensurate with that which could be attained by 
use of a closed-cycle, recirculating cooling system. Second, the design 
through-screen intake velocity is restricted to 0.5 fps (foot per 
second). Third, the total quantity of intake is restricted to a 
proportion of the mean annual flow of a freshwater river or stream, or 
to a level necessary to maintain the natural thermal stratification or 
turnover patterns (where present) of a lake or reservoir except in 
cases where the disruption is beneficial, or to a percentage of the 
tidal excursions of a tidal river or estuary. Further, if there are, 
for example, endangered or threatened species stressed by a facility's 
intake structure, a facility that would otherwise meet the applicable 
performance requirements may have to select and implement additional 
design and construction or operational measures to address impingement 
mortality and entrainment if these measures are inadequate to protect 
the species. Facilities with greater than 2 mgd but less than 10 mgd 
flows are not required to reduce intake flow to a level commensurate 
with a closed-cycle, recirculating cooling system, but they must still 
meet specific operational criteria.
    Under Track II, a facility had the opportunity to demonstrate to 
the NPDES permitting authority (Director) that the technologies it 
employs will reduce the level of adverse environmental impact to a 
comparable level to what would be achieved by meeting the Track I 
requirements for restricting intake flow and velocity. In making this 
demonstration, the regulations allow a facility to rely on a 
combination of measures in addition to technology controls for reducing 
impingement and entrainment to achieve results equivalent to the Track 
I intake flow and velocity requirements. Among these measures, the rule 
would have allowed restoration of the affected waterbody through 
efforts such as restocking fish and improving the surrounding habitat 
to offset the adverse effects that would otherwise be caused by 
operating the intake structures. The Second Circuit, in reviewing the 
new facility rule, determined that section 316(b) did not authorize the 
use of restoration measures in complying with the EPA performance 
standard. (Note that EPA is removing the provision related to 
restoration measures from the CFR in this rulemaking but has included 
the above description of the Phase I rule for completeness.) For more 
information, see Section I above.
    In addition, under the Phase I rule, the Director may establish 
less stringent alternative requirements for a facility if compliance 
with the Phase I standards would result in compliance costs wholly out 
of proportion to those EPA considered in establishing the Phase I 
requirements or would result in significant adverse impacts on local 
air quality, water resources, or local energy markets.
    EPA specifically excluded new offshore oil and gas extraction 
facilities from the Phase I new facility rule but committed to consider 
establishing requirements for such facilities in the Phase III 
rulemaking. 66 FR 65338, December 18, 2001.
ii. Subsequent Litigation
    Various environmental and industry groups challenged the Phase I 
rule. In February 2004, the Second Circuit sustained the entire rule 
except for the restoration provision, ruling that restoration was not a 
technology as provided for in section 316(b). With respect to the other 
provisions of the rule, the court concluded the Phase I rule was based 
on a reasonable interpretation of the applicable statute and 
sufficiently supported by the record. Restoration provisions of the 
rule were remanded to EPA for further rulemaking consistent with the 
court's decision. Riverkeeper, Inc. v. EPA, 358 F.3d 174, 191 (2nd 
Cir., 2004). Today's rule removes the restoration provisions from the 
Phase I rule. For more details, see Chapter I of this preamble.
c. Phase II--Large Flow Existing Power Plants
i. Rulemaking
    On February 16, 2004, EPA took final action on regulations 
governing cooling water intake structures at certain existing power-
producing facilities. 69 FR 41576, July 9, 2004. The final 2004 Phase 
II rule applied to existing facilities that are point sources; that, as 
their primary activity, both generate and transmit electric power or 
generate electric power for sale or transmission; that use or propose 
to use a cooling water intake structure with a total DIF of 50 mgd or 
more to withdraw water from waters of the United States; and that use 
at least 25 percent of the withdrawn water exclusively for cooling 
purposes on an actual intake flow basis. In addition, power producers 
fitting the description above were also subject to the final 2004 Phase 
II rule even if they obtain their cooling water from one or more 
independent suppliers of cooling water. Such facilities were subject to 
the rule if their supplier withdraws water from waters of the United 
States even if the supplier was not itself a 2004 Phase II existing 
facility. EPA included this provision to prevent circumvention of the 
2004 Phase II rule requirements by a facility purchasing cooling water 
from entities not otherwise subject to section 316(b).
    The final 2004 Phase II rule and preamble also clarified the 
definition of an existing power-producing facility. The 2004 Phase II 
rule defined an existing facility as ``any facility that commenced 
construction as described in Sec.  122.29(b)(4) on or before January 
17, 2002; and any modification of, or addition of a unit at such a 
facility that does not meet the definition of a new facility at Sec.  
125.83.'' Because the definition of the term existing facility was 
based in part on the Phase I definition of the term new facility, the 
preamble to the final 2004 Phase II rule also clarified and provided 
some examples of how the definition of existing facility might apply to 
certain changes at power-producing facilities.
    Under the 2004 Phase II rule, EPA established BTA performance 
standards for the reduction of impingement mortality and, under certain 
circumstances, entrainment (see 69 FR 41590-41593, July 9, 2004). The 
performance standards consisted of ranges of reductions in impingement 
mortality and, if applicable, entrainment (e.g., reduce impingement 
mortality by 80 to 95 percent and/or entrainment by 60 to 90 percent) 
relative to a calculation baseline that reflected the level of 
impingement mortality and entrainment that would occur absent specific 
controls. These performance standards were not based on a single 
technology but, rather, on consideration of a suite of technologies 
that EPA determined were commercially available and economically 
achievable for the industries affected as a whole (69 FR 41598-41610, 
July 9, 2004). EPA based the impingement mortality and entrainment 
performance standards on a suite of technologies because it found no 
single technology to be effective at all affected facilities. For 
impingement standards, these technologies included the following: (1) 
Fine- and wide-mesh wedgewire screens, (2) barrier nets, (3) modified 
screens and fish return systems, (4) fish diversion systems, and (5) 
fine-mesh traveling screens and fish return systems. With regard to 
entrainment reduction, these technologies include the following: (1) 
Aquatic filter barrier systems, (2) fine-mesh wedgewire screens, and 
(3) fine-

[[Page 48317]]

mesh traveling screens with fish return systems. Because EPA based the 
performance standards on a combination of technologies and because of 
the uncertainty inherent in predicting the efficacy of one or more of 
these technologies as applied to different facilities, EPA promulgated 
these standards as ranges. Furthermore, because the site-specific 
performance was based on a comparison to a once-through system without 
any specific controls on the shoreline near the source waterbody (i.e., 
calculation baseline, for more details see Section III.B.1 of the 
preamble to the proposed rule, 76 FR 22185, April 20, 2011), the rule 
also allowed facilities to receive credit toward meeting the 
performance standards for impingement and entrainment reduction 
associated with alternative locations of their intakes (e.g., deep 
water where fish and shellfish were less abundant).
    The types of performance standard applicable to a facility (i.e., 
reductions in impingement mortality only or both impingement mortality 
and entrainment) were based on several factors, including the 
facility's location (i.e., source waterbody), rate of use (capacity 
utilization rate), and the proportion of the waterbody withdrawn.
    The 2004 Phase II rule identified five compliance alternatives to 
meet the performance standards. A facility could demonstrate to the 
Director one of the following: (1) That it has already reduced its flow 
commensurate with a closed-cycle recirculating system (to meet both 
impingement mortality and entrainment), or that it has already reduced 
its maximum through-screen velocity to 0.5 fps or less (to meet the 
impingement performance standard only); (2) that its cooling water 
intake structure configuration meets the applicable performance 
standards; (3) that it has selected design and construction 
technologies, operational measures, and/or restoration measures that, 
in combination with any existing design and construction technologies, 
operational measures, and/or restoration measures, meet the applicable 
performance standards; (4) that it meets the applicability criteria and 
has installed and is properly operating and maintaining a rule-
specified and/or approved State-specified design and construction 
technology (i.e., submerged cylindrical wedgewire screens) in 
accordance with Sec.  125.99(a) or an alternative technology that meets 
the appropriate performance standards and is approved by the Director 
in accordance with Sec.  125.99(b); or (5) that its costs of compliance 
would be significantly greater than either the costs considered by the 
Administrator for a like facility to meet the applicable performance 
standards, or the benefits of meeting the applicable performance 
standards at the facility. Under the cost-cost comparison alternative, 
a Director could determine that the cost of compliance for a facility 
would be significantly greater than the costs considered by EPA in 
establishing the applicable impingement mortality and entrainment 
performance standards. Similarly, under the cost-benefit comparison 
alternative, a Director could determine that the cost of compliance for 
a facility would be significantly greater than the benefits of 
complying with the applicable performance standards. If either of these 
determinations were made, the Director would have to make a site-
specific determination of BTA for minimizing adverse environmental 
impact that came as close as practicable to meeting the applicable 
performance standards at a cost that did not significantly exceed 
either the costs EPA considered in establishing these standards or the 
site-specific benefits of meeting these standards.
    The final 2004 Phase II rule also provided that a facility that 
chooses specified compliance alternatives might request that compliance 
with the requirements of the rule be determined on the basis of 
implementing a Technology Installation and Operation Plan (TIOP) that 
would indicate how the facility would install and ensure the efficacy, 
to the extent practicable, of design and construction technologies, 
and/or operational measures, and/or a Restoration Plan. The rule also 
established requirements for developing and submitting a TIOP (Sec.  
125.95(b)(4)(ii)) and provisions that specified how compliance could be 
determined on the basis of implementing a TIOP (Sec.  125.94(d)). Under 
these provisions, a TIOP could be requested in the first permit term, 
and continued use of a TIOP could be requested where a facility was in 
compliance with such plan and/or its Restoration Plan.
ii. Subsequent Litigation
    Industry, environmental stakeholders, and some States \20\ 
challenged many aspects of the 2004 Phase II regulations. On January 
25, 2007, the Second Circuit (Riverkeeper, Inc. v. EPA, 475 F.3d 83, 
(2d Cir., 2007)) upheld several provisions of the 2004 Phase II rule 
and remanded others to EPA for further rulemaking.
---------------------------------------------------------------------------

    \20\ Rhode Island, Connecticut, Delaware, Massachusetts, New 
Jersey, and New York.
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    As noted above, for the 2004 Phase II rule EPA did not select 
closed-cycle cooling as BTA. Instead, EPA selected a suite of 
technologies to reflect BTA, including, for example, screens, aquatic 
filter barriers, and barrier nets. According to the chosen 
technologies, EPA established national performance standards for 
reducing impingement mortality and entrainment of fish and fish 
organisms but did not require the use of any specific technology. Among 
the aspects of the rule the Second Circuit remanded for further 
clarification was EPA's decision to reject closed-cycle cooling as BTA 
and EPA's determination of performance ranges as BTA. In addition, the 
Second Circuit found that, consistent with its Phase I decision, 
restoration was not authorized under the CWA as a technology for BTA 
and that EPA's cost-benefit site-specific compliance alternative was 
not in accord with the CWA. There are also several issues for which the 
court requested additional clarification and some instances where the 
court determined that EPA had failed to provide adequate notice and 
opportunity to comment on certain provisions of the rule.
iii. Suspension
    As a result of the decision in Riverkeeper, Inc. v. EPA, 475 F.3d 
83, (2d Cir., 2007), EPA, on July 9, 2007 (72 FR 37107) suspended the 
requirements for cooling water intake structures at 2004 Phase II 
existing facilities, pending further rulemaking. Specifically, EPA 
suspended the provisions in Sec.  122.21(r)(1)(ii) and (r)(5), and part 
125 Subpart J, with the exception of Sec.  125.90(b). EPA explained 
that suspending the 2004 Phase II requirements was an appropriate 
response to the Second Circuit's decision and that such action would 
allow it to consider how to respond to the remand. In addition, 
suspending the 2004 Phase II rule was responsive to the concerns of the 
regulated community and permitting agencies, both of whom sought 
guidance regarding how to proceed in light of the approaching deadline 
for compliance with the remanded rule. EPA's suspension clarified that 
pending further rulemaking, permit requirements for cooling water 
intake structures at 2004 Phase II facilities should be established on 
a case-by-case, BPJ basis (see Sec.  125.90(b)).
iv. Supreme Court Decision
    Following the decision in the Second Circuit, several industry 
group litigants

[[Page 48318]]

petitioned the U.S. Supreme Court to hear an appeal regarding several 
issues in the case. Entergy Corp. v. Riverkeeper, Inc. et al., S. Ct. 
No. 07-588, et al. On April 14, 2008, the Supreme Court granted the 
petitions for writs of certiorari submitted by these 2004 Phase II 
litigants, but it limited its review to the issue of whether section 
316(b) authorizes EPA to compare costs with benefits in determining BTA 
for cooling water intake structures. The Supreme Court held oral 
arguments in this case on December 2, 2008, and issued a decision on 
April 1, 2009. As explained above, the Supreme Court held that it is 
permissible for EPA to rely on cost-benefit analysis in decision 
making. The court indicated that the phrase ``best technology available 
for minimizing adverse environmental impact'' does not unambiguously 
preclude use of cost-benefit analysis in decision making. 566 U.S. at 
223(2009). The ruling supports EPA's discretion to consider costs and 
benefits, but it imposes no obligation on the Agency to do so.
d. Phase III--Existing Power Plants Below 50 mgd, Existing 
Manufacturing Facilities, and New Offshore Oil and Gas Facilities
i. Rulemaking
    On June 16, 2006, EPA published a final Phase III rule that 
established categorical regulations for new offshore oil and gas 
extraction facilities that have a DIF threshold of greater than 2 mgd 
and that withdraw at least 25 percent of the water exclusively for 
cooling purposes on an actual intake flow basis. The rule establishes 
requirements that address intake velocity, proportionate flow for 
sensitive locations, design and construction technologies or 
operational measures, monitoring and recordkeeping, based on if a 
facility employs a sea chest or not, and is fixed or not. Like the 
Phase I rule, this rule includes a Track II. In the Phase III rule, EPA 
declined to establish national standards for Phase III existing 
facilities. Instead it concluded that CWA section 316(b) requirements 
for electric generators with a DIF of less than 50 mgd and all existing 
manufacturing facilities would continue to be established on a case-by-
case basis under the NPDES permit program using BPJ. (71 FR 35006, June 
16, 2006).
ii. Subsequent Litigation
    Following promulgation of the rule, a number of parties filed 
petitions for review that were subsequently consolidated for hearing in 
the U.S. Court of Appeals for the Fifth Circuit. In 2009, EPA 
petitioned the Fifth Circuit to remand to the Agency those parts of the 
rule that applied to existing facilities. Specifically, EPA requested 
remand of those provisions in the Phase III rule that establish 316(b) 
requirements at electric generators with a DIF of less than 50 mgd, and 
the provision establishing requirements for existing manufacturing 
facilities on a case-by-case basis using BPJ. This request did not 
affect the Phase III rule requirements that establish categorical 
regulations for new offshore oil and gas extraction facilities that 
have a DIF threshold of greater than 2 mgd and that withdraw at least 
25 percent of the water exclusively for cooling purposes on an actual 
intake flow basis.
    On July 23, 2010, the U.S. Court of Appeals for the Fifth Circuit 
issued a decision affirming the parts of Phase III rule relating to new 
offshore oil and gas facilities. The court granted EPA's motion to 
remand the rule with respect to existing facilities. In sustaining the 
requirements for new offshore oil and gas facilities, the Fifth Circuit 
upheld EPA's decision not to use cost benefit balancing in determining 
the requirements for these new facilities.

III. Environmental Effects Associated With Cooling Water Intake 
Structures

A. Introduction

    Multiple types of adverse environmental effects may be associated 
with CWIS operations at regulated facilities. Many facilities employ 
once-through cooling water systems that impinge fishes and other 
aquatic organisms on intake screens. Impinged organisms may be killed, 
injured, or weakened. In addition, early life stage fish or planktonic 
organisms can be entrained by the CWIS and subjected to high velocity 
and pressure, increased temperature, and chemical anti-biofouling 
agents in the system. These factors are highly lethal in most cases, as 
early life stages of larvae are highly sensitive and very unlikely to 
survive entrainment. Even if an organism is entrained as an egg and 
survives, its chances of surviving beyond the larvae stage are 
dramatically lower than eggs that were never entrained. Thus, unless 
measures to protect larvae are in place, egg survival does not indicate 
that adverse environmental impacts have been avoided. Consistent with 
its treatment of entrainment in past 316(b) rules, EPA assumes for the 
purposes of a national rule that 100 percent of entrained organisms 
suffer mortality.
    The effects of CWIS on aquatic habitats and biota in the waterbody 
do not occur in isolation from other ongoing physical, chemical, and 
biological stressors. Anthropogenic stressors may include: Degraded 
water and sediment quality, low dissolved oxygen (DO) levels, 
eutrophication, fishing, channel or shoreline (habitat) modification 
(intake structure and other flood or storm controls), hydrologic regime 
changes and invasive species. For example, many aquatic organisms 
subject to IM&E (impingement mortality and entrainment) reside in 
impaired (i.e., CWA 303(d) listed) waterbodies. The effects of 
anthropogenic stressors on biota may contribute to or compound the 
impact of IM&E, depending on the influence of location-specific 
factors. In addition to stressors acting on biota near a single CWIS, 
multiple CWISs and facilities located in close proximity on the same 
waterbody may have additive or cumulative effects on aquatic 
communities. And, although it is difficult to measure, the compensatory 
ability of an aquatic population, which is the capacity for a species 
to increase survival, growth, or reproduction rates in response to 
decreased population, is likely compromised by IM&E and the cumulative 
impact of other stressors in the environment over extended periods of 
time.

B. Major Anthropogenic Stressors in Aquatic Ecosystems

    All ecosystems and their biota are subject to natural variability 
in environmental conditions (e.g., seasonal cycles, foliage presence) 
as well as periodic large-scale disturbances (e.g., drought, flood, 
fire). In contrast, anthropogenic stressors tend to be more chronic in 
nature and can often lead to long-term environmental degradation 
associated with decreased biodiversity, reduced primary and secondary 
production, and a lowered ecosystem resiliency (i.e., ability of the 
ecosystem to recover to its original state from perturbations).\21\ 
Several of the more important anthropogenic stressors are discussed 
below, with CWIS-related impacts considered as a separate category of 
stress.
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    \21\ Rapport, D. J., & Whitford, W. G. (1999). How Ecosystems 
Respond to Stress. BioScience, 49(3), 193-203. See DCN 10-4871.
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1. Habitat Loss
    Structural aquatic habitat is generally recognized as the most 
significant determinant of the nature and composition of aquatic 
communities. Most 316(b) facilities have been built on shoreline 
locations where industrial buildings, roadways, canals, impoundments, 
and other water storage or conveyance structures have been

[[Page 48319]]

constructed at the cost of terrestrial, aquatic, and wetland habitats. 
The main impacts of aquatic habitat loss are a reduction in the number 
of fish in the environment, a concentration of fishery spawning and 
nursery areas in fewer locations, shifts in species dominance based on 
available habitat and local extirpation of historical fish species. 
Habitat loss in shoreline areas exacerbates the effect of CWIS losses 
because many fish species affected by IM&E rely heavily on coastal 
wetlands as nursery areas.
2. Water Quality and Impaired Waters
    Poor water quality is a major stressor of aquatic biota and 
habitats. Degraded surface water and sediment contaminants reflect both 
current and past industrial, agricultural and urban land use and 
disposal practices. Poor water quality can limit the numbers, 
composition, and distribution of fish and invertebrates; reduce 
spawning effort and growth rates; select for pollution-tolerant 
species; cause periodic fishkills; or result in adverse bioaccumulative 
effects to piscivorous wildlife.
    EPA has determined that the majority of surveyed facilities, 
including 71 percent of electric generators and 79 percent of sampled 
manufacturing facilities, are within two miles of an impaired (i.e., 
CWA section 303(d)-listed) waterbody.\22\ These impairments are caused 
by a variety of chemical, physical, and biological factors. These 
factors include biological stressors, nutrients, organic enrichment/
loading, bioaccumulation, toxics, unknown causes, and other forms of 
anthropogenic sources of pollution (e.g., atmospheric deposition of 
mercury leading to fish advisories). The combined impacts of impaired 
water quality may result in highly degraded or altered aquatic 
communities that are further impaired by IM&E associated with the 
operation of regulated facilities.
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    \22\ Abt Associates, Inc. (2010). Source Water Body Comparisons 
(Under Work Assignment 2-09, Task 4) (pp. 13). Cambridge, MA. See 
DCN 10-4504.
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3. Overharvesting
    Overharvesting is a general term describing the exploitation of an 
aquatic population beyond a level that is sustainable, sometimes to the 
point of significantly reducing the population relative to historic 
levels. Given that many fisheries regulated by the National Marine 
Fisheries Service (NMFS) are overfished on a continual basis, 
overharvesting is a particular problem for stocks also subject to IM&E.
4. Invasive Species
    Non-indigenous invasive species (NIS) are a significant and 
increasingly prevalent stressor in both freshwater and marine 
environments. Approximately 300 NIS have become established in marine 
and estuarine habitats of the continental U.S., and the number of NIS 
continues to increase. Many NIS are nuisance species with undesirable 
effects on local communities.\23\ For example, interactions between NIS 
and other anthropogenic stressors can affect the colonization and 
distribution of native species subject to CWIS impacts.
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    \23\ Ruiz, G. M., Fofonoff, P. W., Carlton, J. T., Wonham, M. 
J., & Hines, A. H. (2000). Invasion of Coastal Marine Communities in 
North America: Apparent Patterns, Processes, and Biases. Annual 
Review of Ecology & Systematics, 31, 481-531. See DCN 10-4880.
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C. Effects of CWIS on Aquatic Ecosystems

    The magnitude and regional importance of IM&E is a function of 
operational CWIS intake volumes and characteristics of the aquatic 
community in the region. Thus, for example, IM&E can contribute to 
impacts on threatened and endangered (T&E) species and reduce 
populations of ecologically critical aquatic organisms, including 
important organisms in an ecosystem's food web. In addition, IM&E may 
diminish the compensatory reserves of populations and reduce indigenous 
species populations, commercial fisheries, and recreational fisheries. 
Further, IM&E may stress overall communities and ecosystems, as 
evidenced by reductions in diversity or other changes in ecosystem 
structure or function. The direct and indirect impacts of CWIS may 
reduce other valuable ecosystem goods and services, including nutrient 
cycling and ecosystem stability.
1. Losses of Fish From Impingement Mortality and Entrainment
    The most visible direct impacts of IM&E are the losses of large 
numbers of aquatic organisms, distributed non-uniformly among fish, 
benthic invertebrates, phytoplankton, zooplankton, and other 
susceptible aquatic taxa (e.g., sea turtles). These losses have 
immediate and direct effects on the population size and age 
distribution of affected species, and may cascade through food webs.
    In some cases, IM&E has been shown to be a significant source of 
anthropogenic mortality of depleted stocks of commercially targeted 
species. For example, approximately 5.4 percent of the estimated A1E 
population of the Southern New England/Massachusetts stock of winter 
flounder (Pseudopleuronectes americanus) is lost to IM&E.\24\ In 
addition to its effect on stocks of marine commercial fish species, 
IM&E increases the pressure on native freshwater species, such as lake 
whitefish (Coregonus clupeaformi) and yellow perch (Perca flavescens), 
whose populations have seen dramatic declines in recent years.\25\
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    \24\ Northeast Fisheries Science Center (NEFSC) of the NOAA 
National Marine Fisheries Service. (2011). 52nd Northeast Regional 
Stock Assessment Workshop (52nd SAW): Assessment Summary Report. DCN 
12-4940.
    \25\ U.S. Department of the Interior (USDOI). (2004). Fisheries: 
Aquatic and Endangered Resources from http://www.glsc.usgs.gov/main.php?content=research_risk&title=Species%20at%20Risk0&menu=research [Retrieved June 23, 
2004]; Wisconsin Department of Natural Resources (Wisconsin DNR). 
(2003). Adrift on the sea of life. Wisconsin Natural Resources, 
June, 17-21. See DCN 10-4914.
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    IM&E is also likely to contribute to reduced population sizes of 
species targeted by commercial and recreational fishers, particularly 
for stocks that are being harvested at unsustainable levels and/or 
undergoing rebuilding. Thus, reducing IM&E may lead to more rapid stock 
recovery, a long-term increase in commercial fish catches, increased 
population stability following periods of poor recruitment and, as a 
consequence of increased resource utilization, an increased ability to 
minimize the invasion of exotic species.\26\
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    \26\ Stachowicz, J. J., & Byrnes, J. E. (2006). Species 
Diversity, invasion success, and ecosystem functioning: 
disentangling the influence of resource competition, facilitation, 
and extrinsic factors. Marine Ecology--Progress Series, 311, 251-
262. See DCN 10-4892.
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2. IM&E Effects on Threatened and Endangered Species
    Populations of T&E (threatened and endangered) species may suffer 
increased mortality as direct or indirect consequences of IM&E. T&E 
species are vulnerable to future extinction or at risk of extinction in 
the near future and IM&E losses could either lengthen population 
recovery time, hasten the demise of these species, or counteract the 
effects of other conservation efforts. For this reason, the population-
level and societal values of T&E losses are likely to be considered 
more important than the absolute number of losses that occur. Due to 
low population sizes, I&E mortality from CWISs may represent a 
substantial portion of the annual reproduction of T&E species.
3. Thermal Effects
    One byproduct of once-through cooling water systems is a discharge 
of a heated effluent. Concerns about the impacts of heated effluents 
are

[[Page 48320]]

addressed by state water quality standards addressing temperature, 
rather than a national rule. Section 316(a) of the Clean Water Act 
provides a mechanism for variances from controls that could be imposed 
due to thermal effects. Based on a limited review of NPDES permits, to 
the extent that facilities have controls on cooling water intake 
structures, these controls have been required to meet water quality 
standards related to temperature.\27\
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    \27\ Abt Associates, Inc. (2010). Source Water Body Comparisons 
(Under Work Assignment 2-09, Task 4) (pp. 13). Cambridge, MA. See 
DCN 10-4504.
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    Thermal pollution has long been recognized as having multiple 
effects upon the structure and function of ecosystems.\28\ Numerous 
studies have shown that thermal discharges may substantially alter the 
structure of the aquatic community by modifying photosynthetic, 
metabolic, and growth rates \29\ and reducing levels of DO. Thermal 
pollution may also alter the location and timing of fish behaviors 
including spawning, aggregation, and migration, and may result in 
thermal shock-induced mortality for some species.\30\ Adverse 
temperature effects are likely to be more pronounced in aquatic 
ecosystems that are already subject to other environmental stressors 
such as high biochemical oxygen demand (BOD) levels, sediment 
contamination, and pathogens. Reduced waterbody volume due to the 
effects of climate change and/or lengthy droughts could exacerbate 
these effects.
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    \28\ Abt Associates, Inc. (2009). Summary of Ecological Effects 
of Thermal Discharge (pp. 28). Cambridge, MA. See DCN 10-4505.
    \29\ Martinez-Arroyo, A., Abundes, S., Gonz[aacute]lez, M. E., & 
Rosas, I. (2000). On the Influence of Hot-Water Discharges on 
Phytoplankton Communities from a Coastal Zone of the Gulf of Mexico. 
Water, Air & Soil Pollution, 119(1-4), 209-230. See DCN 10-4820.
    \30\ Smythe, A. G., & Sawyko, P. M. (2000). Field and laboratory 
evaluations of the effects of `cold shock' on fish resident in and 
around a thermal discharge: an overview. Environmental Science & 
Policy, 3(S1), 225-232. See DCN 10-4887.
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4. Chemical Effects
    The release of chemicals in the discharge of once-through cooling 
waters is another environmental effect associated with industrial 
facility operations. These chemicals include metals from internal 
corrosion of pipes, valves and pumps (e.g., chromium, copper, iron, 
nickel, and zinc), additives (anti-corrosion and anti-scaling agents) 
and their byproducts, and materials from boiler blowdown and cleaning 
cycles. In addition to these pollutants, facilities also discharge 
anti-fouling biocide agents.
    A review of the effects of chemical treatment and discharge into 
the environment suggests that direct ecotoxicity in discharge plumes is 
rarely observed beyond the point of discharge or in a mixing zone near 
the pipe outlet.\31\ However, the presence of these chemicals in the 
receiving water may be additive to low-level chronic adverse effects 
from other anthropogenic stressors identified above.
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    \31\ Taylor, C. J. L. (2006). The effects of biological fouling 
control at coastal and estuarine power stations. Marine Pollution 
Bulletin, 53(1-4), 30-48. See DCN 10-4901.
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5. Effects of Flow Alteration
    The operation of CWISs and discharge returns significantly alter 
patterns of flow within receiving waters both in the immediate area of 
the CWIS intake and discharge pipe, and in mainstream waterbodies, 
particularly in inland riverine settings. In ecosystems with strongly 
delineated boundaries (i.e., rivers, lakes, enclosed bays, etc.), CWISs 
may withdraw and subsequently return a substantial proportion of water 
available to the ecosystem. Even in situations when the volume of water 
downstream of regulated facilities changes relatively little, the flow 
characteristics of the waterbody, including turbulence and water 
velocity, may be significantly altered.
    Altered flow velocities and turbulence may lead to several changes 
in the physical environment. These changes can include sediment 
deposition, sediment transport, and turbidity, each of which plays a 
role in the physical structuring of ecosystems.\32\ Flow velocity and 
turbulence are controlling biological factors in aquatic ecosystem 
health, and have been shown to alter feeding rates, settlement and 
recruitment, bioturbation, growth and population dynamics.\33\
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    \32\ Hoyal, D. C. J. D., Atkinson, J. F., Depinto, J. V., & 
Taylor, S. W. (1995). The effect of turbulence on sediment 
deposition. Journal of Hydraulic Research, 33(3), 349-360. See DCN 
10-4797.
    \33\ Sanford, E. B., Bertness, D., & M. D. Gaines, S. D. (1994). 
Flow, food supply and acorn barnacle population dynamics. Marine 
Ecology Progress Series, 104, 49-62. See DCN 10-4882.
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    Climate change is predicted to have variable effects on future 
river flow in different regions of the United States. Some rivers are 
expected to have large increases in flood flows while other basins will 
experience stress from low water levels. Thus, the adverse effects of 
flow alteration may increase or decrease over longer periods for larger 
rivers, depending on their location.

D. Community-Level or Indirect Effects of CWIS

    In addition to the direct effects of CWISs, IM&E may alter a wide 
range of aquatic ecosystem functions and services at the community 
level. Many of these effects on aquatic community function and service 
are poorly characterized, given the limited scope of IM&E studies and 
an incomplete knowledge of baseline or pre-operational conditions 
within affected waters.
    The operation of CWISs by facilities can lead to localized areas of 
depressed fish and shellfish abundance. Industrial facilities (and the 
intake volume they represent) are located in a non-uniform manner along 
coastlines and rivers. They may be clustered, such that the populations 
affected by IM&E are geographically heterogeneous. This can result in a 
highly localized and patchy distribution of aquatic organisms in 
regional areas.
    IM&E may directly reduce species populations through the death of 
individual organisms, or may indirectly affect species populations by 
altering established predator-prey relationships and thereby disrupting 
ecological niches and food webs. For example, the loss of young-of-year 
predators, such as striped bass, or loss of important forage fish, such 
as menhaden and bay anchovy, may affect trophic relationships and alter 
food webs. IM&E may lead to reductions in local community biodiversity 
or in a loss of genetic diversity in individual fish populations. 
Because IM&E represents a selective pressure on early life stages, it 
may reduce the genetic diversity of resident fish and prevent the 
recovery of depleted stocks.\34\ Also, because many stocks are 
differentiated by oceanic region and/or timing of migratory movements, 
IM&E could alter the seasonal migration and life cycle events of fish 
populations, which could have ramifications for predator species.
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    \34\ Swain, D. P., Sinclair, A. F., & Mark Hanson, J. (2007). 
Evolutionary response to size-selective mortality in an exploited 
fish population. Proceedings of the Royal Society B: Biological 
Sciences, 274(1613), 1015-1022. See DCN 10-4900.
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    IM&E may also alter the pace of nutrient cycling and energy 
transfer through food webs. Fish species have been shown to have 
substantial effects on nitrogen, phosphorous, and carbon cycling due to 
storage and translocation effects.\35\ These alterations in nutrient 
cycling could lead to redirection of nutrient flows to other components 
of the ecosystem including water column phytoplankton, benthic 
macroalgae and attached epiphytes, with subsequent changes to the 
condition of critical

[[Page 48321]]

ecosystem habitats, such as submerged aquatic vegetation.
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    \35\ Vanni, M. J., Layne, C. D., & Arnott, S. E. (1997). ``Top-
down'' trophic interactions in lakes: effects of fish on nutrient 
dynamics. Ecology, 78(1), 1-20. See DCN 12-5047.
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    The effect of long-term or chronic IM&E may lead to a decrease in 
ecosystem resistance and resilience \36\ (i.e., ability to resist and 
recover from disturbance, including invasive species). That is, IM&E is 
likely to reduce the ability of ecosystems to withstand and recover 
from these ecosystem damages, whether those impacts are due to 
anthropogenic effects or natural variability.
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    \36\ Folke, C., Carpenter, S., Walker, B., Scheffer, M., 
Elmqvist, T., Gunderson, L., & Holling, C. S. (2004). Regime Shifts, 
Resilience, and Biodiversity in Ecosystem Management . . . Annual 
Review of Ecology, Evolution, & Systematics, 35(1), 557-581. See DCN 
10-4770.
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E. Cumulative Effects of Multiple Facilities

    Cumulative effects of CWISs are likely to occur if multiple 
facilities are located in close proximity and impinge or entrain 
aquatic organisms within the same source waterbody, watershed system, 
or along a migratory pathway of a specific species (e.g., striped bass 
in the Hudson River). EPA analyses show more than 20 percent of all 
facilities on inland waters withdraw more than 5 percent of the mean 
annual flow.\37\ See TDD Chapter 4.1.3 for detailed discussion. This 
impact is compounded because more than half of all regulated facilities 
are located on waterbodies with multiple CWISs. An inspection of the 
geographic locations of regulated facilities (approximated by CWIS 
latitude and longitude) shows that facilities in inland settings are 
more likely to be located in close proximity to other facilities 
(upstream or downstream) than are facilities in marine and estuarine 
environments. The cumulative impact of clustered facilities may be 
significant, due to the concentrated IM&E, combined intake flows, and 
the potential for other impacts such as thermal discharges.
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    \37\ As described in the Phase I proposed rule (65 FR 49060) and 
the Phase II NODA (66 FR 28853), absent any other controls, 
withdrawal of a unit volume of water from a waterbody will result in 
the entrainment of an equivalent unit of aquatic life (such as eggs 
and larval organisms) suspended in that volume of the water column. 
Thus, facilities withdrawing greater than 5 percent of the mean 
annual flow from freshwater rivers and streams may entrain equal 
proportions of aquatic organisms.
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IV. Summary Description of the Final Rule

    Under today's final rule, the owners or operators of existing 
facilities and new units at existing facilities are subject to BTA 
standards for impingement mortality and entrainment that are expected 
to substantially reduce the adverse environmental impacts of cooling 
water intake structures. Earlier, in Section I, the preamble describes 
what facilities are subject to the rule. The discussion below presents 
an overview of the substantive requirements of the rule.

A. BTA Standard for Impingement Mortality for Existing Units at 
Existing Facilities

    The final rule requires that existing facilities subject to this 
rule must comply with one of the following seven alternatives 
identified in the national BTA standard for impingement mortality at 
Sec.  125.94(c) (hereafter, impingement mortality standards):
    (1) Operate a closed-cycle recirculating system as defined at Sec.  
125.92;
    (2) operate a cooling water intake structure that has a maximum 
through-screen design intake velocity of 0.5 fps;
    (3) operate a cooling water intake structure that has a maximum 
through-screen intake velocity of 0.5 fps;
    (4) operate an offshore velocity cap as defined at Sec.  125.92 
that is installed before October 14, 2014;
    (5) operate a modified traveling screen \38\ that the Director 
determines meets the definition at Sec.  125.92(s) and that the 
Director determines is the best technology available for impingement 
reduction;
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    \38\ EPA is aware that innovative screen designs are currently 
being tested that are expected to provide similar or better 
performance than modified Ristroph traveling screems. Therefore EPA 
has defined modified traveling screen at 40 CFR 125.92 to mean any 
traveling water screen that incorporates the specified measures that 
are protective of fish and shellfish. In this preamble, modified 
traveling water screen with a fish handling and return system is 
often referred to more simply a modified traveling screen.
---------------------------------------------------------------------------

    (6) operate any other combination of technologies, management 
practices and operational measures that the Director determines is the 
best technology available for impingement reduction; or
    (7) achieve the specified impingement mortality performance 
standard.
    Options (1), (2) and (4) above are essentially pre-approved 
technologies requiring no demonstration or only a minimal demonstration 
that the flow reduction and control measures are functioning as EPA 
envisioned. Options (3), (5) and (6) require more detailed information 
be submitted to the Director before the Director may specify it as the 
requirement to control impingement mortality.
    In the case of Option (3), which EPA considers to be a streamlined 
alternative, the facility must submit information to the Director that 
demonstrates that the maximum intake velocity as water passes through 
the structural components of a screen measured perpendicular to the 
screen mesh does not exceed 0.5 feet per second.
    In the case of Option (5), the facility must submit a site-specific 
impingement technology performance optimization study that must include 
two years of biological sampling demonstrating that the operation of 
the modified traveling screens has been optimized to minimize 
impingement mortality. As discussed below, if the facility does not 
already have this technology installed and chooses this option, the 
Director may postpone this study till the screens are installed (see 
VI.G.1.d below).
    In the case of Option (6), the facility must submit a site-specific 
impingement study including two years of biological data collection 
demonstrating that the operation of the system of technologies, 
operational measures and best management practices has been optimized 
to minimize impingement mortality. If this demonstration relies in part 
on a credit for reductions in the rate of impingement already achieved 
by measures taken at the facility, an estimate of those reductions and 
any relevant supporting documentation must be submitted. The estimated 
reductions in rate of impingement must be based on a comparison of the 
system to a once-through cooling system with a traveling screen whose 
point of withdrawal from the surface water source is located at the 
shoreline of the source waterbody.
    The impingement mortality performance standard in (7) requires that 
a facility must achieve a 12-month impingement mortality performance of 
all life stages of fish and shellfish of no more than 24 percent 
mortality, including latent mortality, for all non-fragile species that 
are collected or retained in a sieve with maximum opening dimension of 
0.56 inches \39\ and kept for a holding period of 18 to 96 hours. The 
Director may, however, prescribe an alternative holding period. The 12-
month average of impingement mortality is calculated as the sum of 
total impingement mortality for the previous 12 months divided by the 
sum of total impingement for the previous 12 months. A facility must 
choose to demonstrate compliance with this requirement for the entire 
facility, or for each individual cooling water intake

[[Page 48322]]

structure. Biological monitoring must be completed at a minimum 
frequency of monthly.
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    \39\ Though less common, the EPA recognizes that \1/2\ by \1/4\ 
inch mesh are used in some instances and perform comparably to the 
\3/8\ inch square mesh. Therefore, today's rule allows for 
facilities to apply a \1/2\ by \1/4\ inch sieve (diagonal opening of 
0.56 inches) or a \3/8\ inch sieve (diagonal opening of 0.53 inches) 
when discerning between impinged and entrained organisms.
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    The owner or operator of an existing facility must meet the 
impingement mortality requirements as soon as practicable after 
issuance of a final permit establishing the entrainment requirements 
under Sec.  125.94(d).
    Today's final rule also allows the Director, based on review of 
site-specific data, to conclude that a de minimis rate of impingement 
exists and therefore no additional controls are warranted to meet the 
BTA impingement mortality standard. In addition, today's final rule 
allows the Director flexibility in determining appropriate site-
specific controls that may be less stringent than those found at Sec.  
125.94(c)(1) to (7) for existing units at existing facilities operating 
with a capacity utilization of less than 8 percent averaged over a 24-
month block contiguous period. This provision can be found at Sec.  
125.94(c)(12). EPA notes that these provisions for impingement 
mortality would not apply to entrainment because, as discussed in the 
next section, the requirements for entrainment are established by the 
Director on a site-specific basis.

B. BTA Standard for Entrainment for Existing Units at Existing 
Facilities

    The final rule establishes the national BTA standard for 
entrainment at existing units at existing facilities at Sec.  125.94(d) 
(hereafter, entrainment standards). For such units, the rule does not 
prescribe a single nationally applicable entrainment performance 
standard but instead requires that the Director must establish the BTA 
entrainment requirement for a facility on a site-specific basis. The 
requirements must reflect the Director's determination of the maximum 
reduction in entrainment warranted after consideration of all factors 
relevant to the BTA determination at the site and must include 
consideration of the specific factors spelled out in Sec.  
125.98(f)(2). Facilities that withdraw greater than 125 mgd AIF must 
develop and submit an Entrainment Characterization Study (Sec.  
122.21(r)(9)), as well as provide other information required at Sec.  
122.21(r)(7) and (10), (11), (12) and (13) that must include specified 
data pertinent to consideration of several of the factors identified in 
Sec.  125.98(f).

C. BTA Standards for Impingement Mortality and Entrainment for New 
Units at Existing Facilities

    The owner or operator of a new unit at an existing facility must 
achieve one of two compliance alternatives under the national BTA 
standards for impingement mortality and entrainment for new units at 
existing facilities at Sec.  125.94(e) (hereafter, new unit 
standards).\40\ Under the new unit standards, the owner or operator of 
a facility must reduce AIF at the new unit, at a minimum, to a level 
commensurate with that which can be attained by the use of a closed-
cycle recirculating system as defined at Sec.  125.92(c)(1). The owner 
or operator of a facility with a cooling water intake structure that 
supplies cooling water exclusively for operation of a wet or dry 
cooling tower(s) and that meets the definition of closed-cycle 
recirculating system at Sec.  125.92(c)(1) meets this new unit 
standard. Under the alternative new unit standard, the owner or 
operator of a facility must demonstrate to the Director that it has 
installed, and will operate and maintain, technological or other 
control measures that reduce the level of adverse environmental impact 
from any cooling water intake structure used to supply cooling water to 
the new unit to a comparable level to that which would be achieved 
through flow reductions commensurate with the use of a closed-cycle 
recirculating system. Under this alternative, the owner or operator of 
a facility must demonstrate entrainment mortality reductions that are 
equivalent to 90 percent or greater of the reduction that could be 
achieved through compliance with the first alternative entrainment 
standard for new units.
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    \40\ EPA expects that all new units will comply with these 
requirements through the installation of a closed-cycle cooling 
system, which is one of the most effective technologies for reducing 
impingement and impingement mortality. Therefore, the IM 
requirements for new units are already addressed by the new unit 
requirements by virtue of the first compliance alternative of the IM 
performance standard.
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    The new unit entrainment standards do not apply to certain water 
withdrawals including (1) cooling water used by manufacturing 
facilities for contact cooling purposes; (2) portions of those water 
withdrawals for auxiliary cooling uses totaling less than 2 mgd; (3) 
any volume of cooling water withdrawals used exclusively for make-up 
water at existing closed-cycle recirculating systems; \41\ and (4) any 
quantity of emergency back-up water flows. Furthermore, as is the case 
for existing units, obtaining cooling water from a public water system, 
using reclaimed water from wastewater treatment plants, or desalination 
plants, or using recycled process wastewater effluent as cooling water 
does not constitute use of a cooling water intake structure. The new 
unit requirements apply only to the volume of cooling water used by the 
new unit, or to the cooling water intake structures used by the new 
unit. The new unit requirements do not apply to the rest of the 
existing facility.
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    \41\ For facilities with a combination of closed-cycle 
recirculating systems and other cooling water systems, the 
entrainment mortality standard does not apply to that portion of 
cooling water withdrawn as make-up water for the closed-cycle 
recirculating system.
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    In addition, the Director may establish alternative entrainment 
requirements for new units when compliance with the new unit 
entrainment standards would result in compliance costs wholly out of 
proportion to the costs EPA considered in establishing the requirements 
at issue or will result in significant adverse impacts on local air 
quality, significant adverse impacts on local water resources other 
than impingement or entrainment, adverse impacts on threatened and 
endangered species, or significant adverse impacts on local energy 
markets. Any Director-specified alternative must achieve a level of 
performance as close as practicable to the requirements of Sec.  
125.94(e)(1) or (2).

D. Other Provisions

    The final rule contains a number of other provisions related to the 
BTA impingement and entrainment reduction requirements. For example, 
the rule also provides that the Director may establish more stringent 
requirements as BTA if the Director determines that the facility owner 
or operator's compliance with the requirements otherwise established 
under the final rule would not meet the requirements of applicable 
State and Tribal law, including water quality standards. 40 CFR 
125.94(i). Today's rule also requires the owner or operator of a 
facility subject to this subpart to submit and retain permit 
application and supporting information as specified in Sec.  125.95; 
monitor for compliance as specified in Sec.  125.96; and report 
information and data and keep records as specified in Sec.  125.97. 
Director requirements are specified in Sec.  125.98.
    The rule further provides that, in the case of a nuclear facility 
or a facility constructing or conducting maintenance on nuclear powered 
vessels of the Armed Services, if the owner or operator of the facility 
demonstrates to the Director, upon the Director's consultation with the 
Nuclear Regulatory Commission, the Department of Energy or the Naval 
Nuclear Propulsion Program, that compliance with this subpart would 
result in a conflict with a safety requirement established by these 
entities, the

[[Page 48323]]

Director must establish BTA requirements that would not result in a 
conflict with the Commission's, the Department's or the Naval Nuclear 
Propulsion Program's safety requirement.

V. Summary of Data Updates and Revisions to the Proposed Rule

    This description of revisions to the proposed rule is organized in 
three sections: Data updates, regulatory approach and compliance, and 
new units. EPA published two NODAs (Notice of Data Availability) (77 FR 
34315, June 11, 2012 and 77 FR 34927, June 12, 2012) based on some 
comments received on the proposed rule and additional analyses. EPA 
also took public comment on the information in these notices.

A. Data Updates

    On the basis of comments received, additional information made 
available, and further analyses, EPA revised a number of assumptions 
used in its assessments for the final rule. These included revisions to 
the engineering costs of options considered in development of the final 
rule, the information collection costs, the economic analyses, and the 
benefits analyses. The revised analyses, along with an explanation of 
how they affected decision making for this final rule, are discussed 
below.
1. Impingement Data and Performance Standard
    Since publishing the proposal, EPA received a substantial number of 
comments stating the amount of data to develop the proposed impingement 
mortality performance standard was too limited. EPA received more than 
80 additional documents containing impingement and entrainment data. 
EPA reviewed these materials and found that many documents did not 
provide useful data. For example, in some cases, a document did not 
provide useful information because the only data available were the 
facility name and raw sampling data for a number of different species 
of fish or shellfish, or both. In other cases, the documents focused on 
source water characterization data alone. However, after review, EPA 
identified more than 40 distinct sets of additional impingement 
sampling and performance data.
    EPA also reevaluated and revised the criteria it used for including 
impingement mortality study data in the impingement mortality 
performance standard calculations. In calculating the impingement 
mortality performance standard of Sec.  125.94(c)(7), EPA applied these 
revised criteria for acceptable data to both the new data and the 
earlier data used for proposal. EPA's approach for the final rule is 
similar to that of the proposal. In order to include data in EPA's 
calculation, for the proposal, EPA applied the following four criteria. 
First, the data must be specific to the technology under consideration. 
Second, impingement mortality must have been reported as an absolute 
number or a percentage of impinged fish that were killed. Third, the 
data must reflect that the installed technology was operated under 
conditions that are representative of actual conditions at a facility, 
and fourth, the reported values must be actual measurements. EPA based 
the proposed performance standard on the performance of modified 
traveling screens with a fish return system using a limited definition 
of the control technology.
    In its reevaluation and based on comments, EPA decided to revise 
some of the criteria and add two new ones. In some cases, the effect of 
these changes is to relax the criteria and in others, to impose more 
restrictive criteria. First, all impingement data must be for non-
fragile species (including shellfish). Second, the data must be 
representative of annual mortality data for purposes of deriving an 
annual performance standard. EPA notes that in contrast to the proposed 
rule, the permit application does not require submission of the 
proposed list of ``species of concern.'' EPA found that the term 
``species of concern'' was similar to terms used in the context of T&E 
(threatened and endangered) species, and may further cause confusion 
over existing Services or State requirements for such species. Further, 
despite EPA's efforts to distinguish between species of concern and RIS 
(representative indicator species) in the NODA (77 FR 34325, June 11, 
2012), EPA found that many commenters were still confused by the 
language. Instead, EPA is adopting the term ``fragile species'' and 
using the term exactly as it is used with the impingement mortality 
data and criteria used in calculating the impingement mortality 
performance standard of the rule. EPA included a definition for 
``fragile species'' at Sec.  125.92(m), as a species of fish or 
shellfish that has an impingement survival rate of less than 30 
percent. EPA took this approach to ensure that a facility's performance 
in reducing impingement mortality as demonstrated by collecting 
biological data would reflect only the effects of its improvements to 
the CWIS technology, and not be confounded by effects of data 
collection that are not caused by impingement.
    EPA also relaxed the holding time criteria as a result of 
reevaluating the range of acceptable impingement mortality holding 
times, which at proposal was limited to 24 to 48 hours. After 
evaluating the data, EPA concluded that a range of holding times of 18 
to 96 hours was acceptable for inclusion in the development of a 
performance standard because commenters had provided documentation 
showing that the actual time period typically had little effect on IM 
rates. At proposal, EPA counted all fish that died at any time during 
the holding period. For the final rule being promulgated today, EPA 
excludes those that were dead at time zero because such counts measured 
immediate deaths and not those organisms that were mortally harmed as a 
result of impingement. These counts also might reflect already injured, 
nearly dead, or already dead fish (``naturally moribund'') that were 
impinged by the screen. As a consequence of relaxing the holding times 
and other requirements, EPA based the performance standard on a larger 
set of data, with broader geographic representation. (For more 
information, see DCN 12-6703.) The rationale for these revisions to the 
data acceptance criteria are described in further detail in the TDD, 
Chapter 11. Using the revised criteria, EPA reviewed the data in each 
of the impingement mortality studies for potential inclusion in EPA's 
evaluation of an impingement mortality performance standard. These 
changes resulted in an increase in the number of facility data sets 
acceptable for determining the impingement mortality performance 
standard, from four data sets at three facilities at proposal to 26 
data sets at 17 facilities today. As a result, the 12-month average 
impingement mortality performance standard of all life stages of fish 
and shellfish was revised from no more than 12 percent to no more than 
24 percent mortality, including latent mortality, for each non-fragile 
species that is collected or retained in a sieve with maximum opening 
dimension of 0.56 inches and kept for a holding period of 18 to 96 
hours. The revised performance standard and data evaluation criteria 
are discussed in detail in Section VI and Chapter 11 of the TDD.
    EPA also reevaluated its approach to compliance monitoring for the 
impingement mortality performance standard. In particular, EPA 
considered the costs and burden of frequent biological monitoring for 
those technologies that, according to EPA's record, perform equal to or 
better than

[[Page 48324]]

the IM performance standard. As proposed, all facilities would have 
conducted weekly biological monitoring in perpetuity irrespective of 
the compliance approach or technologies selected. EPA agrees with 
comments that this may be unnecessarily burdensome and of limited value 
for those technologies for which the potential performance is well 
documented. As such, today's final rule includes seven compliance 
alternatives, only one of which requires biological compliance 
monitoring.
    EPA notes, however, that a facility relying in part on a credit for 
reductions in impingement mortality already obtained at the facility 
(Sec.  125.94(c)(6)) must gather biological data at a minimum frequency 
of monthly for a period of two years in order to calculate their 12-
month average impingement mortality. Further, a facility choosing to 
comply using the impingement mortality performance standard (Sec.  
125.94(c)(7)), must conduct biological monitoring at a frequency of at 
least monthly in order to calculate its 12-month average impingement 
mortality. The 12-month average is calculated as the sum of total 
impingement mortality for the previous 12 months divided by the sum of 
total impingement for the previous 12 months. EPA is requiring that a 
facility choose to either demonstrate compliance with this requirement 
for the entire facility, or for each individual cooling water intake 
structure. The EPA expects that as the performance of the technology is 
demonstrated by the facility, the Director could reduce the frequency 
of biological compliance monitoring. Further, prior to a subsequent 
permit application, a facility could collect sufficient performance 
data to demonstrate to the satisfaction of the Director that its 
``systems of technologies'' compliance alternative is BTA at that 
facility.
2. Technology Costs
    Since publishing the proposal, EPA received a number of public 
comments from industry stating that EPA had underestimated the costs of 
modified traveling screens with fish returns. EPA used new information 
to revise the compliance cost estimates (including the methodology used 
for technology assignment) and the capital costs for several compliance 
technologies, including those used as the primary basis for the final 
rule. Those changes include the following:
     In response to comments challenging EPA's assumption that 
modified traveling screens were available at most facilities, EPA 
changed the assignment of the modified traveling cost module \42\ so as 
to apply this only where the existing intake for the model facility 
intake employed traveling screens. As a result, a number of intakes, 
such as those that use passive screens (e.g., fixed screens), were 
assigned higher cost technologies such as larger intakes or wedgewire 
screens with through-screen design velocities of 0.5 fps.
---------------------------------------------------------------------------

    \42\ EPA used a model facility approach to develop compliance 
technology costs where different sets of compliance technology cost 
algorithms called modules were assigned to individual model facility 
intakes on the basis of site-specific conditions. For a more 
detailed discussion, see the TDD Chapter 8.
---------------------------------------------------------------------------

     Because EPA has clarified that properly operated closed-
cycle recirculating systems is one of the compliance alternatives for 
impingement mortality, those intakes with existing closed-cycle cooling 
no longer receive additional impingement technology costs.
     At proposal, the design of the larger intake module was 
based on a through-screen velocity of 1.0 fps and, therefore, was not 
consistent with the low velocity compliance alternatives. To ensure 
that this technology will be consistent at all locations, the through-
screen design velocity for the larger intake was changed to a maximum 
of 0.5 fps, resulting in a substantial increase in capital and 
operational and maintenance costs.
     EPA received a number of comments noting that fish returns 
might be difficult to install at some intakes. EPA reviewed the fish 
return cost component of the modified traveling screen module and 
concluded that EPA's costs represented an ``easy'' installation rather 
than an average of both easy and more difficult installation costs. To 
account for a wider range of fish return costs that includes those with 
higher costs, EPA increased the capital costs of the fish return 
component and included additional costs for those with particularly 
difficult circumstances such as very long intake canals and submerged 
offshore intakes. For a detailed discussion, see Chapter 8 of the TDD.
     EPA received a number of comments stating that it had 
underestimated capital costs for modified traveling screens. During 
site visits to several facilities, EPA obtained actual traveling screen 
replacement costs. EPA compared its estimates to actual reported 
replacement costs and vendor-supplied data and concluded that the 
capital costs were underestimated by about 20 percent. Therefore, EPA 
increased the capital costs of modified traveling screens by 20 
percent.
    These changes to the engineering costs result in a 24 percent 
increase in capital and O&M costs. The revised costing assumptions are 
discussed in further detail in Chapter 8 of the TDD.
3. Monitoring Costs for Impingement Mortality
    Many commenters expressed concern that requirements for monitoring 
for the impingement mortality performance standard were excessive. Of 
particular concern were the long-term costs for impingement mortality 
monitoring at facilities that would be relying on either closed-cycle 
cooling or an intake velocity less than or equal to 0.5 fps through-
screen design velocity. The final rule includes seven compliance 
alternatives for the impingement standard. One of these alternative 
provides for reduced monitoring requirements for facilities employing 
modified traveling screens. This alternative is available if the 
facility has demonstrated the technology is optimized to minimize 
impingement mortality of all non-fragile species. Under this approach, 
EPA requires the facility to provide site-specific performance data to 
identify the operational conditions that will ensure that the 
technology is being operated optimally. Once these operational 
conditions have been identified, the Director must include in the 
permit those operational measures and best management practices 
identified in the study and deemed as necessary by the Director to 
ensure proper operation of the modified traveling screens. EPA also 
clarified in the rule that compliance monitoring and reporting 
requirements for facilities that comply with the impingement mortality 
standard by employing one of the pre-approved or streamlined IM 
compliance alternatives will be largely limited to information that 
ensures proper operation of the installed control technology. EPA 
estimates that this alternative approach will reduce annual monitoring 
and reporting costs from approximately $47 million under the proposed 
rule to approximately $27 million under the final rule.
4. Benefits and Willingness To Pay Survey
    EPA received a number of comments on the proposed rule and NODA 
addressing the use of stated preference surveys to determine the 
public's willingness-to-pay for benefits associated with the rule. EPA 
conducted a stated preference survey to calculate benefits associated 
with minimizing

[[Page 48325]]

adverse impacts to aquatic ecosystems from cooling water intakes. For 
some commenters, the use of stated preference surveys to evaluate 
benefits remains controversial, and they objected to using such 
surveys. Other commenters acknowledge the decades of technical 
development and improvement of these methods and support using stated 
preference surveys. Based on consideration of public comment, EPA 
decided not to employ the survey results for purposes of decision-
making in this rule, or include them in assessing the total benefits of 
the rule. The rule does not require State Directors to require facility 
owners or operators to conduct or submit a willingness to pay survey to 
assess benefits.

B. Regulatory Approach and Compliance

1. Regulatory Approach
    EPA has largely adopted the regulatory approach of the proposed 
rule with several changes regarding compliance, particularly with 
respect to the impingement mortality requirements. These changes 
clarify elements of the rule (as discussed in the NODAs) about which 
commenters expressed uncertainty and provide additional flexibility to 
regulated facilities in meeting the rule's impingement mortality 
standard.
    EPA received some comments questioning whether specific provisions 
apply to the entire facility or to individual intakes. To clarify this 
issue, EPA modified the rule language so as to state clearly that a 
facility with multiple intakes must decide whether it will adopt a 
single compliance strategy for impingement mortality for the entire 
facility or adopt an intake-specific compliance strategy at each 
cooling water intake. Thus, facilities may select different compliance 
strategies for different intakes, providing flexibility at facilities 
with multiple intakes. Regardless of which impingement compliance 
approach a facility chooses (single strategy for entire facility or 
different strategies for different intakes), if the facility chooses to 
comply with the impingement standard by operating at a maximum through-
screen velocity of 0.5 feet per second, the facility must measure and 
comply with the low velocity compliance alternative of 0.5 fps on an 
individual intake basis.
a. Impingement Mortality Standards
    EPA received a substantial number of comments requesting greater 
flexibility and clarification regarding compliance with the impingement 
mortality standards, including suggestions that (1) impingement 
requirements be addressed on a site-specific basis; (2) certain 
technologies should be pre-approved; (3) credit should be given for 
existing technologies and operating conditions; and (4) combinations of 
technologies be allowed. EPA has concluded that low-cost technologies 
for impingement mortality reduction are effective, widely available, 
feasible, and demonstrated for facilities nationally and thus, a 
completely site-specific approach is not appropriate. However, 
recognizing that for some sites technologies other than modified 
traveling screens may allow a facility to achieve the same level of 
performance, EPA has included compliance options that provide for more 
flexibility and allow consideration of the performance of combinations 
of technologies and operating conditions. Some of the more significant 
changes include the following:
     Compliant technologies--EPA has concluded that employing 
certain technologies will meet or exceed the requirement of the 
impingement mortality standard, provided they meet certain design and 
operational criteria. These pre-approved and streamlined technologies 
include a closed-cycle recirculating system, existing offshore velocity 
cap, and maximum design intake velocity of 0.5 fps. Associated with 
these compliance options are reduced monitoring requirements.
    [cir] Closed-Cycle Cooling--EPA has concluded that a fully closed-
cycle recirculating system as defined at Sec.  125.92(c) (and that is 
properly operated and maintained) achieves the impingement mortality 
performance standard. Even after retrofitting a facility to be closed-
cycle, it may still be possible to withdraw and discharge cooling water 
at rates associated with once-through cooling. Existing facilities that 
retrofit to closed-cycle cooling often do so without modifying or 
replacing their condenser to optimize it for closed-cycle operation. In 
such cases, the facility has an incentive to operate its system in a 
once-through cooling mode, to minimize chemical costs or avoid a 
turbine backpressure constraint. EPA has concluded that it is not 
appropriate to add conditions to the definition of closed-cycle cooling 
because water may be withdrawn for purposes of replenishing losses to a 
closed-cycle recirculating system other than those due to blowdown, 
drift, and evaporation from the cooling system. However, the final rule 
provides the Director the discretion to determine whether the operation 
of a cooling system minimizes the make-up and blowdown flows withdrawn, 
consistent with the definition of a closed-cycle recirculating system 
(40 CFR 125.92(c)).

    [cir] Existing Offshore Velocity Caps--The record indicates that an 
existing offshore velocity cap as defined at Sec.  125.92(v) also 
achieves the necessary reductions in impingement mortality and thus 
meets the IM standard. Data in the record concerning existing velocity 
caps show that a velocity cap alone is insufficient, but data on 
existing offshore velocity caps shows that a velocity cap in 
combination with their current offshore locations meet EPA's BTA 
standard for impingement mortality. EPA has determined that new 
offshore velocity caps could comply using the combination of 
technologies approach in Sec.  125.94(c)(6). The offshore component 
likely makes the velocity cap technology unavailable except to 
facilities in marine waters and certain Great Lakes locations; 
therefore, the technology alone is not BTA.
    [cir] Through-Screen Velocity--EPA has clarified that compliance 
with a 0.5 fps intake velocity achieves the IM standards. EPA's record 
shows an intake velocity of 0.5 fps or lower provides similar or 
greater reductions in impingement, and therefore impingement mortality, 
than modified traveling screens--the technology forming the basis for 
the numeric impingement mortality performance standard that is the goal 
for all facilities. There are two ways to demonstrate compliance using 
intake velocity. First, an intake with a maximum design intake velocity 
less than or equal to 0.5 fps is pre-approved BTA for impingement 
mortality and does not require further monitoring. Alternatively, under 
a streamlined option, the facility may demonstrate to the Director that 
the facility meets the velocity requirement through monitoring of the 
actual intake velocity. Screen velocity can be monitored by direct 
measurement or by calculation using the volumetric actual intake flow 
and source water surface elevation.
     Modified Traveling Screens--A facility must operate 
modified traveling screens \43\ that the Director determines meets the 
definition at Sec.  125.92(s). Facilities will demonstrate that they 
have optimized performance of their traveling screen to minimize IM.
---------------------------------------------------------------------------

    \43\ While rotary screens are technically not modified traveling 
screens, the regulation at Sec.  125.92(s) defines modified 
traveling screens to include traveling water screens that 
incorporate measures protective of fish and shellfish. EPA has thus 
provided the flexibility for other types of active screens that 
achieve the same or better performance than modified traveling 
screens.

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[[Page 48326]]

     Systems of Technologies to Meet the IM Standard--EPA 
received a substantial number of comments asking whether previously 
installed technologies or various combinations of technologies and 
operating conditions could also meet the BTA standard for impingement 
mortality. For example, some technologies, such as louvers, reduce the 
rate of impingement, but the effect on overall impingement mortality 
reduction cannot easily be measured and would not appear in biological 
sampling of the technology. In EPA's view, the Director should take 
into account the reduction in impingement--for example, that associated 
with such technologies as louvers or behavioral deterrents, or due to 
intake location--when determining permit conditions to include in the 
facility's permit in order for a combination of technologies to achieve 
the required impingement mortality standards. Thus, the facility should 
obtain credit toward the impingement mortality standard for such 
reductions in the rate of impingement. A number of the flexibilities 
above were described in the June 11, 2012 NODA, and EPA has included a 
provision to allow additional flexibility in achieving compliance 
through the use of a combination of technologies and operating 
conditions. A facility may use a system of technologies, management 
practices and operational measures to achieve the impingement mortality 
standard, including, for example, flow reductions, seasonal operation, 
unit closures, credit for intake location, behavioral deterrent 
systems, and other technologies and operational measures. The Director 
must determine, based on a demonstration by the facility to the 
Director, that the system of technologies or operational measures, in 
combination, have been optimized to minimize impingement mortality of 
all non-fragile species. The Director may require additional 
operational measures, best management practices, and monitoring as part 
of the demonstration. In addition, the facility's permit must include 
conditions to ensure that the facility operates its cooling water 
intake structures in a manner consistent with the conditions and 
measures identified in its demonstration to the Director.
     Numeric IM Performance Standard--As a practical matter, 
EPA expects that very few facilities will choose to comply with the 
numeric impingement mortality performance standard. Those facilities 
that choose to comply in this way will need to demonstrate to the 
Director how the technology the facility is implementing enables the 
facility to meet the impingement mortality standard. The numeric 
standard provides a pathway to compliance for innovative technologies 
that may be developed in the future.
    EPA also received many comments stating that barrier nets were both 
unnecessary and might be unavailable in many locations. Because EPA's 
revised impingement data set had sufficient data to characterize 
shellfish impingement, EPA has eliminated the barrier net requirement 
in the final rule. See Section VI for more information.
b. Definition of Closed-Cycle Cooling System
    In the final rule, EPA revised the definition of a closed-cycle 
recirculating system to provide additional flexibility for the Director 
in determining which closed-cycle cooling systems comply with the IM 
standards. The proposed rule's definition of ``closed-cycle 
recirculating systems'' included, as elements of a properly operated 
closed-cycle system performance, requirements generally expressed in 
terms of cycles of concentration (COC) or percentage flow reduction 
relative to a once-through cooling system. Cycles of concentration 
represents the accumulation of dissolved minerals in the recirculated 
cooling water. Discharge of a portion of the water (called 
``blowdown'') is used to control the buildup of these minerals. COC is 
a measure of how concentrated are chlorides in recirculated water 
relative to make-up water, and thus how well a system recycles intake 
water before replacing it with new withdrawals. This is not to be 
confused with cycles of flow, as some commenters appeared to do.
    Cycles of concentration can be measured as the ratio of chloride 
levels in the recirculated water or blowdown relative to the chloride 
levels in the source water, or makeup water. Some commenters stated 
that, while they have been operating as closed-cycle units for many 
years, they were concerned that their facilities would not be ``closed-
cycle recirculating systems'' under the proposed definition because 
they would not achieve the required COC. EPA has found the 
concentration cycles in the majority of cooling towers usually range 
from 3 to 6 at power plants, and can often exceed 9 at manufacturing 
facilities. However, EPA recognizes that many manufacturers have 
complex water balances, and calculating a specific flow reduction 
attributable to cooling water use could be difficult and time 
consuming. In such cases, many manufacturers could far more readily 
calculate the cycles of concentration of particular unit operations, 
and could therefore show those unit operations that use cooling water 
meet the conditions for closed-cycle cooling. EPA found in site visits 
many complex manufacturing facilities already have this capability, and 
have achieved very high COC. Likewise, power plants may find it much 
easier to measure flow than cycles of concentration. Accordingly, EPA's 
proposed rule attempted to recognize performance using either metric. 
EPA expects most power generators would use percentage flow reduction 
to demonstrate they are closed-cycle, and expects most manufacturing 
facilities would use COC for those units that utilize water for cooling 
purposes. Increasing the amount of minerals present in the water by 
cycling can make water less aggressive to piping; however, EPA is also 
aware that excessive levels of minerals (such as found in certain 
source waters, most notably those with higher salinity) can cause 
scaling problems, leading to different levels of both metrics for 
freshwater and saltwater facilities.
    EPA carefully considered these issues and concluded that the most 
important aspect of the definition of a properly operated closed-cycle 
cooling system is that the makeup flow be minimized. Thus EPA has 
removed the numeric levels of the metrics as a threshold, while 
retaining the minimized makeup flow aspect of the definition. As an 
example, in the case of a facility that uses make-up water from a 
freshwater source, a Director may determine that a closed-cycle 
recirculating system can generally be deemed to minimize make-up and 
blowdown flows if it reduces actual intake flows (AIF) by 97.5 percent 
as compared to a once-through cooling system or if its cooling tower is 
operated at a minimum cycles of concentration of 3.0. And likewise, in 
the case of a facility that uses make-up water from a saltwater, 
brackish, or other source with a salinity of greater than 0.5 parts per 
thousand, a Director may determine that a closed-cycle recirculating 
system can generally be deemed to minimize make-up and blowdown flows 
if it reduces actual intake flows (AIF) by 94.9 percent as compared to 
a once-through cooling system or if its cooling tower is operated at a 
minimum cycles of concentration of 1.5. These reductions and cycles of 
concentration are illustrative. A Director may determine that other 
levels near these numbers could also constitute a closed-cycle 
recirculating system. The final rule further recognizes that in certain 
unavoidable circumstances, these levels for COC or percent flow 
reduction might not be achievable at all facilities. Such circumstances 
could

[[Page 48327]]

include situations where water quality-based discharge limits might 
limit the concentration of a pollutant that is not readily treatable in 
the cooling tower blowdown or situations where varying source water 
quality could lead to unavoidable problems concerning scale formation, 
solids buildup, corrosion, or media fouling. Such facilities should 
demonstrate these circumstances to their Director and indicate the 
measures they have taken to minimize makeup flows. The Director will 
retain the discretion to conclude that the particular facility employs 
a closed-cycle recirculating system when the benchmarks are not met.
    In cases where the Director will make a determination as to whether 
the facility's cooling system meets the definition of a closed-cycle 
recirculating system, EPA's intent is that the withdrawal of small 
amounts of service water (for uses such as fire suppression, potable 
water, screenwash water, vehicle wash water, and such) do not preclude 
consideration of the system as closed-cycle. To avoid misuse of this 
provision, the Director will make the final determination.
    Finally, EPA data show more than 50 facilities have cooling systems 
that include impoundments. In some cases, the cooling systems that 
include impoundments were created in the waters of the U.S., in whole 
or in part, or were created in uplands but withdraw make-up water from 
waters of the U.S. These cooling systems may perform like a closed-
cycle recirculating system. EPA has clarified at 40 CFR 125.92(c)(2) 
that a cooling system that includes an impoundment lawfully created in 
the waters of the U.S for the purpose of cooling may be considered a 
closed-cycle recirculating system. As with other closed-cycle 
recirculating systems, the Director will determine whether the 
impoundment minimizes the withdrawal of water for cooling purposes and 
therefore meets the definition of a closed-cycle recirculating system. 
See Section VI for further discussion.
c. Entrapment
    The proposed rule included a prohibition on trapping organisms in 
an intake structure with no viable escape route. Many commenters 
expressed concern that the entrapment requirements were not well 
defined and would require costly technologies not considered in EPA's 
cost estimates. Moreover, in the commenters' view, the requirements 
could be difficult to comply with, particularly where cooling systems 
employ impoundments or basins downstream of the initial intake 
structure. EPA agrees that in some cases, such as where a canal or 
basin for maintaining consistent water levels is located behind the 
CWIS, that the proposed entrapment requirement could require additional 
controls such as additional fish returns that are not, in all cases, 
feasible. For example, EPA found in site visits that the forebay may be 
located more than a mile from the CWIS, and a fish return in that 
situation would not have been feasible. The final rule deleted the 
requirement that prohibited entrapment. In the final rule, facilities 
would account for all impinged fish and shellfish when conducting their 
two year performance study. To the extent entrapment of shellfish poses 
a concern, the Director may establish additional measures, such as 
seasonal deployment of barrier nets, under Sec.  125.94(c)(8).
d. Requirements for Threatened and Endangered Species
    EPA consulted with the Fish and Wildlife Service and National 
Marine Fisheries Service and EPA made a number of adjustments to the 
rule to protect threatened and endangered species and designated 
critical habitat as a result of the consultation; the protections were 
included to insure that the rule is not likely to jeopardize the 
continued existence of listed species or result in the destruction or 
adverse modification of designated critical habitat. To be clear, the 
ESA provisions of the rule extend to all listed T&E species, not just 
fish and shellfish. See Section VIII.K for a summary of these 
provisions.
2. Compliance Timelines for Impingement Mortality and Entrainment 
Requirements
    At proposal, compliance deadlines for impingement mortality and 
entrainment requirements were set separately. Facilities would have 
been required to meet impingement mortality reduction requirements as 
soon as possible, but no more than eight years after the effective date 
of the rule. Compliance with entrainment reduction requirements would 
have been set by the Director. Many commenters expressed concern that 
the compliance timeline for the impingement mortality and entrainment 
requirements should be harmonized to prevent a facility from having to 
install a technology to comply with impingement mortality requirements, 
only to be required at a later date to install an entrainment reduction 
technology that effectively renders the investment in the impingement 
mortality technology obsolete or worthless.
    EPA agrees that facilities required to install both impingement and 
entrainment compliance technologies will benefit from reduced 
compliance costs if the compliance scheduling is coordinated. EPA also 
agrees that requiring more timely decisions on entrainment requirements 
than anticipated at proposal will facilitate these cost savings without 
sacrificing fish protection. In some cases, impingement compliance can 
be attained with entrainment technologies. For example, the Director 
may determine that the installation of modified fine-mesh traveling 
screens and narrow-slot wedgewire screens will achieve the impingement 
mortality standard and further, that this same equipment represents, on 
a site-specific basis, BTA entrainment control. If the compliance 
schedule is not harmonized, it is possible that a facility could 
install (at significant cost) coarse-mesh traveling screens that it 
might have to later retrofit with fine-mesh panels. It is also possible 
that a facility could make modifications necessary to attain a 0.5-fps 
through-screen velocity to meet the IM standards and later have closed-
cycle cooling identified as BTA for entrainment, thereby making the 
intake modifications for impingement control unnecessary.
    To address this issue in the final rule, EPA revised the compliance 
requirements so that the Director is required first to establish 
entrainment requirements under Sec.  125.94(b)(1) in the final permit. 
The facility will then be required to comply with the impingement 
mortality standard in Sec.  125.94(c) as soon as practicable 
thereafter. See Section VIII on implementation for more detailed 
discussion.
    Because an entrainment requirement could require controls that take 
many years to design, finance and construct, the Director may establish 
interim milestones related to meeting the final requirements to ensure 
that the facility is making progress.

C. New Units

    EPA has revised the definition of new units to mean a stand-alone 
unit at an existing facility the construction of which is commenced 
after the effective date of today's final rule; consists of only a 
stand-alone unit constructed at an existing facility; and that does not 
otherwise meet the definition of a new facility at Sec.  125.83. A 
stand-alone unit is a new, separate unit that is constructed at an 
existing facility. New unit includes stand-alone units that are added 
to a facility for purposes of the same general industrial operation as 
the existing

[[Page 48328]]

facility. A new unit may have its own dedicated cooling water intake 
structure, or may use an existing or modified cooling water intake 
structure.

VI. Basis for the Final Regulation

    In response to the Supreme Court's decision in Entergy Corp. v. 
Riverkeeper, Inc. et al. in April 2009, EPA has reevaluated the 
requirements for existing facilities under CWA section 316(b). As 
discussed above, EPA collected additional data and information to 
update its assessment of the efficacy of various technological measures 
for reducing IM&E and analyses prepared for the earlier rule-making 
efforts. EPA's additional technical rigor provided a strengthened 
analysis of different technologies for reducing IM and their 
effectiveness. As a result of its revised assessments and further 
consideration of the factors affecting the availability of different 
technology in a wide range of settings, EPA has decided not to re-
promulgate requirements for existing facilities that mirror those of 
the final Phase II rule. Further, EPA is adopting, for the reasons 
explained in detail below, a new framework. In addition, as previously 
noted, EPA decided to address all existing facilities subject to 
section 316(b) in this rule (i.e., both those subject to the Phase II 
rule and some of those subject to the Phase III rule). For a brief 
description of the final rule, see Section IV.

A. EPA's Approach to BTA

    CWA section 316(b) requires EPA to establish standards for cooling 
water intake structures that reflect the ``best technology available 
for minimizing adverse environmental impact.'' As explained above, the 
statute is silent with respect to the factors that EPA should consider 
in determining BTA, but courts have held that section 316(b)'s 
reference to CWA sections 301 and 306 is an invitation for EPA to look 
to the factors \44\ considered in those sections in establishing 
standards for section 316(b).
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    \44\ The factors specifically delineated in CWA sections 301 and 
306 include cost of the technology, taking into account the age of 
the equipment and facilities, process employed, engineering aspects 
associated with a particular technology, process changes and non-
water quality environmental impact (including energy requirements).
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    But EPA, when considering such factors, is not bound to evaluate 
these in precisely the same way it considers them in establishing 
effluent limitations guidelines under CWA section 304. As the Supreme 
Court noted, given the absence of any factors specified in section 
316(b), EPA has much more discretion in its standard setting under 
section 316(b) than under the effluent guidelines provisions. 
Therefore, the statute vests EPA with broad discretion in determining 
what is the ``best'' technology that is ``available'' for minimizing 
adverse environmental impact. As the Supreme Court has further 
explained, under section 316(b), the ``best'' technology ``available'' 
may reflect a consideration of a number of factors and ``best'' does 
not necessarily mean the technology that achieves the greatest 
reduction in environmental harm that the regulated universe can afford. 
Rather, the ``best'' (or ``most advantageous,'' in the court's words) 
technology may represent a technology that most efficiently produces 
the reductions in harm.
    EPA interprets section 316(b) to require the Agency to establish a 
standard that will best minimize impingement and entrainment--the main 
adverse effects of cooling water intake structures not otherwise 
addressed by the other sections of the CWA (e.g., thermal discharges). 
In EPA's view, several important considerations underpin its decision. 
First, its BTA determination should be consistent with, and reflective 
of, the goals of CWA section 101: ``to restore and maintain the 
physical, chemical, and biological integrity of the Nation's waters,'' 
with the interim goal of ``water quality which provides for the 
protection and propagation of fish, shellfish, and wildlife and 
provides for recreation in and on the water.''
    Second, E.O. 13563 directs EPA and other Federal agencies to 
identify and use the best, most innovative and least burdensome tools 
for achieving regulatory ends. In its regulatory actions, agencies 
``must take into account benefits and cost, both quantitative and 
qualitative,'' and to the extent permitted by law, only promulgate 
regulations that are based on ``a reasoned determination that its 
benefits justify its costs (recognizing that some benefits and costs 
are difficult to quantify)'' (see section 1(b)(1)). In selecting a 
regulatory approach, agencies must tailor regulations to impose the 
least burden on society and, in choosing among regulatory alternatives, 
select ``those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity)'' to the extent permitted 
by law. 76 FR 3821 (January 21, 2011). Because the Supreme Court has 
concluded that the CWA authorizes EPA to consider costs and benefits in 
its BTA determination, EPA has consequently considered costs and 
benefits in this final rule as directed by the President. In accord 
with E.O. 13563, EPA has concluded that the benefits of the final rule 
justify its costs. For additional discussion, see Section VI below.
    Consideration of benefits is complicated by the debate about the 
tools and data that would permit a complete expression of ecological 
benefits in monetized terms. EPA has, however, used the best available 
science regarding widely accepted tools and data to monetize the 
benefits of the various options in four major categories: recreational 
fishing, commercial fishing, nonuse benefits, and benefits to 
threatened and endangered species (see Section X below). EPA has 
concluded that the benefits estimated for the first two categories are 
generally complete, while the benefits estimated for the latter two 
categories are far from being complete for a number of reasons. For 
example, the nonuse benefits transfer was based on a species that 
represents less than one percent of adverse environmental impacts. EPA 
is continuing to refine its tools to develop a more complete analysis 
concerning benefits for future application.
    In selecting the ``best'' technology available for minimizing 
adverse environmental impact, EPA looked at a number of factors. As 
discussed previously, EPA's initial approach to 316(b) standard setting 
was similar to one it follows in considering a technology-based rule 
under sections 301, 304, and 306. EPA first considered the availability 
and feasibility of various technologies, and then evaluated costs 
associated with these technologies (including potential costs to 
facilities and households), and their economic impacts. EPA also 
reviewed the effectiveness of these technologies in reducing 
impingement mortality and entrainment. Further, EPA also considered 
additional factors set out in CWA section 304(b), including location, 
age, size, and type of facility. In addition, EPA considered the non-
water quality environmental impacts of different technologies on energy 
production and availability, electricity reliability, and potential 
adverse environmental effects that could arise from the use of the 
different technologies evaluated.
    As a result of this thorough evaluation, in the case of the BTA 
standard for impingement mortality, EPA based the standard on 
performance of well-operated modified traveling screens with a fish 
handling and return system as defined more specifically by the rule. 
Under the BTA IM standard, a facility has a number of options for

[[Page 48329]]

compliance. In the case of the BTA standard for entrainment, on the 
other hand, EPA could not identify one technology that represented BTA 
for existing facilities on a national basis.

B. Overview of Final Rule Requirements

    As noted, EPA concluded that the best technology available for 
minimizing impingement mortality was ``modified traveling screens,'' as 
more specifically defined in the rule. The BTA Impingement Mortality 
Standard includes seven technology options for complying with the 
standard whose performance is equivalent to, or better performing than 
modified traveling screens. First, the rule identifies four 
technologies (closed-cycle recirculating systems, reduced design intake 
velocity, reduced actual intake velocity, and existing offshore 
velocity caps) that reduce impingement mortality as well or better than 
modified traveling screens, and therefore will generally comply with 
the BTA Impingement Mortality Standard of today's final rule.
    The rule also provides that, if the Director determines that 
modified traveling screens are insufficient to protect shellfish, the 
Director may establish additional measures under Sec.  125.94(c)(8) 
such as seasonal deployment of barrier nets, or if modified traveling 
screens \45\ are insufficient to protect other species, the Director 
may establish additional protective measures under Sec.  125.94(c)(9). 
In addition, the rule provides in Sec.  125.94(g) that the Director may 
establish additional control measures and monitoring or reporting 
requirements in the permit in order to protect Federally-listed 
threatened and endangered species and designated critical habitat. The 
Director may include such conditions that are designed to minimize 
incidental take, reduce or remove more than minor detrimental effects 
to Federally-listed species and designated critical habitat or avoid 
jeopardizing Federally-listed species and or destroying or adversely 
modifying designated critical habitat (e.g., prey base).
---------------------------------------------------------------------------

    \45\ Or any of the IM compliance alternatives.
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    Next, the final rule provides an option that allows a facility to 
demonstrate to its permitting authority that it has installed modified 
traveling screens--the technology EPA identified as the basis for the 
BTA impingement mortality standard--and to provide data on the 
performance of its screens. The facility must demonstrate that its 
modified traveling screens are consistent with EPA's definition and 
demonstrate through an impingement technology performance optimization 
study that its screens have been optimized to minimize impingement 
mortality. After consideration of the information provided, the 
permitting authority will determine whether the technology is the best 
technology available for impingement mortality reduction at the site 
and include permit conditions to ensure optimal performance of the 
screens. In other words, the owner or operator of a facility will 
comply with the BTA standard for IM at Sec.  125.94(c)(5) if that 
facility uses modified traveling screens as defined at Sec.  125.92(s), 
and operates in accordance with the permit conditions established by 
the Director that ensure the technology will perform as demonstrated. 
As noted above, in certain circumstances, under Sec. Sec.  
125.94(c)(8), (9) and 125.94(g), the Director may require additional 
protective measures.
    As stated in the June 11, 2012 NODA, EPA does not intend for 
facilities to install closed-cycle cooling solely for the purpose of 
meeting the IM requirements. In fact, EPA expects all facilities could 
comply with IM requirements without relying on retrofitting to closed-
cycle cooling (see Exhibit VIII-1, showing expected compliance 
alternative based on technologies in place today). If a facility 
chooses to comply with the BTA IM standard by installing and operating 
traveling screens, the screens must meet the definition of modified 
traveling screens provided at Sec.  125.92(s). These may include, for 
example, modified Ristroph screens with a fish handling and return 
system, dual flow screens with smooth mesh, and rotary screens with 
fish returns such as vacuum pumps. EPA based the regulatory definition 
on the commonly found features of modified traveling screens used in 
developing the BTA impingement mortality standard.
    In addition, the final rule also provides a compliance option that 
would allow facilities the option of demonstrating to the Director on a 
site-specific basis, similar to the showing for modified traveling 
screens, that a system or combination of technical and operational 
measures will achieve the BTA standard for impingement mortality at a 
particular site. Using a combination of technical and operational 
measures as the basis for demonstrating compliance allows facilities 
the opportunity to take credit for intake location, flow reduction, or 
other measures already employed to reduce the rate of impingement. 
Further, the combination of technical and operational measures provides 
the flexibility to use a system of approaches to reducing impingement 
and impingement mortality. This may include technologies that were not 
found to reduce impingement consistently or in all circumstances, but 
that on a site-specific basis have been demonstrated to provide a high 
level of performance. For example, a facility might employ light and 
sound to induce an avoidance response from certain species. This might 
not alone address impingement mortality for all non-fragile species at 
the intake, therefore additional measures (intake location, barrier 
nets, etc.) would also be applied, to minimize the rate of impingement 
or impingement mortality.
    For both the screens and system of technologies, a two year study 
must be completed in which biological data collection is used to make 
site-specific adjustments to screens or the combination of technologies 
in order to optimize performance at that facility. Those optimal 
operating parameters then become permit conditions. For facilities that 
have already installed traveling screens or the technologies associated 
with the system approach, EPA has combined the two year biological 
study with the other permit application and rule requirements for 
biological data collection, including the Source Water Baseline 
Biological Characterization Data. In this manner, EPA is establishing a 
consistent set of biological study requirements, with an overall 
reduction in the burden of the required level of biological monitoring.
    Lastly, a facility may choose to comply with the numerical 
impingement mortality performance standard that was established based 
on the BTA technology. If a facility chooses this compliance option, it 
must conduct periodic monitoring to demonstrate compliance. Under this 
last compliance option, a facility could implement innovative 
technologies to address impingement mortality and subsequently 
demonstrate that their performance is as good as, or better than, a 
modified traveling screen with fish handling and return system. EPA 
envisions that after a sufficient demonstration period of a 
technology's performance, the facility will be able to qualify its 
operation under the previous option.
    For entrainment, on the other hand, EPA could not identify one 
technology that represented BTA for existing facilities on a national 
basis, for the reasons explained in detail below. Instead, the national 
BTA entrainment standards for existing facilities establishes a 
detailed regulatory framework for the determination of BTA

[[Page 48330]]

entrainment requirements by the permitting authority on a site-specific 
basis.
    While site-specific permit requirements are not new, what is 
different about this approach from the current requirement for permits 
to include 316(b) conditions is that for the first time, EPA is 
establishing a detailed specific framework for determining BTA 
entrainment control requirements. Thus, the rule identifies what 
information must be submitted in the permit application, prescribes 
procedures that the Director must follow in decision making and factors 
that must be considered in determining what entrainment controls and 
associated requirements are BTA on a site-specific basis.
    As previously noted, EPA looked at a number of factors in 
considering what national entrainment standard it should adopt. As 
discussed in detail in the following section, EPA identified only one 
high performing technology as a potential BTA candidate for 
entrainment: closed-cycle recirculating systems as defined at Sec.  
125.92(c)(1). While there are other technologies for entrainment that 
are available or demonstrated, they are not uniformly high performing 
technologies. See TDD Chapter 6 for more information regarding the lack 
of intermediate performing technologies for entrainment. EPA has 
identified the following specific factors as the key elements in its 
decision not to prescribe this technology as the basis for a national 
BTA standard for entrainment: land availability, air emissions, and 
remaining useful plant life. How these factors dictated EPA's decision 
is discussed below.
    For new units at existing facilities, EPA has established BTA 
requirements to minimize impingement mortality and entrainment, based 
on flow reduction commensurate with closed-cycle cooling. The rest of 
this section describes in detail the above considerations.

C. Technologies Considered To Minimize Impingement and Entrainment

    As described in Chapter 4 of the TDD, power plants and 
manufacturers withdraw large volumes of cooling water daily. Cooling 
water withdrawals are responsible for over half of surface water 
withdrawals for all uses in the United States, including agriculture 
and municipal uses. The purpose of cooling water withdrawals is to 
dissipate that portion of the heat that is a by-product of industrial 
processes that facilities have not harnessed to a productive end and 
therefore view as waste heat.
    The majority of environmental impacts associated with intake 
structures are caused by water withdrawals that ultimately result in 
the loss of aquatic organisms. These losses might be from impingement, 
entrainment, or both. Impingement occurs when organisms are trapped 
against the outer part of a screening device of an intake 
structure.\46\ The force of the intake water traps the organisms 
against the screen and they are unable to escape. Not all organisms in 
the incoming water are impinged, however. Some might pass through the 
screening device and travel through the entire cooling system, 
including the pumps, condenser or heat exchanger tubes, and discharge 
pipes. This is referred to as entrainment. Various factors lead to the 
susceptibility of an organism to impingement or entrainment. For more 
detailed discussion of impingement and entrainment and the associated 
mortality and other effects, see Section III above.
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    \46\ Typically, cooling water intake structures use various 
screening devices to prevent objects (e.g., debris, trash) from 
being drawn in with the cooling water and ultimately clogging or 
damaging the cooling water system, especially the condenser or heat 
exchanger components.
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    For purposes of this rule, EPA is adopting the following 
conventions for defining impingement and entrainment and mortality:
     Impingement: Occurs when any life stage of fish and 
shellfish are pinned against the outer part of an intake structure or 
against a screening device during intake water withdrawal. Impingement 
may also occur when an organism is near a screen but unable to swim 
away from the intake structure because of the water velocity at the 
intake.
     Entrainment: Occurs when any life stages of fish and 
shellfish are drawn into the intake water flow entering and passing 
through a cooling water intake structure and into a cooling system.
     Impingement Mortality: The death of fish or shellfish due 
to impingement. It may also include organisms removed from their 
natural ecosystem and lacking the ability to escape the cooling water 
intake system and thus subject to mortality. Note that impingement 
mortality need not occur immediately. Impingement may cause harm to the 
organism which results in mortality at some time after impingement. For 
purposes of this rule, EPA has defined impingement mortality as the 
death of those organisms collected or retained by a sieve with a 
maximum opening of 0.56 inches; this includes both the \3/8\-inch sieve 
and a \1/2\-inch by \1/4\-inch mesh.\47\
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    \47\ Mesh sizes of \3/8\ are commonly referred to as 
coarse mesh; this refers to the size of the screen opening (in 
contrast to fine mesh) and not the roughness of the mesh material.
---------------------------------------------------------------------------

     Entrainment Mortality: The death of fish or shellfish due 
to entrainment. This is typically associated with mortality related to 
small organisms that pass the entire way through a facility and are 
killed as a result of thermal, physical, or chemical stresses. This 
term also includes the death of those fish and shellfish that may occur 
on fine mesh screens or other technologies used to exclude the 
organisms from entrainment. For purposes of this rule, EPA defined 
entrainment mortality as the death of those organisms passing through a 
sieve with a maximum opening of 0.56 inches.
    Impingement mortality is typically less than 100 percent of the 
impinged organisms if a fish return or backwash system is employed. 
Impingeable organisms are generally not very small fish or early life 
stages (e.g., those that can pass through \3/8\-inch mesh screens), but 
typically are fish with fully formed scales and skeletal structures and 
well-developed survival traits such as behavioral responses to avoid 
danger. EPA's data demonstrate that, under the proper conditions, many 
impinged organisms can survive.
    Entrainable organisms generally consist of eggs and early life 
stage larvae. Early larvae generally do not have skeletal structures, 
have not yet developed scales, and in many cases are incapable of 
swimming for several days after hatching. EPA has found that 
entrainable organisms that are collected after interaction with the 
CWIS show poor survival in the case of most eggs, and essentially no 
survival of larvae. Consequently, on the basis of the record 
information it has reviewed, EPA concluded for purposes of this rule 
that all entrained organisms die, i.e., no entrained organisms survive. 
(See, for example, 76 FR 22188 [April 20, 2011] and 69 FR 41620 [July 
9, 2004].) Therefore, without entrainment control, entrainment is 
assumed to lead to entrainment mortality. Also see Chapter A7 of the 
Phase II Regional Studies Document (DCN 6-0003; EPA-HQ-OW-2002-0049-
1490).
    Whether an organism near a cooling water intake structure is 
impinged or entrained is a function of the screen mesh size. Holding 
the number and size distribution of organisms at the intake constant, a 
larger screen mesh size will result in relatively more entrainment, 
while a smaller mesh size will result in

[[Page 48331]]

relatively more impingement. Historically, traveling screens deployed 
by power plants used a \3/8\-inch mesh size. For this reason, most 
studies and reports referring to impingement are in fact referring to 
those organisms impinged on a \3/8\-inch mesh screen. Similarly, 
entrainable organisms are those organisms fitting through a mesh of 
less than or equal to \3/8\ of an inch. This also means the majority of 
entrainable organisms are composed of eggs, larvae, and smaller 
juveniles. More recent studies, particularly those that evaluate mesh 
sizes smaller than \3/8\ of an inch, continue to refer to impingement 
as any organism caught on the screen. This can cause some confusion 
because many organisms that would have been entrained with a \3/8\-inch 
mesh instead become impinged by the finer mesh. These are referred to 
as impinged entrainables or ``converts.'' EPA has also found that most 
studies of entrainment are biased toward the larger (older) larvae with 
higher survival rates and do not analyze survival of smaller larvae. 
This bias implies a focus on larvae body lengths sufficient to have 
begun scale and bone development, and it generally reflects the more 
motile early life stages. EPA found that these study findings cannot be 
applied to smaller and less motile life stages, which are incapable of 
avoidance responses. It is also important to note that preventing 
entrainment by some exclusion technologies might result in very high 
entrainment reductions by converting entrainment to impingement, but 
these impinged organisms may have an even lower likelihood of surviving 
impingement than larger potentially impinged organisms. Therefore, 
while entrainment refers specifically to passage through the cooling 
water intake system, entrainment mortality also includes those smaller 
organisms killed by exclusion from the cooling water intake system. 
Today's rule uses the \3/8\-inch mesh size as part of the definition of 
impingement mortality and entrainment mortality as a means of clearly 
differentiating those organisms that might be susceptible to 
impingement or entrainment, and thereby avoids any confusion over the 
status of impinged entrainables or ``converts.''
    Generally, two basic approaches can be used to reduce impingement 
mortality and entrainment. The first approach is flow reduction, where 
the facility installs a technology or operates in a manner to reduce or 
eliminate the quantity of water being withdrawn. Reduced volumes of 
cooling water produce a corresponding reduction in impingement and 
entrainment and, therefore, reduced impingement mortality and 
entrainment mortality. It should be noted that, at electric generators, 
flow reduction could be achieved, perhaps most effectively, by 
installing more energy efficient production, thereby requiring less 
cooling per unit of electricity generated. The second way to reduce 
impingement and entrainment is to install technologies or operate in a 
manner that either (1) gently excludes organisms or (2) collects and 
returns organisms without harm. Exclusion technologies or practices 
divert those organisms that would have been subject to impingement and 
entrainment away from the intake. Collection and return technologies 
are installed to collect and return organisms to the source water, 
allowing impingement to occur but possibly preventing impingement 
mortality.
    Although not available to all facilities, two other approaches to 
reducing impingement and entrainment are (1) relocating the facility's 
intake to a less biologically rich area in a waterbody, and (2) 
reducing the intake velocity. Relocating an intake farther from shore 
or at greater depths can be effective at entrainment reduction but is 
not available to many inland facilities because the distance or depths 
required to reach less biologically-productive waters are not generally 
available. Further, while a far offshore intake may exhibit a lower 
density of organisms, the species found will change as a function of 
distance from the shoreline as well as depth in the water column. 
Therefore, it may not always be desirable to relocate an intake 
structure. A reduced intake velocity provides motile organisms the 
opportunity to swim away from the intake structure. This approach can 
be very effective in reducing impingement but has no effect on 
entrainment.
    Sections 1 and 2 below further describes flow-reduction and 
exclusion technologies.
1. Flow Reduction
    Flow reduction is commonly used to reduce impingement and 
entrainment. For purposes of this rulemaking, EPA assumes that 
entrainment and impingement (and associated mortality) at a site are 
proportional to source water intake volume. Thus, if a facility reduces 
its intake flow, it similarly reduces the amount of organisms subject 
to impingement and entrainment.\48\ Some common flow reduction 
technologies are variable frequency drives and variable speed pumps, 
seasonal operation or seasonal flow reductions, unit retirements, use 
of alternate cooling water sources, water reuse, and closed-cycle 
cooling systems. For additional detailed information on these 
technologies as well as others, see Chapter 6 of the TDD, 
``California's Coastal Power Plants: Alternative Cooling System 
Analysis'' (DCN 10-6964), and EPRI's ``Fish Protection at Cooling Water 
Intake Structures: A Technical Reference Manual'' (DCN 10-6813).
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    \48\ Impingement rates are related to intake flow, intake 
velocity, and the swimming ability of the fish subject to 
impingement. Entrainment is generally considered to be proportional 
to flow and therefore a reduction in flow results in a proportional 
reduction in entrainment, as EPA assumes for purposes of national 
rulemaking that entrainable organisms are uniformly distributed 
throughout the source water. EPA has consistently applied this 
assumption throughout the 316(b) rulemaking process (for a 
discussion of proportional flow requirements in the Phase I and II 
rules see, e.g., 66 FR 65276 and 69 FR 41599; also see EPA's 1977 
draft guidance manual for 316(b), available at DCN 1-5045-PR from 
the Phase I docket) and continues to assume that it is broadly 
applicable on a national scale and is an appropriate assumption for 
a national rulemaking. EPA recognizes that this assumption does not 
necessarily apply when relocating or varying the time pattern of 
withdrawals, such that these may be effective strategies to reduce 
impingement and entrainment in some locations.
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a. Variable Frequency Drives and Variable Speed Pumps
    A facility with variable speed drives or pumps operating at their 
design maximum can withdraw the same volume of water as a conventional 
circulating water pump. However, unlike a conventional circulating 
water pump, variable speed drives and pumps allow a facility to reduce 
the volume of water being withdrawn for certain periods. The pump speed 
can be adjusted to reduce water withdrawals when cooling water needs 
are reduced, such as when ambient water temperatures are colder (and 
therefore capable of dissipating more heat), when fewer generating 
units are operating or when fuel is more efficiently burned. In site 
visits, EPA found that variable drives and pumps were typically used at 
units operating below capacity, such as load-following units. EPA 
estimates that facilities with intermittent water withdrawals could 
achieve a 5 to 10 percent reduction in flow.\49\ For this reason, many 
baseload generating units and continuously operated manufacturing 
processes will obtain limited reductions in flow from using these 
technologies. EPA is further aware that some facilities may need to

[[Page 48332]]

withdraw water for cooling even while the facility is not in 
production, such as facilities on standby status, or nuclear facilities 
where the heat energy generated by fission must still be dissipated 
while the facility is out of service. As a result, EPA determined that 
variable frequency drives and variable speed pumps, while useful in 
specific setting and circumstances, are not BTA candidates because the 
flow reduction technologies have limited application and availability, 
and are not a high performing technology as an entrainment control 
measure.
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    \49\ Withdrawals of colder water could allow facilities to 
reduce their intake flow using variable drives and pumps, but EPA 
does not have data on the efficacy or availability of this approach.
---------------------------------------------------------------------------

b. Seasonal Operation or Seasonal Flow Reductions
    Seasonal operation or seasonal flow reduction refers to the 
reduction or elimination of a quantity of water withdrawn either during 
periods of low demand for electricity output, or to coincide with 
certain biologically important periods. Most facilities that currently 
employ seasonal flow reductions do so to limit thermal impacts or to 
reduce entrainment, because entrainment often has a peak season, 
particularly during a local spawning season. Freshwater drum, for 
example, perform broadcast spawning during early summer when water 
temperatures reach about 65 degrees Fahrenheit.
    During specific peak entrainment periods, a facility could scale 
back its operation (or perhaps not operate at all), thereby reducing or 
eliminating the volume of cooling water withdrawn. This could be 
accomplished through a combination of variable speed pumps or shutting 
down some portion of the pumping system. Seasonal flow reduction could 
also consist of operating a closed-cycle recirculating system as 
defined at Sec.  125.92(c)(1) as once-through during part of the year 
and as a closed-cycle system during the peak entrainment season. (EPA 
notes that closed-cycle cooling has been rejected as noted in the 
previous section, and discussed in more detail below.) Facilities could 
also choose to schedule regular maintenance to occur during these high 
entrainment periods. These maintenance activities often require the 
facility to reduce or cease operations and can be timed to coincide 
with the most biologically productive periods. Through site visits, EPA 
gathered information on species present at facilities and has 
identified some sites where entrainment appears to be significant all 
year long, and other sites where peak entrainment occurs in as few as 
three to four months of the year.\50\ However, if all power-generating 
facilities in a local area were to stop operating at the same time, 
there could be difficulty in supplying electricity to the area. 
Therefore, EPA concluded that seasonal operations have limited 
nationwide application for controlling entrainment and are thus not 
widely available entrainment reduction technology.
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    \50\ See DCN 10-6702 and its attachments for examples of 
spawning ``seasons.''
---------------------------------------------------------------------------

    Impingement is generally more sporadic, less predictable, and more 
difficult to address with seasonal operation. For example, clupeid 
species, such as gizzard shad, experience impingement episodes 
sporadically throughout the winter and spring during periods of 
especially cold water temperatures, or sporadically throughout the 
summer and fall during periods of low dissolved oxygen.
c. Unit Retirements
    Some power plants units have been retired and others have 
essentially ceased all operations but have not been formally retired or 
decommissioned. The reasons for their inactivity vary,\51\ but the end 
result is the facility no longer needs cooling water withdrawals for 
these units. Similarly, manufacturers may retire processing units as 
market demand changes, process lines are moved to other sites, or 
production technologies change. Unit closures provide clear reductions 
in flow, but the demand for electricity (or other products) might 
dictate that production be increased at the facility in question or at 
another facility altogether; there is usually no guarantee that the 
intake flow will be permanently retired. EPA expects flow reductions 
due to unit closures could be reasonably included as part of a 
facility's impingement mortality and entrainment reductions strategy. 
Given the number of variables involved in the decision to retire a unit 
and the likelihood of a facility having a unit that is ready to retire 
at promulgation of the final rule, unit retirements are not a 
nationally available entrainment reduction measure. See Section VIII 
for further discussion of how a facility can take credit for flow 
reductions attributable to unit closures.
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    \51\ Note that some generating units are retired by the owner 
(i.e., the unit is no longer considered sufficiently profitable to 
operate) or is rarely dispatched by its independent system operator 
for market-driven reasons (i.e., the unit cannot deliver at a 
competitive price except during limited peak seasons; see also Sec.  
125.94(c)(12)). They may also be mothballed, placed on cold storage, 
or maintained in various other states of operational readiness.
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d. Use of Alternate Cooling Water Sources
    While not reducing the overall usage of water at a facility, using 
an alternate source of cooling water can reduce impingement and 
entrainment if the alternate source substitutes for withdrawals from 
surface waters. An example is using ``gray'' water as a source of 
cooling water, such as a facility that reaches an agreement with a 
nearby wastewater treatment plant to accept the wastewater treatment 
plant's effluent as a source of cooling water.\52\ Such alternate 
sources are limited by available capacity and consistency of flow. 
Increasing competition for these sources of water may make this a more 
challenging approach for existing facilities than for new facilities 
that are not yet fixed in location. In principle, alternate sources 
could be used to fulfill either a fraction or all of a facility's 
cooling water demands. In practice, the location of alternate sources, 
the costs of moving water from the alternate source to the facility, 
and whether the facility uses a once-through or closed-cycle 
recirculating system as defined at Sec.  125.92(c) will determine 
whether the alternate source can meet all or a portion of the 
facility's cooling water needs. All these factors limit the widespread 
availability of alternate cooling water sources as an entrainment 
reduction measure, however use of alternative sources of cooling water 
such as wastewater treatment effluent could be attractive for certain 
facilities where the cost of retrofitting or other site-specific 
circumstances are favorable.\53\
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    \52\ See, for example, EPA's site visit report for PSEG's Linden 
Generating Station (DCN 10-6557), which has a capacity of 1230 MW, 
35 percent CUR, and uses 7-8 mgd of gray water as the sole source of 
makeup water for its cooling towers.
    \53\ For maps showing which electric generators are near a 
source of available reuse water for cooling, see Tidwell, V., J. 
Macknick, K. Zemlick, J. Sanchez, and T. Woldeyesus. 2013. 
``Transitioning to Zero Freshwater Withdrawal for Thermoelectric 
Generation in the United States.'' (submitted). See also the 
accompanying presentation given at the American Geophysical Union 
Fall 2012 Meeting available at http://www.nrel.gov/docs/fy13osti/57444.pdf.
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e. Water Reuse
    Typically associated with manufacturing facilities, water reuse 
(defined as using water for multiple processes) can reduce the volume 
of water needed for cooling, process, or other uses. For example, a 
facility might withdraw water for non-contact cooling water and then 
reuse the heated effluent as part of an industrial process. In effect, 
the facility has eliminated the need to withdraw additional water for 
the latter

[[Page 48333]]

process. EPA has observed significant water reuse at manufacturing 
facilities but has not developed national level data for such reuse 
because of the range of different manufacturing sectors and the 
significant variability in manufacturing processes appropriate for 
reuse. For example, during site visits, EPA observed that it may be 
difficult to quantify specific water reuse at complex facilities. (See, 
for example, the site visit report for ArcelorMittal, a steel mill at 
DCN 10-6551.) For additional detail on water usage in specific 
industrial sectors, see Chapters 4 and 8 of the TDD.
    Increasingly, electric utilities are adopting water reuse to meet a 
portion or all of their cooling water demands. Water reuse can enhance 
the reliability of power generation in water-limited environments. 
Given the complex use (and reuse) patterns for some facilities and the 
lack of reuse at other facilities, water reuse cannot be considered as 
a widely available entrainment reduction option.
f. Closed-Cycle Cooling Systems
    Closed-cycle cooling systems allow a facility to transfer its waste 
heat to the environment using significantly smaller quantities of water 
relative to once-through cooling, and in some cases no water. The main 
types of closed-cycle cooling systems are wet cooling, dry cooling, 
hybrid cooling, and impoundments. Each is described below.
i. Wet Cooling Systems
    In a wet cooling system, cooling water that has absorbed waste heat 
transfers that heat through evaporation of some of the heated water 
into the surrounding air and recirculates the now cooled water to 
continue the cooling process.\54\ This process enables a facility to 
reuse the remaining water, thereby reducing the quantity of water that 
must be withdrawn from a waterbody. Because the heat is transferred 
through evaporation, the amount of water withdrawn from the water 
source is greatly reduced, though not eliminated completely, because 
make-up water is required to replace that lost through evaporation and 
blowdown.\55\ The two main types of wet cooling systems are natural 
draft and mechanical. While wet cooling systems reduce withdrawals 
significantly relative to once-through systems, they can increase the 
consumptive use of water because they rely on evaporation (which is not 
returned to the waterbody) for heat dissipation. When once-through 
cooling is used and withdrawals are a significant portion of the source 
waterbody, the return of heated water might contribute to greater 
evaporation from the waterbody relative to the waterbody's normal 
evaporation rate. EPA does not have conclusive data on the relative 
magnitude of these effects, but the data do suggest that the relative 
difference in evaporation is not so great that it will play a major 
role in determining a cooling system type in most watersheds. EPA 
examined available information on evaporation losses in DCN 12-6673, 
including a comparison to evaporative losses from the downstream 
effluent plume of once-through cooling systems. While EPA recognizes 
that evaporative losses from closed-cycle systems are greater, EPA's 
analysis does not suggest that the difference is substantial enough to 
outweigh the significant reduction in adverse environmental impacts to 
aquatic organisms. However, the relative loss of water through 
evaporation for closed-cycle and once-through systems is site-specific, 
depending on the exact design of the systems.
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    \54\ In addition, a smaller portion of the heat is also removed 
through direct contact between the warm water and the cooler 
surroundings; this is known as sensible heat.
    \55\ Cooling towers must replace water lost to evaporation; this 
is referred to as makeup water. Additionally, as water evaporates, 
dissolved solids and other materials gradually increase in 
concentration in the circulating water and can cause operational 
difficulties. To minimize these issues, cooling tower operators 
continually discharge a small portion of the circulating flow and 
replace it with makeup water; this is referred to as blowdown.
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    There are two common designs for wet cooling systems. A natural 
draft cooling tower can be as tall as 500 feet and has a hyperbolic 
shape. The height of these towers creates a temperature differential 
between the top and bottom of the tower, which creates a natural 
chimney effect that transfers heat as heated water contacts rising air. 
In contrast, mechanical cooling towers rely on motorized fans to draw 
air through the tower and into contact with the heated water.\56\ These 
towers are much shorter than natural draft cooling towers (typically 30 
to 75 feet tall) and can be built in groups. Mechanical cooling towers 
may require more land area than natural draft cooling towers for an 
equivalent amount of cooling. Both types of towers require electricity 
for pumps, but mechanical draft towers also require electricity to 
operate the fans. In both cases, the electricity need of the towers 
reduces an electric generating facility's net generating output. Thus, 
the monetary and environmental costs of this reduction in energy 
efficiency must be considered. These environmental costs include human 
health and welfare effects from increased air emissions (from burning 
additional fuel to make up for the power that cannot be sold) and the 
global climate change effects of increased greenhouse gas output at 
fossil-fueled facilities (these costs are now explicitly considered in 
the benefit-cost analysis; see Section X below). Both natural draft and 
mechanical cooling towers can operate in freshwater or saltwater 
environments. Saltwater applications typically require more make-up 
water than freshwater applications, making them less efficient in 
reducing water withdrawals. Optimized cooling towers can achieve flow 
reductions of 97.5 and 94.9 percent or better for freshwater and 
saltwater sources, respectively.
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    \56\ Modular cooling tower units provide an additional cooling 
tower alternative. Modular cooling towers resemble mechanical 
cooling towers, but are portable, typically rented for short-term 
periods and quickly assembled.
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ii. Dry Cooling Systems
    Dry cooling systems virtually eliminate the need for cooling water 
withdrawals.\57\ Unlike wet cooling systems, waste heat in dry cooling 
systems is transferred completely through convection and radiation, 
rather than evaporation. Direct dry cooling is much like a car 
radiator; turbine exhaust steam passes through tubes or fins for 
cooling, and the condensate is returned to the boiler to be reheated 
into steam to propel the turbine. The system is completely closed to 
the atmosphere, and there is no contact between the outside air and the 
steam or the resulting condensate. Because of the heavy reliance of dry 
cooling on ambient air temperatures and the lower efficiency of heat 
transfer through convection and radiation, dry cooling systems are much 
larger and therefore more expensive \58\ than wet cooling systems for a 
given cooling load. While dry cooling systems are not uncommon in the 
U.S. (see DCN 10-6943), they have typically been built at smaller 
generating units or in areas where limited water supplies might make

[[Page 48334]]

uncertain the availability of either once-through cooling or wet 
cooling make-up water, such as the arid southwestern United States. Dry 
cooling has not been used for circulating water cooling at nuclear 
facilities.
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    \57\ Dry cooling systems blow down some of the circulating water 
in the cooling system to prevent the buildup of materials in the 
condenser. However, the volume of makeup water is extremely low--a 
dry cooling system typically reduces intake flows by 98-99 percent 
over a comparable once-through cooling system.
    \58\ The construction and capital costs for dry cooling towers 
have been reported as four to 10 times more expensive as wet cooling 
towers, and the auxiliary power consumption for dry cooling is 
higher than for wet cooling. See DCN 10-6679. EPA recognizes that 
costs for dry cooling may have decreased since this document was 
written, but costs for dry cooling are still markedly higher than 
those for wet cooling. The other challenges associated with dry 
cooling remain unchanged.
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iii. Hybrid Cooling Systems
    In certain applications, a facility could choose a hybrid cooling 
system design that incorporates elements of both wet and dry cooling. 
Typically, the base of the tower functions as a wet cooling system and 
the upper portion as a dry cooling system. The most common reason for 
this design is to reduce the visible plume of water vapor, which is 
accomplished by recapturing some of the water vapor evaporated in the 
wet portion of the tower. This design is also usually much shorter than 
natural draft wet towers and can also include plume abatement controls. 
Another version of the hybrid cooling system also includes both wet and 
dry cooling sections, but the dry section functions to directly cool a 
portion of the turbine exhaust steam. The benefits of such a tower may 
include substantial water savings as well as reduction in power plant 
efficiency losses associated with just dry cooling.
iv. Impoundments
    Impoundments are surface waterbodies that serve as both a source of 
cooling water and a heat sink. As with cooling towers, impoundments 
rely on evaporative cooling to dissipate the waste heat; a facility 
withdraws water from one part of the impoundment and then discharges 
the heated effluent back to the impoundment, usually in another 
location to allow the heated water time to cool. Depending on local 
hydrology, impoundments may also require makeup water from another 
waterbody. Impoundments can be man-made or natural, and can be offset 
from other water bodies or as part of a ``run of the river'' system 
(the latter are sometimes referred to as cooling lakes).
2. Exclusion and Collection Technologies
    Over the last several decades, numerous technologies in addition to 
specific flow reduction measures such as velocity controls and closed-
cycle cooling have been developed in an effort to minimize impingement 
mortality and entrainment associated with cooling water intake systems. 
The following section summarizes the most widely used technologies and 
the most effective and best-performing technologies, such as screens, 
barrier nets, aquatic filter barriers, and collection and return 
systems. For additional detailed information on these technologies and 
others, also see Chapter 6 of the TDD, ``California's Coastal Power 
Plants'' report (DCN 10-6964) or EPRI's ``Fish Protection at Cooling 
Water Intake Structures'' report (DCN 10-6813).
a. Screens
    There are several types of screens that offer protection that are 
discussed below, including traveling screens and cylindrical wedgewire 
screens. Not described in this section are fixed screens that are used 
simply for the purpose of debris exclusion but do not offer protection 
to fish, larvae, and eggs.
i. Traveling Screens
    Traveling screens are a technology in place as part of most cooling 
water intake structures. These screens originally were designed to 
prevent debris from entering the cooling water system, but they also 
prevent some fish and shellfish from entering the cooling water system. 
Traveling screens have been installed in a wide variety of operating 
and environmental conditions: salt water, brackish water, freshwater, 
and icy water, as well as river, lake and tidal applications. On the 
basis of the technical survey, EPA found 93 percent of electric 
generators and 73 percent of manufacturers employ traveling water 
screens or other intake screens. Many types of traveling water screens 
(e.g., through flow, dual flow, center flow) are used. The most common 
design in the United States is the through flow system. The screens are 
installed behind bar racks (trash racks) but in front of the water 
circulation pumps. The screens rotate up and, while out of the water, 
debris and impinged organisms are removed from the screen surface by a 
high-pressure spray wash. Screen wash cycles are triggered either 
manually or by a certain level of head loss across the screen 
(indicating clogging). By definition, this technology works by 
collecting (i.e., impinging) fish and shellfish on the screen. Ideally, 
traveling screens would be used with a fish handling and return system, 
as discussed below. The return system should be regularly maintained to 
prevent biofouling or other blockages that may affect survival.
ii. Cylindrical Wedgewire Screens
    Unlike traveling screens, cylindrical wedgewire screens are a 
passive intake system. Wedgewire screens, also called ``V'' screens or 
profile screens, consist of triangular-shaped wires arrayed on a 
cylindrical framing system, with long slots between the wires, 
lengthwise along the screen. Slot sizes for conventional traveling 
screens typically refer to a square opening (\3/8\ inch by \3/8\ inch) 
that is punched, molded, or woven into the screen face. Wedgewire 
screens are constructed differently, however, with the slot size 
referring to the distance between longitudinally adjacent wires. These 
screens are designed to have a low through-slot velocity (less than 0.5 
fps or 0.15 meter per second) and typically have smaller slot sizes 
than a coarse mesh traveling screen. The entire wedgewire structure is 
submerged in the source waterbody. (See Chapter 6 of the TDD for an 
illustration of these screens.)
    When necessary conditions regarding placement in the waterbody are 
met, these screens exploit physical and hydraulic exclusion mechanisms 
to achieve consistently high impingement reductions, and as a result, 
impingement mortality reductions. Wedgewire screens require an ambient 
crossflow current to maximize the sweeping velocity provided by the 
waterbody. The screen orientation allows the crossflow to carry 
organisms away from the screen allowing them to avoid or escape the 
intake. Lower intake velocities also allow fish to escape from the 
screen face. Entrainment reductions can also be observed when the 
screen slot size is small enough and intake velocity is low enough to 
exclude egg and larval life stages.\59\ Limited evidence also suggests 
that extremely low intake velocities can allow some egg and larval life 
stages to avoid the intake because of hydrodynamic influences of the 
crossflow. Therefore, performance is dictated largely by local 
conditions that are further dependent on the source waterbody's 
biological composition. Costs of wedgewire screens increase 
significantly as slot size and design intake velocity decrease because 
the cumulative size of the screen (or number of screens) must grow in 
order to accommodate the same flow of cooling water. Wedgewire screens 
can also employ cleaning and deicing systems such as air-burst sparging 
to help maintain open intake structures and low intake velocities.
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    \59\ Note that this is entrainment exclusion and not necessarily 
related to the survival of entrainable organisms.
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    According to data from the industry questionnaire, EPA's site 
visits, and industry documents, dozens of facilities across the United 
States employ cylindrical wedgewire screens. However, wedgewire screens 
are not feasible for all facilities, particularly where intakes are in 
shallow water or have limited shoreline frontage. Also,

[[Page 48335]]

wedgewire screens might not be feasible where the size and number of 
wedgewire screens would interfere with navigation of vessels. As 
described above, locations also need to have an adequate source water 
sweeping velocity. Most of the performance data for wedgewire screens 
is based on coarse mesh slot sizes with an intake velocity of 0.5 fps. 
Because it is extremely difficult to measure impingement and 
entrainment reductions in the field, most performance data for 
wedgewire screens is based on barge and lab studies.\60\ EPA does not 
have data on the performance of fine mesh wedgewire screens on 
entrainment survival. Consequently, EPA has considered wedgewire 
screens only for impingement mortality. For additional discussion of 
the specific design and operation of cylindrical wedgewire screens, see 
Chapter 6 of the TDD. The following section discusses the importance of 
mesh size to impingement mortality and entrainment reductions.
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    \60\ EPA expects that properly designed wedgewire screens have a 
design intake velocity of 0.5 fps, therefore intakes with wedgewire 
screens will meet the impingement standard at Sec.  125.94(c)(2) and 
there is no need to separately pre-approve this technology as in the 
remanded 2004 Phase II rule.
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iii. Screen Mesh Size Considerations
Coarse Mesh
    Coarse mesh traveling screens are the typical traveling screen 
fitted on the majority of cooling water intakes. A large number of 
facilities have intake screens with \3/8\-inch (9.5 mm) mesh 
panels.\61\ This size mesh is common because, as a general rule, the 
maximum screen slot size is never larger than one-half of the condenser 
tube diameter (the condenser tubing is the narrowest point in the 
cooling water system and, as such, is most susceptible to clogging from 
debris), and this tubing is typically \3/4\ or \7/8\ inch in diameter. 
Mesh of \3/8\-inch (roughly 9.5 mm) size does not prevent entrainment 
and without any other precautions can lead to high mortality of 
impinged fish. Coarse mesh traveling screens have been in use by both 
power plants and manufacturers for more than 75 years and represent the 
baseline technology. Similarly, the majority of successful wedgewire 
installations are coarse mesh.
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    \61\ In today's rule the EPA recognizes that \1/2\- by \1/4\-
inch mesh is used in some instances and perform comparably to the 
\3/8\-inch square mesh.
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Fine Mesh
    Fine mesh traveling and wedgewire screens are similar to coarse 
mesh screens. The only difference is the size of the screen mesh. Fine 
mesh traveling screens have been in use since the 1980s. Typically, 
facilities have incorporated fine mesh in an effort to reduce 
entrainment. The mesh size varies, depending on the organisms to be 
protected, but typically range from 0.5 to 5 mm. Data in the record 
demonstrate that entrainment typically decreases as mesh size 
decreases. Slot sizes larger than 2 mm do not prevent eggs from passing 
through the screen. Converting traveling screens from coarse mesh to 
fine mesh often requires adding more screens in order to maintain the 
same flow, since the open area of a fine mesh screen is less than the 
open area of a coarse mesh screen. Adding more screens is one way to 
maintain that flow.\62\ EPA estimates that as many as 17 percent of 
existing intakes could not be enlarged to accommodate a 2 mm mesh, and 
as many as 55 percent of existing intakes could not accommodate a 0.5 
mm slot size under conditions of low-intake velocities. For these 
reasons, fine mesh screens are available for some locations, but they 
are not the best performing technology and are not an available 
technology for the industry as a whole for IM&E. For more details, see 
Chapter 6 of the TDD.
---------------------------------------------------------------------------

    \62\ A facility could also increase its intake velocity.
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b. Barrier Nets
    Barrier nets are nets that fully encircle the intake area of water 
withdrawal, from the bottom of the water column to the surface, and 
prevent fish and shellfish from coming in contact with the intake 
structure and screens. According to data from the industry 
questionnaire (as of the year 2000), at least a half dozen facilities 
employ a barrier net. Typically, barrier nets have large mesh sizes 
(e.g., \1/2\-inch or 12.7 mm) \63\ and are designed to prevent 
impingement. Because of the large mesh size, they offer no reduction in 
entrainment. They are often deployed seasonally, wherever seasonal 
migrations create high impingement events or to avoid harsh winter 
conditions that jeopardize integrity of the net. Barrier nets also 
prevent impingement of shellfish on the intake traveling screen. 
Shellfish such as crustaceans can pose a unique issue for traveling 
screens; shellfish are not impinged, but they can attach to the 
traveling screen surface and are not removed from the traveling screen 
by pressure wash sprays. Barrier nets have been shown to be helpful in 
this regard.
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    \63\ Barrier net mesh sizes vary, depending on the 
configuration, level of debris loading, species to be protected, and 
other factors.
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c. Aquatic Filter Barriers
    Aquatic Filter Barriers (AFBs) consist of water-permeable fabric 
panels with small pores (less than 20 microns). They are similar to 
barrier nets in that they extend throughout the area of water 
withdrawal from the bottom of the water column to the surface. AFBs 
reduce both impingement mortality and entrainment because they present 
a physical barrier to all life stages. The surface area of an AFB is 
quite large compared to a traveling screen, allowing for extremely low 
water velocities. The low velocity allows non-motile organisms to drift 
away. EPA is aware of one power plant that used an AFB but notes that 
this facility recently ceased operations.\64\ EPA has updated 
performance data for AFB for small flow intakes, but it does not have 
enough data to evaluate the technology at large intakes or in all water 
bodies. EPA does not consider this technology to be demonstrated and 
available as a nationwide BTA candidate.
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    \64\ This facility ceased operations for reasons unrelated to 
any requirements or measures addressing cooling water intake 
impingement or entrainment.
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d. Collection and Return Systems
    Conventional traveling screens were not designed initially with the 
intention of protecting fish and aquatic organisms that become impinged 
against them. The organisms were often handled in the same manner as 
debris on the screens. Marine life can become impinged against the 
screens because of high intake velocities that prevent their escape. 
Prolonged contact with the screens can suffocate organisms that are 
unable to escape or result in descaling injury and latent mortality. 
Organisms that survive initial impingement and removal are not always 
provided with a specifically designed mechanism to return them to the 
waterbody and are often handled in the same way as other screening 
debris. Other objects, such as leaves and trash, that are collected on 
the screen are typically removed with a high-pressure spray and 
deposited in a dumpster or debris return trough for disposal. Exposure 
to high pressure sprays and other screening debris can cause 
significant injuries that result in latent mortality or increase the 
susceptibility to predation or re-impingement. Screens are rotated 
periodically on a set time interval or when the pressure differential 
between the upstream and downstream faces exceeds a set value.
    Conventional traveling screen systems have been modified to reduce 
impingement-related mortalities with

[[Page 48336]]

collection and return systems. In its simplest form, these systems are 
composed of a return flume or trough with sufficient water volume and 
flow to enable impinged organisms to return to the source water. Return 
systems should be designed to avoid predation and latent mortality 
while organisms are in the flume, maintain an appropriate water depth 
in the flume for high survival of the organisms, located at an 
appropriate elevation to avoid large drops of the organisms back to the 
surface water (or large hydraulic jumps if the end of the return is 
below the water's surface), and sited to avoid repeated impingement of 
the organisms by the intake structure.
    Some facilities have modified conventional coarse mesh traveling 
screen systems to reduce impingement mortality. They did this by 
removing fish trapped against the screen and returning them to the 
receiving water with as few injuries as possible. The first modified 
screens, also known as Ristroph screens, feature capture and release 
modifications. In the simplest sense, these screens are fitted with 
troughs (also referred to as buckets) containing water that catch the 
organisms as the screen rises out of the water and the organisms are 
sprayed off of the screen. The return component consists of a mechanism 
to remove impinged fish gently from the collection buckets, such as a 
low-pressure spray. The buckets empty into a collection trough that 
returns fish to a suitable area in the source waterbody. These modified 
screens have shown significant reductions in impingement mortality 
compared with unmodified screen systems.
    Data from early applications of the Ristroph screen design showed 
that while initial survival rates might be high at some installations, 
latent mortality rates were higher than anticipated. This indicated 
that organisms could sustain significant injuries during the 
impingement and return process that were not immediately fatal. 
According to a study conducted by Ian Fletcher in the 1990s (see DCN 5-
4387), industry identified several additional critical screen 
modifications to address latent mortality. These included redesigning 
the collection buckets to minimize turbulence, adding a fish guard 
rail/barrier to prevent fish from escaping the collection bucket, 
replacing screen panel materials with ``fish-friendly,'' smooth woven 
mesh, and using a low-pressure wash to remove fish before any high-
pressure spray to remove debris. The Fletcher analysis also identified 
longer impingement duration, insufficient water retention in the 
buckets, and exposure to the air and temperature extremes as conditions 
that could negatively affect fish survival. Finally, these findings 
indicate that modified Ristroph screens must be rotated continually 
instead of the periodic rotation schedule common with conventional 
screen systems. Performance data for modified traveling screens with 
fish-friendly fish return systems, sometimes referred to as post-
Fletcher modifications, show low levels of impingement mortality across 
a wide variety of waterbody types and fish species. Additionally, 
recently developed screen designs (such as the Passavant Geiger, 
Beaudrey WIP, and Hydrolox screens) have also shown promise in reducing 
impingement mortality.
    For additional and more detailed discussion of the specific design 
and operation of these screen modifications, see Chapter 6 of the TDD.
3. Other Technological Approaches
a. Intake Location and Velocity Caps
    The most common intake location for a cooling water intake 
structure is along a shoreline. In some water bodies, however, 
shoreline locations are thought to have a potential for greater 
environmental impact because the water is withdrawn from the most 
biologically productive waters, especially those containing a high 
density of organisms in earlier life stages, such as nursery areas. 
Some facilities employ an offshore intake to withdraw water from less 
biologically productive areas to reduce impingement and entrainment 
relative to intakes in more productive shoreline areas. Reduction in 
impingement mortality and entrainment due to intake location is highly 
site-specific. The greatest potential for reductions is found with far 
offshore locations at distances of several hundred feet, not found on 
many rivers and streams. Both depth and the offshore location must be 
evaluated to determine whether fish densities and species distribution 
there are substantially different than those near the shoreline. Two 
areas where far offshore locations are commonly used today are the 
oceans and Great Lakes.
    EPA found that several offshore intakes are fitted with a velocity 
cap.\65\ Velocity caps are a physical structure rising vertically from 
the sea bottom and are placed over the top of an intake pipe. Intake 
water is withdrawn through openings in the velocity cap so that it 
converts the direction of water flow into the pipe from vertical to 
horizontal. The velocity cap does not act to reduce the velocity,\66\ 
but the horizontal flow provides a physiological trigger in fish, which 
induces an avoidance response to reduce impingement mortality. The 
velocity cap further serves to limit the zone of influence of the 
intake to the depth level at which the velocity cap is situated, thus 
affecting only the life stages that live at that depth. Velocity caps 
are also usually equipped with supports and bar spacing selected to 
prevent larger aquatic organisms (e.g., sea turtles or marine mammals) 
from entering the intake pipe. Because velocity caps operate under the 
principle that the organisms can escape the current, they do not offer 
entrainment reductions over and above those achieved by being located 
offshore. Reductions in entrainment observed with velocity caps occur 
because of the difference in organism densities in far offshore deep 
water compared to a surface intake at the shoreline.
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    \65\ Others can be fitted with a cylindrical wedgewire screen, 
or might simply be an open pipe.
    \66\ EPA's data show that velocity caps operate at velocities 
above and below the 0.5 fps and can be effective using either 
design.
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    Far offshore velocity caps have limited application in oceans and 
the Great Lakes, are not available in other water bodies, and are 
therefore not available as a candidate for a national BTA. However, the 
technology is a demonstrated high performing technology, and is 
therefore included as a compliance alternative for those facilities 
where the technology is available. For additional and more detailed 
discussion of the specific design and operation of offshore intake 
locations and velocity caps, see Chapter 6 of the TDD.
b. Reduced Intake Velocity
    Impingement mortality can be reduced greatly by reducing the 
through-screen velocity in any screen.\67\ Reducing the rate of flow of 
cooling water through the screen (through-screen velocity) to 0.5 fps 
or less reduces impingement of most fish because it allows them to 
escape the intake current. (See 66 FR 65274 [December 18, 2001] and DCN 
2-028A, EPRI's ``Technical Evaluation of the Utility of Intake Approach 
Velocity as an Indicator of Potential Adverse

[[Page 48337]]

Environmental Impact Under Clean Water Act 316(b).'') As a result, some 
facilities have designed and operate their modified traveling screens 
or wedgewire screens so as not to exceed a through-screen velocity of 
0.5 fps. Swim speed studies demonstrate that for most facilities, an 
intake velocity of 0.5 fps or less will result in 96 percent or better 
reductions in impingement mortality for most species. EPA notes that 
preliminary results from recent studies of fine mesh screens suggest 
that at even lower intake velocities such as 0.25 fps, some 
hydrodynamic influences may reduce entrainment mortality even more, 
because flow dynamics are nonlinear. It is unclear as to whether such 
observations hold true when cooling water withdrawals (water volumes) 
are large. While higher intake velocities are sufficiently protective 
for some species of fish, the higher intake velocities are not 
necessarily protective of all life-stages. For example, younger fish 
may not be strong swimmers or may have not a developed avoidance 
response. Therefore higher intake velocities are not a high performing 
technology. As noted previously, low intake velocity has limited 
application, and is therefore not available as a candidate BTA 
technology. However, the technology is a demonstrated high performing 
technology, and is therefore included as a compliance alternative for 
those facilities where the technology is available.
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    \67\ Limited lab studies indicate that entrainment also can 
decrease as through-screen velocity decreases and that through-
screen velocity can have an effect on entrainment survival rates, 
although such data is extremely variable by species (see DCN 10-6802 
and DCN 10-6803). In any case, EPA does not consider a reduced 
intake velocity as an effective technology for reducing entrainment, 
because entrainable organisms generally lack motility.
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D. Technology Basis for Today's Final Rule

    As described above, EPA examined the full range of technologies 
that reduce impingement or entrainment or both. From an assessment of 
all factors, EPA identified one technology that is best technology 
available for minimizing the adverse impacts of impingement mortality 
at existing facilities: modified traveling screens with a fish-friendly 
fish return. EPA identified no single best technology that is available 
for minimizing entrainment at existing facilities for today's final 
rule. For new units at existing facilities, EPA identified mechanical 
draft wet cooling systems as BTA for both impingement and 
entrainment.\68\
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    \68\ Although EPA also identified velocity reduction to 0.5 feet 
per second or less as a candidate best performing technology for 
impingement mortality, EPA did not promulgate requirements to reduce 
intake velocity as BTA because it is not available at all 
facilities; however, the final rule does allow facilities to comply 
with intake velocity of 0.5 feet per second or less where available.
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    EPA did not identify any single technology or group of technology 
controls as the basis for establishing the national BTA standard for 
entrainment for existing units. Instead, EPA has established a national 
BTA standard for entrainment for existing units that requires 
determination of BTA entrainment requirements on a site-specific basis 
in a structured permitting setting. The framework for determining 
entrainment requirements provides for the consideration at a minimum of 
certain specified factors that must be considered in the Director's 
determination of the BTA controls.
1. Alternative Impingement Mortality Standards for Existing Units
    After considering all factors identified above, EPA has concluded 
that modified traveling screens, such as modified Ristroph screens and 
equivalent modified traveling screens with fish-friendly fish returns, 
are a best technology available for minimizing impingement 
mortality.\69\ These screens use \3/8\ inch, or similar, mesh with 
collection buckets designed to minimize turbulence, a fish guard rail/
barrier to prevent fish from escaping the collection bucket; ``fish-
friendly,'' smooth, woven or synthetic mesh; and a low-pressure wash to 
remove fish before any high-pressure spray to remove debris. The fish 
removal spray must be of lower pressure, and the fish return must be 
fish friendly, provide sufficient water and minimize turbulence. 
Modified traveling screens generally must be rotated continually to 
minimize aquatic exposure to impingement or to the air and thus obtain 
the highest reductions in impingement mortality.
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    \69\ EPA also considered recent screen designs (such as the 
Passavant Geiger, Beaudrey WIP, and Hydrolox screens) in evaluating 
impingement mortality data. In fact, the data set used to calculate 
the impingement mortality performance standard at Sec.  125.94(c)(7) 
included a study of performance at a facility employing a Passavant 
Geiger screen, as well as a facility employing a Beaudrey WIP 
screen.
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    Under the seventh option for complying with the BTA impingement 
mortality standard in today's final rule, a facility may rely on any 
technology it chooses so long as it demonstrates through biological 
compliance monitoring that it achieves the required 12 month 
impingement mortality performance standard \70\ that EPA calculated 
based on the performance of the BTA technology--modified traveling 
screens with fish return. As discussed in the TDD (see, for example, 
TDD Exhibits 11-1 and 11-3), EPA based the 12 month percent mortality 
performance at Sec.  125.94(c)(7) on data from facilities with 
traveling screens modified with features to improve the post-
impingement survival of organisms such as smooth mesh, continuous or 
near-continuous rotation of the screens, buckets with guard rails, low 
pressure sprays for collecting fish, and fish return systems. The 
statistical basis for the 12 month impingement mortality performance 
standard includes 26 sets of 12 month survival percentages across 17 
facilities demonstrating average impingement mortality rates ranging 
from 1.6 to 48.8 percent under conditions of 18 to 96 hour holding 
times. EPA established the 12 month percent mortality as 24 percent 
which is the arithmetic average of the impingement mortality rates from 
the 17 facilities. (This is consistent with EPA's proposed rule use of 
expected value of the beta distribution which can be calculated as the 
arithmetic average.) Note: The 12 month impingement mortality 
performance standard means that no more than 24 percent of the impinged 
fish may die or alternatively at least 76 percent of the impinged fish 
must survive. EPA has occasionally used average annual limitations in 
the effluent guidelines program, most recently for the pulp and paper 
industry category (40 CFR 430, promulgated in 1998). In these 
instances, such as the technology-based BAT, EPA has defined the annual 
average limitations to be the average level demonstrated by the 
technology. Thus, EPA's approach to calculating the 12 month percent 
survival performance standard is consistent with past practice.
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    \70\ In the record, EPA may also refer to this as the 12-month 
percent survival performance standard, % SPS, or the IM performance 
standard.
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    EPA recognizes that variability in the technology performance 
occurs due to changes in seasons, differing intake locations, higher 
mortality of certain species, and speciation found in different water 
bodies. By using a full 12 months of data, EPA has ensured that the 
resulting performance standard reflects the widest range of potential 
conditions present in EPA's database. EPA has further incorporated 
variability into the 12 month impingement mortality performance 
standard by basing it on data from 17 facilities which collectively 
performed more than 1,500 sampling events beginning as early as 1977. 
EPA notes that seven facilities had mortality rates less than 10 
percent which provides evidence that facilities can, and have, 
maintained and operated their systems in a manner consistent with the 
performance standard. Another four facilities demonstrated impingement 
mortality rates significantly greater than the performance standard of 
24 percent, however, EPA notes these facilities were

[[Page 48338]]

not required to optimize their technology performance as part of their 
study, and data collection was not required to achieve a certain level 
of performance.\71\ In each study, EPA has identified elements of the 
technology operation that a facility could modify to achieve the 12 
month percent impingement mortality performance standard. By using the 
12 month percent impingement mortality performance standard, EPA has 
ensured that the resulting performance standard reflects the widest 
range of potential conditions present in EPA's database. In addition to 
those studies meeting the criteria for use in the 12 month percent 
survival performance standard calculations, there are further studies 
in EPA's record that provide additional performance data showing 
facilities can, and have, maintained and operated their systems in a 
manner consistent with the performance standard. EPA's record includes 
approximately 250 total studies related to impingement (see TDD Exhibit 
11A-1).
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    \71\ For example, the Indian Point study states ``Because of the 
preliminary nature of this study, the effectiveness of the 
continuously operating fine mesh traveling screen has not been fully 
evaluated. Further studies incorporating controls for survival 
testing, regulation of spray wash pressures, collection efficiency 
tests, sampling during peak impingement periods for all important 
species, and better holding facilities, will provide more conclusive 
results.''
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    Despite the overwhelming evidence that the 12 month percent 
survival performance standard of 24 percent was consistent with 
demonstrated performance for the best technology, EPA considered other 
alternatives that might incorporate more variability into a performance 
standard. EPA concluded that none of the alternatives were consistent 
with the need for facilities to demonstrate ongoing maintenance and 
operations over a long period of time, such as a year. Any alternative 
would be less stringent and would allow facilities to target long-term 
performance at a level that would be less than the optimal performance 
demonstrated by facilities with the technology in place. Further, the 
12-month average impingement mortality performance standard will 
require a facility to actively evaluate performance during the 12 month 
period enabling the facility to optimize the technology to improve 
performance to counterbalance a result above the standard by one below 
the standard. If EPA had included a monthly average standard, it would 
have similarly needed to incorporate allowances for exceedances. 
Allowing for exceedances would have provided no incentive for improving 
operations for such exceedances. Therefore, EPA determined that the 12 
month impingement mortality performance standard is sufficient to 
ensure performance consistent with best technology available. For this 
reason, EPA is not promulgating the monthly average that was included 
in the proposal. EPA's decision also is consistent with effluent 
guidelines where compliance with the monthly average limitation is not 
required for facilities subject to a longer term limitations such as an 
annual average limitation (e.g., pulp and paper 40 CFR 430 Subpart B 
AOX limitation).
    EPA did not include in the final rule a number of requirements it 
had considered at proposal. The proposed rule would have required the 
seasonal deployment of barrier nets on estuaries and oceans as one 
element of the best technology available for minimizing the impingement 
mortality of shellfish. EPA has opted not to include any specific 
requirements for shellfish in the final rule, because EPA's review of 
the impingement data it used to develop today's final rule impingement 
performance standard includes data that incorporate shellfish survival 
as part of the performance standard. Further, as previously explained, 
the final rule provides for the Director to establish additional 
requirements where necessary.
    EPA expects facilities complying with Sec.  125.94(c) of today's 
rule by compliance option (7) to track their compliance with the 12 
month percent impingement mortality performance standard on an ongoing 
basis and to proactively modify their technology or operations when a 
trend in the sampling suggests that they might be in danger of 
exceeding the 12 month percent impingement mortality performance 
standard in the future. The 12 month percent impingement mortality 
performance standard requires that impingement mortality not exceed 24 
percent, calculated as the sum total number of fish that were impinged 
and died within the holding time divided by the sum total number of 
fish impinged for a 12-month period. EPA expects the ratio will be 
calculated based either on direct sampling counts, or based on both 
counts being extrapolated to represent annual counts. Because comments 
provided data that expanding the proposed 24 to 48 hour holding time 
requirement would generally not affect the observation of mortality due 
to impingement, the regulation allows for holding times from 18 to 96 
hours.
    As explained in more detail in Section VI.E and G below, the BTA 
technology for impingement does not minimize adverse environmental 
impacts associated with entrainment.
2. Entrainment Standards for Existing Units
    As discussed below, EPA is not basing BTA for entrainment at 
existing units (that is, excluding new units at existing facilities) on 
closed-cycle recirculating cooling systems, a highly effective 
technology, because this technology is not available nationally and 
therefore does not represent BTA. EPA also has not identified any other 
effective, available and demonstrated candidate technology (or 
combinations of technologies) for entrainment reduction at existing 
units that is available nationally. For other entrainment technologies 
that might be available on a site-specific basis, see Section VI.E.2 
below and Chapter 6 of the TDD. EPA did not select the other flow-
reduction technologies (such as variable-speed drives and seasonal flow 
reductions) as the technology basis for entrainment control measures 
because these technologies are not uniformly best and are not broadly 
available for most facilities. Further, EPA has not identified a basis 
for subcategorizing existing units at which flow reduction technologies 
are feasible. The effectiveness, availability, and utility to a given 
facility of flow reduction or other entrainment reduction methods 
depends on site-specific geographical and biological conditions as well 
as operations of the facility. For example, this is the reason that EPA 
did not select relocation of a shoreline intake to far offshore as a 
technology basis for the BTA entrainment standard because this 
technology is not widely available for most facilities.
3. Impingement and Entrainment Standards for New Units at Existing 
Facilities
    In contrast to existing units, installing a closed-cycle cooling 
system at a new unit is far less complex. The technology is also highly 
effective, generally achieving greater than 95 percent reductions in IM 
and E (mechanical draft (wet) cooling towers achieve flow reductions of 
97.5 percent for freshwater and 94.9 percent for saltwater sources, or 
by operating the towers at a minimum of 3.0 and 1.5 cycles-of-
concentration, respectively). These reductions in flow and the 
concurrent reductions in impingement and entrainment impacts are among 
the highest reductions in adverse

[[Page 48339]]

environmental impact possible at an intake structure.\72\
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    \72\ Note that these metrics are not explicit requirements for 
closed-cycle recirculating systems. They simply represent what EPA 
views as examples of characteristics of a properly operated and 
maintained closed-cycle recirculating system, as defined at Sec.  
125.92(c)(1).
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    As described below, EPA has concluded that new units, in contrast 
to existing units, have much greater flexibility in terms of cooling 
system design, construction scheduling, and other factors that help 
minimize many of the negative aspects associated with closed-cycle 
cooling. For a more detailed discussion of this rationale, see below.
    Under the final rule, a new unit at an existing facility, where the 
facility that withdraws or will withdraw more than 2 mgd when the new 
unit begins operating will have requirements similar to the 
requirements of a new facility in Phase I. Under the rule, a new unit 
(as defined at Sec.  125.92(u) and described above) is required to have 
a flow limited to that which is commensurate with a closed-cycle 
recirculating system as it would be applied to the new unit. Today's 
final rule also includes an alternative approach (similar to Track II 
in Phase I), in which a facility could comply with the new unit 
standards by demonstrating that the technologies and operational 
measures employed will reduce the level of adverse environmental impact 
from any cooling water intake structure used to supply cooling water to 
the new unit to a comparable level to that achievable by implementing a 
closed-cycle recirculating system as defined at Sec.  125.92(c)(1).
    As discussed above, today's final rule defines a ``new unit'' at an 
existing facility as a stand-alone unit the construction of which 
commences after the effective date of today's final rule. New unit 
includes stand-alone units that are added to a facility for purposes of 
the same general industrial operation as the existing facility. This is 
in contrast to the definition of new facility, where a new facility 
does not include new units that are added to a facility for purposes of 
the same general industrial activity (40 CFR 125.83). The provision 
``for purposes of the same general industrial operation'' is explicitly 
included in today's final rule definition of new unit at an existing 
facility for clarity. A new unit may have its own dedicated cooling 
water intake structure, or the new unit may use an existing or modified 
cooling water intake structure. Any unit at an existing facility that 
does not meet the new unit definition in today's rule is subject to the 
existing unit provisions.
    EPA is adopting more stringent requirements for new units at 
existing facilities because such new units can be designed and 
constructed without many of the additional expenses and operational 
disadvantages associated with retrofitting an existing unit to closed-
cycle cooling. For example, the incremental downtime that can be 
associated with retrofitting to closed-cycle cooling is avoided 
altogether at a new unit. In addition, when new units are added, the 
condensers can be configured for closed-cycle, reducing energy 
requirements (by substantially reducing the turbine backpressure energy 
penalty) and associated air emissions.
    The three factors that led EPA to reject closed-cycle cooling as 
BTA (described below in Section E) are far less relevant for new units 
at existing facilities than for retrofitting existing units. This 
section discusses why EPA concluded that each factor is not a 
significant concern for new units, and why the record supports EPA's 
conclusion that closed-cycle cooling is an available and feasible 
technology for new units at existing facilities.
     Land Availability: In contrast to retrofitting the entire 
existing facility, the amount of space dedicated to closed-cycle for 
the new unit will be limited to the new unit rather than the entire 
facility. As a result, space constraints will be much less of an issue. 
New units also present the opportunity to design an optimized closed-
cycle recirculating system for the new unit. Retrofitting an existing 
facility for the full intake flow of the facility would require a 
facility to identify (or possibly obtain) enough space to accommodate 
the cooling towers and associated equipment. Furthermore, new units and 
their corresponding cooling system can be built in stages rather than 
as a facility-wide retrofit, and since the new unit has not yet been 
built, there is no energy reliability concern (discussed further 
below).
     Air Emissions: EPA expects that emissions are 
significantly less of a concern at new units. The condensers will be 
optimized for closed-cycle, reducing energy requirements, and high-
efficiency cooling towers can be incorporated into the design of the 
new unit, potentially allowing for smaller cooling towers to be 
installed. Turbine backpressure and the associated energy penalty can 
be substantially reduced in a new unit, but EPA acknowledges new units 
will still have auxiliary power consumption for fans. Therefore energy 
penalties and air emissions for tower operations can be minimized 
(though not eliminated). The emissions effects of requiring closed-
cycle cooling at new units at existing facilities is similar to the 
effects of this requirement at new facilities and will not pose an 
unacceptable impact. For more information, see Chapters 6, 8, and 10 of 
the TDD. Further, the new unit is likely to be more efficient and emit 
less pollution than existing units, therefore net emissions are 
expected to decrease as new units replace older, less efficient units.
     Remaining Useful Plant Life: This is clearly not an issue 
for new units. A new unit has its full useful life remaining and thus 
would experience the maximum possible reductions in adverse 
environmental impacts throughout that useful life.
    EPA does not expect that the requirements for new units at existing 
facilities will be a disincentive for facilities to repower existing 
units. The requirements only apply to stand-alone units. Requirements 
for entrainment at repowered units will thus be determined by the 
Director. EPA notes, however, for facilities that do choose to repower 
an existing unit, the costs of employing a closed-cycle cooling system 
are not a barrier, as described above. In fact, some facilities may 
find closed-cycle cooling to be less costly over the long-term. For 
example, in locations with limited water resources such that once-
through cooling of an additional unit is not possible, overall 
reliability will be increased by using closed-cycle cooling systems.
    EPA also recognizes that installing closed-cycle cooling systems at 
new units is a prevailing trend in industry, regardless of the 
regulatory requirements imposed by today's final rule. For example, see 
DCN 12-6672 in the record for today's rule, and DCNs 2-009 and 4-4023C 
(from the Phase I and Phase II dockets, respectively). These documents 
show that, on the basis of responses from facilities to the 316(b) 
industry questionnaire, facilities constructed in recent years are 
significantly more likely to employ closed-cycle cooling.
    EPA recognizes that at some point in the future, every unit will be 
rebuilt, replaced or repowered (or retired). EPA projects that 
approximately 227 MW in new generating capacity per year, will be 
subject to the new unit provision, reflecting the general industry 
trend towards more efficient units. EPA's analysis projects an 
equivalent number of new units at manufacturing facilities will be 
constructed each year. See the Phase I rule for more information

[[Page 48340]]

regarding the affordability and barrier to entry analysis for new 
construction.
    EPA notes that the new unit provision is an important element of 
the final rule, given the generally long lifespan of equipment at 
industrial facilities. For example, generating units at a power plant 
are often projected to have a 50-year lifespan. As a result, these 
facilities have a slow rate of ``evolution'' in adopting newer 
technologies. By requiring closed-cycle cooling in new units, EPA is 
ensuring (along with the Phase I rule) that no new once-through cooling 
units or facilities will be built.

E. Option Selection

    After considering all factors identified above, EPA has concluded 
that it should base the BTA impingement mortality standard for existing 
units on the performance of traveling screens (e.g., modified Ristroph 
screens and equivalent modified traveling screens with fish-friendly 
fish returns)--the ``best technology available'' for minimizing 
impingement mortality. While there are a number of technologies that 
may perform as well as or better than traveling screens, these 
technologies were not feasible or available on a nationwide basis and 
thus were not the ``best technology available'' for standard setting 
purposes. Moreover, the impingement mortality standard for existing 
units provides a number of alternatives, including some of these other 
technologies, for compliance with the standard. EPA based the BTA 
impingement mortality standard for existing units on the performance of 
traveling screens because EPA concluded that this technology is 
effective, widely available, feasible,\73\ and does not lead to 
unacceptable non-water quality impacts.
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    \73\ As part of the feasibility determination, EPA found that 
the costs associated with the IM standards are reasonable for the 
industry as a whole.
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    As explained above, EPA has not identified a technology or 
combinations of technologies that EPA concluded is ``best technology 
available'' for minimizing entrainment at existing units. EPA did not 
identify a technology for reducing entrainment that is effective, 
widely available, feasible, and does not lead to unacceptable non-water 
quality impacts. As such, EPA is unable to identify a nationally 
applicable BTA technology on which to base the BTA entrainment 
standard.
    While EPA concluded that closed-cycle recirculating systems reduce 
entrainment (and impingement mortality) to the greatest extent and are 
the most effective performing technology, after careful consideration 
of multiple factors, EPA concluded that a closed-cycle recirculating 
system is not the ``best technology available'' for existing units 
within the meaning of the statute. It is not the best technology 
available on a national basis for minimizing adverse environmental 
impact and should not form the sole basis for the BTA standard for 
entrainment for the reasons explained below.
    EPA also determined that there were no other ``available'' 
technologies for entrainment whose performance came close to that of 
closed-cycle recirculating systems. Further, while reduced intake 
velocity was a very effective control for impingement and may also 
reduce entrainment of some life stages of fish and shellfish, it does 
not significantly reduce entrainment of eggs and non-motile stages of 
larvae, and it is not physically available in many locations.
    EPA has broad discretion in what factors it should consider when it 
determines the best technology available for minimizing the adverse 
environmental impacts of cooling water intake structures. As both the 
U.S. Supreme Court and the Second Circuit Court of Appeals have 
underscored, section 316(b) is ``sui generis,'' in a class by itself, 
unencumbered by ``specified statutory factors,'' Entergy Corp. v. 
Riverkeeper, Inc., 556 U.S. 208, 222 (2009); Riverkeeper, Inc. v. EPA, 
358 F, 3d 174,187 (2d Cir. 2004). The Second Circuit explicitly 
rejected the argument that, because section 316(b) does not mention 
costs or other factors, EPA cannot give costs or other factors ``any'' 
weight in deciding what is the best technology. Riverkeeper, Inc., 358 
F.3d at 195. Furthermore, the Second Circuit recognized that EPA may 
base its decision on factors other than the effectiveness of a given 
technology in reducing impingement and entrainment and that EPA is 
entitled to deference in deciding what weight to give to the factors it 
considers in its BTA determination. Riverkeeper, Inc., 358 F.3d at 196.
    As noted, costs are one factor EPA may consider in its BTA 
determination. Here, while EPA did consider costs, costs were not a 
dispositive factor in the decision to reject closed-cycle cooling as 
the basis for a uniform national BTA entrainment standard. EPA did not 
reject closed-cycle cooling here either because it was not economically 
achievable or because the costs of closed-cycle would exceed its 
benefits. Instead, EPA rejected closed-cycle cooling as the technology 
basis for a uniform national BTA entrainment standard based on three 
factors: Land availability, air emissions, and remaining useful plant 
life as explained below.
    Central to EPA's evaluation of the availability of closed-cycle as 
BTA was EPA's new understanding of the limitations of technologies 
other than closed-cycle in reducing entrainment. This presented EPA 
with a sharper choice than it had in the Phase II rule. For today's 
rulemaking, EPA took a second look at the data it had relied on in the 
Phase II rule, particularly in light of new data received since the 
Phase II rule. As a result, EPA learned that entrainment exclusion does 
not necessarily equate to entrainment survival (76 FR 22185), a key 
underpinning to EPA's BTA standards for entrainment in the remanded 
Phase II rule.
    For the remanded Phase II rule, EPA had established national BTA 
performance standards for entrainment (and impingement) and included a 
number of different alternative means to achieve the standards. First, 
if a facility demonstrated that it could achieve reductions in flow 
associated with closed-cycle cooling, the facility met the BTA 
performance standards. Alternatively, a facility could demonstrate that 
it met the entrainment performance standards by a combination of 
installed technology and operational or other measures (including 
restoration measures). See 69 FR 41590 for a description of the final 
Phase II rule. Critical to EPA's decision to provide an array of 
choices for achieving the national BTA entrainment performance 
standards was a key factual conclusion. That conclusion was that a 
number of technologies would achieve performance reducing entrainment 
that was ``comparable'' to that of closed-cycle cooling. Consequently, 
for the Phase II rule, EPA established an entrainment performance 
standard of 60 to 90 percent based on data it reviewed for the Phase II 
rulemaking. See 69 FR 41598 for information on EPA's rationale for 
establishing compliance alternatives as part of the final rule.
    In the Phase II rule, while EPA looked to the performance of 
closed-cycle as the benchmark against which it evaluated technologies 
for the BTA standards, EPA did not mandate the achievement of flow 
reductions that were in all cases equivalent to closed-cycle. Given 
that the available data supported the view that there were other much 
less expensive technologies that obtained significant reductions in 
entrainment, EPA was comfortable with a BTA standard that required 
achievement of a level of performance

[[Page 48341]]

that was generally comparable though not equivalent to closed-cycle.
    Since the Phase II rulemaking, EPA has received new data and 
learned that its understanding of entrainment technology performance 
was incomplete. Following the remand of the Phase II rule, EPA 
reexamined the data as well as new information on the performance of 
various entrainment control technologies it had previously reviewed. As 
a result, EPA determined that its conclusion regarding the capability 
of these other technologies--a conclusion on which the Agency had based 
the Phase II BTA performance standards--was no longer supported by the 
data EPA had before it.
    There is a second additional consideration that further required 
EPA to focus renewed attention on how widely available closed-cycle 
cooling in fact was nationally. The Second Circuit decision in the 
Phase II rule removed restoration as a compliance option that EPA could 
consider. The decision underscored that restoration measures--one 
compliance option included in the Phase II rule--were not an available 
tool for complying with any 316(b) standard. However, at the time of 
the Phase II promulgation, EPA expected some facilities would use 
restoration in lieu of closed-cycle cooling, thus making closed-cycle 
or reductions commensurate with closed-cycle feasible (76 FR 41609). 
With the court decisions that restoration was not an available tool for 
compliance, compliance with a standard based on closed-cycle cooling 
alone is less feasible than EPA had expected at the time of the Phase 
II promulgation.
    The changed landscape has narrowed markedly EPA's range of options 
with respect to the technology basis for today's BTA standards. The gap 
between the performance of the most effective entrainment reduction 
technologies (closed-cycle) and other less expensive technologies has 
widened significantly. EPA's narrowed range of compliance technology 
choices required EPA to look even more closely at the feasibility of 
closed-cycle cooling and reduced flow. As the Second Circuit has noted, 
EPA is clearly entitled to make its choice among alternative BTA 
technologies based on more factors other than just a technology's 
effectiveness in reducing impingement and entrainment. Riverkeeper, 
Inc., 358 F.3d at 196. EPA identified three factors as significant in 
its decision to reject closed-cycle cooling as the sole technology 
basis for a national BTA entrainment standard. The three factors that 
collectively support rejecting closed-cycle cooling systems as a 
uniformly applicable BTA for existing facilities (except new units) are 
land availability, increased air emissions and remaining useful life.
1. Land Availability and Geographical Constraints Could Be a Factor on 
a Local Basis
    While EPA's record indicated that the majority of facilities have 
adequate available land to retrofit to closed-cycle cooling, some 
facilities have land constraints.\74\ While EPA originally estimated as 
many as 23 percent of facilities would not have enough space,\75\ it 
observed on site visits that some facilities with a small parcel of 
land could still install closed-cycle cooling by using creative 
engineering solutions. On the other hand, EPA found that some 
facilities with large acreage could not feasibly install cooling towers 
because of local zoning or other local concerns. Thus, existing 
physical space at the facility was not the only factor contributing to 
uncertainty about land availability. Further review has shown that 
setback distances to mitigate noise and plume abatement (based on GPS 
mapping of residential areas) act as an additional constraint on land 
available for retrofitting to closed-cycle, and the cost of acquiring 
new land may be prohibitive for some facilities. Consequently, EPA 
estimates that 25 percent or more of facilities might have one or more 
constraints on land availability that would limit the ability to 
retrofit for cooling towers for the entire facility. EPA lacks adequate 
support to indicate that land constraints can be accommodated at 
existing facilities.
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    \74\ For example, in the case of fossil fuel facilities, 
scrubber controls may already have been required to comply with air 
rules and standards. This may reduce available land for closed-
cycle.
    \75\ EPRI reported at least 6 percent of sites it evaluated were 
deemed ``infeasible'' because no space was available on which to 
locate a cooling tower. (DCN 10-6951) While EPA does not have access 
to the facility level data, EPRI's report supports EPA's conclusion 
that there is significant uncertainty around space constraints for 
facilities to install closed-cycle cooling.
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    EPA also attempted to determine criteria based on the data in its 
record that would enable it to define a threshold for determining land 
availability on a nationwide basis, but was unsuccessful. For example, 
one analysis explored a threshold of approximately 160 acres per GW 
(gigawatt) below which a facility could not feasibly install cooling 
towers. Based on acres and the footprint of the facility and its 
surroundings (primarily those sites for which EPA conducted site 
visits), EPA found such an approach did not accurately identify which 
facilities could feasibly install closed-cycle.
2. Increased Air Emissions Could Be a Factor on a Local Basis
    As previously discussed, retrofitting closed-cycle cooling (without 
also repowering) would result in increased air emissions of various 
pollutants, including particulates, sulfur dioxide, nitrogen oxides, 
mercury, and greenhouse gases, among others.\76\ As a result of 
installing closed-cycle cooling structures, fossil-fueled facilities 
would need to burn additional fuel, thereby emitting additional PM, 
CO2, SO2, NOX, and Hg. Two factors are 
responsible: (1) The need to compensate for energy required for 
operating cooling towers, and (2) slightly lower generating efficiency 
attributed to higher turbine backpressure when the condenser is not 
replaced with one optimized for closed-cycle operation when 
retrofitting existing units (also referred to as the energy penalty). 
While both of these factors contribute to increased air emissions, the 
larger contributor to projected increased air emissions is by far the 
energy penalty.
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    \76\ EPA recognizes that retrofitting closed-cycle cooling could 
be combined with other energy efficiency or pollution control 
technologies with the net effect of reducing air emissions; however, 
facilities could (and may be required to under other rules) install 
such technologies anyway, without converting to closed-cycle 
cooling.
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    The impact of the increased emissions varies according to the local 
circumstances. The increased emissions could consist of stack emissions 
from increased fuel usage, cooling tower emissions, and plumes of water 
vapor. EPA's analysis suggested that the most significant impacts would 
be increased PM2.5 emissions, which are associated directly 
with an increase in human health effects. EPA notes that cooling plume 
abatement and drift elimination technologies exist to address cooling 
tower emissions (and EPA included costs for such technologies in its 
analysis of Proposal Options 2 and 3). Further, EPA expects most 
effects of the particulates from cooling tower emissions would be 
limited to the immediate vicinity, confined wholly to the facility 
property. (See DCN 10-6954.) Therefore, EPA's primary concern is 
increased air emissions associated with additional fuel usage due to 
the energy penalty when retrofitting to cooling towers. EPA's review of 
emissions data from E-GRID (year 2005) suggests that impacts from these 
pollutant discharges could be significant. These include the human 
health and welfare and global climate change effects--all associated 
with a

[[Page 48342]]

variety of pollutants that are emitted from fossil fuel combustion. EPA 
is not able to quantify the frequency with which facilities could 
experience these local impacts, and therefore has concluded that the 
proper forum to address such local impacts fully is in a site-specific 
setting.
3. Remaining Useful Plant Life Could Be a Factor on a Facility Basis
    A number of facilities are nearing the end of their useful life. 
Considering the long lead time to plan, design, and construct closed-
cycle cooling systems, EPA determined that the Director should have the 
latitude to consider the remaining useful plant life in establishing 
entrainment mortality requirements for a facility. The remaining useful 
plant life, along with other site-specific information, will affect the 
entrainment reduction of closed-cycle cooling at a facility. For 
example, retrofitting to a closed-cycle system at a facility that is 
scheduled to close in three years will result in little entrainment 
reduction as compared to retrofitting to closed-cycle at a facility 
that will continue to operate for a significantly longer period.
The Decision To Establish a National BTA Standard Requiring Site-
Specific Determination of BTA Entrainment Controls
    Once EPA determined that a ``one-size-fits-all'' approach for 
entrainment for existing units is not generally feasible, it is 
appropriate to assess the required controls on a site-specific basis. 
Therefore, for existing units, EPA decided to adopt as the BTA 
entrainment standard an overarching regulatory framework under which 
the Director will establish BTA entrainment requirements on a site-
specific basis following prescribed procedures and applying specified 
factors for decision-making prescribed in the regulation and as 
described below.
    EPA concluded that site-specific proceedings are the appropriate 
forum for weighing all relevant considerations in establishing BTA 
entrainment requirements. Closed-cycle cooling is indisputably the most 
effective technology at reducing entrainment. Closed-cycle reduces 
flows by 95 percent and entrainment is similarly highly reduced. But 
given that EPA estimates that 25 percent of existing facilities may 
face some geographical constraints on retrofitting closed-cycle cooling 
and concerns about air emissions and the remaining useful life of a 
facility, EPA rejected the option of requiring uniform entrainment 
controls based on closed-cycle cooling. Instead, EPA elected to adopt 
as the entrainment standard a more flexible process in which, following 
consideration of a host of factors, the Director will prescribe 316(b) 
entrainment conditions appropriate at a particular site. For additional 
discussion on how a site-specific consideration of entrainment control 
requirements will be implemented, see Section VIII below.
    EPA has several reasons for adopting the framework approach as the 
BTA standard for entrainment. As explained, the record shows that 
though closed-cycle cooling is effective, it is neither widely 
available nor feasible, and has significant unacceptable non-water 
quality impacts. While EPA cannot identify with precision the extent of 
these limitations on installing closed-cycle cooling systems 
nationwide, the record indicates that the circumstances are neither 
isolated nor insignificant. In light of this, EPA decided not to 
establish closed-cycle cooling as a presumptive BTA entrainment 
standard, pending a site-specific demonstration of the limitations. 
Instead, entrainment control requirements will be determined in a site-
specific setting where the opportunity for local input in decision-
making process will be maximized.
    With regard to new units at existing facilities, based on the 
performance of properly operated cooling tower operation and the 
availability, feasibility and affordability of closed-cycle cooling at 
new units, EPA selected closed-cycle recirculating systems based on wet 
cooling towers as BTA. For a discussion of how the three factors 
(availability, feasibility and affordability) relate to new units, see 
Section VI.D.3. Consistent with the Phase I rule for new facilities, 
EPA has also included a compliance alternative allowing a facility to 
show performance comparable to that of a closed-cycle recirculating 
system. The new unit provisions in today's final rule are essentially 
the same as the requirements for new facilities under the Phase I rule.

F. Other Options Considered for Today's Final Regulation

    EPA considered several other options for the BTA standards in 
developing today's rule, but ultimately rejected them. This section 
includes a discussion of these options, as well as some technologies 
that EPA considered, but did not include as compliance alternatives to 
the impingement mortality standards.
1. Proposal Option 4--Flexible Impingement Mortality Controls Similar 
to Final Rule at Existing Facilities With DIF of 50 mgd or More; BPJ 
Permits for Impingement Mortality and Entrainment at Existing 
Facilities With Design Intake Flow Between 2 mgd and 50 mgd; Site-
Specific Entrainment Standard for Existing Facilities With DIF of 50 
mgd or More; and Uniform Impingement Mortality and Entrainment Controls 
for All New Units at Existing Facilities Similar to Final Rule
    At proposal, EPA's preferred option was Option 1, which was the 
option closest to today's final rule, and the starting point for the 
description of the changes to the rule in Section V above. At proposal, 
EPA also considered a variant of Option 1, called Option 4, which 
changed the impingement mortality requirements for facilities under 50 
mgd from the performance standard in Option 1 to BTA as determined by 
best professional judgment. In the case of an existing facility below 
50 mgd that added a new unit, the flow associated with the new unit 
would have been subject to the uniform entrainment requirements based 
on closed-cycle cooling. Finally, all existing facilities withdrawing 
more than 2 mgd of DIF would have been subject to entrainment 
requirements established on a site-specific basis, with the exception 
noted above for new units. The option analyzed here, called Proposal 
Option 4, is likewise similar to the final rule, but for the 
impingement standard based on BPJ for facilities between 2 and 50 mgd.
    EPA ultimately rejected Proposal Option 4 because EPA found that 
the technologies on which the impingement mortality performance 
standard of today's final rule is based are available, feasible, 
demonstrated, and affordable for all regulated facilities on a national 
basis. Moreover, EPA's analysis showed that the difference in the total 
costs for the two options was nominal. Additionally, EPA notes that 
many facilities with a DIF under 50 mgd already use closed-cycle 
cooling and would have minimal burden under the final rule. These 
facilities would have no difficulty complying with the requirements EPA 
is establishing in today's final rule. Proposal Option 4, by not 
distinguishing between those facilities under 50 mgd that have already 
minimized adverse environmental impacts from those that have not, masks 
the actions that would have to be taken by the latter group to comply 
with today's final rule. In addition, the flexibilities introduced in 
the June 11, 2012 NODA and included

[[Page 48343]]

in today's final rule applied to all facilities, rather than taking the 
Option 4 approach at proposal of providing for more Director discretion 
for only the smaller withdrawing facilities. EPA also concluded that 
the data collection activities required under the final rule will be 
more protective of threatened and endangered species because they 
provide information on a larger number of facilities than Proposal 
Option 4 for consideration by the Director in permitting decisions. 
Lastly, EPA acknowledges that Proposal Option 4 is more burdensome to 
permitting authorities than is the final rule, as it requires more 
case-by-case decision making.
2. Proposal Option 2--Flexible Impingement Mortality Controls Similar 
to Final Rule at All Existing Facilities That Withdraw Over 2 mgd DIF; 
Site-Specific Entrainment Standard for Existing Facilities With DIF at 
or Below 125 mgd; Require Flow Reduction Commensurate With Closed-Cycle 
Cooling by Facilities Greater Than 125 mgd DIF; and Uniform Impingement 
Mortality and Entrainment Controls for All New Units at Existing 
Facilities
    As previously explained, EPA assessed a number of different 
technologies that reduce impingement mortality and entrainment as the 
possible basis for section 316(b) requirements. EPA concluded that 
closed-cycle recirculating systems (based on wet cooling towers) are 
the most effective technology for reducing impingement mortality and 
entrainment. Notwithstanding that conclusion, EPA has decided not to 
establish a performance standard for impingement and entrainment based 
on closed-cycle recirculating systems for existing facilities. 
Furthermore, EPA found that there are no other effective technologies 
for entrainment that are available nationally. As described previously, 
each of the three factors for rejecting closed-cycle cooling as BTA for 
entrainment would also apply in the case of Proposal Option 2, despite 
the smaller number of facilities that would be subject to a requirement 
to retrofit. The technology basis for entrainment mortality controls 
for facilities greater than 125 mgd DIF under this option would have 
been wet cooling systems. The constraints discussed above that are 
associated with retrofitting a large portion of the universe of 
affected facilities, led EPA to conclude that requiring closed-cycle 
cooling on a uniform basis scale was not appropriate for a national 
regulation.
    EPA notes that it proposed multiple options that included closed-
cycle, and solicited comment on all aspects of closed-cycle cooling. 
After fully considering all comments and data, EPA still finds closed-
cycle cooling is not the ``best technology available for minimizing 
adverse environmental impact'' required by section 316(b). Because of a 
combination of concerns over feasibility/availability, air emissions, 
and remaining useful life of the facility, EPA has rejected closed-
cycle recirculating systems as the basis for national impingement and/
or entrainment controls. Nor is EPA able to identify a subcategory for 
which these concerns no longer apply. Moreover, the complex interaction 
of all of these factors at individual sites does not lend itself to 
other regulatory options that would require closed-cycle recirculating 
systems with an ``off ramp'' if any of the factors were shown to result 
in unacceptable impacts because this would create a presumption for 
closed-cycle cooling rather than an equal balancing of all relevant 
factors. EPA decided not to establish any presumptive BTA entrainment 
outcome. EPA finds the entrainment standards framework in today's final 
rule will provide a consistent, more efficient, and more effective 
approach than standards with an ``off ramp.''
3. Proposal Option 3--Flexible Impingement Mortality Controls at All 
Existing Facilities That Withdraw Over 2 mgd DIF; Require Flow 
Reduction Commensurate With Closed-Cycle Cooling at All Existing 
Facilities Over 2 mgd DIF
    Proposal Option 3 was, in many ways, the same as requiring closed-
cycle cooling at all existing facilities. As described above, each of 
the three factors for rejecting closed-cycle cooling as BTA for 
entrainment would apply with equal force for Proposal Option 3. As a 
result, EPA has concluded Proposal Option 3, similarly, is not 
appropriate as BTA for entrainment.
4. Proposal Option 4 Variant
    EPA also considered a variant of Proposal Option 4. As compared to 
Proposal Option 4, this variant did not include flexible alternatives 
for complying with the BTA impingement mortality standards (including 
pre-approved and streamlined alternatives), but did adopt the 50 mgd 
threshold to determine those facilities for which the Director has more 
discretion in determining BTA via BPJ. EPA analyzed this option to 
directly compare the effects of introducing flexible IM compliance 
alternatives at all facilities (as the final rule does) to the effects 
of introducing greater Director discretion for a subset of facilities, 
via BPJ permitting (as the Proposal Option 4 variant does). The 
preferred option at proposal, Option 1, was estimated to be more costly 
than Option 4 (Option 1 was estimated to cost $384 annually as compared 
with $327 million annually for Option 4). Under the analysis supporting 
the final rule the EPA is adopting today, however, today's final rule 
is estimated to cost $275 million annually in comparison with an 
estimated cost of $284 million annually for the Proposal Option 4 
variant. Thus, EPA has concluded that providing flexible alternatives 
for compliance with the BTA IM standard at all facilities is both more 
effective at reducing costs to society and more readily justified as 
best technology available as compared to the approach of introducing 
greater Director discretion for only a subset of facilities (below 50 
mgd). Hence, EPA rejected the Proposal Option 4 variant, and the 
approach of introducing greater Director discretion for only a subset 
of facilities (below 50 mgd).
5. Proposal Option 2 Variant
    EPA also considered a variation of Proposal Option 2 that would 
have used 125 mgd AIF rather than 125 mgd DIF as the threshold. 
However, as described above, EPA rejected Proposal Option 2 and, for 
the same reasons, rejected this variant of Option 2.
6. Site-Specific Approach To Addressing Impingement
    Many commenters (primarily from manufacturing facilities) commented 
that EPA should adopt a site-specific approach to addressing 
impingement mortality, similar to that employed for entrainment. As a 
result, EPA also considered an approach that would have established 
both impingement mortality and entrainment requirements fully on a 
site-specific basis taking into account for the particular facility, 
among other factors, those previously described as pertinent to EPA's 
316(b) BTA determination. EPA rejected a fully site-specific approach 
for impingement controls principally because low-cost technologies for 
impingement mortality are available, feasible, demonstrated, and 
affordable for facilities nationally. Because technologies are 
available, a fully site-specific approach would place an unnecessary 
additional burden on state permitting resources. Moreover, the final 
impingement mortality standard includes several alternatives that allow 
site-specific demonstration that a particular technology performs at a 
level representing the best technology available for the site. EPA is 
instead promulgating a modified version of the

[[Page 48344]]

proposed rule, adding several elements of flexibility (i.e., compliance 
alternatives), and thus directly addressing many of the concerns raised 
by these commenters.
7. Pre-Approved Technologies
    Many commenters requested that EPA pre-approve technologies that, 
once installed, would obviate the need for further regulatory 
conditions such as periodic monitoring. This is similar to the approach 
taken for cylindrical wedgewire screens in the remanded 2004 Phase II 
rule (see 69 FR 41693). EPA has adopted, in significant measure, 
commenters' suggestion in the BTA impingement mortality standard in 
today's rule by including several pre-approved and several streamlined 
compliance alternatives in the form of technologies that may be 
approved following a demonstration of required performance, so long as 
the facility shows that its alternative technology is operating in a 
manner that minimizes adverse environmental impacts. As an option for 
achieving the impingement mortality standards, a facility may install 
and operate specified impingement controls whose performance is 
comparable to or better than the technology EPA concluded was the 
``best technology available'' for impingement mortality reductions:

 Closed-cycle recirculating systems, defined at Sec.  125.92(c)
 Existing offshore velocity caps, defined at Sec.  125.92(v)
 Technologies that result in a design intake velocity less than 
or equal to 0.5 fps, including most modern cylindrical wedgewire 
screens

Although this rule leaves the BTA entrainment determination to the 
Director, with the possible BTA decisions ranging from no additional 
controls to closed-cycle recirculating systems plus additional controls 
as warranted, EPA expects that the Director, in the site-specific 
permitting proceeding, will determine that facilities with properly 
operated closed-cycle recirculating systems do not require additional 
entrainment reduction control measures. Refer to Section E.1 for the 
EPA's rationale for selecting these controls.

G. Final Rule BTA Performance Standards

    The rule establishes the following BTA standards for Impingement 
Mortality and Entrainment: Impingement Mortality Standards at All 
Existing Units at Existing Facilities that withdraw greater than 2 mgd 
DIF; an Entrainment Standard that requires site-specific entrainment 
controls determined by the Director for Existing Units at Existing 
Facilities that withdraw over 2 mgd DIF; BTA standards for impingement 
mortality and entrainment for new units at existing facilities. The 
previous section described the other options that EPA considered but 
ultimately rejected, and the basis for those decisions.
1. Impingement Mortality Controls for Existing Units at Existing 
Facilities for the Final Rule
    Today's final rule provides a facility a number of alternatives for 
complying with the BTA impingement mortality standard. As discussed 
more below, EPA's BTA impingement mortality standard is based on EPA's 
conclusion that, on a national basis, modified traveling screens with 
fish-friendly return systems are the best performing technology 
available for impingement mortality reduction. But EPA is not requiring 
compliance with the BTA impingement mortality standards only through 
monitoring data that demonstrates achievement of the numeric reduction 
in mortality levels that EPA has determined well-operated modified 
traveling screen will achieve. Rather, the final rule allows facilities 
to comply by employing any of seven alternatives, including monitored 
compliance with a numeric impingement mortality performance standard.
    Based on its review of available data and information submitted by 
commenters, EPA identified a number of other technologies and 
operational measures that could achieve equivalent, or better, 
performance to the impingement mortality reductions achieved with 
modified traveling screens that may be available for some sites. Thus, 
the final rule provides seven alternatives for complying with the BTA 
impingement mortality standards. These include three compliance paths 
based on pre-approved technologies, and three compliance paths that 
offer a streamlined approach to compliance. EPA expects the majority of 
facilities will use one of these six options to comply with the BTA 
impingement mortality standards (see Exhibit VIII-1 for more 
information).
    The following pre-approved technologies will comply with today's 
rule and are associated with minimal monitoring and reporting of 
operational and/or design parameters. These technologies are (the 
numbering reflects the numbering in Sec.  125.94(c)): Operating (1) a 
closed-cycle recirculating system; (2) a cooling water intake structure 
that EPA or the State NPDES permitting authority determines has a 
design maximum through-screen intake velocity of 0.5 feet per second; 
or (4) an existing offshore velocity cap. The general intent behind a 
compliance path based on a pre-approved technology is to provide a 
level of certainty to the regulated entity that they would be deemed 
compliant with the relevant rule requirements by designing, installing, 
and operating the technology as specified in the regulation. The three 
pre-approved compliance alternatives are each based on a particular 
technology approach. The permit for each compliance alternative will 
necessarily include criteria, design standards, and operational 
conditions specific to the pre-approved technology. The compliance 
paths based on pre-approved technologies in today's final rule include 
simplified permit application requirements (such as reduced or minimal 
study), documentation, or reduced monitoring, and will therefore result 
in greatly simplified implementation. In today's final rule, there are 
no biological compliance monitoring requirements for any of the three 
compliance paths based on pre-approved technologies.
    Under the streamlined alternatives, a facility must demonstrate to 
the Director that traveling screens or some combination of technology 
controls or operational measures represent BTA performance under the 
conditions at the site. The three streamlined compliance alternatives 
are (the numbering reflects the numbering in Sec.  125.94(c)) operating 
(3) a cooling water intake structure that EPA or the State NPDES 
permitting authority determines has an actual maximum through-screen 
intake velocity of 0.5 feet per second; (5) modified traveling screens 
whose demonstrated performance represents the best technology available 
for impingement reduction at the site; or (6) a system or combination 
of technologies or operational measures whose demonstrated performance 
is the best technology available for impingement reduction at the site. 
In order to demonstrate BTA performance, a facility will need to 
conduct a two-year site-specific study at the same time it conducts its 
source water characterization and Entrainment Characterization Study. 
This study must demonstrate that its modified traveling screens, or 
combination of technology controls and operational measures, have been 
adjusted and optimized so as to minimize impingement mortality. If the 
Director concludes that the facility has demonstrated optimized 
performance for its controls, the facility will have no

[[Page 48345]]

subsequent biological monitoring and reporting requirements as compared 
to a facility that complies using the impingement mortality performance 
standard. If the screens or other measures are not already installed, 
the Director may approve postponing the two-year study to be conducted 
after the entrainment determination has been made. These three 
streamlined compliance alternatives are based on a technology or suite 
of technologies and practices with more variable performance, and as 
such necessitate some degree of study, in order to optimize technology 
performance for the site-specific conditions encountered by a facility. 
A streamlined compliance alternative may require some level of 
monitoring, but once the optimal performance of the technology has been 
identified, conditions included in the permit specifying optimal 
operation ensure that the streamlined alternative is similar to or 
better than the impingement mortality performance standard. For 
example, the streamlined compliance alternatives also do not require 
biological compliance monitoring.
    The seventh alternative (at Sec.  125.94(c)(7)) for complying with 
the BTA impingement mortality standards requires the owner or operator 
to demonstrate compliance with the numeric impingement mortality 
performance standard through biological monitoring. Under this 
alternative, the owner or operator has the flexibility to choose any 
technology, including a new or innovative technology, provided the 
compliance monitoring demonstrates the performance standard is 
achieved.
    Each of these seven alternatives is further described below. In 
addition, further discussion of how each of these alternatives will be 
implemented may be found in Section VIII.
a. Closed-Cycle Recirculating Systems
    As described above, in Chapter 6 of the TDD, and in prior 
rulemakings, EPA has long recognized the benefits of flow reduction 
from closed-cycle recirculating systems for reducing impingement (as 
well as entrainment). A facility employing a closed-cycle recirculating 
system will typically reduce impingement by more than 95 percent. As a 
result, a facility may choose to comply with the BTA impingement 
mortality standards in today's final rule by demonstrating that it uses 
a properly operated and maintained closed-cycle recirculating system.
    EPA estimates that approximately 18 percent of intake structures 
(i.e., those that already have an existing closed-cycle recirculating 
system, plus facilities located in California and New York, whose State 
regulations are at least as stringent as the final rule) will choose 
this alternative.
    EPA does not have the data to determine precisely which 
impoundments are serving as part of a closed-cycle recirculating system 
as defined at 40 CFR 125.92(c)(2). However, EPA is aware that some 
facilities have created their impoundments in a water of the U.S. as 
part of their cooling system. EPA does not intend to eliminate the use 
of such lawfully created impoundments for their intended purpose, as 
doing so could result in a large number of stranded assets. If the 
cooling system with the impoundment minimizes the withdrawal of make-up 
water for cooling purposes, the Director may determine the cooling 
system meets the definition of a closed-cycle recirculating system.
b. Reduced Intake Velocity
    EPA has long recognized the relationship between impingement and 
intake velocity. EPA conducted an analysis of fish swim speeds in the 
Phase I rule (see 66 FR 65274, December 18, 2001) and concluded that a 
design through-screen velocity of 0.5 fps is protective of 96 percent 
of motile organisms. However, EPA did not select intake velocity as the 
technology basis for the BTA impingement mortality standards. Although 
the performance of 0.5 fps intake velocity achieves greater reduction 
in impingement mortality than the technology on which the BTA 
impingement mortality standards are based, reducing a facility's intake 
velocity is not widely available or feasible for all existing 
facilities (see Chapter 6 of the TDD).
    EPA is including reductions in intake velocity as an alternative 
for complying with the BTA impingement mortality standards through 
reduced intake velocity. A facility choosing this alternative must 
demonstrate that (1) the through-screen design velocity could not 
exceed 0.5 fps or (2) the actual intake velocity does not exceed 0.5 
fps.
    EPA estimates that approximately 34 percent of intake structures 
will choose this alternative. This estimate includes facilities that 
have an existing intake velocity of 0.5 fps or less, plus those 
facilities that are projected to install a technology that would reduce 
their intake velocity (larger intake, wedgewire screens, or variable 
speed pumps).
i. Design Intake Flow Basis
    Consistent with EPA's determination in its earlier 316(b) 
regulatory efforts, the final rule allows a facility to comply with the 
BTA impingement mortality standards by demonstrating that its intake 
has a maximum through-screen design velocity of 0.5 fps. EPA concluded 
that facility's operating at this through-screen design velocity will 
protect the vast majority of impingeable aquatic organisms. Facilities 
choosing to comply with the BTA impingement mortality standards may not 
average velocity across multiple intakes at a facility.
ii. Actual Intake Flow Basis
    EPA is also adopting a provision to allow facilities to demonstrate 
that the through-screen intake velocity at an intake structure does not 
exceed 0.5 fps on the basis of the intake's actual flow. (Again, note 
that facilities choosing this compliance alternative may not average 
intake velocity across multiple intakes.) In contrast to design flow 
above, a facility with an intake having a design through-screen intake 
velocity greater than 0.5 fps may be operated at a reduced capacity and 
therefore may withdraw cooling water at a velocity less than 0.5 fps. 
As long as the actual intake flow is such that the velocity remains at 
or below 0.5 fps, the reductions in impingement (and subsequently, 
impingement mortality) remain the same as a facility with a maximum 
design through-screen intake velocity of 0.5 fps. As described below, a 
facility will be required to monitor its intake flow and report this 
data to the Director to verify that intake flows do not exceed 0.5 fps. 
This approach also permits the Director to allow brief periods where 
the intake velocity will exceed 0.5 fps under extreme conditions.
c. Existing Offshore Velocity Caps
    A number of commenters stated that EPA should consider existing 
offshore intakes fitted with velocity caps to be pre-approved and 
complying with the BTA impingement mortality standards. Locating 
submerged intakes in the deeper regions of larger waterbodies 
(particularly outside the littoral zone \77\) has the potential to 
reduce both impingement and entrainment (I&E), due to the lower 
densities of aquatic organisms as compared to a shoreline-based intake. 
EPA has identified 11 facilities with offshore velocity caps, and 
reviewed a number of studies documenting the performance of these

[[Page 48346]]

facilities. These studies show that the impingement reduction 
performance of intakes submerged far offshore with velocity caps is 
dependent on site-specific conditions. The data show that solely 
locating an intake far offshore (i.e., without also employing a 
velocity cap) achieves a 60 to 73 percent reduction in impingement, and 
therefore does not achieve impingement mortality reduction comparable 
to that of well-operated modified traveling screens. Similarly, the 
data also show that velocity caps alone achieve a 50 to 97 percent 
reduction in impingement, and therefore could result in compliance 
performance comparable to or better than modified traveling screens in 
some, but not in all cases. However, the combination of an existing 
intake located far offshore (i.e., approximately 850 feet, as 
identified in the data for Nine Mile Unit 1 and Oswego Unit 5) in 
combination with use of a velocity cap will result in performance that 
exceeds the 12-month average impingement mortality performance standard 
(alternative seven described above).78 79 Because there is 
some amount of uncertainty in measuring distances from a shoreline, 
including but not limited to due to variations in water levels, storm 
swells, or tidal excursions, EPA has set the minimum distance offshore 
at 800 feet. As a result, the final rule at Sec.  122.95(c)(4) allows a 
facility to comply with the BTA impingement mortality standards with an 
existing offshore intake with an existing velocity cap located at least 
800 feet offshore, based on the performance data from the 11 identified 
facilities.
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    \77\ The littoral zone extends from the shoreline to roughly the 
edge of the continental shelf.
    \78\ An existing facility may also choose to install a new 
offshore intake with a velocity cap, but such a facility would not 
automatically qualify as meeting the impingement requirements for 
the final rule. Such a facility would need to demonstrate equivalent 
performance to the impingement mortality performance standard.
    \79\ A velocity cap must also include bar racks or other devices 
to exclude large marine organisms (e.g., seals, turtles) from 
entering the intake structure.
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    As noted above, the record shows all existing facilities with a 
velocity cap located at least 800 feet offshore will meet or exceed the 
12-month average mortality performance standard of Sec.  125.94(c)(7). 
EPA does not have data showing velocity caps located at lesser 
distances offshore will consistently achieve the impingement mortality 
performance standards, but is aware that some facilities may be able to 
achieve the impingement mortality standards through a combination of 
technologies that includes an offshore location. For example, the 
Office of Naval Research states that the littoral zone in ocean 
environments generally extends from the shore to 600 ft out in the 
water (ONR 2013). SEAMAP data in EPA's record shows installing the 
intake to depths where there is a lower concentration of living 
organisms (i.e., at least 65 feet) is also expected to decrease 
environmental impacts associated with intake operations. Therefore, the 
final rule allows facilities with intake structures at significant 
distances offshore to demonstrate the performance of their technology 
under Sec.  122.95(c)(6), as further discussed below.
    In addition facilities may opt to construct an offshore velocity 
cap at new locations. In those circumstances, the facility will need to 
demonstrate that theperformance of its velocity caps is the best 
technology available for impingement reduction under the alternative 
found at Sec.  122.95(c)(6). For more information, see DCN 12-6601.
    EPA estimates that approximately 1 percent of intake structures 
(i.e., those with an existing velocity cap meeting the definition at 
Sec.  125.92(v) will choose this alternative.
d. Install Modified Traveling Screens
    In the June 11, 2012 NODA, EPA discussed a streamlined compliance 
option that would provide facilities with a less burdensome alternative 
than the proposed rule. In the final rule, EPA has included an option 
at Sec.  125.95(c)(5) for facilities that install traveling screens--
the technology that forms the basis for the numeric IM performance 
standards. Under this option, the facility must demonstrate to the 
Director that it will install and operate modified traveling screens as 
defined at Sec.  125.92(s) that are or will be optimized to minimize IM 
mortality at the site. The facility will also be required to submit an 
impingement technology performance optimization study (Sec.  
122.21(r)(6)) which will include a 2-year optimization study for the 
intake technology. The facility will conduct 2 years of monthly 
impingement data collection, during which the facility will seek to 
optimize the technology performance to minimize impingement mortality. 
This study is intended to determine the optimal configuration and 
operating conditions of modified traveling screens and the fish 
handling and return systems for that intake to be consistently 
protective of aquatic organisms. During the course of the study, EPA 
expects that a facility will evaluate the interim results and make 
changes to the technology or operating conditions as needed to identify 
the most appropriate set of operational characteristics to ensure long-
term success. For example, a facility could adjust the spray wash 
pressure, adjust the rotating speed of the screens, rotate the screens 
more frequently, re-angle the fish sluicing sprays, ensure adequate 
water in the return flume, design the fish return to avoid avian and 
animal predation on the aquatic organisms, and locate the fish return 
in such a way to avoid predation. Once a facility has optimized its 
technology performance, the study will identify operational measures 
that will serve as observable and enforceable permit conditions. As 
evidenced by the data used in determining the performance standard, by 
requiring facilities to study the conditions for optimized performance, 
many facilities will achieve impingement mortality reductions much 
greater than the 12-month average impingement mortality performance 
standard without significant additional investment. Biological data 
collection beyond this two-year study will not be required. The 
facility will simply be required to ensure that it is operating its 
technology under the identified conditions for optimized performance. 
If the Director concludes that the screens will achieve optimized 
performance, the Director will also incorporate operating conditions to 
ensure optimized performance as terms of the facility's NPDES permit.
    As discussed in the NODA and Chapter 4 of TDD, EPA's data indicate 
that most facilities employ traveling screens.\80\ EPA anticipates 
that, as a result, many facilities will view the streamlined screen-
based compliance route as a logical choice for complying with the final 
rule. The streamlined option provides an opportunity for a large number 
of the affected facilities (i.e., those that do not meet the criteria 
for the other compliance technologies) to demonstrate that their 
intakes are effectively reducing impingement mortality while 
significantly reducing the burden on both facilities and regulatory 
agencies. EPA estimates that approximately 30 percent of intake 
structures will choose this alternative.\81\
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    \80\ EPA's technical survey found that 93 percent of electric 
generators and 73 percent of manufacturers already use screens, the 
majority of which are traveling screens.
    \81\ While EPA's data shows 73 to 93 percent of facilities 
already use traveling screens, EPA notes that many facilities use 
more than one technology. For example, some of these facilities also 
have a low intake velocity, an offshore velocity cap, or cooling 
towers. EPA expects facilities will choose the IM compliance 
alternative corresponding to these pre-approved technologies before 
they will choose to comply via optimized performance of their 
traveling screens.
---------------------------------------------------------------------------

    EPA is aware that some facilities have no technologies installed 
and will choose to install modified traveling screens, and further that 
some facilities

[[Page 48347]]

with traveling screens will choose to either retrofit to modified 
traveling screens with fish handling and returns. Obviously, the 
impingement technology performance optimization study cannot be 
undertaken until the technology is first installed. In this case the 
NPDES permit would be issued before the completion of the optimization 
study. EPA expects a permit will be issued that includes a schedule for 
both the technology installation and the required optimization study. 
As discussed earlier, the Director can establish interim measures as 
appropriate (40 CFR 125.94(b)).
e. System of Technologies as the BTA for Impingement Mortality
    EPA recognizes that cooling water intake structures have a variety 
of configurations and facilities may choose to comply with the final 
rule by using more than one of the compliance approaches outlined 
above. In the June 11, 2012, NODA, EPA described an approach where 
facilities would be able to demonstrate ``credit'' toward meeting the 
impingement mortality requirements by reducing the total number of 
organisms impinged. EPA also intended for facilities to have the 
flexibility to employ any system of technologies or combination of 
operational measures to address impingement mortality so long as the 
performance of the selected impingement reduction measures represented 
the best technology available for the site. The final rule includes an 
alternative reflecting these objectives.
    In the broadest sense, facilities have a number of options for 
reducing impingement mortality. Some may choose to comply using an 
approach where a single technology achieves the level of compliance 
necessary. Others may choose an approach of employing multiple 
technologies or operational measures, including reducing the number of 
organisms that are impinged or susceptible to being impinged. The 
following are examples of approaches for which a facility might be able 
to take credit for impingement reduction under this alternative:

 Partial closed-cycle cooling
 Variable speed pumps
 Seasonal outages (including standard maintenance outages that 
are specifically scheduled to avoid a biologically sensitive period)
 Certain impingement technologies that reduce the number of 
organisms exposed to the intake structure (e.g., diversions, louvers, 
barrier nets)
 Intake location
 Behavioral technologies (e.g., light or sound barriers) \82\
---------------------------------------------------------------------------

    \82\ For example, anadromous clupieds such as alewife, blueback 
herring, and American shad have demonstrated avoidance behaviors 
when exposed to high frequency sound. Deployments of this technology 
at Entergy's FitzPatrick Nuclear Station on Lake Ontario have 
resulted in a reduction of over 90 percent in impingement of 
alewife. In this case, EPA expects the Director would determine that 
impingement requirements regarding alewife have been addressed by 
the acoustical deterrent. The Director could disallow such a 
technology if it were deemed to have a negative effect on threatened 
or endangered species whose habitat includes the facility's intake 
location.

    In each case, the technology employed reduces the number of 
organisms that potentially are impinged, resulting in a reduction in 
the number of organisms actually impinged (i.e., a reduction in the 
rate of impingement). By virtue of reducing the actual impingement, 
mortality caused by impingement is no longer a consideration--an 
organism that is never impinged cannot be killed by the intake 
structure. Some technologies work to reduce the intake flow, thereby 
reducing the potential organisms exposed to the intake. Others work to 
divert organisms away from the screens, either through a physical 
exclusion or by being placed in a less biologically productive area. 
EPA concluded that it is appropriate to recognize these reductions in 
impingement as a step in achieving a BTA impingement mortality 
reduction performance at a particular site. As a result, EPA expects 
the reduction in impingement will be treated as an equivalent reduction 
in impingement mortality, and will therefore be considered by EPA or 
the State NPDES permitting authority in evaluating whether the chosen 
technologies and operational measures represent BTA performance under 
the site's conditions. For example, an intake that operates 
infrequently due to the infrequent operation of the electric generating 
unit(s) it serves (such as a peaking unit) may use a relatively small 
amount of water on an annual basis when compared to the design capacity 
of the intake structure. This facility may choose to comply with the 
impingement mortality standard at Sec.  125.94(c)(6) by demonstrating 
to the Director that the facility operates at an annual intake flow 
that is less than or equal to 24 percent of its design intake flow on 
an annual basis. This level of flow reduction could achieve a level of 
performance equivalent to or better than the impingement mortality 
performance standard in Sec.  125.94(c)(7), and therefore could be 
considered to be compliant with the requirements of today's final rule. 
This demonstration may include design data, several years of past 
operating data, and dispatch modeling. These operating conditions would 
then be incorporated into the NPDES permit.
    A facility complying under this part, must submit a impingement 
technology performance optimization study, which must include the 
calculated percent impingement mortality reflecting optimized operation 
of the system of technologies, operational measures, and best 
management practices and all supporting calculations. Total system 
performance is the combination of impingement mortality performance 
reflected in all of the following which apply:
     Rate of impingement--The estimated reductions in rate of 
impingement must be based on a comparison of the system to a once-
through cooling system with a traveling screen whose point of 
withdrawal from the surface water source is located at the shoreline of 
the source waterbody. For impoundments that include waters of the 
United States, the facility's rate of impingement must be measured at a 
location within the cooling water intake system that the Director deems 
appropriate.
     Impingement mortality--If the demonstration relies in part 
on a credit for reductions in impingement mortality already obtained at 
the facility, two years of biological data collection must be provided, 
demonstrating the level of impingement mortality the system is capable 
of achieving.
     Flow reduction--If the demonstration relies in part on 
flow reduction to reduce impingement, the data must include two years 
of intake flows, measured daily, as part of the demonstration. This 
must include documentation of how the flow reduction results in reduced 
impingement.
    The permitting authorities would consider this information shown in 
the two-year impingement technology performance optimization study that 
must be submitted under this alternative. For example, at facilities 
choosing to comply by demonstrating that they are operating below 24 
percent of their intake capacity, or that they are peaking units, the 
Director should use this study to establish operating conditions that 
ensure that the intake continues to operate below 24 percent of its 
intake capacity or continues to serve only peaking units and that these 
units are not later used as intermediate or baseload units. The 
operating conditions and parameters identified in the study will then 
be incorporated in the facility's permit conditions. EPA estimates that 
approximately 17 percent

[[Page 48348]]

of intake structures will choose this alternative.
f. Comply With the Numeric Impingement Mortality Performance Standard
    Facilities complying with the BTA impingement mortality standard by 
achieving the numeric performance standard at Sec.  125.94(c)(7) will 
perform monthly compliance monitoring to verify that the 12 month 
percent impingement mortality resulting from operation of its intake is 
below the standard established in today's final rule. (For more details 
on complying with the impingement requirements, see Section VIII.) EPA 
expects that, save for future technologies or innovations, few 
facilities will avail themselves of this option.
2. Entrainment Controls for Existing Units at Existing Facilities
    The BTA entrainment standard for the final rule establishes a 
framework under which EPA or the State NPDES permitting authority must 
establish site-specific BTA entrainment requirements for each facility 
in the scope of today's rule. EPA considered promulgating no further 
controls to address entrainment mortality, and to rely instead only on 
the BTA impingement mortality controls, which would achieve up to a 34 
percent reduction in total AEI. EPA did not select this option as the 
basis for national BTA because, in EPA's view, some facilities either 
are having a significant impact as a result of entrainment or might be 
able to do more to control entrainment at costs that are low relative 
to benefits. In addition, EPA's data on entrainment at facilities are 
not sufficient to allow the Agency to categorize facilities requiring 
no additional controls for entrainment. Thus, the final rule by 
requiring prescribed information in the permit application will provide 
the Director with adequate information for decision making. Requiring a 
structured site-specific analysis of candidate BTA technologies for 
entrainment control will allow the Director to determine where it is 
appropriate to require such controls. One outcome of the site-specific 
analysis could be that the Director would determine that no other 
technologies beyond impingement controls are required for BTA 
entrainment reductions, either because they are not feasible or because 
the social costs of additional control measures are not justified by 
the social benefits.
    In the case of site-specific entrainment controls for facilities 
withdrawing greater than 125 mgd AIF, the final rule requires 
facilities to also develop and submit an Entrainment Characterization 
Study and related supporting information, as described in Sec.  
122.21(r)(9)-(13) of today's rule, for use by the Director in 
establishing site-specific BTA. For facilities above 125 mgd AIF that 
also meet the definition of closed-cycle recirculating systems at Sec.  
125.92(c), the Director may reduce or waive some or all of this 
information.
    EPA considered simply requiring this information of all facilities 
above 125 mgd AIF without authorizing Directors to reduce or waive this 
information. However, EPA also recognizes that, in some instances, 
these same facilities have already minimized adverse environmental 
impacts significantly. In such cases, there may be limited value to the 
Director requiring a full benefit-cost analysis, or even obtaining the 
Entrainment Characterization Study at Sec.  122.21(r)(9).
    EPA also considered not requiring this information of any 
facilities above 125 mgd AIF meeting the definition at Sec.  125.92(c). 
First, EPA noted that even though these facilities meet the definition 
of a closed-cycle recirculating system, they may still withdraw at 
least 125 mgd, and in some instances withdraw considerably more than 
125 mgd. This is not an insubstantial volume of water withdrawn for 
cooling, and in the case of inland waters this withdrawal may comprise 
a large proportion of that source waterbody. In addition to withdrawing 
large volumes of water, EPA recognizes that some facilities, 
particularly those meeting the definition at Sec.  125.92(c)(2), 
potentially withdraw water at a rate similar to a once-through facility 
not withdrawing from an impoundment, with the potential to cause 
adverse environmental impacts similar to those of once-through cooling. 
The Director may find the information in Sec.  122.21(r)(9)-(13) to be 
useful in determining whether additional controls are warranted. In 
these instances, the Director may decide to require the Entrainment 
Characterization Study at Sec.  122.21(r)(9) first, in order to 
determine if other studies in Sec.  122.21(r)(10) to (13) are also 
warranted.
    Facilities at or under the 125 mgd AIF threshold must still provide 
certain information under the permit application requirements at Sec.  
122.21(r). The Director may require additional information from these 
facilities including some or all of the studies at Sec.  122.21(r)(9)-
(13) if there is reasonable concern regarding entrainment impacts at 
the facility. Where an owner or operator of a facility intends to 
comply with the BTA standards for entrainment using a closed-cycle 
recirculating system as defined in Sec.  125.92(c), the Director may 
reduce or waive some or all of this information.
    Facilities with a closed-cycle recirculating system as defined at 
Sec.  125.92(c)(2) would still submit the studies at Sec.  
122.21(r)(9)-(13) if they withdraw greater than 125 mgd AIF, and if the 
Director has not waived the requirements. These facilities have cooling 
systems that include impoundments of waters of the U.S. where the 
impoundment(s) was constructed prior to October 14, 2014 and lawfully 
created for the purpose of serving as part of the cooling water system. 
This purpose must be documented to the Director's satisfaction in the 
project purpose statement of any required Clean Water Act section 404 
permit obtained to construct the impoundment. In the case of an 
impoundment whose construction pre-dated the CWA requirement to obtain 
a section 404 permit, where alternative permitting documents were 
required, the facility must document the project's purposes to the 
satisfaction of the Director by some other license or permit obtained 
to lawfully construct the impoundment for the purposes of a cooling 
water system. EPA notes that for impoundments constructed in uplands or 
not in waters of the United States, no documentation of a section 404 
or other permit is required. EPA received comments that such 
impoundments should be treated as closed-cycle cooling and has agreed 
to make this change. The Director would still make the determination 
that make-up water withdraws have been minimized. Further, EPA's data 
shows that many facilities that utilize impoundments as part of their 
cooling water systems may actually use a combination of cooling water 
systems (for example, detailed survey responses showed eight facilities 
with an impoundment in addition to other IM technologies). The 
requirement that these facilities provide the Director with certain 
information will help ensure that the Director has adequate information 
upon which to base a decision for these impoundments as to whether 
these facilities have adequate controls already or should be taking 
additional measures to protect the relevant waterbody.
    The Entrainment Characterization Study will include information 
already collected to meet existing Sec.  122.21(r)(4) requirements. In 
addition, under the permit application requirements being added today 
at Sec.  122.21(r)(5) to (13), the facility will submit certain 
additional site-specific information. This will include an engineering 
study of the

[[Page 48349]]

technical feasibility and incremental costs of candidate entrainment 
mortality control technologies. The facility will also study, evaluate, 
and document the technical feasibility of technologies, at a minimum, 
including closed-cycle cooling, fine mesh screens with a mesh size of 2 
mm or smaller, and water reuse or alternate sources; engineering cost 
estimates of all technologies considered; any outages, downtime, or 
other effects on revenue along with a discussion of all reasonable 
attempts to mitigate these cost factors; and a discussion of the 
magnitude of water quality and other benefits, both monetized and 
nonmonetized, of the candidate entrainment mortality reduction 
technologies evaluated. Finally, the information must include a 
discussion of the changes in non-water quality environmental impacts 
attributed to technologies and/or operational measures considered. The 
factors include, for example, increases and decreases in the following: 
Energy consumption, and air pollutant emissions including particulates 
and associated human health and global climate change impacts, water 
consumption, noise, safety (e.g., visibility of cooling tower plumes, 
icing), grid reliability, and facility reliability. For a thorough 
discussion of these study requirements, see Section VIII. The final 
rule also requires peer review of the Comprehensive Technical 
Feasibility and Cost Evaluation Study, Benefits Valuation Study, and 
Non-Water Quality and Other Impacts Assessment. Peer review of the 
Entrainment Characterization Study is not required. Note that the peer 
reviewed studies will rely on data gathered in the Entrainment 
Characterization Study. Peer reviewers will be selected in consultation 
with the Director, who can also consult with EPA and Federal, State, 
and Tribal fish and wildlife management agencies with responsibility 
for fish and wildlife potentially affected by the cooling water intake 
structure(s).
    Under the final rule, EPA expects that the Director will review the 
candidate technologies for entrainment mortality control that, at a 
minimum, includes closed-cycle recirculating systems, fine-mesh screens 
with a mesh size of 2 mm or smaller, and water reuse or alternate 
sources. In the decision about what additional entrainment controls (if 
any) to require, the Director will consider all the facility-specific 
factors in Sec.  125.98(f)(2) and described above. At a minimum, the 
Director must provide a discussion explaining how issues concerning air 
emissions or land availability, insofar as they relate to the 
feasibility of adoption of an entrainment technology, and remaining 
useful plant life, were addressed in the site-specific determination. 
Under the final rule, the Director must issue a written explanation for 
the basis of the BTA entrainment determination for each facility. The 
Director's decision must include a written explanation that, at a 
minimum, includes consideration of the following factors: (i) Numbers 
and types of organisms entrained; (ii) impact of changes in particulate 
emissions or other pollutants associated with entrainment technologies; 
(iii) land availability inasmuch as it relates to the feasibility of 
entrainment technology; (iv) remaining useful plant life; and (v) 
social costs and benefits, which may include qualitative, quantified 
and monetized categories. The Director may also base the proposed 
determination on several other factors, including thermal effects and 
water consumption.
    In addition to the information required for development of 
impingement controls discussed above, the regulation also requires, in 
the case of facilities withdrawing greater than 125 mgd AIF, submission 
of certain other information for use in the site-specific entrainment 
determination of BTA. The final rule also adds the permit application 
requirements at Sec.  122.21(r) (9)-(13) to require the facility to 
prepare several studies, including an Entrainment Characterization 
Study, that will fully characterize the extent of entrainment at the 
facility. (For more details about the study, see above). In addition, 
under the final rule, the facility will provide detailed information on 
the other factors relevant to the Director's site-specific BTA 
determination. These will include information concerning the 
technologies available for control of such entrainment, the costs of 
controls, the non-water quality environmental impacts of such controls, 
the monetized and nonmonetized benefits of such controls, and the 
presence of any threatened and endangered species. The final rule does 
not limit the Director's discretion to consider non-water quality 
impacts in determining whether further entrainment measures are 
justified. EPA encourages, and the CWA requires, the public to have a 
role in the permitting process. Interested members of the public may 
submit written comments on a draft permit during the 30 day public 
notice and comment period and request a public hearing on a draft 
permit. For permits that are issued by EPA instead of a state, 
additional opportunities for public involvement include comment, and in 
some cases, a public hearing on a permittee's State Water Quality 
Certification under section 401 of the CWA. (See 40 CFR 124.10, 124.11, 
124.12(a) and 124.17(a).) Therefore, the final rule clearly affords the 
public a meaningful opportunity for participation in the site-specific 
decision making to help ensure the soundness of both the information 
and subsequent determinations.

H. Economic and Benefit Analysis for the Final Rule

1. Economic Justification for the Final Rule
    Pursuant to the principles in E.O. 12866 and E.O. 13563, EPA has 
assessed costs and benefits for the final rule and has reasonably 
determined that the benefits of the rule justify the costs. EPA has 
estimated the social cost of this rule to be $275 million annually. For 
more information on EPA's analysis of the rule's costs, see Section IX.
    As described in more detail below in Section X, significant 
benefits are associated with the rule. These benefits include the 
annual reduction in impingement mortality of 652 million age-one 
equivalents for existing units. There are, in addition, other important 
benefits, many of which EPA cannot quantify. These benefits include 
effects on many shellfish species and nonuse values associated with the 
vast majority of fish and shellfish. The rule also requires 
establishing site-specific entrainment controls through a process in 
which specific environmental conditions and the localized benefits of 
entrainment reductions will be assessed along with the costs of 
controls. The information generated in the required studies will 
enhance the transparency of decision making and provide an opportunity 
for meaningful public participation, ensuring that decision making is 
based on the best available data. Overall, these requirements and 
subsequent Director actions under this rule will foster protection and 
restoration of healthy aquatic ecosystems that have important 
commercial, recreational, aesthetic and cultural values to their 
surrounding communities. Many of the benefits that will result from the 
rule are not monetized or quantified, and as a result the Agency's 
monetized benefits analysis underestimates the totality of the rule's 
benefits. On the basis of the record, EPA has determined that the 
impingement mortality and entrainment controls will result in benefits 
that justify the costs of the rule.
    EPA also notes that it was able to generate only a partial estimate 
of

[[Page 48350]]

benefits for today's rule. In particular, EPA's analysis does not fully 
quantify or monetize certain potentially important categories of 
benefits, such as existence values for threatened and endangered 
species, secondary and tertiary ecosystem impacts, benthic community 
impacts, shellfish impacts and the impacts arising from reductions in 
thermal discharges that would be associated with closed-cycle cooling. 
Changes in fish assemblages due to impingement, entrainment and thermal 
effects are also not fully valued. These categories of benefits which 
are not fully valued are often referred to as nonuse benefits--i.e., 
benefits that people derive apart from using an affected resource, such 
as fishing. For example, nonuse benefits would include the value that 
individuals place on knowing that an aquatic ecosystem is healthy. EPA 
conducted a nonuse benefits transfer was based on a species that 
represents less than one percent of adverse environmental impacts. EPA 
developed and implemented an original stated preference survey to 
estimate total values (use plus nonuse values) for aquatic resource 
improvements under 316(b) regulatory options. EPA decided not to employ 
the survey results for purposes of decision-making and EPA has not 
accounted for values estimated from the survey in the quantitative 
comparison of costs and benefits. It is also important to note that 
EPA's stated preference survey was designed to estimate respondents' 
willingness to pay for changes in the health of fish populations and 
aquatic ecosystems and to be statistically representative at large 
(regional and national) scales; the results were not specifically 
designed to be statistically representative at the facility level for 
the assessment of benefits for individual site-level permitting 
decisions.
    As noted at the outset, it is not always the case that private 
decision making regarding withdrawals of cooling water takes into 
account society's preferences for fish protection, nor are there market 
transaction opportunities for individuals to express their willing to 
pay for fish protection. Thus, despite the limited information on 
monetized social benefits, EPA has concluded that the benefits of 
today's rule justify the costs of today's rule.
2. Comparison of the Other Options
    As discussed above, EPA considered three other primary options 
before selecting today's rule. See Section VI.F Other Options 
Considered for more detailed explanation of each option. Exhibit VI-1 
illustrates a comparison of the total annualized social costs and 
benefits.

       Exhibit VI-1--Comparison of the Primary Options for 316(b)
               [$2011 Millions at 2013, 3% discount rate]
------------------------------------------------------------------------
                                                     Total
                                                  annualized   Monetized
                     Option                         social     benefits
                                                     cost
------------------------------------------------------------------------
Proposal Option 4...............................      $251.8       $31.0
Final Rule......................................       274.9        32.8
Proposal Option 2...............................      3643.2     -1542.6
------------------------------------------------------------------------

I. Site-Specific Consideration of Entrainment Controls

    As described above, EPA is not promulgating uniform national 
requirements for entrainment for existing facilities. Instead, EPA is 
setting standards for entrainment that include a framework by which a 
facility will be subject to a site-specific determination by EPA or a 
State NPDES permitting authority of appropriate BTA requirements for 
entrainment. This section describes the process for determining section 
316(b) requirements for an individual facility under the national BTA 
standard for entrainment. It describes the elements that the Director 
must consider in the permitting decision and how costs and benefits may 
be considered in such an evaluation.
1. Implementation of a Site-Specific Evaluation of Entrainment for 
Existing Facilities
    The final rule requires a site-specific determination of BTA 
entrainment conditions in individual permits and prescribes the 
requirements for that permitting proceeding. The final rule includes 
permit application requirements for facilities with a cooling water 
intake structure. These requirements are designed to elicit the 
information the Director needs to determine the best technology for 
reducing entrainment for a particular facility, including information 
pertinent to an assessment of whether the benefits justify the costs of 
any particular control measures under consideration.
    Today's final rule is a modification of the proposed approach of a 
site-specific BTA entrainment determination. It will result in one of 
two outcomes at any facility:
    1. Determination that the facility must install additional control 
measures that reduce entrainment beyond that achieved by the currently 
installed equipment. These may include closed-cycle cooling and/or 
other technologies.
    2. Determination that the facility's current, existing technology 
for entrainment achieves the entrainment BTA requirements under the 
national BTA standard.
    Thus, EPA expects that, under this approach, there will be 
additional entrainment controls for some facilities and none for 
others. Even where the Director's determination requires no additional 
control measures, the Director may conclude the permit should include 
conditions that specify proper operation and maintenance of the 
installed technology.
    EPA notes that in a number of areas of the country (California, 
Delaware, New York, and New England; see, for example, DCNs 10-6963 and 
10-6841, and EPA Region I's Brayton Point), permitting authorities have 
already required or are considering requiring existing facilities to 
install or retrofit to closed-cycle cooling systems. These facilities 
are still subject to today's rule but the existing requirements have 
been taken into account in costing.
    For facilities that withdraw more than 125 mgd, the rule generally 
requires that the facility conduct an entrainment study as part of its 
permit application. The study will indicate, at a minimum, the specific 
entrainment data collection methods, taxonomic identification to the 
lowest taxon possible, latent mortality identification, documentation 
of all methods, and quality assurance/quality control procedures for 
sampling and data analysis appropriate for a quantitative survey. Peer 
reviewers must be selected in consultation with the Director, who may 
consult with EPA and Federal, State, and Tribal fish and wildlife 
management agencies with responsibility for fish and wildlife 
potentially affected by the cooling water intake structure. Data from 
the entrainment study is important to provide corroboration of any 
through-facility entrainment survival study results in Sec.  
122.21(r)(7) or from any other studies conducted.
    The final rule also requires the permit application to include the 
following information as part of the entrainment study (which refers to 
the requirements at Sec.  122.21(r)(9) through (13), as opposed to the 
Entrainment Characterization Study at Sec.  122.21(r)(9)). For a 
thorough discussion of these study requirements, see Section VIII:
     An engineering study of the technical feasibility and 
estimated costs of all candidate entrainment control technologies, 
including closed-cycle cooling, fine-mesh screens with a mesh size of 2 
mm or smaller, and water reuse or alternative sources;
     A discussion of any outages, downtime, or other effects on 
revenue

[[Page 48351]]

along with a discussion of all reasonable attempts to mitigate these 
cost factors
     A discussion of the magnitude of water quality benefits, 
whether qualitative, quantitative or monetized, of the candidate 
entrainment reduction technologies evaluated; thermal discharges; and
     A discussion of the changes in non-water quality 
environmental impacts and other factors attributed to technologies and/
or operational measures considered, including, for example, increases 
and decreases in the following: Energy consumption; air pollutant 
emissions including particulates and their health and environmental 
impacts; noise; safety (e.g., visibility of cooling tower plumes, 
icing); electric grid reliability, and facility reliability.
    The permit application will provide the Director with information 
about options for entrainment reductions at the site and other possible 
avenues for addressing any adverse effects from entrainment. The 
purpose of the entrainment study and other permit application materials 
is to assist the Director in better understanding the effect of 
entrainment on species in the waterbody from which cooling water is 
withdrawn. More specifically, the entrainment study will identify 
species that might be entrained, and estimate their baseline 
entrainment rates given current entrainment controls. Moreover, the 
entrainment study will include information about the aquatic ecosystem 
effects of entrainment of species, and any threatened and endangered 
species whose range of habitat includes waters where the facility's 
intake is located. An understanding of the potential ecosystem 
consequences of entrainment for species will help inform Director 
decisions about additional information required in the permit 
application, or permit requirements for any possible additional 
technologies and management practices. EPA will endeavor to identify 
high-quality examples of entrainment studies as they are completed, and 
post them to its Web site for this rule as a resource for study 
preparation.
    EPA's benefits estimates were based on an extrapolation of 
available literature on impingement and entrainment studies; the 
specific Entrainment Characterization Study prepared by a facility 
could lead to a different estimate of impingement and entrainment for 
that facility relative to its share of EPA's estimate in the analysis 
supporting this rule and in the record.
    Following the Director's review of this information, the Director 
must determine what BTA entrainment requirement to propose and explain 
in writing the basis for the draft permit. The draft permit will then 
be available for comment from the interested public under the 
Director's normal permitting process.
2. Site-Specific Consideration of Cost and Benefits
    In establishing requirements under section 316(b) of the CWA, the 
Supreme Court in Entergy made clear that one factor that EPA may, but 
is not required, to consider is the costs and benefits associated with 
various control options. That is, in setting standards, EPA may 
consider the benefits derived from reductions in the adverse 
environmental impacts associated with cooling water intake structures 
and the costs of achieving the reductions. As previously explained, 
following E.O. 13563, EPA has determined that the benefits of the final 
rule justify its costs. In addition, EPA has explained (in Section II.C 
above) why consideration of quantitative and qualitative social costs 
and benefits may be appropriate in the site-specific determinations 
when establishing entrainment controls.
    In the site-specific proceeding, the Director must consider, among 
other factors, monetized, quantified and qualitative social benefits 
and social costs of available entrainment controls, including 
ecological benefits and benefits to any threatened or endangered 
species. The Director may be able to reject otherwise available 
entrainment controls if the costs of the controls are not justified by 
their associated benefits (taking into account monetized, quantified, 
and qualitative benefits), and the other factors discussed in the final 
rule.
    In making the site-specific entrainment BTA requirements 
determination, the final rule requires that the Director consider the 
information submitted under Sec.  122.21(r) with the section 316(b) 
permit application. Further, in the case of the larger withdrawing 
cooling water intake structures (125 mgd AIF or greater), the rule 
requires submission of additional information including, studies on 
entrainment at the facility, the costs and feasibility of control 
options, and information on the benefits of entrainment controls. In 
evaluating benefits, the Director should not ignore benefits that 
cannot be monetized or quantified or consider only the impingement and 
entrainment reductions that can be counted. To result in appropriate 
decisions from society's standpoint, the assessment of benefits must 
take into account all benefits, including categories such as 
recreational, commercial, and other use benefits; benefits associated 
with reduced thermal discharges; reduced losses to threatened and 
endangered species; altered food webs; benefits accruing nonlocally due 
to migration of fish; nutrient cycling effects; and other nonuse 
benefits. Merely because it is difficult to put a price tag on those 
benefits does not mean that they are not valuable and should not be 
included at least qualitatively in any assessment. The rule does not 
require the Director to require a facility owner or operator to conduct 
or submit a willingness-to-pay survey to assess benefits. Further, the 
rule does not limit the Director's discretion to consider non-water 
quality impacts in determining whether further entrainment measures are 
justified. When some benefits are not monetized, the requirement to 
consider costs and benefits in today's rule does not mean the Director 
should base decisions solely on the monetized benefits and costs, 
ignoring the non-monetized benefits. Instead, the Director should 
consider the costs and what the magnitude of the non-monetized benefits 
would have to be in order to justify the costs.
    An aggregate evaluation of benefits (even if accurate) would not 
account for the variations in benefits from location to location. On 
the basis of available information, EPA's analysis of benefits relied 
on extrapolating data from existing impingement and entrainment 
characterization studies to all facilities in the same region on a 
flow-weighted basis. Differences in species, life stages, and 
biological abundance across intake locations (even within a region) 
could lead to very different results for a site-specific analysis of a 
facility as compared to that facility's share of national costs and 
benefits, even if the national results are, on average, accurate. A 
national assessment tends to mask variations in benefits and costs from 
different geographical locations for different water bodies. For 
example:
     Some fish species at coastal facilities have biological 
spawning attributes that differ from those at other locations.
     The proportion of the receiving water withdrawn for 
cooling could also vary among sites.
     The values that communities place on their resources could 
vary from site to site.
     One ecological environment might experience large masses 
of hardier eggs and larvae subject to potential entrainment; another 
will have fewer but less hardy eggs and larvae susceptible to 
entrainment. Without

[[Page 48352]]

detailed study information, it's difficult to ascertain which 
ecological environment faces the greater adverse environmental impact 
from a similar cooling water intake.
    The resulting differences in the value of reduced entrainment--
which could be dramatic for some sites--necessarily disappear in a 
national aggregation of results. The Agency has decided that this 
masking of variation in benefits further supports EPA's decision to 
require consideration of the site-specific benefits of entrainment 
control technologies in the site-specific process to establish 
entrainment controls.
    The Director must then explain the basis for rejecting an available 
technology not selected for entrainment control in light of the 
submissions after consideration of the three factors that supported 
EPA's determination not to establish a uniform national entrainment 
standard based on closed-cycle cooling. The Director also must base the 
determination about BTA controls on the number and types of organisms 
entrained, including Federally-listed, threatened and endangered 
species and designated critical habitat (e.g., prey base) as well as 
consideration of the site-specific social costs and benefits (monetized 
and nonmonetized) of the various control technologies considered for 
the facilities.
    As noted, the Director may reject an otherwise available 
entrainment technology as the BTA requirement (or not require any 
additional BTA controls) if the social costs of the controls are not 
justified by the social benefits (monetized and nonmonetized). EPA 
decided to adopt this approach in determining site-specific entrainment 
controls because it is permissible under Entergy, under E.O. 13563, and 
consistent with the more than 30-year history of section 316(b) 
permitting decisions.
    This history illustrates the role that cost/benefit considerations 
have played. As early as 1977, EPA in a permitting decision and a 
General Counsel opinion explained that, while section 316(b) does not 
require a formal cost-benefit analysis, the relationship of costs and 
benefits may be considered in 316(b) decision making. In re Pub. Serv. 
Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1977 WL 22370 
(June 10, 1977), remanded on other grounds, 572 F.2d 872 (1st Cir. 
1978); accord In re Central Hudson Gas & Elec. Corp., Op. EPA Gen. 
Counsel, NPDES No. 63, 1977 WL 28250, at *8 (July 29, 1977). In the 
more than 30 years since, EPA and State permitting authorities have 
considered the relationship between costs and benefits to some extent 
in making individual permitting decisions. See, for example, In re Pub. 
Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1978 WL 
21140 (E.P.A. Aug. 4, 1978), aff'd, Seacoast Anti-Pollution League v. 
Costle, 597 F.3d 306, 311 (1st Cir. 1979).
    Because E.O. 13563 directs agencies to propose and adopt rules only 
upon a reasoned determination that the benefits justify the costs, EPA 
is allowing this consideration to be applied at the permit level. This 
approach is consistent with the historical application of section 
316(b) requirements and will allow for a full assessment in permit 
decisions of both qualitative and quantitative benefits and costs. As 
designed, EPA's requirement for the establishment of site-specific BTA 
entrainment requirements strikes an appropriate balance between 
environmental improvements and costs, allowing the Director to consider 
all the relevant factors on a site-specific basis and determine BTA on 
the basis of those factors.
    After considering the factors relevant to a site, the Director must 
establish appropriate entrainment controls at those facilities. The 
Director must review available control technology and may reject 
otherwise available entrainment controls as BTA if the social costs of 
the controls are not justified by their social benefits (taking into 
account both quantified and non-quantified benefits) or if the Director 
concludes that there are other unacceptably adverse factors that cannot 
be mitigated. As designed, EPA's national BTA standard for establishing 
site-specific BTA entrainment requirements strikes an appropriate 
balance between environmental improvements and costs by selectively 
requiring closed-cycle cooling or other entrainment technologies at 
some facilities, without requiring the same technologies at all 
facilities.
3. Potential Cost for Site-Specific Entrainment Controls
    For the proposed rule, EPA analyzed possible additional costs 
associated with reductions in entrainment mortality that might result 
from the Directors' determinations of site-specific BTA requirements. 
Because this process will play out over a number of years as Directors 
consider waterbody-specific data, local impacts, and public comment, 
and weigh land availability, air quality impacts, and remaining useful 
life, those estimates of the costs of site-specific determinations are 
highly speculative. EPA is not presenting specific cost estimates today 
for prospective entrainment requirements because we do not have in hand 
the robust data that will be generated for individual site-specific 
settings as required under the national BTA standard for entrainment. 
Without that refined information on a site-specific basis, EPA has no 
ability to predict Director decision-making and therefore, the Agency 
is not estimating costs associated with the ultimate entrainment 
requirements. Similarly and for the same reasons, EPA did not estimate 
costs associated with requirements at Sec. Sec.  125.94(g), 
125.94(c)(8) or 125.94(c)(9).
    EPA estimates that the most effective technology for reducing 
entrainment, closed-cycle cooling, is not available to at least one 
quarter of all facilities because of geographic constraints, air 
permitting restrictions in a nonattainment area and remaining useful 
life of the facility. EPA has limited information on which facilities 
these are, despite the certainty that these availability concerns are 
real and significant. In addition, EPA does not have in hand the site-
specific data that will be generated as a result of today's rule. If 
EPA had this data, it would be possible to estimate the costs and 
benefits ultimately associated with the Directors' site-specific 
determinations under the national BTA standard for entrainment. The 
hypothetical costs generated at proposal were reported in an attempt to 
signal that EPA neither expects that zero facilities would be subject 
to closed-cycle cooling as a result of the site-specific BTA process 
for entrainment, nor that all facilities at which these technologies 
are feasible would be subject to closed-cycle cooling requirements. 
Without the site-specific information, there is significant uncertainty 
around any estimates EPA could generate of these costs (including those 
reported at proposal) and benefits.

VII. Response to Major Comments on the Proposed Rule and Notices of 
Data Availability (NODAs)

    Over 1,100 organizations and individuals submitted comments on a 
range of issues in the proposed rule, including over an additional 
62,000 letters from individuals associated with mass letter writing 
campaigns. An additional nearly 250 comments were received on the two 
NODAs. Responses to all comments, including those summarized here, are 
in the Response to Comments document in the official public docket (see 
DCN 12-0004). To facilitate a more comprehensive response and to 
simplify the task of discussing EPA's rationale for promulgating the 
final rule, EPA is

[[Page 48353]]

responding to these public comments in essay form. Each topic area 
discussed in the comment letters has been addressed in one of the 
comprehensive essay responses. The major comments received and EPA's 
responses are summarized in this section.

A. Scope and Applicability

1. Source of Water--Impoundments
    Many commenters expressed concern that the proposed rules do not 
adequately address the unique water bodies resulting from the many man-
made reservoirs specifically designed and constructed as cooling water 
impoundments (referred to as cooling ponds in the proposed rule). 
Commenters expressed confusion regarding the applicability of the 
proposed regulations because impoundments have both intakes from the 
impoundments and intakes that supply water to the impoundment. Many 
requested that EPA clarify that man-made impoundments, built to supply 
water for power plants, do not constitute water of the United States 
for purposes of implementing the rule or that they should be classified 
as meeting the definition of closed-cycle cooling.
    Response: As discussed in Section I, facilities that withdraw 
cooling water from impoundments that are waters of the United States 
and that otherwise meet the criteria for coverage (including the 
requirement that the facility has or will be required to obtain an 
NPDES permit) are subject to today's rule. Revisions to the definition 
of waters of the U.S. are outside the scope of this rulemaking. 
However, today's regulatory definition of closed-cycle recirculating 
systems specifies that such a system may include impoundments of waters 
of the U.S. where the impoundment was constructed prior to today's 
final rule. To meet the rule definition for closed-cycle recirculating 
system, this impoundment must have been lawfully created for the 
purpose of serving as part of the cooling water system as documented in 
the project purpose statement for the Clean Water Act section 404 
permit obtained to construct the impoundment. In the case of an 
impoundment whose construction pre-dates the CWA requirement to obtain 
a section 404 permit, EPA expects documentation of the project's 
purpose to be demonstrated to the satisfaction of the Director. This 
documentation could be some other license or permit obtained to 
lawfully construct the impoundment for the purposes of a cooling water 
system, or other such evidence as the Director finds necessary.
    The definition of closed-cycle recirculating system at Sec.  
125.92(c)(1) of today's rule also specifies that impoundments that are 
not waters of the United States but withdraw make-up water from waters 
of the U.S. meet the definition of a closed-cycle recirculating system, 
if make-up withdrawals have been minimized. These impoundments are 
constructed in uplands, and are not required to obtain a 404 permit. 
Thus, these impoundments do not need to provide documentation of the 
project's purpose.
2. New Units
    In the proposal, EPA defined new units as newly built units added 
to increase capacity at the facility. The definition did not include 
any rebuilt, repowered or replacement unit, including any units where 
the generation capacity of the new unit is equal to or greater than the 
unit it replaces. Many industry stakeholders agreed that the definition 
of new units should not include repowered existing units. Others 
thought that new units should be treated similarly to existing units 
with entrainment standards applied on a site-specific basis and that 
the nine proposed factors should also be applied to entrainment 
decisions for new units. Environmental organizations argued that EPA 
should set a deadline by which all existing facilities must comply with 
the new unit standards and that EPA's exclusion of repowered/rebuilt 
facilities created a loophole through which existing facilities could 
perpetually operate as an existing unit, even after replacing all of 
the generating equipment. Many of the comments had several elements in 
common:
     Requirements should be flexible enough to address sites 
where meeting the requirements is not technically feasible (e.g., 
limited land availability).
     EPA needs to provide greater clarity regarding how new 
unit standards apply to manufacturing facilities.
     The DIF is a more appropriate parameter for determining 
compliance because AIF cannot be determined until after the system is 
built, and baseline AIF would require assumptions about as-yet 
undetermined operational factors.
     It is unclear how the new unit requirements will be 
applied to manufacturing units, and the requirements do not appear to 
consider the circumstance where a new unit is constructed at an 
existing manufacturing facility where construction of the new unit does 
not require any modifications to the existing intake structure.
     Some commenters have noted that the new unit provisions 
are a departure from previous determinations and are unclear. They 
argue that they have not had adequate opportunity to comment on this 
issue and request EPA re-propose new unit requirements if it wants to 
continue with this initiative.
    Response: EPA's definition of a ``new unit'' for the final rule can 
be found at Sec.  125.92(u). New units includes the addition of a 
stand-alone unit that is constructed at an existing facility. The rule 
definition makes it clear that the new unit may be for the same general 
industrial activity as the existing facility. Because the requirements 
are much like the Phase I requirements for new facilities the costs for 
installing controls at new units are similar to the costs imposed on 
new facilities. The cooling water withdraws made by the rest of the 
existing facility are subject to the requirements at 40 CFR 125.94(c) 
and (d).
    With respect to impingement mortality and entrainment, the final 
rule requires, at Sec.  125.94(e)(1), that new units achieve flows 
commensurate with that of a closed-cycle recirculating system. As with 
the new facility Phase I rule, the new unit may choose to meet an 
alternative requirement at 40 CFR 125.94(e)(2) and demonstrate to the 
Director that the technologies and operational measures employed will 
reduce the level of adverse environmental impact from any cooling water 
intake structure used to supply cooling water to the new unit to a 
comparable level to that which would be achieved upon implementing 
closed-cycle recirculating for that new unit. This includes a 
demonstration showing that the entrainment reduction is equivalent to 
90 percent or greater of the reduction that could be achieved through 
implementing a closed-cycle recirculating system. This demonstration 
must also include a showing that the impacts to fish and shellfish, 
including important forage and predator species, within the watershed 
will be comparable to those which would result if the facility were to 
implement a closed-cycle recirculating system.
    Facilities may choose to install a closed-cycle recirculating 
system, and EPA has observed that many new units are selecting closed-
cycle recirculating systems on their own, particularly for combined 
cycle and natural gas for reasons unrelated to 316(b) (such as water 
availability). In these cases, benefits related to reductions in IM&E 
would be expected to occur.
    Finally, for new units at existing facilities, the Director may 
establish alternative requirements if the data specific to the facility 
indicate that

[[Page 48354]]

compliance with the requirements of paragraphs (e)(1) or (2) of Sec.  
125.94 for each new unit would result in compliance costs wholly out of 
proportion to the costs EPA considered in establishing the requirements 
at issue, or would result in significant adverse impacts on local air 
quality, significant adverse impacts on local water resources other 
than impingement or entrainment, or significant adverse impacts on 
local energy markets. This provision is identical to that provided in 
the Phase I new facility rule.

B. Proposed Amendments Related to Phase I Rule

    Commenters suggested that restoration be allowed in a range of 
situations, including where a nuisance species is a problem that will 
get worse with the use of cooling water intake structure technology, 
where affected species are not species of concern in man-made lakes, 
and to reduce the cost of meeting 316(b) requirements (i.e., offset 
losses).
    Response: The Second Circuit found that EPA exceeded its authority 
by allowing facilities subject to CWA section 316(b) to comply with 
section 316(b) through restoration measures and, thus, EPA has deleted 
these provisions from the regulations at Sec. Sec.  125.84 and 125.86 
to make the rule consistent with the court decisions.

C. Environmental Impact Associated With Cooling Water Intake Structures

    Many commenters expressed concern that limited scientific evidence 
exists that measureable aquatic population or community effects occur 
as a result of cooling water withdrawals and that impingement mortality 
and entrainment mortality requirements should not apply unless adverse 
environmental impacts are demonstrated. They also noted that not all 
environmental impacts are adverse. For example, removal of invasive 
species or quickly reproducing species might not be harmful.
    Response: EPA disagrees. The evidence shows that the total number 
of aquatic organisms lost annually is in the hundreds of billions, or 
is 1.9 billion on an age-one equivalent basis. Additional data provided 
in comments shows aquatic organisms are lost through impingement and 
entrainment by all types of cooling water intake structures. The data 
demonstrates that the effects of cooling water intake structures on the 
aquatic environment are significant and widespread. In addition, there 
is documented evidence of population level effects of cooling water 
intakes for certain species in certain instances. See, for example, 69 
FR 41587, July 9, 2004 for a discussion from the 2004 Phase II rule. 
Also, Bayshore, Indian River and Indian Point are discussed in the BA 
for the final rule.

D. EPA's Approach to BTA

1. Relationship of Costs and Benefits
    Many commenters expressed concern that the proposed rule's costs 
significantly outweigh the benefits and that studies, technology 
modifications, monitoring, and reporting should not be required if 
costs exceed benefits.
    Response: While the rule costs exceed the monetized benefits as 
presented, EPA has concluded that the costs do not outweigh total 
benefits when both monetized and nonmonetized benefits are considered. 
EPA notes that the monetized benefits are only a subset of all 
benefits. In the absence of complete estimates of nonuse benefits, EPA 
estimated partial nonuse benefits for the final rule using the benefits 
transfer approach from proposal. This approach is still a partial 
estimate, because the nonuse benefits transfer was based on a species 
that represents less than one percent of adverse environmental impacts. 
With respect to entrainment, the rule authorizes the Director to 
consider costs versus benefits on a site-specific basis. With respect 
to impingement mortality, the rule provides seven compliance 
alternatives based on a set of widely used, demonstrated, proven 
technologies, many of which have been in use for decades and whose 
efficacy is well supported in EPA's record.
2. Site-Specific Approach
    Many commenters agreed with EPA's site-specific approach for 
entrainment mortality requirements but argued that the same approach 
should also be applied to impingement mortality requirements. State 
agencies and environment organizations are concerned that the site-
specific entrainment determinations will create additional 
administrative burdens on already overextended permitting authorities 
which could exacerbate permit backlogs.
    Response: EPA does not agree that impingement mortality is best 
addressed by the same approach adopted for entrainment. This is because 
EPA has been able to identify low-cost technologies that are available, 
feasible and demonstrated for impingement mortality nationally. EPA has 
not been able to identify an available, feasible and demonstrated 
technology nationally for entrainment, and therefore has adopted as its 
national BTA entrainment standard a structured process for determining 
on a site-specific basis what entrainment controls are the best 
technology available at a particular facility. EPA agrees that site-
specific entrainment has potential to create additional burdens for 
states, but EPA has tried to limit this burden by simplifying its 
information collection requirements from those at proposal. EPA has 
streamlined the information collection requirements so that information 
necessary for the Director to make a BTA determination is submitted by 
the permittee in the permit application early in the process, thus 
minimizing the number of transactions between permittee and the 
Director.

E. BTA Performance Standards

1. Impingement Standards
    EPA received a substantial number of comments on how the final rule 
should address impingement mortality. EPA proposed an impingement 
mortality standard based on the performance of modified traveling 
screens with fish handling and return that required achievement of a 
numeric IM performance standard. As an alternative EPA proposed that a 
facility could demonstrate that either the design intake velocity or 
the actual intake velocity at its operation was less than 0.5 fps. Most 
of the commenters, including members of the U.S. Congress, state and 
local elected officials, and industry stakeholders, requested 
additional flexibility in complying with the impingement mortality 
standards. While the proposal would not specifically require the use of 
modified traveling screens with a fish handling and return system to 
meet the impingement mortality standards, some commenters interpreted 
the proposed rule as requiring this. EPA proposed impingement mortality 
standards that were expressed as a monthly average and a 12-month 
average. EPA recognizes, however, that some regulated entities might 
find a technology-based compliance option, rather than a performance-
based approach, more attractive. Such an approach, particularly the 
specification of pre-approved technologies, could offer higher 
regulatory certainty, easier demonstration of compliance, and might 
offer a less expensive alternative because of reduced monitoring 
requirements associated with pre-approved technologies. Some commenters 
viewed the proposed impingement mortality standard as overly stringent 
and requested that EPA establish alternative impingement mortality 
standards, including site-specific impingement mortality

[[Page 48355]]

requirements similar to those proposed for entrainment. Other 
commenters provided data pertaining to the performance of technologies, 
including modified traveling screens used as the basis for the 
impingement mortality performance standard. Several industry 
stakeholders stated that, despite EPA's best intentions, the proposed 
rule applied a one-size-fits-all approach for impingement mortality. 
While all the suggested changes to the proposal seek to provide 
additional flexibility through a variety of approaches, most of the 
comments had several elements in common:
     Defining modified traveling screens as a pre-approved 
technology or otherwise streamlining the NPDES process for facilities 
using the candidate technology on which BTA is based. Thus, EPA would 
designate certain technologies or certain conditions as complying with 
the impingement requirement.
     Providing a mechanism to identify other technologies that 
perform comparably to modified traveling screens.
     Modifying the proposal so that facilities that have 
already reduced the rate of impingement could obtain credit toward the 
impingement mortality standard.
     Developing a more tailored approach to protecting 
shellfish.
     Creating alternatives for facilities with very low (de 
minimis) impingement levels or mortality rates.
     Providing additional clarity on species of concern as it 
pertains to demonstrating compliance with the numeric impingement 
mortality performance standard.
     Reevaluating the impingement mortality numerical 
performance standards.
    In addition, as noted above, EPA also received a number of comments 
suggesting that it adopt a site-specific approach to reducing 
impingement mortality similar to the proposed approach for addressing 
entrainment, rather than uniform national requirements for impingement 
mortality and a site-specific approach for entrainment only.
    Many commenters expressed concern that the entrapment requirements 
were not well defined and would require costly technologies that are 
not considered in EPA's cost estimates and could be difficult to comply 
with, particularly where cooling systems employ impoundments or basins 
downstream of the initial intake structure.
    Response: See the earlier discussion concerning how EPA determined 
the numeric impingement mortality performance standard. Additionally, 
see earlier discussion for an explanation of how EPA revised the 
impingement mortality standard to provide seven alternatives for 
compliance.
    EPA agrees that specific entrapment requirements are not necessary 
and requirements for facilities to deploy technologies to avoid 
entrapment have been deleted from the final rule. However, a facility 
that entraps fish must count the entrapped organisms as impingement 
mortality.
2. Entrainment Standards
    A substantial number of commenters supported EPA's site-specific 
approach for entrainment standards. Suggested revisions to the approach 
included the following:
     EPA should recognize the value of waterbody-based 
requirements, including withdrawals on lakes/reservoirs and less than 5 
percent of rivers as not requiring entrainment mortality.
     Units with a low capacity utilization should be exempt 
from entrainment mortality.
     Facilities with AIF of less than 125 mgd should be 
presumed as entrainment mortality compliant.
     EPA should consider entrainment survival.
    Response: With respect to waterbody-based requirements and capacity 
utilization thresholds, EPA disagrees with commenters suggestions. 
There is no fundamental difference in technological performance based 
on waterbody so there is no need to subcategorize based on waterbody. 
EPA found that low CUR facilities are generally peaking plants that 
operate at full capacity for portions of days during a few months or 
less. Further, EPA found that some sites continue to withdraw water 
through their cooling water intake structure even when no power is 
being generated. If that period of cooling water intake operation 
corresponds with times when spawning is occurring, those facilities 
could have significant impacts from impingement and entrainment. 
Therefore, simply being a low CUR unit does not imply no adverse 
environmental impacts. Instead, EPA found that low CUR should be looked 
at more closely on an individual unit basis. EPA has included a 
provision in the final rule that states where a generating unit has an 
annual average capacity utilization rate of less than 8 percent 
averaged over a 24-month block contiguous period, the owner or operator 
may request that the Director establish less stringent standards for 
IM. With respect to facilities below 125 AIF being considered 
entrainment compliant, EPA disagrees with the comment since any 
facility at any flow may have an adverse environmental impact. With 
regard to entrainment survival, EPA does allow for consideration of 
entrainment survival. The monitoring requirements for entrainment for 
new units at Sec.  125.96(d)(3) states that mortality after passing the 
cooling water intake structure must be counted as 100 percent mortality 
unless you have demonstrated to the approval of the Director that the 
mortality for each species is less than 100 percent.
3. Closed-Cycle Cooling
    Both industrial stakeholders and many state agencies endorsed an 
approach that deems facilities with closed-cycle cooling to be in 
compliance with the BTA impingement mortality standard, and eligible 
for reduced monitoring and reporting requirements. Most industrial 
stakeholders agreed with the EPA decision that closed-cycle cooling 
should not be imposed as a national BTA standard. They argue that 
although closed-cycle cooling might be available and achievable at many 
facilities, requiring closed-cycle cooling nationally has numerous 
drawbacks including the following:
     Requirements for closed-cycle flow reduction do not take 
into consideration the site-specific limitations at some facilities 
(e.g., blowdown water quality, scale, fouling problems).
     Cooling towers would result in significant adverse impacts 
from fine particulates, carbon dioxide emissions, evaporative water 
loss, and other issues.
    Commenters expressed concern that the proposed definition of a 
closed-cycle recirculating system is far more restrictive than the 
definition used in the Phase I rule. It includes only systems that 
withdraw make-up flow intermittently, are designed to operate above 
minimum COC, reduce flow by a specified percentage (depending on 
whether salt or fresh water), and did not include impoundments that are 
waters of the United States. Some commenters stated that while they 
might have been effectively operating as closed-cycle units for many 
years, they have concerns with their ability to comply with the 
definition in the proposal, particularly with respect to the specified 
COC.
    Response: EPA agrees that facilities employing a closed-cycle 
recirculating system for entrainment should also be deemed in 
compliance with the impingement mortality standard, as long as the 
system is properly operated. While a closed-cycle recirculating

[[Page 48356]]

system is the most effective technology for reducing entrainment, EPA 
has not established BTA based on closed-cycle cooling because EPA 
concluded it was not BTA, for the reasons specified in Section VI. 
Regarding the definition of closed-cycle cooling, EPA identified two 
parameters that demonstrate proper operation: Flow reduction and cycles 
of concentration. To provide flexibility, EPA has removed the numeric 
levels of the metrics as threshold, while retaining the minimized 
makeup flows aspect of the definition. Therefore while the definition 
in this final rule does not establish fixed requirements in terms of 
COC and comparable percentage flow reduction to qualify as a closed-
cycle recirculating system, the rule provides that a closed-cycle 
recirculating system ``generally'' will achieve the specified 
benchmarks that characterize a properly operating closed-cycle cooling 
system. EPA further recognizes that certain unavoidable circumstances 
could exist where the specified COC or percent reduction values might 
not be achievable. Such site-specific circumstances could include 
situations where water quality-based discharge limits might limit the 
concentration of a pollutant that is not readily treatable in the 
cooling tower blowdown or situations where the source water quality 
could lead to unavoidable problems concerning scale formation, solids 
buildup, corrosion, or media fouling. If a facility can demonstrate 
that these occurrences are unavoidable, under the definition in the 
final rule, the Director may determine that such a facility is a 
closed-cycle recirculating system, taking into account the site-
specific circumstances. In addition, EPA has explained how the 
conditions added to the existing facilities definition do not in effect 
make it more stringent than the Phase I definition of closed-cycle 
recirculating systems. The auxiliary electricity a facility uses to run 
the fans in a closed-cycle system is electricity the facility can't 
sell. The opportunity cost to the facility of using that electricity to 
run the fans is the forgone revenue they would have been able to earn 
if they had run their cooling water system in once-through mode. The 
forgone revenue provides the incentive for a facility to run its 
closed-cycle system in once-through mode, rather than in closed-cycle 
mode. Thus, EPA adjusted the definition of a closed-cycle recirculating 
system to be appropriate for retrofit situations.

F. Implementation

    Many commenters expressed concern that the compliance timeline for 
impingement mortality and entrainment requirements should be 
synchronized to prevent a facility from having to install technology to 
comply with impingement mortality requirements and then later be 
required to install entrainment mortality technology.
    Response: To address this concern, EPA revised the impingement 
mortality compliance requirements to provide that after issuance of a 
final permit establishing the entrainment requirements under Sec.  
125.94 (d), the owner or operator of an existing facility must comply 
with the impingement mortality standard in paragraph Sec.  125.94(c) as 
soon as practicable. When the Director establishes a compliance 
schedule under Sec.  125.94(d), the schedule must provide for 
compliance as soon as practicable. Thus, EPA has synchronized decision 
making about technology requirements, avoiding situations where 
investments in IM controls would later be rendered obsolete by 
entrainment control requirements.

G. Costs

1. Impingement Mortality Technology Costs
    Commenters expressed concern about the approach for technology 
assignments used to estimate compliance with the impingement mortality 
standards and generally asserted that costs were underestimated. These 
concerns included the following:
     The EPA incorrectly assumed traveling screens were an 
available technology at most facilities.
     EPA underestimated the costs of modified traveling 
screens.
     EPA underestimated the difficulty and costs of installing 
fish returns.
    Response: EPA disagrees that traveling screens are not an available 
technology at most facilities; survey data provided by industry shows 
that 93 percent of generators and 73 percent of manufacturers already 
have screens. EPA agrees that some facilities may not be able to 
readily upgrade their screens to modified traveling screens with fish 
return, but that the vast majority can.
    EPA has updated the estimated costs of the rule to reflect the 
difficulty of installing fish return and adjusted the cost of modified 
traveling screens to reflect most recently available vendor data. 
Specifically, EPA reviewed the cost methodology and made a number of 
revisions including the following:
     EPA revised the technology assignment such that only those 
model intakes that have existing traveling screens are assigned 
modified traveling screen costs.
     EPA increased the estimated capital costs for modified 
traveling screens by 20 percent.
     EPA increased the estimated capital costs of fish returns 
and provided for an additional increase for facilities whose intakes 
would be difficult to install fish returns.
    For further discussion, see Section IX and the TDD (Chapter 8).
2. Entrainment Mortality Technology Costs
    Industrial stakeholder commenters argued that closed-cycle cooling 
costs are underestimated and the cost analysis fails to include any 
costs for entrainment requirements. Riverkeeper argued that the EPA 
closed-cycle costs are overestimated.
    Response: For both the proposal and this final rule, EPA revised 
the methodology for estimating closed-cycle costs from what was used 
for Phase II and Phase III. EPA's revised methodology is based on the 
cost methodology provided by the Electric Power Research Institute 
(EPRI). EPRI based its cost methodology on over 50 actual and planned 
closed-cycle cooling system retrofits and EPA concluded that these cost 
estimates better reflect actual costs. EPRI has updated their closed-
cycle cost methodology since EPA adoption of the earlier version and 
provided an estimate of closed-cycle costs for generators with a design 
flow above 50 mgd (See DCN 12-6807). A comparison between the EPRI 
estimates and comparable EPA estimates indicate that the EPA capital 
and downtime costs are somewhat lower than the EPRI estimates, while 
the EPA energy penalty costs are higher. (See DCN 12-6656.) While 
Riverkeeper cites actual costs from retrofit projects completed in 1998 
and 2002 to support the argument that EPA's capital costs are 
overestimated, EPA has identified more recent closed-cycle retrofits 
where the capital costs were much higher than the EPA average, 
suggesting that the costs used by EPA in the final rule are 
representative of the range of costs that may occur nationwide. (See 
DCN 12-6656.) Thus EPA considers its closed-cycle costs to reasonably 
reflect actual costs.
    EPA also received estimated costs for closed-cycle retrofits at 
small, medium, and large manufacturing cooling systems from the 
American Chemical Council (ACC). A comparison of these costs to 
comparable EPA estimates indicated that for larger systems the costs 
are mostly in agreement but that for smaller systems (e.g., 5,000 gpm), 
the EPA cost estimates are lower. EPA's acknowledges its methodology 
uses a linear approach and does not fully

[[Page 48357]]

account for the increased costs associated with the diseconomies of 
scale at the lower end of the spectrum of system sizes.
    Under EPA's selected option, compliance for entrainment reduction 
requirements is established on a site-specific basis. Because no 
particular result is prescribed under this approach, it is difficult to 
ascribe compliance costs for this aspect of the rule without the site-
specific information that will be generated as a result of the national 
BTA standard for entrainment decision-making established by today's 
rule. For Proposal Options 2 and 3 where closed-cycle cooling would be 
required, EPA did estimate costs for closed-cycle cooling. EPA has not 
estimated what site-specific determinations will be made as part of the 
analysis.

H. Monitoring and Reporting

1. Velocity Monitoring
    Many commenters explained that it would be difficult to directly 
measure through-screen velocity for screen technology and agreed with 
the suggestion in the NODA that EPA should allow for calculation of 
through-screen velocity. Also, many were concerned that a velocity 
limit based on minimum water levels would be difficult to comply with. 
Of concern are extreme conditions that are beyond the facility's 
control (e.g., low water due to drought).
    Response: EPA agrees that direct measurement of intake velocity on 
a traveling screen may be problematic in some circumstances, and the 
final rule allows intakes to comply with the low velocity IM compliance 
alternatives by either calculation or direct measurement. Compliance 
will be demonstrated through monitoring and reporting of actual or 
calculated intake velocities. Short-term exceedances of the velocity 
may be permissible for brief periods, with Director approval, for 
purposes of maintaining the cooling water intake system, such as 
backwashing the screen face. EPA expects that facilities will employ 
appropriate design and operational measures to ensure that the maximum 
velocity is not exceeded during minimum ambient source water surface 
elevations, as can be anticipated through best professional judgment 
using hydrological data.
2. Impingement Mortality Monitoring
    EPA received many comments concerning impingement mortality 
monitoring. Issues regarding impingement monitoring included the 
following:
     Many commenters expressed concern that the impingement 
mortality standard is unclear as to what species the impingement 
mortality requirements apply.
     Intakes with low impingement would have difficulty 
calculating impingement mortality.
     Monitoring requirements for impingement mortality are 
excessive, especially given the physical and biological challenges of 
appropriate sampling.
     Monitoring requirements should be eliminated for properly 
installed/operated pre-approved technologies.
     Impingement ``selects'' impaired organisms, resulting in 
bias.
    Response: EPA has addressed concerns regarding monitoring in the 
final rule. For example, there is no biological compliance monitoring 
for pre-approved and streamlined compliance alternatives in Sec.  
125.94 (c)(1) through (6) of today's rule beyond that required for the 
permit application, and monitoring may be greatly reduced for other 
facilities. EPA recognizes that biological monitoring can be expensive, 
which factored into EPA significantly reducing those requirements. With 
respect to intakes with low impingement having difficulty calculating 
impingement mortality, facilities can demonstrate under Sec.  
125.94(c)(6) that the rate of impingement is reduced due to intake 
location or other technologies or factors. Further, under Sec.  
125.94(c)(11) a facility can demonstrate to the Director that there is 
a de minimis rate of impingement such that no additional controls are 
warranted.
3. Reporting Requirements
    Comments concerning reporting requirements included the following:
     Commenters argue that permit application deadlines are 
unreasonable, especially given the limited number of consultants 
available and that EPA overestimates the number of facilities that have 
completed these studies.
     Peer review requirements are overly burdensome.
     Permit application requirements are burdensome and EPA 
should revise the proposed rules to remove, limit, or streamline the 
numbers and types of data, studies, and reports required. Permit 
application requirements should be reduced for smaller facilities with 
intake flow in the 2-125 mgd range.
     The proposed rule requires the Sec.  122.21(r) permit 
application materials for each permit cycle, regardless of whether the 
facility has been modified. After the initial assessment of BTA in the 
first permit cycle under the new rule, the permittee should not be 
required to do additional studies and submit further documentation 
unless there is a significant change in the facility's cooling system.
    Response: EPA notes that facilities have several flexibilities to 
address the first point, including: (1) If a permit is issued prior to 
July 14, 2018, the Director can delay submission requirements until 
such time that the facility can complete them and (2) in permit terms 
subsequent to the first permit issued under today's rule, the Director 
can waive some or all of the studies. With respect to peer review, EPA 
disagrees that peer review is overly burdensome. How to undertake a 
peer review is widely known, generally following a well-established 
process. EPA notes that peer review is a normal part of Agency 
activities, and that commenters generally favor the application of peer 
review to environmental data and analyses. With respect to the burden 
of the permit application process and subsequent permit cycles, EPA has 
reduced the permit application requirements for the final rule and 
streamlined biological data collection to two years of data collected 
as part of the permit application (with the exception of the few 
facilities expected to comply with the impingement mortality standard 
under the alternative at Sec.  125.94(c)(7)). In addition, entrainment 
studies are not prescribed for facilities below 125 mgd, although the 
Director may require the facility to provide information beyond the 
basic permit application information. Also, the Director can waive 
study requirements in permit terms subsequent to the first permit 
issued under today's rule.

I. Endangered Species Act

    Some commenters argued that it is inappropriate to automatically 
treat T&E species in a special category and provide for special 
consideration for them under the rule. These commenters asserted that 
EPA has no basis for incorporating ESA requirements into the rule and 
addressing ESA species under the NPDES program; they argued that the 
ESA operates independently. Other commenters argued that EPA has an 
obligation under the ESA to consult with the Services if cooling water 
intake structures are likely to affect threatened or endangered 
species.
    Response: EPA has addressed T&E species and critical habitat in 
this rule to the extent necessary to ensure that this action is 
consistent with both the Endangered Species Act and CWA section 316(b). 
Section 7 of the Endangered Species Act states that

[[Page 48358]]

``each Federal agency shall, in consultation with and with the 
assistance of [the services] insure that any action authorized, funded, 
or carried out by [the agency] . . . is not likely to jeopardize the 
continued existence of any threatened or endangered species or result 
in the destruction or adverse modification of [designated critical] 
habitat.'' Under CWA section 316(b), facilities subject to NPDES 
permitting that have cooling water intake structures are subject to BTA 
to minimize adverse environmental impacts. The final rule requires 
NPDES 316(b) permittees to identify all Federally-listed threatened and 
endangered species and/or designated critical habitat that are or may 
be present in the action area. The Director may reject an otherwise 
available technology as a basis for entrainment requirements if the 
Director determines there are unacceptable adverse impacts including 
impingement, entrainment, or other adverse effects to Federally-listed 
threatened or endangered species or designated critical habitat. EPA 
consulted with the Services under the ESA regarding this rule, and a 
summary of the requirements related to threatened or endangered species 
is discussed in Section VIII.K of this preamble.

VIII. Implementation

    The following sections describe how the Agency expects the final 
rule requirements to be implemented. The requirements of today's final 
rule will be applied to facilities through NPDES permits issued by EPA 
or authorized States under CWA section 402. A facility may generally 
choose to demonstrate compliance with the final rule by demonstrating 
compliance for the entire facility, or by demonstrating compliance for 
each individual cooling water intake structure. For example, a facility 
with two intakes could demonstrate flow reduction commensurate with an 
existing closed-cycle recirculating system for the first intake, and 
demonstrate the intake velocity at the screen face is less than 0.5 
feet per second at the second intake. Alternatively, the facility could 
demonstrate that each of the facility's intakes are designed with an 
intake velocity of less than 0.5 feet per second. For details about the 
scope and applicability of today's final rule, see Section I above.
    Today's final rule (as described in Section IV above) establishes 
permit application requirements for existing facilities in Sec. Sec.  
122.21 and 125.95, monitoring requirements in Sec.  125.96, and record-
keeping and reporting requirements in Sec.  125.97. All existing 
facilities subject to the final rule that withdraw from one or more 
cooling water intake structures with a facility-wide DIF of greater 
than 2 mgd are required to comply with the national BTA impingement 
mortality standard at Sec.  125.94(c) and national BTA entrainment 
standard at Sec.  125.94(d). New units at existing facilities are 
required to meet the national BTA impingement mortality and entrainment 
standards at Sec.  125.94(e).
    The final regulations also require the Director to review permit 
application materials submitted by each regulated facility, establish 
impingement mortality and entrainment requirements in accordance with 
this rule, and issue permits that include monitoring and record-keeping 
requirements (Sec.  125.98). The permit application requirements, 
monitoring, record-keeping, and reporting requirements for each of the 
compliance alternatives are detailed in the following sections.

A. When does the final rule become effective and how are the 
requirements sequenced in an orderly way?

    This rule becomes effective on October 14, 2014. The requirements 
in this rule will then be implemented in NPDES permits as the permits 
are issued.
    EPA has sought to address the information and studies required in 
the permit application associated with ongoing permitting proceedings 
and subsequent permitting after the first implementation of this rule 
in a permit. The EPA realizes that, in some cases, a facility may 
already be in the middle of a permit proceeding at the time of 
promulgation of this rule, or the Director may have already required 
much of the same information be submitted by the facility prior to 
promulgation of today's final rule. Therefore the rule includes several 
provisions that provide flexibility for the permit application 
requirements. First, in the case of any permit expiring after July 14, 
2018, under Sec.  125.95 the facility must submit permit application 
materials required in Sec.  122.21(r) with its next NPDES permit 
renewal application. Second, in the case of any permit expiring prior 
to July 14, 2018, under Sec.  125.95 a facility may request that the 
Director waive the submission date of the permit application 
requirements of Sec.  122.21(r) based on a showing by the owner or 
operator of the facility that it could not develop the information for 
which such a waiver is requested by the time required for submission of 
the permit renewal application. If the Director then chose to allow a 
delay for the submittal of any of the information requirements of Sec.  
122.21(r), the Director would then determine the schedule for 
submission of any delayed requirements to be as soon as practicable. 
Third, in the case of permit proceedings begun prior to the effective 
date of today's rule, and issued prior to July 14, 2018, the Director 
should proceed. See Sec. Sec.  125.95(a)(2) and 125.98(g). In such 
circumstances where permit proceedings have already begun prior to the 
effective date of the rule, these facilities will still need to submit 
the appropriate permit application materials found at Sec.  122.21(r) 
permit applications during their next application. Additionally, while 
EPA expects that many facilities will already comply with Sec.  
125.94(c), in some cases the facility will need to choose one of the 
compliance alternatives for IM in their subsequent permit cycle.\83\ In 
particular, EPA expects the facility would submit the information 
required in Sec.  122.21(r), and the Director would make a 
determination of BTA for entrainment for that facility. Only after the 
Director has established site-specific BTA requirements for entrainment 
reduction will the facility have to select the compliance alternative 
on which it will rely to meet the IM requirements of today's rule. The 
Director may either amend the permit to include the IM requirements or 
include them in a subsequent permit if the Director determines the 
proposed controls are consistent with Sec.  125.94(c). The Director 
would establish a schedule incorporating each of these sequential 
actions. In addition, the rule allows the Director the flexibility to 
grant a request for a waiver of permit application requirements in 
Sec.  122.21(r)(6) in order to accommodate the circumstances described 
here. See Sec. Sec.  122.21(r)(1)(i) and 125.95(a). Fourth, in permit 
applications subsequent to the first permit issued under Sec.  
125.94(a)(1) with all required information submitted under Sec.  
122.21(r), the Director may approve a request to reduce information 
required, if conditions at the facility and in the waterbody remain 
substantially unchanged since the previous application.\84\ See Sec.  
125.95(c). In

[[Page 48359]]

addition to all of these flexibilities, today's final rule gives 
advance notice to affected facilities about permit application 
materials and compliance schedules.
---------------------------------------------------------------------------

    \83\ EPA's costs do not assume zero compliance costs for prior 
BTA determinations or permit proceedings; all facilities were 
assessed costs on the basis of technologies in place as described in 
Section IX.
    \84\ However, if conditions at the facility or in the waterbody 
have in fact changed substantially since the previous permit 
application, the Director will revisit data collection needs and 
possibly the BTA determination. The presence of any habitat 
designated as critical, or species listed as threatened or 
endangered after issuance of the current permit (whose range of 
habitat or designated critical habit includes waters where a 
facility intake is located) constitutes potential for a substantial 
change that must be addressed by the owner/operator in subsequent 
permit applications, unless the facility received an exemption 
pursuant to 16 U.S.C. 1536(o) or a permit pursuant to 16 U.S.C. 
1539(a) or there is no reasonable expectation of take.
---------------------------------------------------------------------------

    While the final rule has both reduced and streamlined the permit 
application requirements, the EPA has determined that for many 
facilities, it may take as long as 39 months to plan, collect, and 
compile the data and studies required to be submitted with the permit 
application (see Section C below for a more detailed discussion of each 
application element). The rule therefore specifies that July 14, 2018 
reflects the date after which all permit application requirements must 
be submitted as specified at Sec.  125.95. Specific permit requirements 
may not need a full 39 months for completion, therefore the Director 
may establish a schedule for submission of the required permit 
application elements. For example, planning for required sampling may 
take 6 months, inclusive of establishing a sampling team, developing 
sampling protocols, and acquiring necessary equipment. Source water 
sampling and characterization under Sec.  122.21(r)(4) includes two 
years' worth of data. Therefore, the EPA expects a minimum of 30 months 
will be necessary for submission of Sec.  122.21(r)(4), assuming the 
facility collects new data; this timeframe could be shorter if the 
facility chooses to use existing biological data. Facilities choosing 
to comply with the IM requirements through either Sec.  125.94(c)(5) or 
(c)(6) must collect at least 2 years data upon which the facility would 
demonstrate that the modified traveling screens or the facility's 
systems of technology have been optimized to minimize impingement 
mortality. Therefore, the EPA expects a minimum of 30 months will be 
necessary for submission of Sec.  122.21(r)(6), assuming the facility 
collects new data. Collection of entrainment characterization data and 
studies should occur in parallel with IM studies and sampling. Thus, 
after the initial 6 month planning period, facilities that do not 
already have recent entrainment characterization data will collect a 
minimum of 2 years entrainment data under Sec.  122.21(r)(9). 
Facilities are expected to need an additional 9 months to assemble the 
entrainment data and studies as required by Sec.  122.21(r)(9) through 
(12). Therefore, the EPA has concluded that as many as 39 months will 
be necessary for final submission of all requirements under Sec.  
122.21(r). This time frame will be adequate for facilities under 125 
mgd AIF; facilities over 125 mgd AIF also need to have their 
122.21(r)(10) to (12) studies peer reviewed. The EPA expects 3 months 
will be needed for completion of peer review requirements and 
generation of a final report. However, many of the facilities over 125 
mgd AIF were subject to the Phase II rule before it was suspended (that 
is, all electric generators over 125 mgd AIF are also above 50 mgd 
DIF), and likely need less time for up front planning and/or data 
collection. Therefore, the EPA has concluded that as many as 39 months 
will be adequate for these facilities to meet all requirements under 
Sec.  122.21(r). These time frames are consistent with the timeline EPA 
included in the proposed rule, and also matches the 3\1/2\ years 
previously provided in the Phase II rule for data collection and 
studies. EPA notes the submission of the studies required with the 
permit application should not be confused with the schedule for 
compliance with the BTA requirements, as discussed below.
    EPA has also sought to sequence the impingement mortality controls 
so that a facility may select and implement these controls after the 
Director's determination of controls on entrainment. With respect to 
entrainment requirements, existing facilities withdrawing greater than 
125 mgd AIF must submit permit application materials including the 
studies prescribed in today's final rule at Sec.  122.21(r)(9) through 
(13) in order to help the Director determine what entrainment controls 
to require at the facility. Facilities at or below this threshold must 
submit any information requested by the Director. The Director will 
then review these materials and determine if further entrainment 
controls are necessary. Once the BTA requirements for entrainment have 
been established, the facility would finalize its chosen method for 
compliance with impingement mortality under Sec.  125.94(c). It would 
then be appropriate for the Director to develop a schedule whereby the 
facility would proceed to design, construct, and implement its 
technologies for impingement mortality, for entrainment, or for both 
together should the same technology addresses both impacts. In this 
manner, the EPA has harmonized the schedules for meeting both 
impingement mortality requirements and entrainment requirements.
    EPA further notes that approximately 2 percent of facilities have 
no controls in place for impingement or entrainment, or that a facility 
may choose to install modified traveling screens as part of its 
compliance response. In these circumstances, not only does EPA expect 
such decisions to be delayed until after the Director has determined 
the BTA requirements for entrainment, EPA acknowledges that the 
required optimization study of Sec.  122.21(r)(6) cannot be completed 
until after the technology has been designed and constructed. EPA has 
provided the Director the flexibility to establish an appropriate 
schedule for submission of such studies under Sec.  125.95(a)(2).
    After the effective date of the regulation, when the first permit 
implementing the new regulatory requirements is issued, permitting 
authorities typically consider the need to allow facilities some period 
of time to come into compliance. Under today's final rule, facilities 
will have to comply with the impingement mortality and entrainment 
requirements as soon as practicable according to the schedule of 
requirements set by the Director. The concept of compliance schedules 
may be found in the generally applicable NPDES regulations at 40 CFR 
122.47. Because section 316(b) has no statutory deadline for meeting 
the ``best available technology for minimizing adverse environmental 
impact'' standard, there is no statutory bar to use of a compliance 
schedule in appropriate circumstances. The EPA recognizes that it will 
take facilities time to upgrade existing technologies, and install new 
technologies, and that there are limits on the number of facilities 
that can be simultaneously offline to install control technology and 
still supply goods and services to orderly, functioning markets. It is 
appropriate for the Director to take this into account when 
establishing a deadline for compliance. Any such schedule would take 
into account factors provided in Sec.  125.98(c), such as measures 
needed to maintain adequate energy reliability by an electric 
generating facility, or extenuating circumstances such as scheduled 
production outages at a manufacturing facility.
    There may be overlap in the technologies used to comply with 
impingement mortality and entrainment standards, which could result in 
the facility needing more time to comply with the impingement mortality 
requirements. For example, if a facility plans to retrofit to wet 
cooling towers to reduce entrainment, the wet cooling towers technology 
will also comply with the impingement mortality

[[Page 48360]]

standard under Sec.  125.94(c)(1). As such, the Director would schedule 
compliance with the impingement mortality requirements to match the 
schedule for entrainment requirements. Further, EPA recognizes that in 
some cases, especially where additional entrainment control 
technologies are required, the facility could require a lengthy period 
of time to design, construct, and implement control technologies. 
Therefore, the rule authorizes the Director, at Sec.  125.94(h), to 
establish interim BTA requirements in a facility's schedule of 
requirements, for impingement mortality, entrainment, or both, where 
necessary on a site-specific basis.
    In contrast to the proposed rule, today's final rule does not 
include a requirement for compliance with the impingement mortality 
standards within eight years. EPA expects, however, that the final rule 
will generally result in compliance within a similar period of time. 
The combination of permit issuance, the Director's determination of BTA 
for entrainment, and the subsequent schedule of requirements for 
impingement mortality will result in some facilities, particularly 
those already in a permitting proceeding, or with controls similar to 
what the new permit requires, being in compliance within a very short 
time frame. Some facilities that are not now in a permitting proceeding 
may need as much as three and a half years to fully complete their 
studies and data collection, and depending on the types of control 
selected, may need additional time to design, construct, and implement 
their technologies. In some cases, the Director's determination for 
entrainment may result in a facility meeting both the impingement 
mortality and entrainment BTA requirements in fewer than eight years. 
All facilities will be required to follow their schedule as determined 
by the Director.
    EPA notes that there is a three-year period after the effective 
date of this rule before Directors will be receiving permit 
applications containing the full set of application requirements in 
Sec.  122.21(r). EPA is aware that currently many NPDES permits for 
facilities with a CWIS have been administratively continued. For these 
administratively continued permits, the Director should consider if any 
permits would need additional updated information to support the permit 
issuance decision. The Director may, under 40 CFR 122.21(g)(13), 
request additional information including any permit application 
requirements in Sec.  122.21(r).

B. How does the final rule reduce biological monitoring requirements?

    The EPA has streamlined the biological data and study requirements 
for both impingement mortality and entrainment into one comprehensive 
set of permit application requirements and provisions. The Source Water 
Baseline Biological Characterization Data, impingement technology 
performance optimization study, Entrainment Characterization Study, and 
where applicable, entrainment performance studies are all conducted 
within the same two year time frame prior to submission of an 
application for a permit. Further, as shown in Exhibit VIII-1, EPA's 
analysis indicates that more than 99 percent of existing facilities 
will choose an alternative for impingement mortality that does not 
require continual biological compliance monitoring. Thus any required 
biological data consists solely of that required to be collected to 
meet the permit application requirements. See Section F for further 
discussion.

   Exhibit VIII-1--EPA's Projections of How Facilities Will Choose To
                     Comply With the IM Requirements
------------------------------------------------------------------------
                                                        Percent of total
      IM compliance alternative       Intake count \a\       intakes
------------------------------------------------------------------------
Closed-cycle recirculating system                  307                18
 \c\................................
Design velocity.....................               362                21
Actual velocity.....................               226                13
Existing offshore velocity cap \c\..                10                 1
Modified traveling screens..........               488                29
System of technologies..............               278                17
Impingement Mortality Performance                   12               0.7
 Standard...........................
De minimis..........................             **\b\             **\b\
                                     -----------------------------------
    Total...........................             1,682               100
------------------------------------------------------------------------
\a\ EPA's compliance costs for each facility are based on the sum of the
  facility's intake level compliance costs. Some facilities have more
  than one intake. See IX.B.2 for more information on the use of the
  survey data.
\b\ EPA has not estimated which facilities will be determined to be ``de
  minimis'' under Sec.   125.94(c)(11) by the Director. For purposes of
  this analysis, EPA has assumed no facilities fall under the ``de
  minimis'' provision.
\c\ EPA is not projecting facilities will install closed-cycle
  recirculating systems or offshore velocity caps to comply with the IM
  requirements, rather these facilities already have these technologies
  installed.

    By merging the data collection and studies into the permit 
application requirements, EPA expects approximately half of all 
affected facilities will be able to complete the initial permit 
application within a few months.\85\ In the case of a facility that was 
not previously required to collect data and conduct studies, it may 
take up to 45 months lead time for a permit to be applied for, and 
additional time for the permit to be issued. Although the permit 
application times may be longer for the first permit cycle after this 
rule, this is a tradeoff for the flexible IM requirements.
---------------------------------------------------------------------------

    \85\ For example, facilities that were subject to Phase II will 
have already collected most of the data and information as part of 
the Phase II rule issued February 16, 2004 and implemented up until 
suspension of that rule on July 9, 2007.
---------------------------------------------------------------------------

    Once the permit is issued, EPA anticipates very few, if any, 
facilities will be required to conduct ongoing biological compliance 
monitoring related to impingement controls; for more details, see 
Section F and Exhibit VIII-4. Instead, for each subsequent permit cycle 
each facility would either (1) demonstrate to the Director that 
facility operations and waterbody characteristics are substantially 
unchanged, or (2) update any biological characterization data. 
Anticipating that NPDES permits are renewed when they expire, the 
update to the facility's biological characterization and any 
corresponding biological performance evaluations would be conducted 
approximately every five years.

[[Page 48361]]

C. What information will I be required to submit to the director when I 
apply for my NPDES permit?

    Today's final rule establishes, at Sec.  122.21(r), permit 
application requirements for all facilities subject to the requirements 
of Sec.  125.94. Each permit application element at Sec.  122.21(r) is 
described in more detail below. The final rule requires existing 
facilities to prepare and submit some of the same information as 
previously required for new facilities subject to subparts I or N 
(i.e., Phase I new power plants and manufacturers or Phase III new 
offshore oil and gas facilities), namely the information at Sec.  
122.21(r)(2) through (4). In addition, the rule adds subparagraphs for 
existing facilities to the regulations at Sec.  122.21(r)(4), as well 
as (r)(5) through (13) to include the information and study 
requirements specific to existing facilities.
    In the case of a new unit constructed at an existing facility, EPA 
expects much of the information submitted by the facility in previous 
permit applications would still be current and relevant. Therefore, EPA 
has reduced the permit application requirements to those necessary to 
update the facility's previously submitted information under Sec.  
122.21(r)(2), (r)(3), (r)(4), (r)(5), (r)(6), (r)(7) and (r)(8). In 
other words, the new unit permit application is intended to describe 
the changes to these documents as a result of the addition of the new 
unit. In addition, the facility must submit information specific to the 
new unit's chosen compliance method at Sec.  122.21(r)(14).
    All existing facilities are required to complete and submit permit 
application studies to describe the source waterbody (Sec.  
122.21(r)(2)), cooling water intake structures (Sec.  122.21(r)(3)), 
characterize the biological community in the vicinity of the cooling 
water intake structure (Sec.  122.21(r)(4)), cooling water system 
(Sec.  122.21(r)(5)), and operational status (Sec.  122.21(r)(8)). 
Facilities that already use a closed-cycle recirculating system must 
still submit this information in their permit application. The Director 
will need, for instance, the biological sampling data in Sec.  
122.21(r)(4) to serve as a record basis for their BTA determination in 
the permit. Furthermore, in Phase I, new facilities were required to be 
commensurate with closed-cycle, to meet the 0.5 fps velocity limit, and 
to collect two years' worth of biological data to establish a record 
basis for impacts at the facility. In addition, the data collected here 
is important to inform an owner/operator's evaluation of whether and if 
so what threatened or endangered species or designated critical habitat 
are or may be present in the action area.
    All existing facilities must describe their existing impingement 
and entrainment technologies or operational measures and a summary of 
their performance, including but not limited to reductions in 
impingement mortality and entrainment due to intake location and 
reductions in total water withdrawals and usage (Sec.  
122.21(r)(5)(iii)). All facilities must also complete and submit their 
chosen compliance method for impingement mortality (Sec.  
122.21(r)(6)). This includes identification of any requests for BTA 
determinations under Sec.  125.94(c)(11) de minimis rates of 
impingement or Sec.  125.94(c)(12) low capacity utilization power 
generation units. In addition, the owner or operator of an existing 
facility must submit the information required under paragraph (r)(6) of 
Sec.  122.21 for the alternative specified at 40 CFR 125.94(c) that the 
owner or operator of an existing facility chooses to rely on as its 
method of compliance with the BTA Standards for Impingement Mortality 
specified in 40 CFR 125.94. Because the IM compliance options Sec.  
125.94(c)(1), (2), and (4) include pre-approved technologies, the owner 
or operator of a facility choosing one of these three options to comply 
with the IM requirements does not have either biological studies or 
biological compliance monitoring related to the applicable IM standard. 
Compliance options Sec.  125.94(c)(3), (5), and (6) are streamlined 
options. For two of these three options, the permit application element 
Sec.  122.21(r)(6) further requires a site-specific study for the 
purposes of technology optimization to minimize impingement mortality, 
including additional biological data collection that in most cases 
would occur during the same two year period of data collection for the 
Source Water Baseline Biological Characterization Data required under 
Sec.  122.21(r)(4) to characterize the baseline, and a demonstration 
that the operation of specific technologies at your facility have been 
optimized to minimize impingement mortality. The owner or operator of a 
facility choosing one of these three options to comply with the IM 
requirements do not have ongoing biological compliance monitoring as 
part of the applicable IM standard. As discussed in the previous 
section, the Director can establish a schedule \86\ for submitting the 
optimization study if the facility first needs to install additional 
technology for IM.
---------------------------------------------------------------------------

    \86\ The Director could, for example, issue a permit before the 
optimization study has been completed, and include a schedule for 
submission of the optimization study in the newly issued permit.
---------------------------------------------------------------------------

    All existing facilities may submit to the Director additional 
permit application studies to describe biological survival studies that 
address technology efficacy and other studies on entrainment at the 
facility (Sec.  122.21(r)(7)). This requirement does not impose any new 
or additional study requirements. This permit application element 
includes the submission of existing studies conducted by or relevant to 
the facility. Further, the burden of this requirement has been reduced 
since proposal by only referring to studies of entrainment.
    All existing facilities that withdraw more than 125 mgd AIF \87\ of 
water for cooling purposes must also submit additional information to 
characterize entrainment and assess the costs and benefits of 
installing various potential technological and operational controls. 
These facilities are required to submit to the Director additional 
permit application studies including Sec.  122.21(r)(9), Entrainment 
Characterization Study; Sec.  122.21(r)(10), Comprehensive Technical 
Feasibility and Cost Evaluation Study; Sec.  122.21(r)(11), Benefits 
Valuation Study; and Sec.  122.21(r)(12), Non-water Quality 
Environmental and Other Impacts Assessment. As with the biological data 
collection required of some facilities under Sec.  122.21(r)(6), EPA 
expects biological data collection for the purposes of entrainment 
characterization to occur during the same two year period of biological 
data collection required under Sec.  122.21(r)(4). EPA notes that 
facilities below the 125 mgd threshold are not automatically exempt 
from entrainment requirements. The Director may determine that 
entrainment studies may be required or that entrainment controls may 
need to be installed for any cooling water intake structure. See the 
Section VI of this preamble for more information.
---------------------------------------------------------------------------

    \87\ AIF is calculated from the most recent three years' data or 
five years in subsequent permit cycles. As such, AIF is a variable 
number. It is possible that a facility could transition from below 
125 mgd to above 125 mgd if the facility significantly increases 
withdrawal of cooling water, such as if the facility increases 
capacity or if it adds a new unit. In these cases, the facility will 
then be required to conduct the studies and meet the permit 
application requirements at Sec.  122.21(r)(9)-(13). This 
consequence is intended to incentivize facilities to reduce or reuse 
water for cooling, thereby avoiding the need for additional permit 
application studies.
---------------------------------------------------------------------------

    The final rule further requires the studies at Sec.  122.21(r)(10) 
through (r)(12) be subject to an external peer review as required at 
Sec.  122.21(r)(13); a separate peer review is not required for Sec.  
122.21(r)(9), as it is implicitly

[[Page 48362]]

reviewed via its use in Sec.  122.21(r)(10) and (r)(11). EPA expects 
the facility would first notify the Director of the peer review in 
advance. For example, facilities could identify their peer reviewers 
near the beginning of their biological data collection for the required 
Entrainment Characterization Study at Sec.  122.21(r)(9). Since a 
facility's permit application requires two years of biological data, 
EPA expects this is more than enough time for the facility to identify 
peer reviewers, and for the Director to disapprove of a peer reviewer 
or require additional reviewers. Further, this provides the Director 
ample opportunity to confer with those agencies with responsibility for 
fish and wildlife potentially affected by the cooling water intake 
structure, including other Federal, State, and Tribal agencies. 
Similarly, in the case of permits for electric generating utilities, 
EPA expects this is enough time to confer with state co-regulators such 
as public utility commissions, or independent system operators whose 
responsibility it is to ensure reliability of the electricity grid. To 
minimize the overall time required to conduct a peer review, all 
studies conducted by the facility under Sec.  122.21(r)(10) through 
(12) will be subject to peer review at the same time, in a holistic 
fashion. Additional guidance on conducting peer review is available on 
EPA's Peer Review Program Web site at www.epa.gov/peerreview. EPA 
expects the Director will use the permit application information, 
studies, and peer review results to assess the impingement and 
entrainment impacts of the cooling water intake structure and determine 
appropriate technological or operational controls, or both, as 
necessary.
    While all facilities must submit Sec.  122.21(r)(2) through (6) and 
(r)(8) and, where applicable (r)(7), EPA has reduced the permit 
application requirements based on the facility's chosen compliance 
method for impingement mortality. Exhibits VIII-2 and VIII-3 below 
illustrate the permit application requirements as they relate to an 
existing facility's chosen compliance methods. EPA expects permit 
application requirements for new units will consist of updates to 
previously submitted permit applications for the rest of the existing 
facility at which the new unit is being constructed.
    For a new unit at an existing facility, EPA expects that only the 
appropriate and relevant updates to the existing facility's permit 
application materials are required (in addition to newly developed 
materials required at Sec.  122.21(r)(14)). For example, the facility 
would update Sec.  122.21(r)(3) to indicate the addition of the new 
unit, any new intakes associated with the new unit, expected 
operational characteristics, etc. For the owner or operator of a new 
unit and with an AIF greater than 125 mgd, the permit application 
materials under Sec.  122.21(r)(9)-(13) are required. In those 
circumstances where data specific to the facility indicate that 
compliance with the requirements of paragraphs (e)(1) or (2) of Sec.  
125.94 for a new unit would result in compliance costs wholly out of 
proportion to the costs EPA considered in establishing the requirements 
at issue, or would result in significant adverse impacts on local air 
quality, significant adverse impacts on local water resources other 
than impingement or entrainment, or significant adverse impacts on 
local energy markets, the rule requires the submission of such data as 
part of Sec.  122.21(r)(14). EPA notes that when a new unit increases 
an existing facility's AIF greater than 125 mgd, the permit application 
requirements also include Sec.  122.21(r)(9) through (13). Further, 
facilities may need several years to complete studies and data 
collection and, depending on the types of controls selected, may need 
additional time to design and construct their technology. Thus while 
the rule requires the permit application for a new unit at least 180 
days prior to commencing cooling water withdrawals, it is in the 
facility's best interest to submit this data well in advance in order 
to prevent any delays in the Director's review of permit application 
materials and subsequent issuance or renewal of the facility's NPDES 
permit. For the owner or operator of a new unit opting to comply via 
Sec.  125.94(e)(2) the application materials required under Sec.  
122.21(r)(14) must demonstrate entrainment reductions equivalent to 90 
percent or greater of the reduction that could be achieved through 
compliance with Sec.  125.94(e)(1).

 Exhibit VIII-2--Summary of Permit Application Requirements for Existing Facilities According to Existing Facilities' Chosen Method for Compliance With
                                                             Impingement Mortality Standard
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Sec.   122.21 subsection
    Compliance approach to    --------------------------------------------------------------------------------------------------------------------------
         impingement               (r)(2)          (r)(3)          (r)(4)          (r)(5)         (r)(6)       (r)(6)(i)      (r)(6)(ii)       (r)(8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Closed-cycle recirculating     Yes...........  Yes...........  Yes...........  Yes..........  Yes..........  No...........  No...........  Yes.
 system.
Design intake velocity.......  Yes...........  Yes...........  Yes...........  Yes..........  Yes..........  No...........  No...........  Yes.
Actual intake velocity.......  Yes...........  Yes...........  Yes...........  Yes..........  Yes..........  No...........  No...........  Yes.
Existing offshore velocity     Yes...........  Yes...........  Yes...........  Yes..........  Yes..........  No...........  No...........  Yes.
 cap.
Modified traveling screens...  Yes...........  Yes...........  Yes...........  Yes..........  Yes..........  Yes..........  No...........  Yes.
Combination of technologies..  Yes...........  Yes...........  Yes...........  Yes..........  Yes..........  No...........  Yes..........  Yes.
Impingement Mortality          Yes...........  Yes...........  Yes...........  Yes..........  Yes..........  Maybe........  Maybe........  Yes.
 Performance Standard.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                             Exhibit VIII-3--Summary of Permit Application Requirements for Existing Facilities: Entrainment
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Sec.   122.21 subsection
     Compliance approach to     ------------------------------------------------------------------------------------------------------------------------
          entrainment                 (r)(7)            (r)(8)            (r)(9)          (r)(10)          (r)(11)          (r)(12)          (r)(13)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Closed-cycle recirculating       Yes.............  Yes.............  Var.\a\........  Var.\a\........  Var.\a\........  Var.\a\........  Var.\a\
 system.
Director BTA entrainment         Yes.............  Yes.............  Yes............  Yes............  Yes............  Yes............  Yes.
 determination: facility AIF
 above 125 mgd.
Director BTA entrainment         Maybe...........  Maybe...........  Maybe..........  Maybe..........  Maybe..........  Maybe..........  Maybe.
 determination: facility AIF
 125 mgd or below.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Director has the discretion to waive.


[[Page 48363]]

    In addition, the Director may set information requirements not 
included in today's rule to aid in best professional judgment 
permitting, such as will occur for entrainment at facilities below 125 
mgd AIF, and for impingement and entrainment at existing facilities 
below 2 mgd DIF, neither of which are required by today's rule to 
submit items in Sec.  122.21(r)(9) through (r)(13). The Director may 
find aspects of the permit application requirements to be relevant in 
such situations. A summary of each permit application requirement 
follows.\88\
---------------------------------------------------------------------------

    \88\ Where a closed-cycle recirculating system withdraws greater 
than 125 mgd AIF, the information required in Sec.  122.21(r)(9) to 
(13) is required, unless the Director reduces or waives some or all 
of the information required.
---------------------------------------------------------------------------

1. Sec.  122.21(r)(2) Source Water Physical Data
    This requirement is unchanged from the Phase I rule and the 2004 
Phase II rule. The facility is required to submit data to characterize 
the facility and evaluate the type of waterbody potentially affected by 
the cooling water intake structure. The applicant is required to submit 
a narrative description and scaled drawings showing the physical 
configuration of all source water bodies used by the facility, 
including areal dimensions, depths, salinity and temperature regimes, 
and other documentation that supports the determination of the 
waterbody type where each cooling water intake structure is located; 
identification and characterization of the source waterbody's 
hydrological and geomorphological features, and the methods used to 
conduct any physical studies to determine the intake's area of 
influence in the waterbody and the results of such studies; and 
locational maps. The Director uses this information to evaluate the 
appropriateness of any design or technologies proposed by the 
applicant.
2. Sec.  122.21(r)(3) Cooling Water Intake Structure Data
    This requirement is unchanged from the Phase I rule and the 2004 
Phase II rule. This data is used to characterize the cooling water 
intake structure and evaluate the potential for impingement and 
entrainment of aquatic organisms. Information on the design of the 
intake structure and its location in the water column allows evaluation 
of which species and life stages might be subject to impingement and 
entrainment. A diagram of the facility's water balance is used to 
identify the proportion of intake water used for cooling, make-up, and 
process water, as well as any cooling water supplied by alternate 
sources, such as reuse of another facility's effluent. The water 
balance diagram also provides a picture of the total flow in and out of 
the facility, and is used to evaluate gray water, waste water, and 
other reuses in the facility. The applicant is required to submit a 
narrative description of the configuration of each of cooling water 
intake structure and where it is in the waterbody and in the water 
column; latitude and longitude in degrees, minutes, and seconds for 
each cooling water intake structure; a narrative description of the 
operation of each of cooling water intake structure, including design 
intake flows, daily hours of operation, number of days of the year in 
operation and seasonal changes, if applicable; a flow distribution and 
water balance diagram that includes all sources of water to the 
facility, recirculating flows, and discharges; and engineering drawings 
of the cooling water intake structure.
3. Sec.  122.21(r)(4) Source Water Baseline Biological Characterization 
Data
    This information is similar to that required in the Phase I rule. 
Existing facilities are required to characterize the biological 
community in the vicinity of the cooling water intake structure and to 
characterize the operation of the cooling water intake structures. This 
supporting information must include existing data if they are 
available. However, the facility may supplement the data using newly 
conducted field studies if it chooses to do so. The information the 
applicant must submit includes identification of data that are not 
available and efforts made to identify sources of the data; a list of 
species (or relevant taxa) for all life stages and their relative 
abundance in the vicinity of the cooling water intake structure; and 
identification of the species and life stages that would be most 
susceptible to impingement and entrainment. All species should be 
evaluated, including the forage base and those species most important 
in terms of significance to commercial and recreational fisheries. In 
addition, the applicant must identify and evaluate the primary period 
of reproduction, larval recruitment, and period of peak abundance for 
relevant taxa; data representative of the seasonal and daily activities 
(e.g., feeding and water column migration) of biological organisms in 
the vicinity of the cooling water intake structure. In addition, 
instead of the information required at Sec.  122.21(r)(4)(vi), the 
owner or operator of an existing facility or new unit at an existing 
facility must identify all Federally-listed threatened and endangered 
species and/or designated critical habitat that are or may be present 
in the action area pursuant to Sec.  125.95(f). The action area can 
generally be considered the area in the vicinity of impingement and 
entrainment at the cooling water intake structure. The applicant must 
also include documentation of any public participation or coordination 
with Federal or State agencies undertaken. If the applicant supplements 
the information with data collected using field studies, supporting 
documentation for the Source Water Baseline Biological Characterization 
Data must include a description of all methods and quality assurance 
procedures for sampling, and data analysis including a description of 
the study area; taxonomic identification to the lowest taxon possible 
of sampled and evaluated biological assemblages (including all life 
stages of fish and shellfish); and sampling and data analysis methods. 
The sampling or data analysis (or both) methods used must be 
appropriate for a quantitative survey and based on consideration of 
methods used in other biological studies performed in the same source 
waterbody. The study area should include, at a minimum, the area of 
influence of the cooling water intake structure. The applicant may also 
identify protective measures and stabilization activities that have 
been implemented and describe how these measures and activities 
affected the baseline water condition in the vicinity of the intake.
    EPA is adding Sec.  122.21(r)(4)(ix), (x) and (xi) to the Source 
Water Baseline Biological Characterization Data for existing 
facilities. Item (ix) simply defines the term ``Source Water Baseline 
Biological Characterization Data.'' EPA is requiring item (xi), 
identification of fragile species found at the facility. EPA notes that 
in contrast to the proposed rule, the permit application does not 
require submission of the proposed ``species of concern.'' EPA found 
that the term ``species of concern'' was too similar to terms as used 
in the context of T&E (threatened and endangered) species, and may 
cause confusion over existing Services or State requirements for such 
species. Further, despite EPA's efforts to distinguish between species 
of concern and RIS (representative indicator species) in the NODA (77 
FR 34325, June 11, 2011), EPA found that many commenters were still 
confused by the language. Instead, EPA is adopting the term ``fragile 
species'' and using the term exactly as it is used with the impingement 
mortality data and criteria used in calculating the

[[Page 48364]]

impingement mortality standards of the rule. The definition for 
``fragile species'' at Sec.  125.92 is a species of fish or shellfish 
that has an impingement survival rate of less than 30 percent even when 
the BTA technology of modified traveling screens are in operation. EPA 
has identified fragile species in the Chapter 11 of the TDD for the 
final rule. Further, EPA is providing examples, in the list of 14 
specific species in today's regulatory definition as a non-exclusive 
list. This list includes only those species specifically analyzed as 
part of the performance standards development. If a permit applicant 
can sufficiently demonstrate a record basis, the permitting Director 
may deem a particular species to be a fragile species for the purpose 
of a particular permit.
    American shad (Clupeidae), bay anchovy (Engraulidae), and blueback 
herring (Clupeidae) belong to families that are specifically identified 
in the TDD Chapter 11 as examples of species that may be, at the 
Director's discretion, excluded from performance standards on the basis 
of impingement survival. As another example, threadfin shad (a species 
not specifically identified as fragile in today's rule) are prone to 
fall die-off when the water temperature reaches 42 degrees. The EPA 
does not intend for such naturally occurring mortality to be counted 
against a facility's performance in reducing impingement mortality. EPA 
is aware of limited success in flow reduction and behavioral deterrent 
systems in protecting fragile species. However, there are no 
demonstrated and available technologies for industry as a whole to 
address fragile species. EPA has long recognized these species as 
having low survival rates under the best of conditions, and established 
different mechanisms to address these in today's final rule. Today's 
BTA for impingement mortality allows the Director to establish site-
specific controls under Sec.  125.94(c)(9) to address fragile species.
    EPA notes the change in terminology to ``fragile species'' 
eliminates the proposed rule burden on States to review and approve 
each facility's site-specific species of concern, and eliminates 
confusion over any T&E or RIS that may be subject to more stringent 
requirements under other Federal, State, and Tribal law. Further, use 
of ``fragile species'' instead of ``species of concern'' greatly 
increases the transparency of the Agency's impingement mortality 
performance standards.
    In addition, EPA notes that Sec.  122.21(r)(4)(vi) requires the 
applicant to submit information on all threatened and endangered 
species, not just those T&E species that are fish or shellfish. 
Examples of T&E species that are not fish or shellfish are corals, sea 
turtles and marine mammals.
4. Sec.  122.21(r)(5) Cooling Water System Data
    The Director uses this data in determining the appropriate 
standards that would be applied to the facility. Facilities are able to 
use this information, along with the water balance diagram required by 
Sec.  122.21(r)(3), to demonstrate the extent to which flow reductions 
have already been achieved at the facility level. The applicant must 
provide the following information for each cooling water intake 
structure they use: A narrative description of the operation of the 
cooling water system and its relationship to cooling water intake 
structures (including the use of helper towers); the proportion of the 
design intake flow that is used in the system including a distribution 
of water used for contact cooling, non-contact cooling, and process 
uses; a distribution of water reuse (to include cooling water reused as 
process water, process water reused for cooling, and the use of gray 
water for cooling); description of reductions in total water 
withdrawals including cooling water intake flow reductions already 
achieved through minimized process water withdrawals; description of 
any cooling water that is used in a manufacturing process either before 
or after it is used for cooling, including other recycled process water 
flows; the proportion of the source waterbody withdrawn (monthly); the 
number of days of the year the cooling water system is in operation and 
seasonal changes in the operation of the system, if applicable. The 
applicant must also submit a description of existing impingement and 
entrainment technologies or operational measures and a summary of their 
performance, including for example reductions in entrainment due to 
intake location and reductions in total water withdrawals and usage, 
and efficiencies in energy production for each producing unit that 
result in the use of less cooling water, including for example combined 
cycle and cogeneration. For example, the applicant may provide 
comparative density data for the intake to demonstrate the extent to 
which location of the intake has reduced adverse environmental impact. 
The additional information at Sec.  122.21(r)(5)(iii) is specific to 
those process units that use cooling water for purposes other than 
power generation or steam, and where the owner or operator intends to 
comply with the BTA for IM through either the use of flow reduction 
measures or the reuse of other water for cooling purposes.
5. Sec.  122.21(r)(6) Chosen Method of Compliance With Impingement 
Mortality Standard
    Today's final rule is flexible in providing seven different 
compliance options for meeting impingement mortality requirements. 
Under Sec.  122.21(r)(6), the facility must identify its approach to 
meet the impingement mortality standards. The facility must identify 
the compliance method for the entire facility or, alternatively, the 
compliance method for each cooling water intake structure at the 
facility. Finding it to be unnecessary because the facility will 
already have a set of requirements to meet based on its chosen method 
of compliance, EPA has eliminated the proposed requirement for a 
separate impingement mortality reduction plan. In addition, monitoring 
and studies conducted under the reduction plan is no longer required by 
all facilities. Instead today's final rule specifies data collection 
requirements only in those instances where the facility must 
demonstrate a particular performance outcome as described below.
    Facilities choosing to comply with Sec.  125.94(c) by operating a 
modified traveling screen (under Sec.  125.94(c)(5)) must submit an 
impingement technology performance optimization study under Sec.  
122.21(r)(6)(i). The site-specific study must demonstrate the modified 
traveling screen as defined at Sec.  125.92 has been optimized to 
minimize impingement mortality. The study must include a minimum of two 
years of biological data collection. This time frame is consistent with 
the requirements at paragraph (r)(4)(iv) of Sec.  122.21 to identify 
primary periods of reproduction and peak abundance, as well as Sec.  
122.21(r)(4)(v) to provide data representative of the seasonal 
activities, both of which would require at least one year worth of data 
collection. EPA expects facilities will either use existing biological 
data already required under Sec.  122.21(r)(4) to complete their site-
specific impingement studies, modify their biological data collections 
under Sec.  122.21(r)(4) to be comprehensive and inclusive, use 
existing performance studies, or collect supplemental data necessary to 
make their demonstrations. If a facility is using previously collected 
data or studies that are more than 10 years old, the facility must 
demonstrate the data is still relevant and representative of the 
facility. If a facility

[[Page 48365]]

intends to return organisms to a different waterbody from which they 
are withdrawn, a request for consideration of this must be made to the 
Director under Sec.  122.21(r)(6).
    The rule specifies sampling at least monthly during the two year 
data collection effort of the impingement technology performance 
optimization study, and requires documentation of methods used 
including counting of moribund organisms, latent mortality, holding 
times, and counting of entrapment. The Director may establish more 
frequent collection, as well as specify sampling methods and additional 
protocols to be used. If the facility intends to return fish and 
shellfish to a different waterbody than the source waterbody that is 
used to withdraw cooling water, EPA expects this would be identified as 
part of Sec.  122.21(r)(6)(i). While EPA does not expect this situation 
occurs very frequently, the permit application information at Sec.  
122.21(r)(6)(i) along with (r)(4) would provide the Director the 
information needed to determine whether such a return location is 
appropriate.\89\ If the site-specific impingement study demonstrates 
the modified traveling screen (as defined at Sec.  125.92) has been 
optimized to minimize impingement mortality, the Director may then 
determine the modified traveling screen is the best technology 
available for impingement mortality at the site. The Director would 
then include permit conditions that ensure the technology will perform 
as demonstrated. If the Director determines that additional data is 
required to identify permit operating conditions, the Director has the 
authority to establish such requirements under Sec.  125.95(d). Note 
that the EPA envisions the study will function to optimize performance, 
which is not the same as requiring a study merely demonstrating a 
specific numeric level of performance for impingement mortality has 
been or can be achieved. For the majority of facilities, EPA expects 
annual performance using modified traveling screens will exceed the 
Agency's calculated average annual performance standards for 
impingement mortality. Several examples of modified traveling screens 
in EPA's record show annual performance for impingement mortality that 
is superior to the impingement mortality performance standard (e.g., 
lower than 10 percent).
---------------------------------------------------------------------------

    \89\ For example, the St. Lucie generating facility determined 
that this arrangement was not appropriate at their site; see DCN 10-
6515. The Brunswick facility, has a fish return flume that goes to a 
tributary rather than the intake canal or the river. This 
arrangement places the aquatic organisms away from the intake canal 
and in a more gentle water environment to increase the organisms' 
survival; see DCN 10-6569.
---------------------------------------------------------------------------

    Similarly, facilities choosing to comply with Sec.  125.94(c) by 
operating a system of technologies (under Sec.  125.94(c)(6)) that will 
achieve the impingement mortality standard must submit a impingement 
technology performance optimization study under Sec.  122.21(r)(6)(ii). 
The site-specific study must provide a description of the technologies, 
operational measures, or sampling approaches or any combination of them 
to be used to meet the BTA for impingement mortality. The study must 
demonstrate that the system of technologies has been optimized to 
minimize impingement mortality. EPA notes the ``system'' may consist of 
one or more technologies already in place, or may be combined with 
newly installed technologies. Further, the study must include a minimum 
of two years of biological data collection, as just described.
    The EPA is aware that it is possible for a facility to reduce its 
rate of impingement, but the same number of impinged fish die. This has 
the unintended consequence of increasing the percent impingement 
mortality calculated by the facility. EPA does not intend for such 
facilities to be penalized for significant reductions in impingement 
rates obtained through existing technologies and practices in place. 
Therefore, one difference in the required study for the system of 
technologies compliance alternative (as compared to the study required 
for modified traveling screens) is an understanding that operational 
measures, best management practices, intake location, and other 
technologies do not always lend themselves to direct impingement 
mortality measurements or data collection. Thus the study can include 
flow measurements and monitoring the rate of impingement (as opposed to 
directly monitoring mortality) as described below.
    If the facility chooses to rely on credit for reductions in the 
rate of impingement already achieved, the impingement technology 
performance optimization study must document the reductions to be used 
as credit. The estimated reductions in impingement must be based on a 
comparison of the facility to a once-through cooling system with a 
traveling screen located on the shoreline of the source waterbody. For 
example, a facility with an offshore intake, an intake canal, or an 
intake located immediately downstream of a dam in a cold water stream, 
could demonstrate the population of fish at the intake is lower in 
these areas, resulting in lower rates of impingement. This provision is 
intended to allow a facility that conducted or completed a baseline 
characterization under the Phase II rule to use that same information 
as part of their demonstration under this rule.
    As discussed in Section VI, EPA has identified flow reduction as 
one of the best ways to reduce both impingement and entrainment. 
Today's final rule, as part of the system of technologies compliance 
option at Sec.  125.94(c)(6), provides the owner or operator of a 
facility the opportunity to demonstrate flow reduction as part of 
meeting the IM standards. If the facility chooses flow reduction to 
reduce impingement, the study at Sec.  122.21(r)(6)(ii) must include 
two years of intake flows measured daily. This flow information plus 
the data collected under Sec.  122.21(r)(4)(iv) would be used to 
document how the flow reduction results in a reduced rate of 
impingement, as well as documenting the extent to which such reductions 
are seasonal or intermittent. Many pumps operate at only one speed, 
which doesn't allow the facility to adjust its intake flow to changing 
conditions. As a potential application of Sec.  125.94(c)(6), EPA is 
aware of a manufacturing facility that installed multiple pumps of 
different sizes, and the operator only utilized those pumps that were 
necessary to obtain the exact amount of cooling water needed. As 
another example, variable speed drives offer many facilities an 
opportunity to reduce their intake flows by as much as 10 percent. 
Variable speed drives are available at all facilities, and EPA expects 
variable speed drives will be considered when replacing existing 
recirculating pumps; however, EPA also acknowledges variable speed 
drives may not be practical in all cases. Nevertheless, EPA expects 
variable speed drives will be considered by the Director when 
establishing entrainment requirements under today's final rule. EPA 
provided an example of how a facility would receive credit for existing 
technologies in the NODA (see 77 FR 34322, June 11, 2011). An 
additional sample calculation that includes flow reduction is provided 
later in this section.
    The study must identify each of these contributing components, and 
requires the calculation of the impingement mortality reflecting each 
component of the system. The impingement technology performance 
optimization study must demonstrate the system of technologies has been 
optimized to minimize impingement mortality. In addition, the study 
must document the percent impingement mortality

[[Page 48366]]

reflecting optimized operation of the total system of technologies, 
operational measures, and best management practices at Sec.  
122.21(r)(6)(ii)(D). The Director may then determine the system of 
technologies is the best technology available for impingement reduction 
at the site. The Director would then include permit conditions that 
ensure the technology will perform as demonstrated.
6. Sec.  122.21(r)(7) Entrainment Performance Studies
    EPA proposed that a facility must submit all previously conducted 
performance studies, but has revised this provision in the final rule 
to include only entrainment related studies. Impingement performance 
studies, where relevant, are already part of the permit application at 
Sec.  122.21(r)(6). This avoids imposing a requirement on all 
facilities to submit previous impingement studies that may be 
unnecessary, and eliminates a burden on the Director to review all such 
studies, many of which may no longer be relevant.\90\ Under today's 
final rule, the applicant must submit a description of any biological 
survival studies conducted at the facility and a summary of any 
conclusions or results, including the following: site-specific studies 
addressing technology efficacy, through-facility entrainment survival 
(distinguished for eggs and larvae), entrainment analyses, or studies 
conducted at other locations including a justification as to why the 
data are relevant and representative of conditions at the facility. 
Because of changes in the waterbody over time, studies older than 10 
years must include an explanation of why the data are still relevant 
and representative of conditions at the facility. If the data are no 
longer relevant and representative, the Director may reject the data. 
The Director uses such studies when establishing technology-based 
requirements for entrainment. Permit applicants are not required to 
conduct new studies simply to fulfill this requirement. This 
requirement is rather aimed at obtaining results for relevant studies 
that have already been conducted as part of past permit proceedings or 
for other purposes even if those studies were not completed or 
conducted entirely as planned.
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    \90\ For example, the study may be old and no longer 
representative, the study may address a pilot study of a technology 
no longer under consideration by the facility, or the facility may 
have already selected one of the compliance methods for IM based on 
pre-approved technologies at Sec.  125.94(c)(1), (2) or (4).
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7. Sec.  122.21(r)(8) Operational Status
    The applicant must submit a description of the operational status 
of each unit for which a cooling water intake structure provides water 
for cooling, including the following: Descriptions of each individual 
unit's operating status including age of the unit, capacity utilization 
for the previous five years (including any unusual or extended outages 
that significantly affect the facility's reporting of flow, 
impingement, or other data), and any major upgrades completed in the 
past 15 years (e.g., boiler or condenser replacement, changes to fuel 
type, a new production line); a description of completed, approved, or 
scheduled uprates and NRC (Nuclear Regulatory Commission) relicensing 
status for nuclear facilities; a description of plans or schedules for 
decommissioning or replacement of units; and a description of current 
and future production schedules for manufacturing facilities. The 
Director will use such information in determining the BTA for 
entrainment as well as when establishing compliance schedules. For 
example, where the remaining useful plant life is considerably shorter 
than the useful life of an entrainment technology or where a facility 
has a planned retirement within the next permit cycle, this information 
is useful to support a determination regarding that specific 
entrainment technology. This information would also be used under Sec.  
125.94(c)(12) to document infrequently used power generating units that 
operate with a capacity utilization of less than 8 percent averaged 
over a 24-month block contiguous period and that the Director may 
therefore determine warrants IM controls less stringent than Sec.  
125.94(c)(1) through (c)(7). With respect to entrainment, the BTA for 
entrainment is determined by the Director for each site, and energy 
reliability is one factor the Director may consider when establishing 
entrainment controls (see Sec.  125.98(f)(3)). EPA expects the 
information submitted on energy reliability will be considered by the 
Director when making a BTA determination for entrainment for low CUR 
units.
8. Sec.  122.21(r)(9) Entrainment Characterization Study
    Facilities that withdraw greater than 125 mgd AIF must develop a 
study that includes a minimum of two years of entrainment data 
collection. EPA envisions the facility would extend the data collection 
methods and frequency to develop the source water characterization 
already required by Sec.  122.21(r)(4) to develop the Entrainment 
Characterization Study. The study would include complete documentation 
of the data collection period and frequency of entrainment 
characterization, and an identification of the organisms sampled to the 
lowest taxon possible. The data collection must be representative of 
the entrainment at each intake, and the study must document how the 
location of the intake in the waterbody and the water column are 
accounted for. The study must document the intake flows associated with 
the data collection. Consistent with the permit application 
requirements requiring biological data collection at Sec.  122.21(r)(4) 
and (6), EPA requires at least two years of data to sufficiently 
characterize annual, seasonal, and diel variations in entrainment, 
including variations related to climate, weather, spawning, feeding, 
and water column migration. Also consistent with the permit application 
requirements at Sec.  122.21(r)(4) and (6), facilities may use 
historical data that are representative of current operation of the 
facility and conditions at the site with documentation regarding the 
continued relevance of the data. The study must include analysis of the 
data to determine total entrainment and entrainment mortality. 
Documentation in the study must include the method in which latent 
mortality would be identified, and all methods and quality assurance/
quality control procedures for sampling and data analysis would be 
described. The sampling and data analysis methods must be appropriate 
for a quantitative survey.
    This information will help the Director determine the site-specific 
BTA for entrainment. For facilities with no entrainment technologies 
currently in place, this information characterizes the total potential 
for entrainment. The information can also be used to demonstrate that 
technologies and other measures already in place, or site-specific 
factors such as intake location or design, already reduce entrainment. 
For example, abundance data might demonstrate lower comparative 
densities that can significantly lower entrainment rates. The 
information could also be used by new units under Sec.  125.94(e)(2) to 
demonstrate that an alternative technology or combination of 
technologies reduce entrainment at that site to a level commensurate 
with closed-cycle cooling.

[[Page 48367]]

9. Sec.  122.21(r)(10) Comprehensive Technical Feasibility and Cost 
Evaluation Study
    The owner or operator of the facility must submit an engineering 
study of the technical feasibility and incremental costs of candidate 
entrainment control technologies. The study must include an evaluation 
of technical feasibility of closed-cycle cooling and fine-mesh screens 
with a mesh size of 2 mm or smaller, reuse of water or alternate 
sources of cooling water, and any other entrainment reduction 
technologies identified by the applicant or requested by the Director. 
This study must include a description of all technologies and 
operational measures considered (which could include alternative 
designs of closed-cycle recirculating systems such as natural draft 
cooling towers, hybrid designs, compact or multi-cell arrangements, or 
the conversion of helper towers to a fully recirculating system); and 
documentation of factors that make a candidate technology impractical 
or infeasible for further evaluation. For example, a discussion of land 
availability might include an evaluation of adjacent land, and acres 
potentially available because of generating unit retirements, 
production unit retirements, other buildings and equipment retirements, 
ponds, coal piles, rail yards, transmission yards, and parking lots; 
decommissioning of existing units; repurposing of existing land uses; 
documentation that insufficient acres are available on-site; and 
evidence of the feasibility of the purchase or other acquisition of 
property adjacent to the facility.
    For the analysis of water reuse and use of alternate sources of 
cooling water, the owner or operator must examine the available 
alternatives for reuse of effluent from within the facility or from 
other dischargers in the vicinity. The volume of water available need 
not be for the full intake flow; reuse of water could contribute to a 
partial reduction in flow at the facility. Additionally, if the 
facility were to retrofit to a closed-cycle system, the significant 
reduction in flow may make nearby alternative sources more feasible. 
This analysis should include an estimate of the cost to build any new 
infrastructure (e.g., piping, pump houses) and the ongoing operational 
costs (e.g., pump costs) for the Director's consideration.
    The final rule requires that the cost information be presented as 
both the facility's compliance costs and the social costs, and in net 
present value (NPV) terms and the corresponding annual value. Social 
costs are the costs estimated from the viewpoint of society, rather 
than individual stakeholders. Social cost represents the total burden 
imposed on the economy; it is the sum of all opportunity costs 
incurred. See Chapter 8 of EPA's 2010 Guidelines for Preparing Economic 
Analyses (DCN 10-3258). Some adjustments to facility compliance costs 
to produce social costs cause them to be higher than compliance costs, 
while other cause social costs to be lower. Although a facility makes 
investment decisions by taking tax consequences into account (after-tax 
costs), the favorable tax treatment of investments is viewed as a 
transfer and not a real resource cost, thus pre-tax costs are used in 
social cost analysis. From society's viewpoint, costs in the future 
must be amortized and discounted to net present value using a social 
discount rate, rather than a market cost of capital as reflected in 
market interest rates. The Office of Management and Budget (OMB) 
Circular A-4 (DCN 10-3266) instructs agencies to use both 3 percent and 
7 percent discount rates. Certain administrative costs are not borne by 
a facility, but rather by the Director, and are social costs. 
Compliance costs include the facility's administrative costs, including 
costs of permit application, while the social cost adjustment includes 
the Director's administrative costs. EPA has estimated the Directors' 
administrative costs in the ICR for the final rule, and describes the 
methodology for estimating these costs in detail in the EA. Facilities 
may adopt a similar approach to including Director's administrative 
costs in their social cost estimates. In addition, this component is 
not expected to be large or to vary significantly across technology 
options considered.
    From a facility's viewpoint, downtime costs include lost net 
revenue, while from society's viewpoint, if another facility is 
dispatched or inventory of manufactured goods can be sold, the only 
social cost of downtime is any increase in marginal costs of production 
at other facilities dispatched or the cost of holding inventory. Unless 
a facility can demonstrate that its costs of compliance will result in 
lower overall supply in the markets in which its products are sold, and 
that the effect of the lowered supply is an increase in market price 
and lower quantity of product sold, the facility should not make a 
social cost adjustment to reflect these larger market impacts.
    In addition to the required social costs, the owner or operator may 
choose to provide facility level compliance costs; however, such costs 
must be provided and discussed separately from social costs. The cost 
evaluation component of this study must include engineering cost 
estimates of all technologies considered above and also discuss and 
provide documentation of any outages, downtime, energy penalties or 
other effects on revenue. The cost evaluation should be based on least-
cost approaches to implementing each candidate technology while meeting 
all regulatory and operational requirements of the facility. 
Depreciation schedules, interest rates, further consideration of 
remaining useful life of the facility as discussed in Sec.  
122.21(r)(8), and any related assumptions must be identified. The owner 
or operator of the facility must obtain peer review of the 
Comprehensive Technical Feasibility and Cost Evaluation Study, as 
described in Section 12.
10. Sec.  122.21(r)(11) Benefits Valuation Study
    The owner or operator of the facility must submit a detailed 
discussion of the benefits of the candidate entrainment reduction 
technologies evaluated in Sec.  122.21(r)(10) and using data in the 
Entrainment Characterization Study in Sec.  122.21(r)(9). Each category 
of benefits should be described narratively, and when possible benefits 
should be quantified in physical or biological units and monetized 
using appropriate economic valuation methods. This includes incremental 
changes in the impingement mortality and entrainment of individual fish 
and shellfish for all exposed life stages, estimation of changes in 
stock and harvest levels of commercial and recreational species, and 
description of any monetization. This may include monetization using 
market values, market proxies (e.g., models based on travel costs or 
other methodologies), benefits transfer and stated preference methods. 
Benefits that cannot be monetized should be quantified where feasible 
and discussed qualitatively where not. The study must identify 
increased or decreased thermal discharges, and must evaluate the 
potential changes in facility capacity, operations, and reliability due 
to relaxed permitting constraints related to thermal discharges. The 
study must also include discussion of recent mitigation efforts already 
completed and how these have affected fish abundance and ecosystem 
viability in the intake structure's area of influence. Finally, the 
study must identify other benefits to the environment and the 
community, including improvements for mammals, birds, and other 
organisms and aquatic habitats. The owner or operator of the facility 
must obtain peer review of the benefits evaluation study, as described 
in Section 12. EPA expects peer

[[Page 48368]]

reviewers to have appropriate qualifications (e.g., fisheries 
biologist, economist) for the subject matter. The Director may consult 
with EPA and Federal, State and Tribal fish and wildlife management 
agencies with responsibility for fish and wildlife potentially affected 
by the cooling water intake structure(s) to determine which peer review 
comments must be addressed by the final study. The dollar values in the 
social benefits analysis should be based on the principle of 
willingness-to-pay (WTP), which captures monetary benefits by measuring 
what individuals are willing to forgo in order to enjoy a particular 
benefit. While the Director must consider benefit and cost information, 
the Director will also determine if this information is of sufficient 
rigor to make a decision on entrainment controls on the basis of this 
information. For instance, the Director may decide not to rely on 
benefit-cost information in establishing the entrainment controls when 
the benefits analysis includes only a qualitative discussion of nonuse 
benefits. Willingness-to-pay for nonuse benefits can be measured using 
benefits transfer or a stated preference survey. However, the rule does 
not require the Director to require a facility owner or operator to 
conduct or submit a stated preference survey to assess benefits.
11. Sec.  122.21(r)(12) Non-Water Quality Environmental and Other 
Impacts Assessment
    The owner or operator of the facility must submit a detailed 
discussion of the changes in non-water quality environmental and other 
factors attributed to technologies or operational measures, or both, 
considered. These changes may include, for example, increases or 
decreases in the following: Energy consumption; air pollutant emissions 
and their health and environmental impacts; noise; safety concerns, 
such as the potential for plumes, icing, and availability of emergency 
cooling water; grid reliability, including an estimate of changes to 
facility capacity, operations, and reliability due to cooling water 
availability; consumptive water use (including effects of surface water 
evaporation of thermal discharges); and facility reliability, such as 
production of steam and impacts to production based on process unit 
heating or cooling. The owner or operator of the facility must provide 
for peer review of the Non-Water Quality Environmental and Other 
Impacts Assessment as described in the following section.
12. Sec.  122.21(r)(13) Peer Review
    The owner or operator of the facility must provide for peer review 
of the permit application studies required at Sec.  122.21(r)(10) 
Comprehensive Technical Feasibility and Cost Evaluation Study, Sec.  
122.21(r)(11) Benefits Valuation Study, and Sec.  122.21(r)(12) Non-
Water Quality and Other Impacts Assessment. While facilities that 
withdraw more than 125 mgd AIF must conduct these studies and therefore 
must provide for peer review, facilities that withdraw equal to or less 
than 125 mgd AIF may have study requirements including peer review as 
determined by the Director. In today's final rule, EPA did not adopt 
separate peer review requirements for the Entrainment Characterization 
Study at Sec.  122.21(r)(9), because this data would be included in the 
Comprehensive Technical Feasibility and Cost Evaluation Study, Benefits 
Valuation Study, and Non-Water Quality and Other Impacts Assessment, 
and these studies are already subject to peer review. For these 
reasons, EPA reduced the burden in the final rule by eliminating the 
peer review requirement for entrainment characterization.
    EPA recognized at proposal that in many cases it is more efficient 
for permit applicants to combine the required studies into one document 
and have them reviewed holistically by a single set of peer reviewers. 
Such an approach is allowed by the final rule, as long as the peer 
review panel has the background appropriate to conduct a complete and 
combined review and the Director approves.
    The Director may consult with Federal, State and Tribal fish and 
wildlife management agencies with responsibility for fish and wildlife 
potentially affected by the cooling water intake structure(s). Further, 
the Director may require the owner or operator of the facility to 
include additional peer reviewers of the studies. EPA expects peer 
reviewers to have appropriate qualifications (e.g., in the fields of 
biology, engineering) for the subject matter. An explanation for any 
significant reviewer comments not accepted must be included in the 
final study submission. Additional guidance on conducting peer review 
is available on EPA's Peer Review Program Web site at www.epa.gov/peerreview.
13. Sec.  122.21(r)(14) New Units
    New units at existing facilities must identify the compliance 
method for the new unit under the permit application requirements at 
Sec.  122.21(r)(14). Where the facility complies with BTA standards for 
entrainment at Sec.  125.94(e)(1) by reducing its intake flows 
commensurate with that of a closed-cycle recirculating system (as 
defined at Sec.  125.92(c)(1)), the BTA standards for impingement 
mortality will have been met by Sec.  125.94(c)(1). To comply with the 
alternative at Sec.  125.94(e)(2), there must be a demonstration that 
entrainment reductions equivalent to 90 percent or greater of the 
reductions that could be achieved through compliance with Sec.  
125.94(e)(1).\91\ In this case, permit application requirement Sec.  
122.21(r)(14) requires this demonstration to include the Entrainment 
Characterization Study at Sec.  122.21(r)(9). The Director may 
determine additional data and information, including data collection, 
is necessary to make the demonstration.
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    \91\ Note that a new unit may construct a new intake structure 
or utilize capacity from an existing intake structure. For the 
former, the requirements of Sec.  125.94(e)(1) are simple to 
conceptualize and apply. But for the latter, EPA clarifies that the 
new unit requirements only apply to that portion of the flow that is 
serving the new unit. For a new unit using an existing intake 
structure that chooses to comply using Sec.  125.94(e)(1), 
demonstrating that the new unit achieves the required reduction in 
flow should be a relatively simple exercise in identifying intake 
flows and the distribution of cooling water from the intake 
structure. For a new unit using an existing intake structure that 
chooses to comply using Sec.  125.94(e)(2), the facility would 
demonstrate that it has reduced entrainment for that portion of the 
intake flow serving the new unit by 90 percent; the facility would 
not be required to reduce entrainment for the flow of the entire 
intake structure by 90 percent, unless the Director makes such a 
site-specific determination for entrainment at the existing units as 
well.
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D. When are permit application studies due?

    The owner or operator of a facility applying for reissuance of a 
permit must submit the information required at Sec.  122.21(r) to the 
Director no later than 180 days before the current permit expires. 
Those facilities that were subject to the section 316(b) Phase II rule 
from February 16, 2004 until suspension of that rule on July 9, 2007 
were already collecting some information required at Sec.  122.21(r). 
EPA has structured this rule to take advantage of those data and 
expects facilities to use them when they satisfy requirements for 
permit applications.
    In some cases, required permit application information might have 
been collected, but reports might not have been generated or finalized 
prior to the rule suspension in 2007. Further, facilities not subject 
to the Phase II rule (e.g., existing power plants below 50 mgd DIF and 
all existing manufacturers) might not have collected this information 
or might not have collected information to identify permit operating

[[Page 48369]]

conditions. In those cases, facilities would have to collect additional 
data in order to have two years of biological data collection. EPA 
expects associated studies and reports will take several additional 
months to complete. For this reason, EPA has established a provision 
for permit application submittal for a permit expiring prior to July 
14, 2018, allowing the Director flexibility to delay application 
requirements based on a showing by the owner or operator that it could 
not develop the information by the time required for submission of the 
permit application. The Director would then establish a schedule for 
submission of the delayed permit application requirements. EPA notes 
that the Director has the discretion to require additional studies, 
data collection, or an on-site inspection as part of the permit 
process.
    Facilities whose permit expires after July 14, 2018 would submit 
all required materials in Sec.  122.21(r) with their permit renewal 
application.
    New units at existing facilities must submit the information 
required at Sec.  122.21(r) to the Director no later than 180 days 
before commencing operation of the new unit. Because these units are 
being constructed at a facility that is already operating, the facility 
will have already submitted many of the permit application materials. 
The addition of a new unit would require an update of or supplement to 
permit application materials that have already been submitted. New 
units take significant time and resources to plan, design, and 
construct; therefore the final rule does not have a provision to waive 
permit application requirements based on a showing by the owner or 
operator that it could not develop the information by the time required 
for submission of the permit application. For permit renewals 
subsequent to the first permit issued under today's rule, the new unit 
would be included in the assessment of the entire facility and would no 
longer require unique permit application submissions. As discussed 
previously, the owner or operator is encouraged to submit applications 
well in advance of the 180 day requirement to avoid delay.
    EPA is aware that some intake structures withdraw from a manmade 
lake or reservoir that is stocked and managed by a State or Federal 
natural resources agency. In some cases, the biological 
characterization of the source water is heavily influenced by the 
actions of the natural resources agency. Further, the results of 
biological data collection and studies may be confounded by such 
actions. Today's final rule at Sec.  125.95(a)(3) gives the Director 
discretion to waive some or all of the permit application requirements 
of Sec.  122.21(r) in such circumstances.
    In permit terms subsequent to the first permit issued under the 
final rule, the facility will re-submit the Sec.  122.21(r) permit 
application studies, while the rule still includes two years of 
biological data collection for some facilities. In this manner, the 
biological characterization over time would be routinely evaluated, 
i.e., every 5 years under a standard permit cycle. To reduce the burden 
of such data collection, however, the final rule provides that the 
owner or operator of a facility may submit a request to the Director to 
reduce the information required. See 40 CFR 125.95(c). In most cases, 
EPA anticipates the facility would make any such request prior to 
conducting its two years of biological data collection. Therefore the 
request for reduced information requirements must be submitted to the 
Director at least two years and six months before the expiration of the 
facility's NPDES permit. The Director may approve such a request if 
conditions at the facility and in the waterbody remain substantially 
unchanged since the previous permit application.\92\ EPA expects the 
Director would assess the relevant previously submitted information and 
determine whether it remains representative of current source water, 
intake structure, cooling water system, and operating conditions. 
Accordingly, the Director may accept or reject any part of the request.
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    \92\ The presence of any habitat designated as critical, or 
species listed as threatened or endangered after issuance of the 
current permit (whose range of habitat or designated critical habit 
includes waters where a facility intake is located) constitutes 
potential for a substantial change that must be addressed by the 
owner/operator in subsequent permit applications, unless the 
facility received an exemption pursuant to 16 U.S.C. 1536(o) or a 
permit pursuant to 16 U.S.C. 1539(a) or there is no reasonable 
expectation of take.
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E. How will the director determine the best technology available for 
minimizing adverse environmental impacts?

1. Review and Approval of Permit Application Materials
    Under today's rule, the Director will review all materials 
submitted by an existing facility with its permit application to 
determine appropriate NPDES permit conditions and requirements to 
minimize impingement mortality and entrainment. As stated at 40 CFR 
125.98(a), the Director shall not issue a permit before receiving a 
permit application form and any supplemental information which are 
completed to his or her satisfaction (see existing Permit Application 
and Special NPDES Program Requirements at 40 CFR 122.21(e)).
    Facilities with a design intake flow at or below 2 mgd will 
continue to have permit conditions set on a case-by-case, best 
professional judgment basis under 40 CFR 125.90(b) and 401.14. For such 
facilities, however, the Director may choose to apply some portions of 
the permit application conditions in today's rule to aid in the BPJ 
determination.
    The Director is encouraged to expeditiously provide any comments on 
submitted materials so the facility can make responsive modifications 
to its information gathering activities. For permit applications 
subsequent to the first permit issued under today's rule, the Director 
could indicate whether reduced or different information must be 
submitted with the permit application. More specific responsibilities 
are described below:
    a. If the Director has made a BTA determination for entrainment 
before the effective date of the rule, and substantially the same 
information was already submitted and considered by the Director in 
making that determination, under Sec.  125.98(g) the Director may 
proceed with the Determination of BTA without requiring the owner to 
submit the information required in Sec.  122.21(r).
    To clarify further, EPA has included a ``transition'' provision at 
Sec.  125.98(g) of today's rule that makes it clear that for any 
facility that has submitted a permit application before the effective 
date of the regulation, the Director may select the best approach to 
development and implementation of the next permit. These provisions are 
intended to avoid any unnecessary delay in recently submitted permit 
applications or draft permits. EPA expects that facilities will 
continue with any data collection requirements, study requirements, and 
schedules in recently issued permits.
    b. If the Director establishes a compliance schedule under Sec.  
125.94, the Director will establish a schedule that sets requirements 
as soon as practicable. In establishing the schedule, the Director is 
encouraged to consider the extent to which those technologies proposed 
to be implemented to meet the requirements of Sec.  125.94(d) will be 
used, or could otherwise affect a facility's choice of technology, to 
meet the requirements of Sec.  125.94(c). Impacts of thermal 
discharges, along with other stressors, might be a relevant 
consideration when assessing benefits of technologies to reduce impacts 
of cooling water intakes or discharges. The Director is also encouraged 
to consider energy reliability, transmission capacity, and

[[Page 48370]]

grid requirements when establishing a schedule for electric power 
generating facilities. The Director may confer with local and regional 
electric power agencies and state utility regulators when establishing 
a schedule for electric power generating facilities (see DCN 10-6860 
for information on the approach taken by California). The Director may 
determine that extenuating circumstances (e.g., lengthy scheduled 
outages, future production schedules) warrant establishing a different 
compliance date for any manufacturing facility.
    c. The Director will review the permit application materials and 
studies submitted under Sec.  122.21(r) and determine which entrainment 
controls are appropriate. Factors that must be considered and factors 
that may be considered in making the determination are provided at 
Sec.  125.98. The Director must issue a written explanation for the BTA 
determination and must make this determination, and any other 
information submitted by third parties, available with the permit for 
public review. This determination is expected to be issued as part of 
the permit's statement of basis under 40 CFR 124.7.
2. Role of Social Cost-Benefit Analysis in Permit Determinations
    In deciding what technology to require a permittee to install to 
address entrainment, the Director may undertake an evaluation of social 
costs and benefits of implementing such requirements. This analysis 
will be based on the information submitted by the applicant, 
supplemented by any information submitted by third parties, and 
additional information as determined appropriate by the Director. EPA 
recognizes the resource limitations faced by permitting authorities and 
does not generally expect that the Director would develop additional 
information on which to base the evaluation of social benefits and 
costs, although the Director may opt to do so. This analysis should 
evaluate benefits and costs from the perspective of society as a whole, 
rather than costs and benefits accruing to limited parties (e.g., very 
local populations or the permittee, which presents a limited set of 
information to the Director).
    It is also important to note that the stated preference survey 
conducted by EPA which was discussed in the June 12, 2012 Notice of 
Data Availability (77 FR 34927) was designed to estimate respondents' 
willingness to pay for changes in the health of fish populations and 
aquatic ecosystems and be statistically representative at large 
(regional and national) scales; the results were not designed to be 
statistically representative at the facility level for the assessment 
of benefits for individual site-level permitting decisions. Today's 
final rule does not require the Director to require a facility owner or 
operator to conduct or submit a stated preference survey to assess 
benefits. Further, the rule does not limit the Director's discretion to 
consider non-water quality impacts in determining whether further 
entrainment measures are justified.
    A number of cost elements should be accounted for in assessing the 
social cost of entrainment technology implementation. These are 
summarized below.
a. Technology Installation Cost
    These peer-reviewed engineering cost estimates of the physical 
construction of candidate entrainment technologies at the facility are 
required. These costs would be provided by the applicant under Sec.  
122.21(r)(10).
b. Installation Downtime Cost
    Installation of closed-cycle cooling systems will often require 
facilities to take additional downtime beyond ordinary annual 
maintenance downtime. An estimate of downtime cost to the facility is 
required under Sec.  122.21(r)(10). EPA expects a facility will 
document that portion of downtime that is incremental to any downtime 
the facility already incurs due to, for example, routine maintenance 
outages, overhauls, refueling, and periodic replacement of equipment 
that is at the end of its useful life. Downtime costs to the facility 
include the value of lost production (e.g., electricity) minus any 
variable cost savings, as well as any other costs to the facility 
associated with downtime (shutdown and startup routines, special 
maintenance protocols, etc.) minus any savings associated with 
downtime. If they are considered in the social costs analysis, downtime 
costs must be adjusted to reflect production made up by other 
facilities or firms, because these temper the real resource costs from 
society's viewpoint. The cost of downtime is determined on a different 
basis for social cost. Specifically, the cost of downtime to society is 
the cost incurred for other facilities and generating units to make up 
the electricity or manufactured goods that would have otherwise been 
generated by the facility minus the cost that would have otherwise been 
incurred by the facility incurring downtime. This difference in cost 
reflects the additional cost, if any, that society must pay to generate 
the replacement goods, and may differ substantially from the cost of 
downtime to the facility.
c. Energy Penalty Cost
    Operation of closed-cycle cooling systems may impose an energy 
penalty. EPA is using energy penalty to mean only the opportunity costs 
associated with reduced power production due to derating (turbine 
backpressure). Energy penalty does not include the costs to operate 
pumps and fans associated with closed-cycle cooling, which are 
operation and maintenance costs (and covered below). Under well-
established principles in benefit-cost analysis, the cost of the energy 
penalty to the facility is not the opportunity cost to society. 
Instead, the cost to society is the cost of generating the electricity, 
whether incurred by the regulated facility or another facility, that is 
no longer available for consumption because of the energy penalty. This 
cost may be incurred by the facility, if it can increase the energy 
input to, and output from, the generating unit to generate the 
electricity that is otherwise no longer available for consumption, or 
by another generating unit if the regulated unit cannot make up the 
electricity. In either case, the social cost of the energy penalty is 
the cost of generating the electricity that would otherwise be 
available for consumption except for the energy penalty. Again, an 
assessment of these costs would be determined under the Sec.  
122.21(r)(10) demonstration.
d. Operation and Maintenance Costs for the Entrainment Technology 
Equipment
    The cost of energy to operate the entrainment technology for 
electric generators should appear in the operation and maintenance 
costs, along with other labor and materials costs. In the same way as 
described above, the social cost of the energy required to operate 
entrainment technology is the cost for generating this electricity, as 
it is otherwise no longer available for end-use consumption. This cost 
could be incurred by the regulated facility, if it has sufficient 
capacity to make up the loss, or by another facility, if the regulated 
facility is not capable of generating the electricity that is no longer 
available for end-use consumption.
e. Other Administrative Expenses
    This includes additional permitting or reporting expenses, or both. 
For social costs, the estimate should include the costs to the facility 
and those expected to be incurred by the Director.
    EPA has estimated the Directors' administrative costs in the ICR 
for the final rule, as explained in the EA, and

[[Page 48371]]

facilities may adopt a similar approach to estimating these costs at 
the permit level. For assessing social cost, the cost elements outlined 
above would typically be accounted for on a real cost basis--that is, 
pre-tax and without adjusting for future inflation. Costs are tallied 
over an appropriate time frame, which will typically be the expected 
useful life of the technology installation or the remaining life of the 
facility, if less. Costs should be calculated as both net present value 
and annualized values, using an appropriate social discount rate. The 
applicant should document the basis for the discount rate chosen, and 
its methodology and calculations.
f. Benefits
    In assessing the benefits of entrainment technology installation, 
the Director would assess the value to society from the reductions in 
impingement mortality and entrainment that would result from 
installation of a closed-cycle cooling system, fine mesh screens, or 
other entrainment technologies. All benefits, including monetized, 
quantified and qualitative benefits, should be considered in this 
assessment. The benefits assessment would typically look at a range of 
potential benefit categories, including increased harvest for 
commercial fisheries, increased use values for recreational fisheries, 
and nonuse values (existence and bequest values). The latter may be 
difficult to quantify or monetize. If appropriate data are available 
from benefits transfer or conducting stated preference studies or other 
sources that can be applied to the site being evaluated, these should 
be used to monetize nonuse values. Otherwise, nonuse values should be 
evaluated quantitatively and/or qualitatively. Quantitative analysis, 
even without monetization, can be quite useful in evaluating nonuse 
benefits. For example, quantifying impacts to forage and threatened and 
endangered species, and other indirect impacts on the aquatic 
environment, might allow the Director to derive a much more complete 
understanding of benefits as compared to a qualitative narrative, even 
if not directly comparable to monetary costs.
    Quantifying and valuing the benefit categories listed above 
involves significant challenges, as described in the BA. For example, 
assessing the productivity and value of commercial fisheries involves 
estimating the expected increases in commercial yield of economically 
valued species over time as a result of reduced impingement mortality 
and entrainment, and valuing these at market prices minus any 
incremental production costs associated with the incremental catch. 
Similarly, assessing recreational use benefits involves estimating the 
improvements in recreational fishing opportunities resulting from 
reduced impingement mortality and entrainment, and assigning a value to 
these improvements. The value assignment is based on the estimated 
population profile--in particular, number and proximity to affected 
water resources--of recreational users, the availability of alternative 
competing water resources for recreational usage, and the resulting 
estimated change in demand for use and value of the affected water 
resources based on reduced impingement mortality and entrainment and 
increased recreational fishing performance. EPA acknowledges this could 
be difficult to do even on a site-specific basis.
    Nonuse benefits, which encompass existence and bequest values, 
include impacts in such areas as population resilience and support, 
nutrient cycling, natural species assemblages, and ecosystem health and 
integrity. Nonuse values include improving the survival probability of 
a threatened or endangered species if present in the vicinity of the 
facility. Benefits might also need to be assessed beyond the vicinity 
of the facility's intake if migratory species are affected by the 
intake. Residual impacts of thermal discharges might also be 
appropriate to consider in the social benefits calculation.
    In much the same way as described for the social cost assessment, 
social benefits are tallied yearly over the expected performance life 
of the compliance technology. This tallying should account for the 
``phase-in'' of benefits (e.g., benefits may build up over time as the 
impingement mortality and entrainment reductions affect commercial 
fisheries productivity). Benefits are computed on a present value basis 
and annualized using an appropriate discount rate as described above. 
The same discount rate should be used for benefits and costs. Often, it 
is appropriate to calculate benefits and costs using more than one 
discount rate. For example, for regulatory impact analysis, OMB 
recommends that Federal agencies use both a 3 percent and a 7 percent 
rate. However, comparisons between specific benefit and cost numbers 
should always involve values computed using the same rate.
    The resulting estimates of social cost and benefits must be 
considered in determinations on whether to require a permittee to 
install entrainment technology and the specific level of entrainment 
technology to be installed. The Director may reject otherwise available 
technologies as the BTA requirements for entrainment controls if the 
social costs of compliance are not justified by the social benefits, or 
if there are other adverse impacts that cannot be mitigated that the 
Director deems to be unacceptable. If all technologies considered have 
social costs not justified by the social benefits, or have unacceptable 
adverse impacts that cannot be mitigated, the Director may determine 
that no additional control requirements are necessary beyond what the 
facility is already doing. The Director should document the basis for 
such a determination and include it in the public notice for the draft 
permit.
3. Streamlined Process
    The process for complying with the impingement mortality standards 
is expected to be highly streamlined. As shown in Exhibit VIII-1, EPA 
expects more than 99 percent of facilities will comply by one of the 
six compliance options that do not require continual biological 
compliance monitoring (one of the three compliance alternatives based 
on pre-approved technologies or one of the three streamlined compliance 
alternatives). If a facility chooses to comply by operating a modified 
traveling screen, the Director will review the impingement technology 
performance optimization study, including the identification of 
species, duration and structure of the study, and any monitoring 
requirements.
4. De Minimus Provision
    The Director may, based on a review of data submitted under Sec.  
122.21(r), conclude that the documented rate of impingement at the 
cooling water intake structures is so low that no additional controls 
are warranted. As described in section I.A.H, low flow facilities may 
in particular be candidates for such consideration, although the 
authority of the Director is not limited to low flow facilities. The 
Director may want to consider facility withdrawal rates in relation to 
the mean annual flow of the river and possible co-location with other 
CWISs when making a de minimis determination. Notice of this 
determination would be included in the draft permit made available for 
public comment, and the Director's response to any comment on this 
determination must be included in the record for the final permit. EPA 
considers low rates of impingement to be measured as an organism or 
age-one equivalent count, and not as the effect of impingement on

[[Page 48372]]

fish populations. The Director may require data collection to 
demonstrate support for a de minimis level of impingement. In addition, 
EPA does not expect that a de minimis exemption would apply to 
facilities with no technology present other than trash racks, a 
technology that nearly all facilities employ. In making a determination 
that no additional controls are warranted, the Director may wish to 
consider factors such as whether the waters are subject to a TMDL for 
an aquatic life use, the waters are not attaining a designated use, and 
there would be more than minor detrimental effects on threatened or 
endangered species or critical habitat. The Director will still 
establish proper operation and maintenance conditions in the permit 
whenever making a de minimis finding that no additional controls are 
warranted. EPA notes that the de minimis provision for impingement does 
not necessarily mean a facility has a de minimis level of entrainment. 
The life stages affected by impingement are different than those 
affected by entrainment, and low counts of impingeable life stages do 
not always mean the counts of entrained organism are similarly low. 
Since the entrainment requirements are already determined by the 
Director for each site, EPA concluded that specific regulatory language 
for de minimis entrainment was unnecessary.
5. Low Capacity Utilization Units
    The Director may consider less stringent controls for intakes 
dedicated to low capacity utilization rate (CUR) power generating 
units. If an existing facility has a cooling water intake structure 
used exclusively for one or more existing electric generating units, 
each with an annual average capacity utilization rating of less than 8 
percent averaged over a 24-month block contiguous period, the owner or 
operator may request that the Director establish BTA standards for 
impingement mortality for that cooling water intake structure which are 
less stringent than Sec.  125.94(c)(1) to (c)(7). When determining the 
permit's IM requirements associated with the low CUR unit, the Director 
may consider, after conferring with any appropriate state co-regulators 
(such as public utility commissioners) and with regional transmission 
organizations, independent system operators or other planning 
authorities, the significance of the unit's operation to the overall 
reliability of electric power in the area.
    In addition, in determining the IM requirements associated with a 
low CUR unit, the Director should consider any seasonal factors for 
affected species that might justify seasonal limits on the unit's 
operation, for example any increased impacts resulting from the unit's 
operation during spawning runs. Also, when considering the presence and 
potential effects to threatened and endangered species, the Director 
should consider whether the life stages present at the location are at 
risk of being impinged or entrained at the low CUR unit's cooling water 
intake.
    In the event that the Director determines less stringent controls 
for intakes dedicated to low capacity utilization power generating 
units are appropriate, they should consider, at a minimum, the 
following in establishing controls:
    Strategies for minimizing water withdrawal during stand by periods 
of operation, startup/shutdown, and on-line periods of operation;
    The effectiveness of installing variable speed pump drives to 
reduce water withdrawals during all periods of operation, particularly 
during stand-by periods of operation; and
    The effectiveness of installing alternative equipment (e.g. 
behavioral deterrents) to minimize impingement mortality.
    The owner or operator would demonstrate whether they have an intake 
only serving one or more low capacity utilization power generating 
units in permit application requirements at Sec.  122.21(r)(3) and (8). 
Under Sec.  122.21(r)(6), the owner or operator would indicate a 
request that the Director establish alternative BTA standards that are 
less stringent than Sec.  125.94(c)(1) through (7). EPA recognizes the 
contribution of peaking units in serving peak electricity demands, and 
maintaining a reliable electricity grid. However, if peaking units are 
in standby mode for long periods relative to periods when they are 
generating electricity, the result is a capacity utilization of the 
cooling water intake that is greater than the capacity utilization of 
the generator. Significant periods of standby could contribute to a 
greater impact on aquatic life. While the 8 percent capacity 
utilization is an industry standard that distinguishes those units 
making the greatest contribution to a smoothly functioning electricity 
grid, a Director may still determine that the impacts to aquatic life 
are significant enough to deny a request that BTA at that intake should 
be less stringent than Sec.  125.94(c)(1) to (c)(7). EPA anticipates 
the Director will have the information necessary to determine BTA in 
such circumstances based on the permit application requirements, 
including but not limited to an identification of the number of days 
the cooling water system is in operation, flow on those days, and 
seasonal changes in the operation of the system under Sec.  
122.21(r)(5) and the biological information under Sec.  122.21(r)(4).
    As discussed previously, the Director will determine the BTA for 
entrainment for low CUR units on a site-specific basis. EPA expects 
that many of the same factors discussed above--including the 
significance of the unit's operation to the overall reliability of 
electric power in the area, the diversity of fuels available for the 
unit, and the impact of the costs of any potential entrainment 
requirements on the unit's cooling water intake structure on overall 
reliability of electric power in the area--will be relevant in making 
site-specific BTA entrainment determinations for low CUR units. The 
Director may consider the factors at Sec.  125.98(f)(3) when making 
these determinations for low CUR units, which includes grid 
reliability, among other factors.
6. Monitoring
    The Director will review any impingement mortality and entrainment 
monitoring reports submitted by the facility to ensure ongoing 
compliance. EPA is shifting toward an electronic discharge monitoring 
report system, and many of the impingement mortality and entrainment 
standards can be incorporated into the discharge monitoring report 
itself, rather than requiring a separate report. Except for facilities 
choosing alternatives Sec.  125.94(c)(7), detailed biological data 
collection would only be included as part of the facility's permit 
application submission and not for compliance purposes. The Director 
has the discretion to request additional information, including 
inspection of the facility, at Sec.  125.95(d) (i.e., permit 
application and supporting information requirements) and Sec.  
125.96(c) (i.e., additional monitoring requirements).
7. Nuclear Units
    The rule includes a provision that permits the owner of a nuclear 
facility to demonstrate to the Director that compliance with the rule 
would result in a conflict with safety requirements for their facility. 
See Sec.  125.94(f). EPA anticipates that this provision would be 
implemented as follows. Initially, the Director will draft a permit and 
will share the draft permit with the owner or operator of the nuclear 
facility. Upon reviewing the draft permit, the owner or operator will 
determine whether in their view a conflict with a safety requirement 
established by the Nuclear

[[Page 48373]]

Regulatory Commission, the Department of Energy or the Naval Nuclear 
Propulsion Program exists. If a conflict exists, the owner or operator 
should communicate the conflict to the NRC, Department or Program and 
the Director. In all cases, whether a conflict exists or not, the 
Director should notify the NRC, Department or Program and the owner or 
operator of the facility that he or she wishes to informally confer 
regarding the permit. Such interactions should be scheduled, conducted 
and documented. Where a conflict is identified, the Director would make 
a site-specific BTA determination.

F. What are example permit conditions and compliance monitoring for 
impingement mortality?

    As previously discussed, the owner or operator must comply with BTA 
standards as soon as practicable on a schedule of requirements 
established by the Director. EPA did not specify dates by which the BTA 
standards for impingement mortality must be met because the specific 
method of compliance with the BTA standards for impingement mortality 
is tied to the determination of BTA requirements for entrainment. 
Further discussion of this alignment of compliance deadlines is 
provided in Section A. Today's final rule provides for several methods 
of compliance with the BTA for impingement mortality. This section 
discusses each of the methods for compliance, how they follow from the 
permit application requirements at Sec.  122.21(r), and any minimum 
monitoring and reporting requirements associated with each method.
1. Closed-Cycle Recirculating System
    In this method of compliance, an existing facility must operate a 
closed-cycle recirculating system as defined at Sec.  125.92(c). The 
facility would indicate the choice to use this compliance method under 
Sec.  122.21(r)(6) in its permit application. As specified in Sec.  
122.21(r)(1), the facility would need to submit Sec.  122.21(r)(9) 
through (13), if it exceeds 125 mgd AIF and these requirements are not 
waived by the Director. The information still required at Sec.  
122.21(r)(2) to (8) is considerably less burdensome. The monitoring 
must be representative of normal operating conditions, and must include 
measuring cooling water withdrawals, make-up water, and blowdown flows. 
The facility must monitor actual intake flows at a minimum frequency of 
daily, or may monitor the representative cycles of concentration at a 
minimum frequency of daily. These monitoring data would be used by the 
Director to determine that make-up and blowdown flows have been 
minimized. The owner or operator would submit these data with their 
existing DMR or equivalent state report. Facilities complying using 
closed-cycle cooling are not subject to biological compliance 
monitoring unless otherwise specified by the Director (see Sec.  
125.96(c)).
2. 0.5 Feet per Second Through-Screen Design Velocity
    In this method of compliance, the facility must operate a cooling 
water intake structure that has a maximum design through-screen intake 
velocity of 0.5 feet per second. The facility must submit information 
under Sec.  122.21(r) to the Director that demonstrates that the 
maximum design intake velocity as water passes through the structural 
components of a screen measured perpendicular to the screen mesh could 
not exceed 0.5 feet per second. The maximum velocity must be achieved 
under all conditions, including during minimum ambient source water 
surface elevations (based on BPJ using hydrological data) and during 
periods of maximum head loss across the screens or other devices during 
normal operation of the intake structure.
    EPA notes a cylindrical wedgewire screen, in general, is designed 
for 0.5 feet per second. In Phase II, EPA pre-approved wedgewire 
screens under specific operational conditions. Today's final rule 
simplifies the demonstration requirements for a facility employing 
cylindrical wedgewire screens to that of demonstrating the maximum 
design through-screen velocity is 0.5 feet per second. As another 
example, a facility may have pumping and piping constrictions that 
physically limit the design intake velocity to less than 0.5 feet per 
second. The Director may choose to establish permit conditions that 
address the physical limitations of the intake, such as requiring a 
pump be removed from service, or that only one of two (redundant) pumps 
may operate at any time. Facilities choosing to comply under this 
section do not have monitoring requirements under this section.
3. 0.5 Feet per Second Through-Screen Actual Velocity
    This method of compliance is similar to the design velocity 
alternative discussed above, except that the intake's maximum design 
velocity can exceed 0.5 fps, as long as the intake is operated such 
that the actual, measured velocity does not. As an example, a facility 
may have originally been constructed with a maximum design intake of 
1.0 feet per second, but now, because it has retired generating 
capacity but not pumps, may only withdraw cooling water such that the 
actual intake velocity at the intake never exceeds 0.5 feet per second. 
This would constitute compliance with the impingement mortality 
standard. The maximum velocity must be achieved under all conditions, 
including during minimum ambient source water surface elevations (based 
on BPJ using hydrological data) and during periods of maximum head loss 
across the screens or other devices during normal operation of the 
intake structure.
    Monitoring the velocity at the screen face or immediately adjacent 
to the screen face must be conducted at a minimum frequency of daily. 
Monitoring of the approach velocity does not meet this requirement. 
However, in lieu of velocity monitoring at the screen face, the owner 
or operator may calculate the through-screen velocity using intake 
water flow, water depth, and the screen open area. EPA is requiring 
this point of measurement to ensure that fish are actually able to swim 
away (not into an embayment from which they cannot escape) from the 
location within the intake structure at which they are most susceptible 
to being impinged.
    Under today's final rule, the Director may authorize the facility 
to exceed the low velocity compliance alternative for brief periods for 
the purpose of maintaining the cooling water intake system, such as 
backwashing the screen face. In this compliance option, facilities are 
not subject to biological compliance monitoring unless otherwise 
specified by the Director (see Sec.  125.96(c)).
4. Existing Offshore Velocity Cap
    In this method of compliance, facilities will submit information 
under Sec.  122.21(r) that they operate an offshore velocity cap that 
meets the definition at Sec.  125.92(v) and that was installed prior to 
the effective date of this rule. The definition of offshore velocity 
cap includes the requirement that the velocity cap be located a minimum 
of 800 feet offshore. The velocity cap must include devices to exclude 
marine animals, such as bar screens. The velocity cap must be designed 
to change the direction of water withdraw from vertical to horizontal, 
thereby creating velocity patterns that can be sensed and trigger an 
avoidance response by fish and other aquatic organisms. Intake flow 
must be monitored at a minimum frequency of daily. This information 
will confirm the intended velocity patterns are created. In this 
compliance option, facilities are not subject to biological compliance 
monitoring

[[Page 48374]]

unless otherwise specified by the Director (see Sec.  125.96(c)).
    EPA notes that facilities choosing to construct a velocity cap at 
an offshore location after the effective date of this rule would use 
compliance options Sec.  125.94(c)(6) (Systems of Technologies as the 
Site-specific BTA for Impingement Mortality) or Sec.  125.94(c)(7) 
(Impingement Mortality Performance Standard).
5. Modified Traveling Screens
    In this method of compliance, a facility must first operate a 
modified traveling screen that meets the definition at Sec.  125.92(s). 
The definition identifies and requires those features of a traveling 
water screen that provide for an appropriate level of fish protection: 
collection buckets (or equivalent) to minimize turbulence to aquatic 
life; guard rails or barriers to prevent loss of fish from the 
collection system; screen panel materials such as smooth woven mesh, 
drilled mesh, molded mesh, or similar materials to protect fish from 
descaling; continuous or near-continuous rotation of screens and 
operation of collection equipment to recover impinged fish as soon as 
practical; low pressure wash or vacuum to remove collected organisms 
from the screens; fish handling and return with sufficient water flow 
to return fish directly to the source water in a manner that does not 
promote predation or the re-impingement of the fish, or a large 
vertical drop. EPA intends for this definition to generally include 
modified Ristroph screens (including Geiger screens, Beaudrey WIP 
screens, and Hydrolox screens), dual flow screens, and rotary screens.
    Modified traveling screens with a fish return and handling system 
is the technology basis for the impingement mortality standard, 
therefore the EPA fully expects biological monitoring of a properly 
designed, built, and operated modified traveling screen would 
consistently be able to meet the impingement mortality performance 
standard. If EPA were to simply set a performance standard based on the 
numeric performance levels achievable by modified traveling screens, a 
facility would have to conduct continual biological monitoring to 
demonstrate compliance. A far more efficient way to demonstrate 
compliance would be for facilities to optimize the operation of their 
technologies for their site-specific conditions and identify the 
conditions that distinguish proper operation at their facility. The 
optimized operation of the technology would be largely demonstrated 
through the biological data collection and studies required in the 
permit application at Sec.  122.21(r)(4) and (6)(i), including an 
impingement technology performance optimization study. Biological data 
collection should follow the sampling protocols described in section7 
below.
    The optimized operation documented by the impingement technology 
performance optimization study will result in more than just meeting 
the impingement mortality standard, and results in a facility achieving 
the best possible performance.\93\ The biological data collection and 
analysis in the impingement technology performance optimization study 
will identify the operating conditions that result in optimized 
performance, such as fish sluicing spray pressures, rotation speed and 
frequency of the screens, angle of the fish sluicing sprays, fish 
return trough water flows, and fish return trough location.\94\ The 
Director will then establish these operating conditions as permit 
conditions, along with an equipment inspection condition to assure 
proper functioning of the technology. As long as the permit conditions 
are met, the EPA does not expect any biological compliance monitoring 
will be required, unless otherwise specified by the Director, for 
example, for the protection of shellfish or fragile species (see Sec.  
125.96(c)). Note that EPA does not intend for facilities to install 
closed-cycle cooling solely for the purpose of meeting the IM 
requirements.
---------------------------------------------------------------------------

    \93\ As demonstrated by the numerous studies included in the 
record for today's final rule, many facilities are able to achieve 
less than 10 percent impingement mortality, a performance level 
comparable to the impingement mortality of closed-cycle cooling. 
Merely requiring facilities to achieve a numerical performance 
standard through modified traveling screens creates disincentives to 
perform better.
    \94\ EPA also requires the entrapment of organisms, as well as 
organisms that are carried over the screens, to be counted as 
impingement mortality.
---------------------------------------------------------------------------

6. Systems of Technologies as the BTA for Impingement Mortality
    In this method of compliance, a facility must demonstrate a system 
of technologies is employed that will meet the impingement mortality 
standard. This option will allow a facility the flexibility to choose 
the systems approach of technologies, management practices, and 
operational measures it will use to demonstrate compliance, including 
but not limited to flow reductions, intake location, behavioral 
deterrents, unit closures, seasonal operations, and newly installed 
velocity caps. Like the compliance option for modified traveling 
screens, the optimized operation of the system of technologies will be 
largely demonstrated through the biological data collection and studies 
required in the permit application at Sec.  122.21(r)(4) and (6)(ii). 
However, the analysis and studies for combining the performance of 
varied technologies is more involved.
    If the system of technologies includes credit for reductions in the 
rate of impingement by the system, the impingement technology 
performance optimization study required at Sec.  122.21(r)(6)(ii) will 
provide an estimate of those reductions including relevant supporting 
documentation. The estimated reductions in rate of impingement must be 
based on a comparison of the facility's system to a once-through 
cooling system with a traveling screen whose point of withdrawal from 
the surface water source is located at the shoreline of the source 
waterbody. EPA expects Phase II facilities will use information already 
collected as part of their calculation baseline (69 FR 41594, July 9, 
2004). In addition, the study must include two years of biological data 
collection demonstrating the rate of impingement resulting from the 
system. For this demonstration, data collection must be conducted no 
less frequently than monthly. The Director may establish more frequent 
data collection or a longer period of study.
    If the system of technologies includes credit for reductions in 
impingement mortality already obtained at the facility, the study must 
include two years of monthly biological data collection demonstrating 
the level of impingement mortality the optimized system achieves. 
Biological data collection must be representative of the impingement 
and the impingement mortality at the intakes and should follow the 
sampling protocols described in section 7 below. The impingement 
technology performance optimization study must provide a description of 
any sampling approach used in measuring impingement mortality, 
including a taxonomic identification to the lowest taxon possible of 
all organisms to be sampled; the method in which naturally moribund 
organisms are identified and taken into account; and the method in 
which mortality due to holding times is taken into account. In 
addition, the study must describe how the location of the cooling water 
intake structure in the waterbody and the water column are accounted 
for in the sampling locations. EPA requires the entrapment of 
organisms, as well as organisms that are carried over the screen, to be 
counted as impingement mortality.
    If the system of technologies specifically includes flow reduction 
to reduce impingement, the impingement

[[Page 48375]]

technology performance optimization study must include two years of 
intake flows, measured daily, as part of the demonstration, and must 
describe the extent to which flow reductions are seasonal or 
intermittent. The rule clarifies that credit for flow reductions must 
result from actual reductions in flow, therefore the AIF will be used 
as a point of comparison, and not the DIF. The study must document how 
the flow reduction results in reduced impingement, and how the 
reduction in impingement has reduced the site-specific impingement 
mortality. Today's final rule at Sec.  125.98(f)(3)(iii) further 
clarifies that credit in reduced impingement or impingement mortality 
resulting from unit closures will be valid for a period of 10 
years.\95\ This is also reflected in permit application requirements 
for an owner or operator planning to retire the facility in the current 
permit term at 40 CFR 122.21(r)(1)(ii)(F), or in the following permit 
cycle at 40 CFR 122.21(r)(1)(ii)(G).
---------------------------------------------------------------------------

    \95\ Because a permit may be administratively continued or may 
not be issued every 5 years, EPA has specified 10 years rather than 
two permit cycles to avoid facilities from taking credit for a unit 
closure that potentially occurred decades prior.
---------------------------------------------------------------------------

    The Director must determine the system of technologies, management 
practices, and operational measures that is the best technology 
available for impingement reduction at the site. As the basis for the 
Director's determination, the facility must demonstrate that the system 
of technology has been optimized to minimize impingement mortality of 
all non-fragile species. In addition to the impingement technology 
performance optimization study, the Director may also use the 
biological source water characterization and/or the entrainment 
characterization studies in the permit application. EPA expects the 
Director's decision will be informed by comparing the impingement 
mortality data under Sec.  122.21(r)(6)(ii) to the impingement 
mortality performance standard that would otherwise apply under Sec.  
125.94(c)(7).
    In addition, the impingement technology performance optimization 
study requires documentation of the percent impingement mortality 
reflecting optimized operation of the total system of technologies, 
operational measures, and best management practices and all supporting 
calculations. The following example illustrates how these provisions 
will adjust for flow, location, and other technologies in demonstrating 
the IM performance for a system of technologies.
    The example uses values that simplify the calculations to better 
illustrate the adjustments, and are not intended to reflect values that 
EPA expects at any facility. To simplify the example further, the 
facility has only fish and does not have shellfish in its source 
waters. EPA has chosen a hypothetical facility that examined each 
change in a separate study.\96\ The hypothetical facility intake is 
located at a submerged offshore location, has an acoustical deterrent, 
and installed variable speed drives. For the purposes of this example, 
the facility has completed sampling at the forebay for two years as 
part of Sec.  122.21(r)(4) and (6). During the most recent 12 months, 
the counts of non-fragile species totals 40,000 impinged fish. During 
the 24-hour holding period following each monthly sample collection, 
the total fish that died were counted, for a total of 12,000 dead fish 
for the preceding 12 months. The facility then calculated the average 
IM for the preceding 12 months at 30 percent as follows:
---------------------------------------------------------------------------

    \96\ EPA recognizes that facilities often examine the combined 
effect of two or more technologies (e.g., deterrents and offshore 
location) within a single study. In applying these provisions, the 
facility could use the outcomes associated with the combined 
performance of multiple technologies, but this would result in 
permit conditions that would also be combined.
[GRAPHIC] [TIFF OMITTED] TR15AU14.000

    To adjust the observed percent IM for a submerged offshore location 
and acoustical deterrent, the facility first extracts information from 
its previously conducted studies related to performance and calculation 
baseline. Alternatively, the facility could conduct a performance study 
during the same two year period in which it conducts its biological 
data collection as part of the permit application requirements at Sec.  
122.21(r). For the submerged offshore location adjustment, fish density 
and flow data show the offshore location reduces the rate of 
impingement for all species by 4,000 fish annually. For the acoustical 
deterrent, performance data show a reduction in the rate of impingement 
of fish by 11,000 organisms annually. For purposes of this example, 
assume none of the 15,000 fish are assumed to contribute to further 
mortality; in other words, all of the fish that avoided impingement in 
the first place survive. Therefore, the facility has reduced 
impingement by 15,000 fish (i.e., sum of both submerged offshore 
location and acoustical deterrent). The facility then takes credit for 
this reduction by adding the forgone impingement to the denominator of 
the percent IM calculations as follows:
[GRAPHIC] [TIFF OMITTED] TR15AU14.001


[[Page 48376]]


    In summary, calculating percent IM at the forebay yields a 30 
percent IM, and then applying the performance for existing technologies 
shows the effective percent IM is actually 22 percent. Next, to adjust 
for the variable speed drives, the facility has determined from flow 
monitoring that the volume of cooling water flow has been reduced by 11 
percent. In this example, assume the flow reduction does not vary 
considerably each month. The volume of reduced flow multiplied by the 
density of fish near the intake is calculated each month for 12 months, 
and the facility projects that the reduced flow excludes an additional 
8,000 fish from impingement each year. Then the facility would apply 
the reduction in annual counts of impinged fish to the denominator, as 
follows:
[GRAPHIC] [TIFF OMITTED] TR15AU14.002

    Thus, the facility's site-specific system of technologies including 
optimized operation of acoustical deterrents has a total system 
performance of 19 percent annual impingement mortality. This example is 
intended to illustrate how facilities would obtain credit for existing 
technologies in a systems approach. While this example includes 
acoustical deterrents, it does not imply that acoustical deterrents are 
an appropriate technology for all facilities. EPA expects a facility 
will use the required two years' worth of monthly biological data 
collection and studies to conduct a similar analysis for each month. 
The minimum required data collection and studies will result in annual 
average performance calculations for 12 consecutive months. The 
facility will use this information as part of its demonstration to the 
Director.
    If the Director determines the system of technologies, management 
practices, and operational measures is the best technology available 
for impingement reduction at the site, the Director will establish 
specific operating conditions as permit conditions, along with 
appropriate equipment inspection conditions to assure proper 
functioning of each technology. For example, a system with acoustical 
deterrents would likely have permit conditions related to frequency of 
tones, volume, location, and frequency of operation of the acoustical 
deterrents. The Director will also establish monitoring requirements 
for intake flow and velocity where such measures are an important part 
of the system of technologies, such as the case of variable speed 
drives. For example, a system that includes seasonal flow reductions 
would likely have permit conditions for flow monitoring. As long as the 
permit conditions are met, the EPA does not expect any biological 
compliance monitoring will be required, unless otherwise specified by 
the Director (see Sec.  125.96(c)).
7. Impingement Mortality Performance Standard
    In this method of compliance, facilities are required to monitor to 
demonstrate compliance with the impingement mortality performance 
standard at Sec.  125.94(c)(7) by demonstrating a 12-month average 
mortality of 24 percent or less. The facility is required to monitor at 
a minimum frequency of monthly, unless a greater frequency is specified 
by the Director. For each monitoring event, the facility would 
determine the number of non-fragile organisms that are collected or 
retained on sieve with a maximum spacing of 0.56 inches (i.e., that are 
impinged [I]), and the number that die after impingement (i.e., 
impingement mortality [IM]). The facility must establish a post-
impingement holding period of 18 to 96 hours otherwise specified by the 
Director. Under the definition at Sec.  125.92(b), all life stages of 
fish and shellfish excludes specified nuisance species from the totals 
for both impingement and impingement mortality. Also, as defined at 
Sec.  125.92(q), latent mortality means the delayed mortality of 
organisms that were initially alive upon being impinged or entrained 
but that do not survive the delayed effects of impingement and 
entrainment during an extended holding period. Delayed effects of 
impingement and entrainment may be due to stresses that include but are 
not limited to temperature change, physical stresses, and chemical 
stresses. The manner in which latent mortality is counted must be 
identified in the Entrainment Characterization Study at Sec.  
122.21(r)(9), and must also be counted in the Impingement mortality 
performance standard at Sec.  125.94(c)(7). Fish that are included in 
any carryover from a traveling screen or removed from a screen as part 
of debris removal must be counted as impingement mortality. Fish that 
are entrapped by the cooling water intake system must be counted as 
impingement mortality.
    The 12-month average of impingement mortality is calculated as the 
sum of total impingement mortality over 12 months divided by the sum of 
the total impingement over the same 12 months, as shown by the 
following equation:
[GRAPHIC] [TIFF OMITTED] TR15AU14.003

    Note that this equation would be applicable to calculating the 
annual average for the previous 12 months. Although facilities will be 
conducting biological monitoring monthly (or more frequently) and 
reporting that data in their discharge monitoring reports, facilities 
are not required to meet a monthly impingement mortality performance 
standard. Therefore, in this equation, IM is the sum of all impingement 
mortality over the course of the previous 12 months, and I is the sum 
of all impinged fish for the previous 12 months. If the facility's 
calculated annual average percentage impingement mortality is less than 
the 12-month average performance standard, it will be deemed to be in 
compliance with the 12-month average performance standard.
    In establishing the monitoring requirements, EPA expects any 
approved monitoring protocols will

[[Page 48377]]

consider the entire daily and (where appropriate) tidal cycles over 
which data collection should occur. Typically, facilities have 
collected impingement samples continuously for 6 or 8 hours and 
repeated this cycle to cover an entire 24-hour period. Stratifying 
collection in this manner allows an analysis of the diel variation 
exhibited by many aquatic organisms, which may be important. EPA also 
expects the approved monitoring protocols will ensure that sampling 
occurs during periods of representative intake flow and not during 
periods of non-peak flow or scheduled outages.
    The ideal point to measure impingement mortality is the location 
where organisms are returned to the waterbody. However, for ease of 
sampling and access, EPA envisions that most facilities will collect 
samples from the fish return system(s) at some point before the fish 
return discharge point. According to the studies in EPA's database, EPA 
envisions that facilities will either (1) divert some or all of the 
flow from the fish return into a fish collection and holding area, or 
(2) place a net or basket fitted with \3/8\-inch mesh spacing in the 
fish return and collect and transfer the retained organisms to a 
holding tank. While nearly all studies in the record report the use of 
\3/8\-inch mesh spacing, as discussed below, the final rule allows the 
use of other sieve and mesh spacings with a 0.56 inch maximum opening. 
A facility will handle the organisms in the collection device as little 
as possible and transfer them to a holding area with conditions as 
close as practicable to the source water. The facility will count the 
number of organisms in the holding area and subsequently hold the 
sample using proper technique \97\ to maintain the health of the 
collected organisms.\98\ At a period of 18 to 96 hours after the 
initial collection, the facility will count the number of dead 
organisms and determine the percentage of organisms that died in 
comparison to the total number of organisms measured initially. Any 
organisms not collected by the fish handling and return system, such as 
entrapped organisms, organisms in the carryover of a traveling screen, 
or organisms collected by a high-pressure wash and sent to debris bins, 
will be counted as 100 percent impingement mortality. The facility will 
keep records of this information and compare its result to the 
impingement mortality performance standard at Sec.  125.94(c)(7).
---------------------------------------------------------------------------

    \97\ EPA recognizes that at present, there are no standard 
methods for conducting impingement and entrainment studies and that 
there can be variability in designing a sampling plan between sites. 
However, some elements should be incorporated into any sampling 
plan, as outlined in DCN 10-6708.
    \98\ Facilities that divert the flow directly would similarly 
pass the flow through a net or debris basket fitted with \3/8\-inch 
mesh spacing or would count only organisms that would have been 
collected with such a basket or net.
---------------------------------------------------------------------------

    As explained in Section VI, the impingement mortality restrictions 
in the final rule are based on the operation of a modified traveling 
screen with a fish return. Because EPA wants to ensure that a 
facility's monitoring plan is consistent with the technical basis for 
today's requirements, EPA is requiring facilities to monitor 
impingement mortality using a sample that has been passed through a 
sieve or net with no more than 0.56 inches maximum opening, so that 
only organisms that do not pass through this mesh size are counted.\99\ 
In doing so, facilities would retain (and therefore count) only 
organisms that would have been impinged on a \3/8\'' mesh screen, which 
was the technological basis used for developing the impingement 
mortality performance standard.\100\ Facilities could similarly apply a 
``hypothetical net'' in that they could elect to count only organisms 
that would not have passed through a net with mesh openings less than 
0.56 inches. For example, a facility that uses a fine-mesh screen of 
0.5 mm or diverts the flow directly to a sampling bay will need to 
count only organisms that remain if the flow passed through a net, 
screen, or debris basket fitted with \3/8\-inch mesh spacing. EPA 
further expects the impingement mortality restrictions could be applied 
to other fish protection technologies and provides a compliance route 
for future technologies that are better performing.
---------------------------------------------------------------------------

    \99\ For a discussion of how EPA has changed its view of screen 
mesh size, see Section III of the proposed rule (76 FR 22188, April 
20, 2011). EPA recognizes that smaller organisms that previously 
would have passed through a screen and been entrained might be 
``converted'' by a fine mesh screen to an impinged organism; because 
organisms size would affect the rate of mortality, EPA has chosen 
not to rely on definitions of impingement and entrainment based on a 
physical process, but instead to define impingement mortality and 
entrainment mortality based on organisms sizes.
    \100\ EPA's analysis of impingement survival rates is based on 
data from facilities with \3/8\'' mesh screens; the performance 
standard may be applied differently at facilities with smaller mesh 
size. Therefore, these standards do not provide a disincentive to 
facilities from using finer-meshed screens (i.e., screens with a 
mesh opening smaller than \3/8\ inch) on their traveling screens. As 
long as the organisms that are large enough to have been impinged on 
a coarse mesh screen achieve the required survival rates, the 
facility will be considered to meet the impingement mortality 
requirements.
---------------------------------------------------------------------------

    In today's rule, EPA is including provisions for reduced biological 
monitoring. EPA determined that monthly monitoring at a minimum is 
appropriate for at least the first full permit term. In permit terms 
subsequent to the first permit issued under today's rule, the owner or 
operator may request the Director to reduce monitoring requirements 
under Sec.  125.95(c). EPA expects the Director would reduce monitoring 
requirements as appropriate, if the facility demonstrates that its 
operational and biological conditions have remained the same. Given 
that the source waterbody may change over time (including hosting 
different or increased numbers of individuals or species), the 
biological characterization required at Sec.  122.21(r)(4) including 
two years of data serves to alert interested parties as to the status 
of the waterbody and any changes in the biology of the waterbody. Under 
the compliance option (7) impingement mortality performance standard, 
EPA expects that as new technologies are successfully demonstrated, in 
subsequent permits facilities would request less frequent monitoring, 
or be able to incorporate such technologies in a permit application 
choosing a Sec.  125.94(c)(6), system of technologies, demonstration. 
Once the Director has determined the technology is fully demonstrated 
for that site, the facility would therefore reduce their biological 
data collection to the minimum required by the permit application at 
Sec.  122.21(r) and any monitoring the Director determines to be 
appropriate for verifying permit operating conditions.
8. Additional Measures
    Sections Sec.  125.94(c)(8) and (9) provide the Director discretion 
to require additional measures to protect shellfish and fragile 
species. An example of shellfish protection measures is a barrier net, 
including seasonal deployment of such nets. An example of additional 
protection measures for fragile species is an acoustical deterrent 
system.
9. Summary
    The following Exhibit VIII-4 summarizes the monitoring requirements 
for impingement mortality by compliance approach alternative. The 
Director has the discretion to require additional monitoring under 
Sec.  125.96(c) and (d). Since all permits must have requirements for 
visual inspections, these are not included in the exhibit.

[[Page 48378]]



   Exhibit VIII-4--Summary of Monitoring Requirements for Impingement
                                Mortality
------------------------------------------------------------------------
       Compliance approach          Type of monitoring      Frequency
------------------------------------------------------------------------
Closed-cycle recirculating system  Intake, makeup and   Daily.
                                    blowdown flows (or
                                    cycles of
                                    concentration).
Velocity (DIF)...................  None...............  None.
Velocity (AIF)...................  Velocity (measured   Daily.
                                    or calculated from
                                    flow).
Velocity cap.....................  Intake flow........  Daily.
Modified traveling screens.......  TBD \a\............  TBD \a\.
Systems of Technologies..........  TBD \b\............  TBD \b\.
Impingement mortality performance  Biological           Monthly.
 standard.                          monitoring.
------------------------------------------------------------------------
\a\ Monitoring requirements may vary, depending on the permit-specific
  operating conditions.
\b\ The monitoring requirements are based on the technologies employed.
  For example, seasonal flow reduction would require flow monitoring.

G. What monitoring is required for entrainment?

    Where the Director establishes entrainment controls, the Director 
is required to establish monitoring requirements. The final rule 
requires that the permit application studies at Sec.  122.21(r) be 
submitted for each permit renewal. For facilities that withdraw 125 mgd 
AIF, EPA expects that the Director will use these studies, including 
the Source Water Baseline Biological Characterization Data at Sec.  
122.21(r)(4) and the Entrainment Characterization Study at Sec.  
122.21(r)(9), as a basis for any monitoring requirements for 
entrainment. To facilitate the determination of entrainment 
requirements for facilities below 125 mgd AIF, a Director may require 
the owner or operator to submit some or all of the study requirements 
at Sec.  122.21(r)(9) through (13) or variations thereof. The Director 
may require additional monitoring necessary to demonstrate compliance 
with Sec.  125.94(d), additional measures to protect Federally-listed 
endangered and threatened species and designated critical habitat 
requirements under Sec.  125.94(g), interim standards under Sec.  
125.94(h), and any more stringent standards under Sec.  125.94(i).
    Under Sec.  125.96(d), existing facilities with new units are 
required to conduct compliance monitoring to demonstrate flow 
reductions consistent with the requirements of Sec.  125.94(e)(1), or 
equivalent impingement and entrainment reductions. The Director may 
establish flow monitoring or monitoring of cycles of concentration as 
discussed in Section F. Such measures will be used to document that the 
facility has minimized make-up and blowdown flows.
    For facilities complying under Sec.  125.94(e)(2), the frequency of 
monitoring will be determined by the Director and will vary depending 
on the facility's chosen method of compliance.
    To meet requirements under Sec.  125.94(e)(2), facilities must 
measure AIF to establish a site-specific baseline without any new 
technologies or employing additional operational measures. The facility 
must also measure the density of entrainable organisms (ED) 
at a proximity to the intake that is representative of the entrainable 
organisms present without the cooling water intake structure. Samples 
will be collected over a 24-hour period to monitor each species as 
required by the Director. Samples will be collected no less than 
biweekly during the primary period of reproduction, larval recruitment, 
and peak abundance identified during the Source Water Baseline 
Biological Characterization Data required under Sec.  122.21(r)(4). 
Samples will be representative of the cooling water intake when the 
structure is in operation. In addition, sufficient samples must be 
collected to allow for calculation of 12-month average entrainment 
levels. The sampling will measure the total count of entrainable 
organisms or density of organisms, unless the Director approves of a 
different metric for such measurements. If the abundance varies 
seasonally, the Director may require several measurements of 
entrainment through the year, from which a 12-month average can be 
calculated.
    For the purpose of today's rule, entrainable is defined as any 
organism that passes through a sieve with a maximum opening of 0.56 
inches. As discussed in Section VI, this would avoid any confusion as 
to which organisms are subject to which standards (i.e., requirements 
for IM or requirements for E). The regulation specifies that the sieve 
used for calculating impingement must be the same sieve used for 
calculating entrainment, so all organisms are accounted for. Facilities 
can also monitor the latent entrainment mortality in front of the 
intake structure. Entrainable organisms passing through the cooling 
water intake structure are to be counted as 100 percent entrainment 
mortality unless the facility demonstrates to the approval of the 
Director that the mortality for each species is less than 100 percent.
    In addition, facilities must monitor the AIF for each intake. The 
AIF must be measured at the same time as the samples of entrainable 
organisms are collected.
    The following equation illustrates how to calculate a baseline 
level of entrainment (EB):

EB = ED x AIF

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

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

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

EB = ED x AIF
6,400 organisms/100m3 x (100m3/26,417 gallons) x 
200,000,000 gallons per day
= 48 x 106 organisms per day

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

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

    The minimum required level of performance for demonstrating 
entrainment mortality at a comparable level (EC) to a closed-cycle 
cooling system is the level corresponding to 90

[[Page 48379]]

percent \101\ of the reduction that a facility with a closed-cycle 
cooling system could achieve:
---------------------------------------------------------------------------

    \101\ The 90 percent metric is required in Phase I, and adopted 
here because new units are subject to requirements similar to the 
Phase I requirements. Phase I, at 40 CFR 125.86 specifies, ``reduced 
both impingement mortality and entrainment of all life stages of 
fish and shellfish to 90 percent or greater of the reduction that 
would be achieved through Sec.  125.84(b)(1) and (2).''

EC = (EB) x (100 - (97.5 x .9)) / 100
= (48 x 106 organisms per day) x (100 - (97.5 x .9)) / 100
= 5.88 x 106 organisms per day.

    The Director may require additional monitoring necessary to 
demonstrate compliance with Sec.  125.94(d), endangered species 
requirements under Sec.  125.94(g), interim standards under Sec.  
125.94(h), and any more stringent standards under Sec.  125.94(i).
    In addition, all facilities will either conduct visual inspections 
or employ remote monitoring devices when the cooling water intake 
structure is in operation. The facility will conduct such inspections 
at least weekly to ensure that any technologies installed to comply 
with Sec.  125.94 are maintained and operated to ensure that they will 
continue to function as designed. EPA is aware that for some 
facilities, this requirement could pose a feasibility challenge (for 
example due to ice cover in the winter season, inability of divers to 
see through more than a few inches of water, or certain intakes in deep 
water). The rule, therefore, authorizes the Director to establish 
alternative procedures. See Sec.  125.96(e).

H. What reports am I required to submit?

1. Status Reports
    If the Director establishes a compliance schedule, the Director 
will also establish any status reporting requirements. These reports 
may include updates on biological monitoring, technology testing 
results, construction schedules, or other appropriate topics and serve 
as milestones for the facility and the Director to evaluate the 
progress of the facility in meeting BTA. See Sec. Sec.  125.94(b) and 
(d) and 125.97(b).
2. Monitoring Reports
    The required reports for monitoring activities are similar to 
requirements that are already in NPDES permits for effluent discharges. 
EPA expects such reports to be included with the Discharge Monitoring 
Reports (DMRs) or equivalent state reports. Facilities would report any 
monitoring, demonstration, and other information required by the permit 
sufficient to determine compliance with the permit requirements 
established under Sec.  125.94, as well as any other monitoring 
requirements specified in the permit. See 40 CFR 125.97(a).
    Entrainment requirements will be determined on a site-specific 
basis by the Director. For facilities that are required to install 
entrainment controls, EPA expects that these facilities would generally 
conduct ongoing flow (or other) monitoring as verification that 
entrainment has been reduced. See Sec.  125.96(b) and (c). However, the 
Director may require facilities to report entrainment monitoring and 
analysis, including:
     The compliance measurement location.
     A description of the flow monitoring procedure.
     Documentation of flow reductions.
     Any other monitoring requirements specified in the permit.
    The report must include any monitoring and analysis required as 
part of additional measures for threatened and endangered species, 
shellfish, or fragile species as established by the Director. Further, 
your report will include documentation of cooling water that is process 
water, gray water, waste water, reclaimed water, or other water reused 
as cooling water in lieu of water obtained by an intake. The Director 
will evaluate these reports for compliance with permit requirements as 
appropriate.
3. Annual Certifications
    Today's rule requires a facility to submit an annual certification 
statement signed by the responsible corporate officer. See Sec.  
125.97(c). In most cases, the statement would indicate the information 
from the previous statement is still pertinent. If modifications were 
made to the facility that impacts cooling water withdrawals or 
operation of the cooling water intake structures, the statement would 
indicate such, and the facility would submit revisions to the 
information required in their permit application at Sec.  122.21(r).
4. Other Reporting
    In addition, EPA notes that supplemental reporting may be required 
under the ESA as part of any incidental take statement or permit (50 
CFR 402.14(i)) or a section 10 permit (50 CFR 222.307) that is issued 
by the United States Fish and Wildlife Service or the National Marine 
Fisheries Service to ensure compliance with the Endangered Species Act.

I. What records will I be required to keep?

    As described at Sec.  125.97(d), facilities are required to keep 
all permit applications, status, monitoring, and annual reports and 
related supporting information and materials at least until the 
subsequent permit is issued. Facilities might wish to keep records for 
a longer period to maintain a complete regulatory history of the 
facility. For example, existing source water biological studies 
submitted with a facility's permit application could contain data that 
has been collected in the past 10 or more years. When the Director has 
approved a request for reduced information collection in the permit 
application, the rule requires that records of submissions that are 
part of a previous permit application be kept until the subsequent 
permit is issued. See Sec.  125.95(e). Records supporting the BTA 
determination for entrainment must be kept until such time as the 
Director revises the determination. The Director may establish 
additional record-keeping requirements in the permit, such as 
additional records documenting compliance monitoring, data collection, 
or more frequent reports.
    Facilities must also keep records of all data used to complete the 
permit application and show compliance with the requirements of Sec.  
125.94, any supplemental information developed under Sec.  125.95, and 
any compliance monitoring data submitted under Sec.  125.96. The 
Director may require that these records be kept for a longer period.

J. What are the respective Federal, State, and Tribal roles?

    Today's final rule affects authorized State and Tribal NPDES permit 
programs. Under 40 CFR 123.62(e), any existing approved section 402 
permitting program must be revised to be consistent with new program 
requirements within one year from the date of this promulgation, unless 
the NPDES-authorized State or Tribe must amend or enact a statute to 
make the required revisions. If a State or Tribe must amend or enact a 
statute to conform to today's final rule, the revision must be made 
within two years of this promulgation. States and Tribes seeking new 
EPA authorization to implement the NPDES program must comply with the 
requirements when authorization is approved. This final regulation does 
not alter State authority under section 510 of the CWA.
    In addition to updating their programs to be consistent with 
today's final rule,

[[Page 48380]]

States and Tribes authorized to implement the NPDES program are 
required under NPDES State program requirements to implement the 
cooling water intake structure requirements of subpart J following 
promulgation of the final regulations. The permit requirements in this 
final rule must be implemented upon the first issuance or reissuance of 
permits following promulgation. Duties of an authorized State or Tribe 
under this regulation are described throughout this section and include 
reviewing permit application materials, determining appropriate 
requirements, reviewing monitoring and reporting data, and assessing 
whether a facility is complying with the final rule's requirements.
    EPA recognizes that some States have invested considerable effort 
in developing and implementing section 316(b) permits. This final 
regulation at Sec.  125.98(b) and (g) allows the Director flexibility 
where there are ongoing permit proceedings or where a BTA determination 
has already been made based on substantially the same information 
required at Sec.  122.21(r).
    EPA will implement these requirements where States or Tribes are 
not authorized to implement the NPDES program.

K. Protection of Endangered and Threatened Species and Designated 
Critical Habitat

1. Existing Requirements Under Section 9 of the Endangered Species Act
    The ESA imposes duties not just on Federal agencies but also on 
other entities. Section 9 of the ESA specifically provides that it is 
unlawful for any person to ``take'' any endangered species of fish or 
wildlife except under defined circumstances. The Services (National 
Marine Fisheries Service or U.S. Fish and Wildlife Service) may provide 
an exemption to the prohibition on take in one of two ways. Take may be 
permitted under section 10 of the ESA (16 U.S.C. 1539) or the Services 
may provide an exemption for take that is incidental to otherwise legal 
activity through a statement that is included with the Services' 
biological opinion developed during Federal agency consultation. (16 
U.S.C. 1536(o)) The incidental take statement specifies the terms and 
conditions necessary to implement reasonable and prudent measures which 
minimize incidental take.
    Nothing in today's rule changes the existing, independent 
obligations of the facilities subject to this rule under section 9 of 
the ESA. Unless exempted by an incidental take statement or section 10 
permit, facilities have been prohibited from taking (for example, 
harming or killing) endangered species of fish or wildlife. In order to 
obtain a section 10 permit, the facility would be required to develop a 
Habitat Conservation Plan (HCP), which is a mandatory component of an 
incidental take permit application. The HCP must specify the 
anticipated effects of the proposed taking, how those impacts will be 
minimized or mitigated, the alternative actions to the taking that the 
applicant considered, the reasons for not utilizing those alternatives, 
and other necessary or appropriate measures that the Secretary may 
require.
2. EPA's Consultation Under Section 7 of the ESA
    Under section 7 of the Endangered Species Act, each Federal agency 
must insure that any action authorized, funded, or carried out by the 
agency ``is not likely to jeopardize the continued existence of any 
endangered species or threatened species or result in the destruction 
or adverse modification of habitat of such species which is determined 
by the Secretary, after consultation as appropriate with affected 
States, to be critical. . . .'' 16 U.S.C. 1535(a)(2). In the case of 
any Federal agency action subject to the ESA that may affect listed 
species or critical habitat, the Federal agency must consult with the 
concerned offices with responsibilities under the ESA, specifically 
NMFS and/or FWS. 50 CFR 402.14(a).
    In July 2012, EPA began informal consultation with the NMFS about 
the proposed section 316(b) regulations. In October 2012, EPA began 
informal consultation with the FWS. EPA prepared a draft biological 
evaluation of the effects of this rule on threatened and endangered 
species and in it concluded that the rule was not likely to adversely 
affect listed species or designated critical habitat. EPA was unable to 
obtain the Services' concurrence on EPA's ``not likely to adversely 
affect'' finding. In June 2013, EPA requested formal consultation with 
the Services under the Endangered Species Act and with that request 
submitted a final biological evaluation to the Services. EPA completed 
consultations with the Services and has included the Services' 
biological opinion and associated documents in the record for this 
rulemaking.
    Among the organisms potentially subject to impingement and 
entrainment at cooling water intake structures are those that are 
listed as threatened and endangered. In addition to impinging or 
entraining threatened and endangered species, operation of CWISs may 
also adversely affect their critical habitat. Today's rule includes a 
number of provisions specifically designed to address incidental take 
of all federally-listed threatened and endangered species and to insure 
that the rule is not likely to jeopardize the continued existence of 
listed species or result in the destruction or adverse modification of 
critical habitat. These provisions are described below.
    The regulatory model adopted by EPA in the Phase I rule and later 
in the subsequently-withdrawn Phase II rule for large existing power 
producing facilities provided a structure to address and minimize 
adverse impacts to threatened and endangered species. EPA's approach 
required that facilities subject to the 316(b) rules, at the permit 
application stage of the permitting process must, among other things, 
identify threatened and endangered species that might be subject to 
impingement and entrainment in order to ensure that the permitting 
authority would have the requisite information on which to make a 
decision about the need for controls to protect threatened and 
endangered species. See 40 CFR 122.21(r)(4).
    The Phase I and Phase II regulations specifically authorized the 
permit writer (referred to as the ``Director'' in EPA's permitting 
regulations) to adopt measures designed to protect threatened and 
endangered species. Thus, for example, EPA's Phase I regulations for 
cooling water intake structures at new facilities require that, under 
one of the compliance options, an owner or operator must select and 
implement impingement and entrainment minimization measures ``if there 
are threatened or endangered or otherwise protected Federal, State or 
Tribal species.'' Moreover, the permit writer may require additional 
impingement and entrainment reduction measures if the permit writer 
determines that the facility after meeting the required performance 
standard would ``still contribute unacceptable stress to the protected 
species, critical habitat of those species or species of concern.'' 40 
CFR 125.84(b)(4) & (5).
    The Phase II regulation continued the general approach followed in 
the Phase I regulation for protection of threatened and endangered 
species. Permit applicants needed to submit the same information on 
threatened and endangered species required in the Phase I rule. In 
addition, building on the earlier information requirements, the 
regulation also would have required facilities selecting and 
implementing certain of the alternative BTA

[[Page 48381]]

compliance measures to submit a Comprehensive Demonstration Study that, 
among other things, characterized impingement and entrainment at the 
facility. Further, the rule would have required a facility to submit an 
Impingement Mortality and/or Entrainment Characterization Study that 
included taxonomic identification, characterization and documentation 
of current impingement mortality and entrainment of all life stages of 
fish, shellfish and any species protected under Federal, State or 
Tribal law (including threatened or endangered species). 69 FR 41687-
88, July 9, 2004. In addition, the Phase I and II rules included a 
requirement for the facility to include in their permit application 
documentation of any public participation or consultation with Federal 
or State agencies on impacts of their cooling water intake structure on 
threatened and endangered species. The regulation then would have 
required the permit writer to determine appropriate permit requirements 
and conditions. EPA noted that its existing NPDES permitting 
regulations reference a number of Federal laws that might apply to 
Federally-issued NPDES permits, including the Endangered Species Act. 
69 FR 41643-44, July 9, 2004.
    Threatened and endangered species were important considerations in 
the proposal to today's rule and were of particular concern to the EPA. 
The preamble to the proposal reflects at a number of points that, in 
looking at the benefits of different regulatory options, EPA attempted 
to assess the benefits to threatened and endangered species. See 76 FR 
22174, 22197, 22207. The proposal also noted the importance of 
obtaining information for the permit writer about potential entrainment 
reductions. Thus, the proposal would have required certain facilities 
to develop and submit with their permit application detailed 
information on their operations as well as an engineering study of the 
technical feasibility and incremental costs of candidate entrainment 
mortality control technologies and a detailed discussion of the 
magnitude of non-water quality benefits. EPA proposed that some 
facilities would need to submit an Entrainment Characterization Study 
that included an entrainment mortality data collection plan that would 
indicate, at a minimum, taxonomic identification, latent mortality 
identification, documentation of all methods, and quality assurance/
quality control procedures or sampling and data analysis appropriate 
for a quantitative survey. Under the proposal, EPA would also have 
required peer review of the entrainment mortality data collection plan. 
Peer reviewers would be selected in consultation with the Director who 
may consult with EPA and Federal, State, and Tribal fish and wildlife 
management agencies with responsibility for fish and wildlife 
potentially affected by the cooling water intake structure(s). Further, 
facilities with greater than 125 mgd AIF would complete an entrainment 
study. The entrainment study could include information already 
collected to meet the Phase II requirements at Sec.  122.21(r)(2)-
(r)(4) before those requirements were suspended.
    EPA and the Services have completed consultations on the rule. EPA 
has received the final biological opinion and associated documents from 
the U.S. Fish and Wildlife Service and the U.S. National Marine 
Fisheries Service and has included them in the record for the rule. The 
Services have concluded that the rule is not likely to jeopardize the 
continued existence of listed species or result in the destruction or 
adverse modification of designated critical habitat.
3. Final Rule Provisions Related to Threatened and Endangered Species
    As noted previously, establishing standards for cooling water 
intake structures to minimize impingement and entrainment of all 
aquatic organisms will promote and enhance protection of T&E species. 
In addition, the rule contains a number of provisions that specifically 
concern T&E species; these provisions were developed in light of EPA's 
consultation with the Services and were established by EPA to insure 
that this rule is not likely to jeopardize listed species or result in 
the destruction or adverse modification of designated critical habitat. 
To be clear, the ESA provisions of the rule extend to all listed T&E 
species, not just fish and shellfish.
    The treatment of T&E species in today's rule follows directly from 
the Agency's longstanding approach as well as from EPA's proposed 2011 
rule which indicated the EPA's intention to address protection of T&E 
species. The rule adopts the identical approach followed in the Phase I 
and II rules, while adding some refinements to that earlier model which 
EPA discussed in the proposed rule. First, it adopts the proposed 
requirements that insure an adequate information base is submitted to 
the permit writer. As was the case with the Phase I and withdrawn Phase 
II rule, apprising the permit writer of the presence and extent of T&E 
species at a facility's intake continues to be an important element of 
the permit application requirements for existing facilities. While 
retaining the existing permit application requirement of 40 CFR 
122.21(r), EPA has included in today's rule a provision at Sec.  
125.95(f) that requires a facility in its permit application to 
identify all Federally-listed threatened and endangered species and 
designated critical habitat that are or may be present in the action 
area. The action area can generally be considered the area in the 
vicinity of the cooling water intake structure. The evaluation is to be 
based on information readily available to the facility at the time of 
the permit application. In addition, the rule requires the largest 
withdrawing facilities to provide taxonomic identification of species 
in the vicinity of the intake, thus providing a mechanism for 
facilities to determine more accurately their potential impact on 
protected species.
    The rule requires that the Director transmit all permit 
applications to the Services upon receipt. The rule provides the 
Services with 60 days to review the permit application. This 60 day 
review takes place prior to the public notice of the State or Tribe's 
draft or proposed permit. EPA expects that the Services will respond 
within 60 days and provide to the Director (1) any corrections to the 
list of Federally-listed threatened and endangered species and critical 
habitat included in the permit application, (2) any measures that the 
Services recommend (including monitoring and reporting) for the 
protection of listed species, including any measures that would 
minimize any incidental take of listed species, and/or avoid likely 
jeopardy to a listed species or destruction or adverse modification of 
critical habitat, and/or (3) notify the State or Tribe that the 
Service(s) have no corrections to the list of species and critical 
habitat and/or that the Service(s) do not recommend any control 
measures. The Services' 60 day review period does not constrain the 
Director's ability to process the applicant's permit application; 
however, the Director may not propose/publish the draft permit until 
the 60 day review period has ended, unless the Director has received 
the Services' response prior to that time.
    In addition, the Services will receive, pursuant to existing 
regulations at 40 CFR 124.10(c)(1)(iii) and (e), all permit 
applications, as well as fact sheets or statements of basis (for EPA-
issued permits), draft permits, and public notices for all permits. At 
this stage of the process, the Services will have the opportunity to 
review the draft permit and other materials and provide any

[[Page 48382]]

additional input or suggested control measures to address effects to 
listed species or critical habitat. Together, the existing and new 
requirements related to transmittal of permitting documents to the 
Services will ensure that the Services have the opportunity to provide 
information and recommendations to the permit writer relating to any 
facility that may affect listed species. This information will be part 
of the public record for the permitting decision and the Director would 
be required to consider it as a relevant factor, along with all of the 
other relevant factors, in deciding what conditions to establish in the 
permit. Further, as explained in the MOA between EPA and the Services 
discussed elsewhere in today's notice, EPA will use the full extent of 
its CWA authority to object to a permit where EPA finds that issuance 
of the permit is likely to jeopardize the continued existence of a 
listed species or result in the destruction or adverse modification of 
designated critical habitat. The rule's requirements insure a full 
vetting of information and concerns in the permitting process that must 
be considered by the Director. These requirements, coupled with the 
EPA's commitment to exercise its oversight authority, insure that 
today's rule is not likely to jeopardize the continued existence of a 
listed species or result in the destruction or adverse modification of 
designated critical habitat.
    Among the recommendations that may be made by the Services to the 
facility and the Director are measures to minimize incidental take. EPA 
expects that any measures the Services recommend to minimize incidental 
take will be consistent with ESA regulations and guidances concerning 
reasonable and prudent measures. As stated in the ESA regulations under 
50 CFR 402.14(i)(2), ``Reasonable and prudent measures, along with the 
terms and conditions that implement them, cannot alter the basic 
design, location, scope, duration, or timing of the action and may 
involve only minor changes.'' The Endangered Species Handbook (FWS and 
NMFS, 1998) explains that: ``Measures are considered reasonable and 
prudent when they are consistent with the proposed action's basic 
design (e.g., narrowing of disturbed right-of-way at known species 
locations), location (e.g., temporary storage of equipment or other 
materials), scope, duration, and timing. Reasonable and prudent 
measures and terms and conditions should be developed in coordination 
with the action agency and applicant, if any, to ensure that the 
measures are reasonable, that they cause only minor changes to the 
project, and that they are within the legal authority and jurisdiction 
of the agency or applicant to carry out.''
    Installation of closed-cycle cooling is a major design alteration 
of a facility involving significant design and construction activities 
(the range of costs associated with closed-cycle cooling is described 
elsewhere in today's notice). Because installation of closed-cycle 
cooling does alter the basic design of a facility and would involve 
more than minor changes, as described in the Services' regulations and 
Handbook, EPA does not expect that installation of closed-cycle cooling 
would be specified as a measure solely for purposes of minimizing 
incidental take. The final rule at Sec.  125.98(j) provides that 
nothing in this rule authorizes the take of threatened or endangered 
species of fish or wildlife. However, the Services may exempt take 
through an incidental take statement issued pursuant to ESA section 
7(o) or a permit under ESA section 10. See 16 U.S.C. 1536 (o) and 16 
U.S.C. 1539.
    This Clean Water Act rule cannot authorize take and does not 
purport to do so (nor can NPDES permits authorize take prohibited under 
the ESA). Accordingly, under Sec.  125.98(b)(1), the permit writer, 
including EPA, must include, in the 316(b) permit requirements, 
standard language that states the permit does not authorize the take of 
Federally-listed threatened and endangered species. In addition, under 
Sec.  125.96(g) (additional monitoring requirements) and Sec.  
125.97(g) (additional reporting requirements),where the Director 
requires additional measures to protect listed species, monitoring and 
reporting requirements associated with those measures will be included 
in the permit.
4. EPA Oversight of State-Issued NPDES Permits To Protect Threatened 
and Endangered Species
    In 2001, the EPA, FWS, and NMFS signed a Memorandum of Agreement 
(MOA), (66 FR 11202, Feb. 22, 2001) with the objective of enhancing 
coordination between the agencies and to assist the agencies in 
executing their respective responsibilities under the Clean Water Act 
and Endangered Species Act. The MOA reflects, in part, the EPA's 
longstanding commitment to overseeing the operation of state NPDES 
programs to ensure protection of endangered species with existing 
regulatory requirements. The EPA reaffirms its commitment to ensure 
coordination of the EPA's and Services' programs and appropriate 
protection of listed species, and EPA will follow the procedures in the 
MOA in overseeing implementation of this rule.
    The MOA committed the EPA to a number of specific actions that are 
pertinent to today's rule. Under the MOA, EPA committed, when contacted 
by the Services, to coordinate with the Services and the State/Tribe 
during the permit development process, in order to ensure that permits 
will comply with all applicable CWA requirements. One way in which 
coordination between EPA and the Services is facilitated is through the 
exchange of information about permits. The MOA facilitates such 
information exchange, as do EPA's NPDES permit regulations at 40 CFR 
124.10, that preceded the MOA. These regulations require the Director 
to provide public notice and a comment period for draft permits, and to 
notify persons identified at 40 CFR 124.10(c)(1)(iii) and (iv). Such 
persons specifically include Federal and State agencies with 
jurisdiction over fish, shellfish, and wildlife resource and over 
coastal zone management plans and thus include the U.S. Fish and 
Wildlife Service and the National Marine Fisheries Service.
    EPA's commitment to coordinate effectively with the Services 
includes following the procedures in section IX.A.6 and 7 of the MOA:
    EPA may make a formal objection, where consistent with its CWA 
authority, or take other appropriate action, where EPA finds that a 
State or Tribal NPDES permit will likely have more than minor 
detrimental effect on Federally-listed species or critical habitat.
    For those NPDES permits with detrimental effects on Federally-
listed species or critical habitat that are minor, it is the intention 
of the Services and EPA that the Services will work with the State or 
Tribe to reduce the detrimental effects stemming from the permit. For 
those NPDES permits that have detrimental effects on Federally-listed 
species or critical habitat that are more than minor, including 
circumstances where the discharge fails to ensure the protection and 
propagation of fish, shellfish and wildlife, and where the State or 
Tribe and the Services are unable to resolve the issues, it is the 
intention of the Services and EPA that EPA would work with the State or 
Tribe to remove or reduce the detrimental impacts of the permit, 
including, in appropriate cases, by objecting to and Federalizing the 
permit where consistent with EPA's CWA authority.
    EPA will use the full extent of its CWA authority to object to a 
State or Tribal permit where EPA finds (taking

[[Page 48383]]

into account all available information, including any analysis 
conducted by the Services) that a State or Tribal permit is likely to 
jeopardize the continued existence of any listed species or result in 
the destruction or adverse modification of critical habitat.
    EPA may review or waive review of draft State or Tribal NPDES 
permits (40 CFR 123.24(d)). EPA will work with the Services through the 
local/regional coordinating teams to help determine which categories of 
permits should be reviewed for endangered species concerns. If EPA 
finds that a draft permit has a reasonable potential to have more than 
a minor detrimental effect on listed species or critical habitat, and 
review of a draft permit has been waived, EPA will withdraw this waiver 
during the public comment period (see 40 CFR 123.24(e)(1)).
    The grounds for EPA's exercise of its discretionary authority to 
object to State or Tribal permits are described in the NPDES 
regulations at 40 CFR 123.44. These include that the proposed permit 
fails to comply, or to ensure compliance with, any applicable 
requirement of this part, for example, that a permit application did 
not contain information sufficient to demonstrate that the permit will 
ensure compliance with applicable requirements. See 40 CFR 
123.44(c)(1).
    If EPA objects to a NPDES permit under the MOA, EPA will follow the 
permit objection procedures outlined in 40 CFR 123.44 and coordinate 
with the Services in seeking to have the State or Tribe revise its 
permit. A State or Tribe may not issue a permit over an outstanding EPA 
objection. If EPA assumes permit issuing authority for a NPDES permit, 
EPA will consult with the Service prior to issuance of the permit (as a 
Federal action) as appropriate under section 7 of the ESA.
    While the MOA was adopted by the agencies in the context of NPDES 
permits for discharges of pollutants, it applies equally to NPDES 
permits that contain conditions for cooling water intake structures. 
Moreover, section 316(b) of the CWA accords EPA broad authority to 
protect waters of the United States from adverse environmental impacts 
associated with cooling water intake structures, including adverse 
effects to Federally-listed species and designated critical habitat. In 
implementing this provision, EPA is authorized to consider costs and 
benefits of different approaches to minimizing these impacts. The 
importance of listed species, and accordingly the benefits associated 
with preventing their extinction, animated Congress's enactment of the 
Endangered Species Act in 1973. In the case of aquatic organisms that 
are listed as endangered or threatened, and designated critical 
habitat, EPA has the authority, and will exercise the full extent of 
its authority, to object to a permit proposed by a State where EPA 
finds (taking into account all available information, and giving, as 
appropriate, substantial weight to the views of the Services) that a 
State or Tribal permit is likely to jeopardize the continued existence 
of such species or result in the destruction or adverse modification of 
such critical habitat. If the State permit is not modified to address 
EPA's objections, EPA will issue the permit in consultation with the 
Services. EPA's commitment to use the full extent of its CWA authority 
to object to permits that are likely to jeopardize listed species or 
result in the destruction or adverse modification of critical habitat 
is a safeguard for the protection of listed species and critical 
habitat. Additionally, where the Service communicates in writing to EPA 
its conclusion that a proposed State permit is likely to jeopardize the 
continued existence of a listed species, EPA will, upon request, 
provide the Service a written response. EPA's commitment to use the 
full extent of its CWA authority, along with the other provisions of 
the rule requiring the EPA, the Services, and State Directors to fully 
consider effects to threatened and endangered species and critical 
habitat and include appropriate protections in NPDES permits, insures 
that the rule is not likely to jeopardize the continued existence of 
listed species or result in the destruction or adverse modification of 
designated critical habitat.

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

    EPA's NPDES permitting regulations at Sec.  122.49 list Federal 
laws that might apply to the issuance of NPDES permits under the NPDES 
rules. These include the Wild and Scenic Rivers Act, 16 U.S.C. 1273 et 
seq.; the National Historic Preservation Act of 1966, 16 U.S.C. 470 et 
seq.; the Coastal Zone Management Act, 16 U.S.C. 1451 et seq.; and the 
National Environmental Policy Act, 42 U.S.C. 4321 et seq. For a brief 
description of each of these laws, see Sec.  122.49. The provisions of 
the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 
1801 et seq., relating to essential fish habitat might also be 
relevant. EPA's permit application requirements ensure that FWS and 
NMFS will have--and other Federal agencies as well, should have--a 
broader information base from which to make informed decisions. Note 
also that, in the case of EPA-issued permits, EPA's NPDES permitting 
regulations specifically require following the requirements of specific 
Federal laws that may apply to the issuance of NPDES permits.

IX. Cost Development and Economic Impact Analysis

    This section summarizes EPA's analysis of the social cost and 
economic impact for three regulatory options. In addition to today's 
rule, referred to as the Final Rule, EPA analyzed two other options 
similar to those options at proposal (see section VI.D Other Options 
Considered for Today's Final Regulation for more context). The 
regulatory options can be described as follows:
     Final Rule: Flexible impingement mortality performance 
standard for existing units based on modified traveling screens with 
fish returns for all facilities with DIF greater than 2 mgd, closed-
cycle cooling or its equivalent for new units for impingement and 
entrainment, and a national BTA standard that requires a site 
determination of entrainment BTA for all other existing units at 
existing facilities;
     Proposal Option 2: Intake flow commensurate with closed-
cycle cooling for facilities that have a design intake flow of greater 
than 125 mgd, flexible impingement mortality limitations based on 
modified traveling screens with fish returns for all facilities with 
DIF greater than 2 mgd, and closed-cycle cooling or its equivalent for 
new units; and
     Proposal Option 4: Flexible impingement mortality 
limitations based on modified traveling screens for all facilities with 
DIF greater than 50 mgd, closed-cycle cooling or its equivalent for new 
units, and a site-specific determination of entrainment BTA for all 
other facilities and for impingement mortality controls at facilities 
with flow less than or equal to 50 mgd.
    The first part of this section provides an overall summary of the 
costs of the regulatory options to regulated facilities and Federal and 
State governments. This discussion is followed by a review of the 
method for developing compliance cost estimates. The third part 
provides an estimate of the total social costs of the regulatory 
options. The final part reviews the economic impact of the regulatory 
options.

[[Page 48384]]

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

    In estimating the total cost of the regulatory options, EPA 
estimated costs for the following components: capital costs and other 
one-time costs; installation downtime costs; annual operation and 
maintenance costs; and recordkeeping, monitoring, entrainment-related 
studies, and reporting costs. All of these costs are included in the 
economic impact analysis for the final rule. The cost estimates reflect 
the incremental costs attributed only to this final rule. For example, 
facilities already having closed-cycle recirculating systems as defined 
at Sec.  125.92 will meet the impingement mortality and entrainment 
standards of today's rule and, therefore, will not incur costs to 
retrofit new technologies. These facilities, including those in New 
York and California, will still incur permitting costs. EPA has 
established that existing closed-cycle recirculating systems will 
comply with the impingement BTA requirements.
    For the economic analysis, EPA distinguished between the two 
industry groups regulated by the standards for existing facilities as 
follows:
     Electric Power Producers (electric generators)--facilities 
owned by investor-owned utilities, municipalities, States, Federal 
authorities, cooperatives, and nonutilities, whose primary business is 
electric power generation or related electric power services.
     Manufacturing and Other Industries (manufacturers)--
facilities in the paper, aluminum, steel, chemicals, petroleum, food 
and kindred products (primary manufacturing industries), and other 
industries. In addition to engaging in production activities, some of 
these facilities also generate electricity for their own use and 
occasionally produce excess power for sale.
    For a more detailed discussion of costs to regulated facilities and 
costs to Federal, State, and local governments, see Chapter 8 of the 
TDD and Chapter 3 of the EA.
    Electric generators incurring costs include facilities owned by 
private firms, governments, and electric cooperatives. Manufacturers 
incurring costs include facilities owned by private firms only. The 
administrative costs to Federal, State, and local governments include 
the costs of rule implementation--e.g., permits, monitoring, and 
working with facilities subject to the final rule to achieve 
compliance.
    In the economic analysis, EPA accounted for these costs on an as-
incurred basis. They are reported on a pre-tax or after-tax basis, 
depending on the specific component of the analysis. These costs also 
underlie the analysis of the social costs of the regulatory options.

B. Development of Compliance Costs

    This section describes the data and methods used to estimate 
compliance costs of the options considered for today's final rule. 
Costs were developed for technology controls to address impingement 
mortality separately from technology controls for entrainment because 
the requirements of the various rule options considered may lead to 
different technologies being used by each facility to comply. The 
options considered may impose different compliance timelines for 
impingement mortality and entrainment control technologies, although 
decision making has been synchronized to avoid investments in 
impingement BTA controls that could later be rendered obsolete by the 
BTA requirements for entrainment. Different methodologies were used and 
each is briefly described below. More detailed information on these 
methodologies and costs of other technologies and regulatory approaches 
are available in Chapter 8 of the TDD.
1. Combined Facility-Specific and Model-Facility Approach
    EPA estimated national level costs for regulated facilities under 
the final rule and other regulatory options. In general, facility-
specific data can be used to determine the requirements that apply to a 
facility and whether that facility already meets the final rule's 
requirements. This approach requires facility-specific technical data 
for the approximately 1,065 facilities that EPA estimates will be 
subject to the final rule. The change in the number of facilities 
subject to the final rule compared to the number estimated at proposal 
is attributable to changes in how EPA accounted for baseline closures. 
See Appendix H of the EA for more details. An alternative approach is 
to develop a series of model facilities that exhibit the typical 
characteristics of the regulated facilities and calculate costs for 
each model facility; EPA would then determine how many of each model 
facility would be needed to accurately represent the full universe of 
regulated facilities.
    The approach used in this effort involved calculating compliance 
technology costs for 338 individual facilities for which EPA had 
detailed technical data from its questionnaires regarding the intake 
design and technology. Specifically, these are the facilities that 
completed the detailed technical questionnaire. Where facilities 
reported data for separate cooling water intake structures, EPA derived 
compliance technology costs for each intake, and summed these intake 
costs to obtain total costs for each facility. EPA used the actual 
facility data to construct model facilities. Each model facility's 
costs were then multiplied by a specific weighting factor, derived from 
a statistical analysis of the industry questionnaire, to obtain 
industry-wide costs. The weighting factors are similar to the ones 
derived during the development of the 2004 Phase II and 2006 Phase III 
rules.
2. Updates to the Survey Data
    For the 2004 Phase II rule analysis, EPA developed facility-
specific cost estimates for all facilities and published those costs in 
an appendix (69 FR 41669, July 9, 2004). Since the initial 
implementation of the 2004 Phase II rule, EPA identified several 
concerns with using only the facility-specific costing approach, and 
the use of those costs in Appendix A. Since 2004 EPA has collected data 
from industry and other groups as described in Section III of the 
proposed rule (76 FR 22183, April 20, 2011). These data generally 
reflect changes to actual intake flow, design intake flow, intake 
velocity, technology in place, and operational status. EPA developed a 
new master database including this new data to supplement the data from 
the detailed technical questionnaire. Although it has been more than 10 
years since the detailed technical questionnaire was initially 
collected, EPA has undertaken more than 50 site visits and reviewed 
available literature. In addition, EPA compared its data with that 
collected by Edison Electric Institute, Electric Power Research 
Institute, and the Energy Information Administration. On the basis of 
that review, EPA concluded that the master database is representative 
and reasonably reflects costs for all facilities.\102\ The following 
section describes how EPA used this new database to estimate compliance 
costs.
---------------------------------------------------------------------------

    \102\ EPA notes that, while it has not collected updated 
technical information for every facility, it has updated financial 
data, as discussed later in this section.
---------------------------------------------------------------------------

3. Tools for Developing Compliance Costs
    During development of the 2004 Phase II rule, EPA began developing 
a spreadsheet-based tool that would provide facilities and permit 
authorities with a simple and transparent method for calculating 
facility-specific

[[Page 48385]]

compliance costs. EPA refined the tool in developing the Phase III 
regulations. EPA has since made further refinements to the cost tool, 
which was used to calculate the compliance costs for impingement 
mortality for today's final rule. The cost tool employs a decision tree 
(for a graphical presentation of the decision tree, see Chapter 8 of 
the TDD) to determine a compliance response for each model facility. 
The decision tree assigns a technology costing ``module'' for the 
retrofit to a given technology. Impingement cost estimates are derived 
through a series of computations that apply facility-specific data 
(such as DIF, width of intake screens, and such) to the selected 
technology module. Cost tool outputs include capital costs, incremental 
operation and maintenance costs, and installation downtime (in weeks).
    To calculate the compliance costs of retrofitting to closed-cycle 
cooling for controlling entrainment, EPA used a second tool based on a 
cost-estimating spreadsheet using a modified version of a similar tool 
developed by the Electric Power Research Institute (EPRI). EPRI's first 
draft methodology presented three levels of capital cost according to 
the relative difficulty of the retrofit project (easy, average, and 
difficult). For electric generators, EPA used costs for the average 
level of difficulty because it was developed across a broad spectrum of 
facilities and is the most appropriate for estimating national level 
costs rather than lower or upper bounds. For manufacturers, EPA used 
the difficult level of retrofit costs. This reflects the more complex 
water systems and technical challenges to retrofitting closed-cycle 
cooling at multiple locations within a manufacturing facility. In site 
visits, EPA found the largest manufacturing facilities had multiple 
intakes, distributed the water to multiple production processes, have 
already significantly increased water reuse as a result of water 
audits, and generally operate a complicated water distribution network 
at the entire facility, and would therefore require multiple retrofits 
to convert the facility to be commensurate with closed-cycle 
recirculating system.\103\ Accordingly, EPA determined that the 
difficult level of retrofit costs is more representative for purposes 
of estimating national level costs. EPA's tool includes additional 
modifications to EPRI's methodology, such as increased compliance costs 
for approximately 25 percent of facilities to reflect the additional 
expense of noise control or plume \104\ abatement, and using only the 
cooling water flow rate for non-contact cooling water flow \105\ for 
purposes of estimating costs for closed-cycle cooling. EPA has included 
the spreadsheet tools in the docket for today's final rule to assist 
both facilities and permit authorities in estimating compliance costs 
(see DCNs 12-6650 and 12-6651 for the cost tool, as well as and DCN 10-
6930 for EPRI's retrofit analysis).
---------------------------------------------------------------------------

    \103\ A refinery, for example, may have dozens of heat exchange 
processes throughout the facility, including a mix of wet and dry 
non-contact cooling equipment.
    \104\ The EPRI tool includes drift abatement technologies in its 
cost assumptions, so no additional costs were included for drift 
eliminators.
    \105\ As described in the TDD, EPA used only non-contact cooling 
water flows in determining the proper size for wet cooling towers. 
Cooling towers are not widely used for contact cooling or process 
water, so these flows were excluded. For electric generators, the 
vast majority of flow is non-contact cooling, but manufacturers are 
more varied in their water usage.
---------------------------------------------------------------------------

4. Which technologies form the basis for compliance cost estimates?
    EPA identified two broad classes of control technologies that may 
be used singularly or in combination to comply with the final rule. 
These classes of control technologies are (1) technologies that address 
impingement mortality, and (2) technologies that address entrainment. 
For further details, see Section VI.
    For the impingement mortality requirements, EPA analyzed data from 
a wide variety of technologies and facilities, and concluded that 
modified (Ristroph or equivalent) \3/8\'' mesh traveling screens with 
fish-friendly fish handling and returns are the most appropriate basis 
for determining compliance costs.\106\ As discussed in Section VI of 
this preamble, a facility may also comply with impingement mortality 
requirements by meeting a low velocity compliance alternative, 
operating a closed-cycle recirculating system as defined at Sec.  
125.92(c), or employing an existing offshore velocity cap as defined at 
Sec.  125.92(v). On the basis of facility-specific data, EPA made a 
preliminary assessment of which model facilities would not currently 
meet impingement mortality requirements through any of these pre-
approved technologies, and assigned technology costs on the basis of 
modified traveling screens with a fish handling and return system if 
the existing intake used traveling screens. If the intake does not 
currently use traveling screens, EPA assigned costs for installing 
technologies that would comply with the low velocity compliance 
alternative (larger intakes, wedgewire screens, or variable speed 
pumps) based on site-specific conditions. These assigned technologies 
will meet the BTA standard (see Sec.  125.94(b)). Although EPA no 
longer requires installation of barrier nets or equivalent technologies 
to protect shellfish in all tidal waters, EPA included the cost of 
barrier net technology at approximately 10 percent of the intakes as a 
cost component for the ``systems'' approach to compliance with the IM 
standards.
---------------------------------------------------------------------------

    \106\ Note that this does not preclude the use of other 
technologies; EPA simply used the available performance data in 
deriving the performance requirements. EPA's research has shown that 
other technologies may also be capable of meeting the final rule 
requirements; however, these technologies are not available at all 
facilities.
---------------------------------------------------------------------------

    EPA also analyzed the costs of those options associated with 
entrainment requirements based on wet cooling systems. EPA also 
evaluated other technologies for reducing entrainment, such as seasonal 
operation of cooling towers, partial towers, variable speed pumps, and 
fine-mesh screens. The costs of the final rule include but are not 
limited to permit applications; characterization of the source water, 
intake structures and any technologies in place; studies of impingement 
and entrainment; and recordkeeping, monitoring, and reporting. The 
costs also include costs of technologies for complying with the BTA for 
IM; the cost of additional technologies that may be required to meet 
the site-specific BTA for entrainment are not included, nor are costs 
for additional measures that may be required for protection of listed 
threatened and endangered species. Section VI further describes the 
performance of these technologies. A detailed discussion of how the 
costs were developed is in Chapter 8 of the TDD.
5. How is installation downtime assessed?
    Installation downtime is the length of time that a facility might 
need to shut down for installing a compliance technology. Downtime 
estimates primarily assume that the facility would need to completely 
shut down operations for some portion of the installation period to 
retrofit an intake, such as relocating an intake, connecting wet 
cooling systems into the facility, or reinforcing condenser housings. 
EPA estimated downtime as incremental outages, taking into account the 
periodic outages all facilities incur as part of preventative 
maintenance or routinely scheduled outages. For example, nuclear 
facilities have refueling outages approximately every 18 months lasting

[[Page 48386]]

approximately 40 days.\107\ The entrainment control implementation 
periods under Proposal Option 2, 10 years for fossil fuel facilities 
and 15 years for nuclear facilities, would provide facilities with an 
opportunity to schedule the retrofit when other major upgrades are 
being done, thereby significantly reducing downtime.
---------------------------------------------------------------------------

    \107\ Nuclear Energy Institute reported average length of outage 
from 2003 to 2009.
---------------------------------------------------------------------------

    For most facilities subject to impingement mortality, EPA assigned 
no incremental downtime. Facilities that are replacing or 
rehabilitating existing traveling screens typically do so one intake 
bay at a time without affecting the overall operations.\108\ EPA has 
also found that facilities that need to scrub screens do so during 
other routinely scheduled outages. For some compliance technologies, 
however, such as relocating an intake or expanding an existing intake 
to lower the intake velocity, several weeks of downtime may be incurred 
because these are more invasive tasks. See TDD Exhibit 8-4 for EPA's 
net construction downtime for the various IM compliance technologies.
---------------------------------------------------------------------------

    \108\ EPA's data shows that facilities have an average of 4 to 5 
bays.
---------------------------------------------------------------------------

    EPA reviewed historical retrofit data and site visits conducted 
since 2004 and has largely retained its assumptions for downtime from 
the Phase II and Phase III rules for facilities retrofitting to closed-
cycle cooling. On average, EPA assumes the net installation downtime 
for retrofitting to closed-cycle cooling for non-nuclear electric 
generators is 4 weeks. This total downtime allows for the tie-in of the 
closed-cycle system to the existing cooling water system. The refueling 
outage downtime, the safety-sensitive nature of nuclear facility 
retrofits, and other data in EPA's record supports 28 weeks as the net 
construction downtime for nuclear facilities. EPA converted downtime 
for manufacturing facilities that use cooling water for power and steam 
generation into the incremental cost for purchasing electricity during 
the outage. For individual process units other than power generation 
units at a manufacturing facility, on average the downtime was assumed 
to be zero. In EPA's extensive experience with manufacturers, EPA's 
record reflects that manufacturers are generally able to shut down 
individual intakes for specific process lines, use inventory approaches 
such as temporary increases of intermediate products, and develop other 
workarounds without interrupting the production of the entire facility. 
For further discussion of how EPA accounted for installation downtime 
in estimating national costs, see below.
6. How is the energy penalty assessed?
    The term energy penalty in relation to a conversion to closed-cycle 
cooling has a number of different interpretations. The first is the 
extra power required to operate fans at a mechanical draft cooling 
tower and additional pumping requirements (sometimes referred to as 
auxiliary energy requirements or parasitic loads). The second is the 
lost power output because of the reduction in steam turbine efficiency 
from an increase in cooling water temperature relative to once-through 
cooling (often referred to as the turbine efficiency penalty or turbine 
backpressure penalty). EPA is clarifying that it views the former as 
incremental O&M costs, and the latter is EPA's interpretation of the 
energy penalty. Energy penalty costs apply only to facilities 
retrofitting to closed-cycle cooling without replacing the condenser. 
Facilities installing a new impingement mortality technology will not 
generally face an energy penalty and will generally see little or no 
measureable change in auxiliary power consumption. EPA's national-level 
costs include both these costs. The auxiliary power consumption was 
included as a separate component in the operation and maintenance costs 
and was assessed for all facilities. The turbine efficiency penalty was 
typically expressed as a percentage of power output. EPA estimates the 
turbine efficiency energy penalty for nuclear and non-nuclear power 
generation would be 2.5 and 1.5 percent, respectively (see Chapter 8 of 
the TDD). For most manufacturers generating their own electricity, EPA 
assumed the same energy penalty for turbine efficiency loss as 
estimated for non-nuclear power facilities (i.e., 1.5 percent).
7. How did EPA assess facility-level costs for the national and 
regional economic impacts analysis?
    As part of the economic impact analysis, EPA assessed the impact of 
the final rule's requirements on electric generators in the context of 
national and regional electricity markets. For this analysis, EPA used 
the Integrated Planning Model (IPM[supreg]), a comprehensive 
electricity market optimization model that assesses such impacts within 
the context of regional and national electricity markets. EPA has used 
IPM to analyze the impacts of various regulatory actions affecting the 
electric power sector over the last decade, particularly Clean Air Act 
regulations.
    Because IPM requires facility-specific costs for each analyzed 
facility, yet compliance costs were developed as weighted sums of model 
facility costs, EPA developed a method to distribute the aggregate 
costs to facilities that were not themselves model facilities. For 
these facilities, EPA converted facility-level costs developed for 
model facilities to a cost per mgd DIF and then averaged these values 
to derive cost equations using DIF as the independent variable. These 
cost equations provide average costs that can be applied to any 
facility by simply scaling to that facility's DIF. For details on the 
IPM analysis, see the EA, Chapter 6. For details on facility cost 
development, see the TDD, Chapter 8.
8. How did EPA assess costs for new units?
    Power generation and manufacturing units that are a new unit as 
defined at Sec.  125.92(u) must meet an entrainment reduction 
performance standard based on closed-cycle cooling or an equivalent 
reduction in entrainment for the cooling water component of the intake 
flow based on the DIF. This section briefly describes the data and 
methods used to estimate compliance costs for new units at existing 
electric generators and manufacturers. Chapter 8 of the TDD has a 
complete description of the methodology.
a. New Units at Existing Electric Generators
    Compliance costs for new units at existing electric generators are 
estimated using a similar methodology to that used for estimating 
compliance costs for existing facilities. As described in Chapters 6 
and 8 of the TDD, however, there are a number of differences in costs 
between a closed-cycle cooling retrofit at an existing facility 
compared to installing closed-cycle cooling at a new unit. In general, 
these differences result in lower costs for the installation of a 
closed-cycle recirculating system at a new unit (as compared to a 
retrofit scenario), due to improved efficiency of the turbine, the 
elimination of construction downtime, greater ease of integrating the 
closed-cycle system into the design and construction of the new unit, 
offsetting costs of certain system and construction components, and 
greater overall system optimization.
    EPA could not determine precisely which facilities will construct 
new units. Instead, EPA used an approach to estimate what portion of 
the new capacity (i.e., additional megawatts capacity to be constructed 
each year) would be subject to the final rule. Using national 
projections of increased

[[Page 48387]]

generating capacity,\109\ EPA categorized the new capacity into three 
groups for 316(b) compliance purposes: (1) Subject to the Phase I 
rule,\110\ (2) subject to today's final rule, but projected to install 
a cooling system that complies with the rule regardless of the rule 
requirements,\111\ and (3) subject to today's rule and projected to 
incur compliance costs. Exhibit IX-1 presents the estimated total new 
capacity and the estimated capacity for new stand-alone units.
---------------------------------------------------------------------------

    \109\ Capacity increases include considerations for fuel type. 
See Chapter 8 of the TDD for details.
    \110\ New capacity that is part of a new facility (as defined by 
the Phase I rule) is subject to separate requirements not addressed 
by today's rule. Today's requirements for new units require flow 
reduction commensurate with a closed-cycle recirculating cooling 
system.
    \111\ Data in the record show a marked increase in the use of 
closed-cycle cooling in facilities constructed in recent years and 
for those projected to be constructed in the near future. These data 
indicate that in the 1990s (prior to the Phase I rule), 83 percent 
of new cooling systems installed were closed-cycle cooling systems 
and that the current trend was approximately 97 percent. Based on 
these data EPA assumed that 75 percent to 90 percent of new units 
will be designed with a closed-cycle recirculating cooling system 
regardless of the requirements of today's rule. See DCN 12-6672. As 
a result, this category of new capacity was not assigned any 
compliance costs.

                              Exhibit IX-1
------------------------------------------------------------------------
                                                   Total       Existing
                                                 including     facility
                                                  Phase I     new units
                   Fuel type                   -------------     only
                                                    New     ------------
                                                  Capacity   Stand-Alone
                                                    (MW)         (MW)
------------------------------------------------------------------------
Fossil Fuel...................................          295           80
Combined Cycle................................        3,264          147
                                               -------------------------
    Total.....................................        3,559          227
------------------------------------------------------------------------

    Costs for closed-cycle cooling are assigned to a portion of new 
stand-alone units, as shown the generating capacities in Exhibit IX-3.

                              Exhibit IX-3
------------------------------------------------------------------------
                                                Annual only    24-year
                                               -------------  total only
                   Fuel type                                ------------
                                                Stand-Alone  Stand-Alone
                                                     MW           MW
------------------------------------------------------------------------
Fossil Fuel...................................            8          191
Combined Cycle................................           15          353
                                               -------------------------
    Total.....................................           23          544
------------------------------------------------------------------------

    EPA then estimated the total costs for the third group (i.e., those 
units that would incur compliance costs) to comply with requirements 
for new units. EPA used certain assumptions regarding cooling system 
design to modify cost equations used for estimating closed-cycle 
retrofit costs at existing units and then applied the cost equations to 
the portion of projected new unit generating capacities that would be 
subject to the new unit provisions of today's rule. These costs include 
capital \112\ and O&M costs, as well as a reduction in net generating 
capacity due to auxiliary power consumption to operate the closed-cycle 
recirculating system. Due to the complex nature of constructing a new 
unit, there is no increase in the length of the construction project as 
a result of employing a closed-cycle system; similarly, there is no 
downtime, as the unit has not yet begun operating. See Chapter 8 of the 
TDD for more information.
---------------------------------------------------------------------------

    \112\ The record indicates that the total estimated capital cost 
for installing a closed-cycle recirculating system at a new unit to 
comply with today's rule ranges from a negative value (as compared 
to the cost for installing a once-through system) to a positive 
value that could approach the cost of an existing facility retrofit. 
Said differently, if one assumes that the new unit would have 
constructed a new intake structure, EPA's record shows that the 
capital costs for the new unit once-through system would be greater 
than if the new unit installs a closed-cycle recirculating system. 
(See DCN 10-6650.) Alternatively, if the new unit did not require 
modification of the existing cooling system infrastructure, then the 
capital costs for installing a closed-cycle recirculating system 
would be similar to an existing facility retrofit minus some tie-in 
costs since the condenser is being replaced. While EPA envisions 
that the actual costs will vary (i.e., some will be in the negative 
portion of the range and others will be in the positive), EPA is 
also unable to project what cooling water intake arrangements a new 
unit will use. Consequently, for all new units, EPA selected a 
capital cost equal to the midpoint between the tower only and the 
easy retrofit costs. As a result, EPA assumed that the capital costs 
for these units was $154 per gpm in 2009 dollars which converts to 
$30,800 to $60,060 per MW capacity depending on fuel type. For a 
more detailed discussion, see TDD Chapter 8.
---------------------------------------------------------------------------

b. New Units at Existing Manufacturers
    On the basis of site visits to manufacturing facilities, EPA has 
observed that manufacturers are increasingly taking advantage of water 
conservation and reuse measures as a means of cost-cutting. EPA also 
notes that manufacturers are subject to a wide variety of ELGs and 
that, in the course of complying with requirements for those ELGs, a 
facility may also reduce its intake flow. (See Chapter 4 of the TDD.) A 
new unit provides the opportunity to employ such measures to the 
fullest extent in designing the new unit. The availability of water 
conservation and reuse opportunities, coupled with operational 
flexibility at facilities with multiple industrial processes, leads EPA 
to conclude that facilities installing new units at existing 
manufacturers will comply with the new unit provisions through 
achieving the 90 percent reduction required at Sec.  125.94(e)(2). 
Thus, EPA concluded that the new unit provisions would result in no 
additional compliance costs for achieving flow commensurate with 
closed-cycle cooling at new units.\113\
---------------------------------------------------------------------------

    \113\ EPA also notes that some manufacturers may also be able to 
increase reuse to a degree where the facility no longer meets the 
applicability thresholds of today's rule.
---------------------------------------------------------------------------

    To the extent that manufacturers are not able to incorporate water 
reuse measures as a means of complying with the new unit provision, 
EPA's estimate of new unit costs for manufacturers may be an 
underestimate. Manufacturers generally withdraw less water than 
electric generators (including manufacturers who generate their own 
electricity). Thus EPA has concluded that any underestimation would be 
insignificant.

C. Social Costs

    EPA assessed the costs to society resulting from the final rule and 
other options considered in development of this rule. The findings 
presented in this section assume that facilities with impoundments will 
qualify as having closed-cycle recirculating systems in the 
baseline.\114\ As a result, EPA assigned no compliance technology costs 
to these facilities; however, these facilities remain subject to 
today's rule and are assigned administrative costs. To the extent that 
some of these facilities do not qualify as having closed-cycle 
recirculating systems in the baseline, the costs reported in this 
section may be underestimates. The social cost of regulatory actions 
includes costs to electric generators and manufacturers to comply with 
the final rule, and costs to States and the Federal government to 
administer the rule. These costs are the opportunity costs to society 
of employing scarce resources to prevent the environmental damage that 
would occur without today's rule. EPA estimated total social costs for 
existing and new units at existing facilities.
---------------------------------------------------------------------------

    \114\ In other words, EPA assumed facilities indicating use of 
an impoundment in response to their technical survey have lawfully 
created such impoundments for the purposes of cooling water.
---------------------------------------------------------------------------

    In estimating social costs, EPA assumed that the final rule and 
other options considered in development of this rule will not affect 
the aggregate quantity of electricity or other affected goods and 
services sold to consumers. Thus, the social cost of regulatory 
requirements includes no loss in consumer and producer surplus from 
reduced sales of electricity or other goods and services produced by 
regulated facilities. The Agency calculated the social cost of the 
final

[[Page 48388]]

rule and the other options considered using two discount rates: 3 
percent and 7 percent.
    For existing facilities, EPA assumes that all facilities subject to 
the final rule will begin bearing costs associated with today's rule 
beginning as soon as 2014, and likely complete investments associated 
with today's rule by 2030, depending on the technology-installation 
schedules for the final rule and other regulatory options 
considered.\115\ EPA performed the social cost analysis over a 51-year 
period to reflect (1) the last year in which individual facilities are 
expected to achieve compliance (2030) under the final rule or any of 
the options considered, (2) the life of the longest-lived compliance 
technology installed at any facility (30 years), and (3) a period of 
five years after the last year of compliance technology operation 
during which benefits continue to accrue. Under this framework, the 
last year for which EPA has calculated projected costs is 2059, with 
benefits continuing beyond 2059, though on a diminishing basis, through 
2064.\116\
---------------------------------------------------------------------------

    \115\ EPA conducted the cost and economic impact analyses on a 
calendar-year basis. For these analyses, EPA used calendar year 2013 
as the promulgation year of today's rule and 2014 as the first post-
promulgation analysis year. This slight difference from the actual 
promulgation year of 2014 results from the fact that EPA completed 
its cost and economic impact analyses for the final rule and 
alternative options before EPA decided to delay promulgation from 
2013 to 2014. Because the rule is being promulgated during the first 
half of 2014, EPA concluded that it would be reasonable to continue 
using 2013 as the assumed promulgation year for the regulatory 
analysis. EPA expects the differences in the estimated costs and 
benefits of the rule due to this slight imprecision to be minimal.
    \116\ For this analysis, EPA assumed that the last year of 
technology installation for all regulated facilities under any of 
the regulatory options--i.e., 2030--is also the first year of 
steady-state compliance with regulatory requirements.
---------------------------------------------------------------------------

    To estimate social costs for existing facilities, EPA developed a 
year-explicit schedule of compliance outlays over the 46-year period 
from 2014 to 2059 according to cost-incurrence assumptions (for details 
on cost-incurrence assumptions, see EA, Chapter 3). EPA then adjusted 
these costs for predicted real change (i.e., adjusted for inflation) to 
the year of their incurrence and discounted all costs to the beginning 
of 2013, the promulgation year used for the analysis. Because the 
analysis period extends beyond the useful life of some compliance 
equipment, the social cost analysis accounts for re-installation of 
impingement mortality compliance technologies after the end of their 
initial useful life periods. However, for the regulatory option that 
requires a specific entrainment control technology (e.g., wet cooling 
systems)--Proposal Option 2--EPA does not expect regulated facilities 
to completely rebuild these systems (components such as piping and the 
concrete basin can be reused). EPA accounted for other technology 
replacement costs (such as pumps and fill material) as part of ongoing 
operations and maintenance expenses.
    For new units at existing electric generators, EPA calculated an 
average annual amount of new capacity to be constructed during the 46-
year social cost analysis period, beginning in 2014. While EPA does not 
expect the annual construction of new units to be constant, predicting 
the year-to-year fluctuations would be resource intensive. On average, 
EPA assumes that its estimate of new unit costs is reasonable. EPA 
accounted for compliance costs for these units on an as-incurred basis, 
as done for existing facilities. Similar to compliance costs for 
facilities subject to the final rule, EPA analyzed costs incurred by 
State and Federal governments for administering the regulation on a 
year-explicit basis over the 46-year social cost analysis period.
    Exhibit IX-4 presents social costs for existing units at existing 
facilities under the final rule and other options considered, 
calculated using 3 percent and 7 percent discount rates. At the 3 
percent discount rate, EPA estimates total annualized social costs of 
$272 million for the existing unit provision of today's rule, $252 
million for Proposal Option 4, and $3,643 million for Proposal Option 
2. At the 7 percent discount rate, these costs are $295 million for 
today's rule, $272 million for Proposal Option 4, and $3,583 million 
for Proposal Option 2.\117\ See the EA (Chapter 7) for an explanation 
of why the annualized costs at the 3 percent discount rate are lower 
than the annualized costs at the 7 percent discount rate for the final 
rule and Proposal Option 4, while the inverse is the case for Proposal 
Option 2 (annualized costs at the 3 percent discount rate are higher 
than at the 7 percent discount rate). The largest component of social 
cost is the cost of regulatory compliance incurred by regulated 
facilities (as opposed to administrative costs estimated for States and 
the Federal government). These costs include (1) one-time technology 
and other initial costs of complying with the rule, (2) one-time costs 
of installation downtime, (3) annual fixed and variable operating and 
maintenance costs, including auxiliary energy requirement, (4) value of 
energy penalty from operation of compliance technology, and (5) 
permitting costs (initial and follow-up start-up costs, initial permit 
costs, annually recurring costs associated with monitoring, and non-
annually recurring permitting costs).
---------------------------------------------------------------------------

    \117\ Because EPA was unable to identify those facilities for 
which entrainment control technology would be established as BTA 
standards on a site-specific basis, the Agency did not analyze 
technology costs associated with these site-specific requirements. 
Consequently, the cost and economic analyses conducted in support of 
today's rule assume that under the existing unit provision of the 
final rule and Proposal Option 4, Electric Generators and 
Manufacturers install IM technology only. These analyses also assume 
that under Proposal Option 2, Electric Generators with DIF exceeding 
125 mgd install only cooling towers and all other Electric 
Generators install only IM technologies. Under Proposal Option 2, a 
small number of Manufacturers are assigned both IM and entrainment 
control technologies because of engineering issues associated with 
maintaining separation of contact and non-contact cooling water in 
some manufacturing operations. Although EPA did not estimate 
technology costs for facilities for which entrainment technology is 
established as BTA on a site-specific basis, EPA did include the 
costs for data collection and studies that facilities will need to 
perform in order to provide information to Directors to make these 
site-specific determinations. EPA included these costs in the 
administrative costs that are estimated for the final rule and other 
options considered.
---------------------------------------------------------------------------

    Compliance costs estimated for electric generators account for the 
largest share of total compliance-related social cost and direct 
compliance cost under all three options. On a per-facility basis and at 
the 3 percent discount rate, the annualized pre-tax compliance costs 
for the electric generators segment under today's final rule are $0.4 
million, $0.4 million under Proposal Option 4, and $6 million under 
Proposal Option 2.\118\ For manufacturers, the average cost per 
regulated facility at the 3 percent discount rate is $0.1 million under 
the final rule and Proposal Option 4, and $0.4 million under Proposal 
Option 2.\119\ EPA's analysis found a similar profile of per facility 
costs using the 7 percent discount rate (see EA Chapter 7 for 
additional detail). EPA's estimate of Federal and State government 
costs for administering this rule is small in relation to the estimated 
direct cost of regulatory compliance. EPA estimates $1 million in 
annual administrative costs to States and Federal government for the 
final rule, using both the 3 and 7 percent discount rates. These cost 
values are the same for Proposal Option 4. EPA estimates $0.7 million 
in annual administrative costs to States and the

[[Page 48389]]

Federal government for Proposal Option 2, regardless of the discount 
rate used.
---------------------------------------------------------------------------

    \118\ Calculated by dividing direct compliance costs for each 
type of facility by the total of 544 electric generators subject to 
today's rule on the basis of facility count-based weights (see EA 
Appendix H).
    \119\ Calculated using the total of 521 manufacturers subject to 
today's rule on the basis of technical weights (see EA Appendix H).

 Exhibit IX-4--Total Annualized Social Costs--Existing Units at Existing
                               Facilities
                     [in millions, 2011 dollars] \a\
------------------------------------------------------------------------
                                     Proposal                  Proposal
                                     option 4    Final rule    option 2
------------------------------------------------------------------------
                      Using 3 percent discount rate
------------------------------------------------------------------------
Direct Compliance Costs:
    Electric Generators..........       $202.9       $203.7     $3,413.3
    Manufacturers................         47.8         67.7        229.2
Total Direct Compliance Cost.....        250.7        271.4      3,642.5
State and Federal Administrative           1.0          1.0          0.7
 Costs...........................
Total Social Costs...............        251.8        272.4      3,643.2
------------------------------------------------------------------------
                      Using 7 percent discount rate
------------------------------------------------------------------------
Direct Compliance Cost:
    Electric Generators..........        219.2        220.0      3,339.3
    Manufacturers................         51.9         74.2        243.0
Total Direct Compliance Cost.....        271.1        294.3      3,582.3
State and Federal Administrative           1.0          1.0          0.7
 Costs...........................
Total Social Costs...............        272.1        295.3      3,583.0
------------------------------------------------------------------------
\a\ Cost estimates exclude costs associated with baseline closure
  facilities.

    EPA also estimated the cost for installing closed-cycle 
recirculating systems at new units at existing electric generators, to 
reflect the costs of today's rule. As shown in Exhibit IX-5, EPA 
estimated that the new unit provision of the final rule will result in 
an annualized cost of $2.5 million and $2.0 million using 3 percent and 
7 percent discount rates, respectively, including compliance costs to 
facilities and administrative costs to States and Federal government.
    The Agency estimated that at a 3 percent discount rate, the total 
social cost of the final rule, including the existing and new unit 
provisions, will be $275 million. At a 7 percent discount rate, this 
cost is $297 million.

 Exhibit IX-5--Annualized Total Social Cost of the Final Rule--Existing
                  and New Units at Existing Facilities
                   [In millions, 2011 dollars] \a\ \b\
------------------------------------------------------------------------
                                                        3%         7%
                                                     Discount   Discount
                                                       rate       rate
------------------------------------------------------------------------
New Units.........................................       $2.5       $2.0
Existing Units....................................      272.4      295.3
Existing and New Units............................      274.9      297.3
------------------------------------------------------------------------
\a\ Cost estimates exclude costs associated with baseline closure
  facilities.
\b\ Values may not add due to rounding.

D. Economic Impacts

    EPA used several analytic approaches to assess the economic impact 
of today's rule and the other options considered, on electric 
generators and manufacturers. EPA conducted separate analyses for 
electric generators and manufacturers using different methodologies for 
each regulated facilities segment. The following sections summarize the 
methodologies EPA used to conduct the economic impact analyses and the 
findings of these analyses. EPA conducted the economic impact analyses 
discussed in this section for existing facilities; the Agency used 
compliance cost estimates from the EPA engineering analysis (see TDD 
Section X.B).
1. Electric Generators
    For the electric generators segment, EPA assessed the economic 
impact of the existing unit provision of the final rule and other 
options it considered in three ways: (1) The financial burden 
associated with a particular regulatory option on facilities and 
entities that own them, (2) how potential changes in the price of 
electricity would affect electricity consumers, in general, and 
residential households, in particular, and (3) broader economic impacts 
on the electricity market, taking into account the interconnectedness 
of regional and national electricity markets. In preparing the first 
two sets of analyses, EPA developed and used sample weights to 
extrapolate impacts assessed initially at the level of sample of 
facilities, to the full population of facilities subject to the final 
rule. For information on how EPA developed and used sample weights, see 
the EA, Appendix H.
    In addition, EPA assessed the impact of the new unit provision of 
the final rule on decisions of existing facilities to construct stand-
alone new units that would be subject to the new unit provision. EPA 
made this assessment in two ways: (1) On the basis of comparison, on a 
per MW basis, of compliance costs for new units to the overall cost of 
building and operating generating units and (2) as is the case with the 
existing unit provision, in the context of regional and national 
electricity markets, taking into account their interconnectedness.
a. Cost-to-Revenue Analysis for Regulated Facilities and Their Parent 
Entities--Existing Unit Provision of the Final Rule
    EPA assessed the cost to regulated facilities and their parent 
entities on the basis of a cost-to-revenue analysis. For each analysis 
level (facility and parent entity), the Agency assumed, for analytic 
convenience and as a worst-case scenario, that none of the compliance 
costs would be passed on to consumers through electricity rate 
increases and, instead, would be absorbed by regulated facilities and 
their parent entities.\120\ EPA developed

[[Page 48390]]

this analysis for 544 electric generators.\121\
---------------------------------------------------------------------------

    \120\ As discussed in EA Chapter 2A: Industry Profiles, the 
majority of regulated electric generators operate in States with 
regulated electricity markets. EPA estimates that facilities located 
in these States may be able to recover compliance cost-based 
increases in their production costs through increased electricity 
prices. This depends on the business operation model of the facility 
owner(s), the ownership and operating structure of the facility 
itself, and the role of market mechanisms used to sell electricity. 
In contrast, in States where electric power generation has been 
deregulated, cost recovery is less certain. While facilities 
operating within deregulated electricity markets may be able to 
recover some of their additional production costs through increased 
revenue, EPA cannot determine the extent of cost recovery ability 
for each facility.
    \121\ EPA calculated this number as a weighted estimate using 
facility count-based weights. This number excludes facilities 
assumed either to have already retired their steam operations or 
expected to do so in the future.
---------------------------------------------------------------------------

i. Cost-to-Revenue Analysis for Regulated Facilities
    To provide insight into the potential significance of the 
compliance costs to regulated facilities, EPA calculated the ratio of 
annualized after-tax compliance costs to baseline annual facility-level 
revenues. In the cost-to-revenue comparisons, EPA used cost-to-revenue 
thresholds of 1 and 3 percent to categorize facilities according the 
potential economic impact of the rule. EPA concludes that facilities 
incurring costs below 1 percent of revenue will not face significant 
economic impacts, while facilities with costs of at least 1 percent but 
less than 3 percent of revenue have a chance of facing economic 
impacts, and facilities incurring costs of at least 3 percent of 
revenue have a higher probability of significant economic impacts. For 
a more detailed discussion of the methodology EPA used for the 
facility-level cost-to-revenue analysis, see EA Chapter 4.
    Exhibit IX-6 presents a summary of the facility-level cost-to-
revenue analysis results for the final rule and other options 
considered. EPA estimates that overall, under the final rule, 86 
percent of regulated facilities will incur compliance costs of less 
than 1 percent of revenue. Under Proposal Option 4, 87 percent of 
regulated facilities would also incur costs of less than 1 percent of 
revenue. EPA estimates that Proposal Option 2 would result in 42 
percent of facilities incurring costs exceeding 1 percent of revenue, 
and 43 percent incurring costs exceeding 3 percent of revenue.

                      Exhibit IX-6-- Facility-Level Cost-to-Revenue Analysis Results for the Final Rule and Options Considered \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Number of facilities with cost-to-revenue ratio
                                             -----------------------------------------------------------------------------------------------------------
                   Option                                    < 1%                           >= 1% and < 3%                           >= 3%
                                             -----------------------------------------------------------------------------------------------------------
                                                  #             %             #             %             #             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal Option 4...........................               475              87.4                35               6.5                31               5.7
Final Rule..................................               470              86.5                40               7.4                31               5.7
Proposal Option 2...........................               228              41.9                79              14.5               235              43.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Facility counts exclude baseline closures.
\b\ EIA reports no revenue for 1 facility (2 on a weighted basis). Therefore, EPA conducted this analysis for 339 facilities (542 on a weighted basis).
  For more information on facility sample weights see EA Appendix H.

ii. Cost-to-Revenue Analysis for Regulated Parent Entities
    EPA also assessed the economic impact using the cost-to-revenue 
metric at the level of the parent entity. This analysis, which focuses 
on domestic parent entities with the largest ownership share in the 
facility, provides insight on the impact of compliance requirements on 
those entities that own more than one regulated facility. The analysis 
helps to answer the question of whether owning multiple facilities that 
are required to comply with today's rule causes financial stress at the 
entity level. For each identified parent entity, EPA aggregated 
facility-level, annualized, after-tax compliance costs to the level of 
the parent entity and compared these entity-level costs to entity-level 
revenue.
    Similarly to the facility-level analysis, EPA used cost-to-revenue 
thresholds of 1 and 3 percent to categorize facilities according the 
potential economic impact of the rule. EPA used two weighting 
approaches for this analysis: (1) Facility-level weights, but without 
entity-level weights and (2) entity-level weights, but without 
facility-level weights. These approaches, which are described in 
Appendix H of the EA, provide a range of estimates for the number of 
entities incurring compliance costs and the costs incurred by any 
entity that owns a regulated facility. (For a more detailed discussion 
of the methodology used for the entity-level cost-to-revenue analysis, 
see EA Chapter 4).
    Exhibit IX-7 presents results for the entity-level analysis for the 
two weighting approaches. EPA estimates that between 123 and 159 
entities own regulated facilities. Further, the Agency estimates that 
between 91 and 94 percent of parent entities will incur annualized 
costs of less than 1 percent of revenues under the final rule. This 
finding also holds under the two other options EPA considered, with 
between 91 and 94 percent of entities incurring costs of less than 1 
percent of revenue under Proposal Option 4 and between 70 and 78 
percent under Proposal Option 2.

                                             Exhibit IX-7--Entity-Level Cost-to-Revenue Analysis Results \b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Number of entities with cost-to-revenue ratio of
                                                         Total   ---------------------------------------------------------------------------------------
                  Parent entity type                   number of          < 1%             >= 1% and < 3%             >= 3%              Unknown \a\
                                                        entities ---------------------------------------------------------------------------------------
                                                                  #      %      #      %      #      %      #      %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Using Facility-Level Weights:
    Proposal Option 4................................        123        112       91.1          3        2.4          0        0.0          8        6.5
    Final Rule.......................................        123        112       91.1          3        2.4          0        0.0          8        6.5
    Proposal Option 2................................        123         86       69.9         17       13.8         12        9.8          8        6.5
Using Entity-Level Weights:
    Proposal Option 4................................        159        150       94.2          0        0.0          0        0.0          9        5.8

[[Page 48391]]

 
    Final Rule.......................................        159        150       94.2          0        0.0          0        0.0          9        5.8
    Proposal Option 2................................        159        124       78.1         18       11.6          7        4.4          9        5.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ EPA was unable to determine revenues for 8 parent entities (9 weighted).
\b\ This analysis assumes no cost pass-through to electricity consumers.

b. Potential Electricity Price Effects--Existing Unit Provision of the 
Final Rule
    As an additional measure of economic impact, EPA conducted two 
assessments of the potential price effects on electricity of today's 
rule: (1) The annual increase in electricity costs per MWh (megawatt 
hour) of total electricity sales and (2) the potential annual increase 
in household electricity costs. For analytic convenience and as a 
worst-case scenario, these assessments assume that all compliance costs 
will be passed through on a pre-tax basis to consumers as increased 
electricity prices. This full cost pass-through assumption represents a 
``worst-case'' impact scenario from the perspective of electricity 
consumers. Facilities that are merchant providers can pass along costs 
only to the degree that they are competitive with other generators in 
the dispatch process.\122\ This assumption is the opposite of EPA's 
assumption in the facility- and entity-level analyses discussed above--
that facilities will pass none of the compliance costs through to 
consumers in electricity rate increases. If facilities are able to pass 
through all costs, the impacts in the previous subsection would not 
occur. The two conditions (no cost pass-through and full cost pass-
through) could not occur at the same time. Thus, the results of the 
electricity price-effects analyses discussed in this section, and of 
the facility- and entity-level analyses discussed in Section IX.D.a.1, 
should not be combined. EPA conducted this analysis for 544 electric 
generators.
---------------------------------------------------------------------------

    \122\ As discussed earlier in Section X.D.b.1, even though 
individual regulated facilities may not be able to recover all of 
their compliance costs through increased revenues, the market-level 
effect may still be that consumers will see higher overall 
electricity prices because of changes in the cost structure of 
electricity supply and resulting changes in market-clearing prices 
in deregulated electricity markets.
---------------------------------------------------------------------------

i. Compliance Cost per Unit of Electricity Sales
    EPA assessed the potential increase in electricity rates by NERC 
region based on the annual cost of the regulatory options per unit of 
electricity sold. The Agency used two data inputs: (1) Total pre-tax 
compliance cost by NERC region, and (2) estimated total electricity 
sales in the year 2020, to gauge the full effects of the rule. To 
calculate the total estimated annual cost in each NERC region, the 
Agency summed sample-weighted, pre-tax annualized compliance costs over 
regulated facilities by region. EPA then calculated the approximate 
average price impact per unit of electricity consumption by dividing 
total compliance costs by the reported total MWh of sales in each NERC 
region. (Details of this analysis are presented in the EA, Chapter 4.)
    As reported in Exhibit IX-8, under the existing unit provision of 
the final rule, annualized compliance costs (in cents per kWh sales) 
range from nearly $0.00 in the WECC region to $0.040 in the HICC 
region. EPA reached the same findings for Proposal Option 4. Under 
Proposal Option 2, costs range from $0.00 in the WECC region to $0.351 
in the HICC region. On average, across the United States, the final 
rule and Proposal Option 4 result in a cost of $0.009 per kWh, while 
Proposal Option 2 results in a higher cost of $0.155 per kWh.

 Exhibit IX-8--Compliance Cost per Unit of Electricity Sales in 2020 by
                    Regulatory Option and NERC Region
                     [2011 [cent]/KWh sales] \a\ \b\
------------------------------------------------------------------------
                                     Proposal                  Proposal
       NERC region \c\ \d\           option 4    Final rule    option 2
------------------------------------------------------------------------
ASCC.............................        0.000        0.000        0.000
FRCC.............................        0.014        0.014        0.171
HICC.............................        0.040        0.040        0.351
MRO..............................        0.010        0.010        0.174
NPCC.............................        0.008        0.008        0.126
RFC..............................        0.011        0.011        0.200
SERC.............................        0.013        0.013        0.219
SPP..............................        0.009        0.009        0.078
TRE..............................        0.008        0.008        0.206
WECC.............................        0.000        0.000        0.000
United States....................        0.009        0.009        0.155
------------------------------------------------------------------------
\a\ This analysis assumes full pass-through of all compliance costs to
  electricity consumers.
\b\ Cost values exclude baseline closures.
\c\ ASCC--Alaska Systems Coordinating Council; FRCC--Florida Reliability
  Coordinating Council; HICC--Hawaii Coordinating Council; MRO--Midwest
  Reliability Organization; NPCC--Northeast Power Coordinating Council;
  RFC--ReliabilityFirst Corporation; SERC--Southeastern Electric
  Reliability Council; SPP--Southwest Power Pool; TRE--Texas Reliability
  Entity, and WECC--Western Energy Coordinating Council.
\d\ No explicitly analyzed facilities are in the ASCC region. For more
  information on explicitly and implicitly analyzed regulated
  facilities, see EA Appendix H.


[[Page 48392]]

ii. Cost to Households
    As an additional measure of the potential electricity price effects 
associated with the final rule, EPA estimated the potential annual 
increase in electricity costs per household and by NERC region. EPA 
used total annualized pre-tax compliance cost per MWh of sales, as 
estimated for the electricity rate impact analysis discussed above and 
the quantity of residential electricity sales per household as reported 
in the 2011 EIA database. To calculate the potential annual cost impact 
per household, EPA multiplied the average cost per kWh by the average 
kWh per household estimated for each NERC region. (Chapter 4 of the EA 
presents details of this analysis.)
    As presented in Exhibit IX-9, under the existing unit provision of 
the final rule, the average annual cost per residential household 
varies across NERC regions, ranging from $0.01 in WECC to $2.82 in 
HICC. EPA reached the same findings for Proposal Option 4. Under 
Proposal Option 2, the average annual cost per residential household 
also varies across NERC regions, ranging from $0.01 in WECC to $31.72 
in SERC. EPA estimated that on average, for a typical U.S. household, 
the final rule will result in an annual cost of $1.03 in higher 
electricity rates per household. EPA estimates that this cost would be 
$1.03 per household under Proposal Option 4 and $17.23 per household 
under Proposal Option 2.

  Exhibit IX-9--Average Annual Cost Burden per Residential Household in
   2020 for the Final Rule and Options Considered, and by NERC Region
                         [2011 dollars] \a\ \b\
------------------------------------------------------------------------
                                     Proposal                  Proposal
       NERC region \c\ \d\           option 4    Final rule    option 2
------------------------------------------------------------------------
ASCC.............................        $0.00        $0.00        $0.00
FRCC.............................         1.91         1.91        23.15
HICC.............................         2.82         2.82        24.61
MRO..............................         0.99         1.02        18.10
NPCC.............................         0.61         0.62         9.52
RFC..............................         1.10         1.10        20.64
SERC.............................         1.96         1.96        31.72
SPP..............................         1.30         1.30        10.71
TRE..............................         1.15         1.15        30.59
WECC.............................         0.01         0.01         0.01
United States....................         1.03         1.03        17.23
------------------------------------------------------------------------
\a\ The rate impact analysis assumes full pass-through of all compliance
  costs to electricity consumers.
\b\ Cost estimates exclude baseline closures.
\c\ ASCC--Alaska Systems Coordinating Council; FRCC--Florida Reliability
  Coordinating Council; HICC--Hawaii Coordinating Council; MRO--Midwest
  Reliability Organization; NPCC--Northeast Power Coordinating Council;
  RFC--ReliabilityFirst Corporation; SERC--Southeastern Electric
  Reliability Council; SPP--Southwest Power Pool; TRE--Texas Reliability
  Entity, and WECC--Western Energy Coordinating Council.
\d\ No explicitly analyzed facilities are in the ASCC region. For more
  information on explicitly and implicitly analyzed regulated
  facilities, see EA Appendix H.

    As noted above, this analysis assumes that facilities will pass 
through to consumers all compliance costs through increased electricity 
rates. However, facilities and owner entities might not be able to 
recover all these costs through rate increases, thereby reducing the 
impact of today's rule on electricity consumers. At the same time, EPA 
recognizes that electric generators that operate as regulated public 
utilities will generally recover environmental compliance costs through 
rate increases to consumers.
c. Barrier-To-Development Analysis--New Unit Provision of the Final 
Rule
    EPA assessed the impact of the new unit provision of the final rule 
on decisions of existing facilities to construct stand-alone new units 
that would be subject to the new unit provision. As discussed earlier 
in this preamble, under this provision, electric power generating units 
that meet the definition of a new unit will be required to achieve 
intake flow commensurate with closed-cycle cooling. The question of 
potential impact of this provision on the construction of new stand-
alone units is important because new stand-alone units will generally 
operate with higher energy efficiency and lower environmental impact 
than older electric generating capacity, which the new units would tend 
to displace as a source of electric power generation. As such, EPA 
sought to ensure that the new unit provision would not impede 
construction of stand-alone new units.
    For this analysis, EPA compared the compliance costs for new units 
to the overall cost of building and operating generating units, on a 
per MW basis. The purpose of this analysis is to determine whether the 
required addition of a closed-cycle recirculating system (CCRS) as part 
of a new unit would substantially increase the cost for the new stand-
alone unit, and adversely affect the decision to construct the new 
stand-alone unit. This analysis showed that given the low cost of CCRS 
in relation to the cost of new capacity, the CCRS requirement will not 
pose a barrier to development of new stand-alone units.
    EPA also assessed the costs associated with the new unit provision 
of the final rule as part of its electricity market analysis, as 
discussed in the following section (Section IX.D). This analysis tests 
the impact of the new unit requirements on electricity markets 
accounting for the expected number and timing of new unit 
installations, and provides additional insight on whether the costs of 
complying with the new unit provision of the final rule would affect 
future capacity additions. This analysis found no material effect of 
the final rule's new unit provision on the number and type of new units 
that would be constructed. This finding also supports EPA's conclusion 
that the new unit provision will not be a barrier to development of new 
capacity.
d. Impacts in the Context of Electricity Markets--Existing and New Unit 
Provisions of the Final Rule
    In the analyses for the previous 316(b) regulations, including the 
proposed rule, EPA used the Integrated Planning Model 
(IPM[supreg]),\123\ a comprehensive electricity market optimization 
model, to assess the economic impact of regulatory options within the 
context of

[[Page 48393]]

regional and national electricity markets. To assess facility and 
market-level effects of the final rule, EPA used an updated version of 
this same analytic system, the Integrated Planning Model Version 4.10 
MATS (IPM V4.10--MATS) platform.
---------------------------------------------------------------------------

    \123\ Developed by ICF, Inc.
---------------------------------------------------------------------------

    Use of a comprehensive, market analysis system is important in 
assessing the potential impact of the final rule because of the 
interdependence of electricity generating units in supplying power to 
the electric transmission grid. Increases in electricity production 
costs and potential reductions in electricity output at regulated 
facilities--due to the temporary shutdown of existing electric 
generating units during technology installation--can have a range of 
broader market impacts that extend beyond the effect on regulated 
facilities and their direct customers. In addition, the impact of 
compliance requirements on regulated facilities may be seen differently 
when the analysis considers the impact on those facilities in the 
context of the broader electricity market instead of looking at the 
impact on a stand-alone, single-facility basis.
    The IPM V4.10--MATS platform provides outputs for the NERC regions 
that lie within the continental United States. This IPM platform does 
not analyze electric power operations in Alaska and Hawaii because 
these operations are not connected to the continental U.S. power grid. 
The IPM V4.10--MATS platform is based on an inventory of U.S. utility- 
and non-utility-owned boilers and generators that provide power to the 
integrated electric transmission grid, as recorded in the EIA 860 
(2006) and EIA 767 (2005) databases.\124\ IPM does not include electric 
power facilities that do not provide power to the U.S. power grid 
(e.g., some generating units at industrial facilities). The IPM V4.10--
MATS universe consists of 14,920 generating units at 4,910 existing 
electric power facilities, including 520 of the 544 regulated electric 
power facilities subject to the final rule.\125\
---------------------------------------------------------------------------

    \124\ In some instances, facility information has been updated 
to reflect known material changes in a facility's generating 
capacity since 2006.
    \125\ Facilities excluded from the IPM analysis include three 
facilities in Hawaii and one facility in Alaska (i.e., areas that 
are outside the geographic scope of the model), four on-site 
facilities that are not connected to the integrated electric 
transmission grid, four facilities excluded from the IPM baseline as 
the result of custom adjustments made by ICF, and 12 facilities that 
did not respond to the 316(b) survey.
---------------------------------------------------------------------------

    This IPM V4.10--MATS platform embeds a baseline energy demand 
forecast from the Department of Energy's Annual Energy Outlook 2010 
(AEO2010), with adjustments by EPA to account for the effect of certain 
voluntary energy efficiency programs. This platform also incorporates 
in its analytic baseline the expected compliance response to existing 
regulatory requirements for the following promulgated air regulations 
affecting the power sector: the final Mercury and Air Toxics Standards 
(MATS) rule; the final Cross-State Air Pollution Rule (CSAPR); \126\ 
regulatory SO2 emission rates arising from State 
Implementation Plans (SIP); Title IV of the Clean Air Act Amendments; 
NOX SIP Call trading program; Clean Air Act Reasonable 
Available Control Technology requirements and Title IV unit specific 
rate limits for NOX; the Regional Greenhouse Gas Initiative; 
Renewable Portfolio Standards; New Source Review Settlements; and 
several state-level regulations affecting emissions of SO2, 
NOX, and mercury that are already in place or expected to 
come into force by 2017.
---------------------------------------------------------------------------

    \126\ EPA's Cross-State Air Pollution Rule (CSAPR) was 
promulgated to replace EPA's Clean Air Interstate Rule (CAIR), which 
had been remanded to EPA in 2008. However, on December 30, 2011, the 
U.S. Court of Appeals for the D.C. Circuit stayed CSAPR pending 
judicial review and left CAIR in place. On August 21, 2012 the Court 
issued an opinion vacating CSAPR and again leaving CAIR in place 
pending development of a valid replacement. On March 29, 2013, the 
United States filed a petition asking the Supreme Court to review 
the D.C. Circuit's opinion. Nevertheless, as explained above, CAIR 
remains in effect at this time. In light of the continuing 
uncertainty on CAIR and CSAPR, EPA determined it would not be 
appropriate or possible at this time to adjust emission projections 
on the basis of speculative alternative emission reduction 
requirements in 2020. EPA expects that the decision vacating CSAPR 
and leaving CAIR in place has minimal effect on the results of the 
analysis conducted in support of the final rule.
---------------------------------------------------------------------------

    In contrast to the screening-level analyses described earlier, 
which are static analyses and do not account for interdependence of 
electric generating units in supplying power to the electric 
transmission grid, IPM accounts for potential changes in the generation 
profile of individual electric power facilities and consequent changes 
in market-level generation costs, as a result of the final rule. The 
model is dynamic in that the analysis covers a multiple-decade period 
with information and decisions in any specific period depending on the 
analysis information and optimization results for the entire analysis 
period. The model is also forward-looking in that it uses forecasts of 
future conditions to make decisions for the present. Finally, in 
contrast to the screening-level analyses in which EPA assumed either no 
pass through of compliance costs (facility and entity cost-to-revenue 
analyses discussed in Section IX.D.a.1) or full cost pass-through 
(analysis of potential electricity price effects, Section IX.D.b.1), 
IPM assesses price and revenue effects from increased costs in 
competitive wholesale electricity markets, where some recovery of 
compliance costs through increased electricity prices is possible but 
not guaranteed.
    In performing analyses based on the IPM V4.10--MATS platform, EPA 
used as its baseline a projection of electricity markets and facility 
operations without the final rule requirements (baseline case). As 
discussed above, this baseline accounts for compliance with the 
recently promulgated Federal air rules. EPA then overlaid this baseline 
with the estimated compliance costs and other operating effects--
downtime for installation of IM technologies at existing units and 
auxiliary energy requirement to operate cooling towers at new units--
for regulated facilities under the policy case.
    As discussed in Appendix P of the EPA report, the IPM V4.10--MATS 
platform models the electric power market over the 43-year period from 
2012 to 2054. Within this total analysis period, EPA looked at shorter 
IPM analysis periods (run-year windows) \127\ to assess the effect of 
the final rule on national and regional electricity markets. 
Specifically, to assess the impact of the final rule during the period 
when regulated facilities temporarily suspend their operation to 
install compliance technologies--the short-term effects analysis or the 
downtime effects analysis--EPA used results reported for the 2020 IPM 
run year, which represent an 8-year window of 2017 through 2024.\128\ 
The incurrence of downtime may lead to higher electricity generation 
costs overall, as generating units at regulated facilities are taken 
out of service to complete technology installation and other generating 
units, presumably with higher production costs, are dispatched to meet 
electricity demand. Because of the potential resulting increase in 
electricity generation costs, it is

[[Page 48394]]

important to examine market-level effects during the period in which 
downtime would occur.
---------------------------------------------------------------------------

    \127\ Due to the highly data- and calculation-intensive 
computational procedures required for the IPM dynamic optimization 
algorithm, IPM is run only for a limited number of years. Run years 
are selected based on analytical requirements and the necessity to 
maintain a balanced choice of run years throughout the modeled time 
horizon. Each run year represents adjacent years in addition to the 
run year itself.
    \128\ As discussed earlier in this document, for the cost and 
economic impact analyses, EPA assumed that electric generators will 
install IM technologies during the 5-year window of 2018 through 
2022. Because this technology-installation window falls within the 
time period captured by the 2020 run year (i.e., 2017 through 2024), 
EPA judges that 2020 is an appropriate year to capture the effects 
of technology-installation downtime.
---------------------------------------------------------------------------

    To assess the longer term effect of the final rule on electricity 
markets during the period after compliance technology is installed at 
all regulated facilities--the steady-state post-compliance period--EPA 
analyzed results reported for the IPM 2030 run year, which represents a 
10-year window of 2025 through 2034.\129\ Effects that may occur during 
this steady-state period include increased electricity production costs 
at regulated facilities and potential permanent losses in generating 
capacity from early retirement (closure) of generating units. Both 
effects may lead to higher overall electricity generation costs through 
not only the increased production cost in regulated facilities, but 
also through dispatch of higher production cost units to offset 
capacity losses, reflecting the general upward shift in production 
costs.\130\
---------------------------------------------------------------------------

    \129\ EPA expects this steady-state period to begin in the last 
year of the technology-installation window, i.e., 2022, and continue 
into the future. The 2022 analysis year is captured in the IPM 2020 
run year, as opposed to the 2030 run year. However, because all 
analysis years represented by the 2030 run year (i.e., 2025-2034) 
fall outside the technology-installation window of 2018 through 
2022, EPA judges that 2030 is an appropriate year to capture longer 
term, steady-state effects of the final rule.
    \130\ In seeking to minimize the cost of meeting electricity 
demand, IPM will tend to shift production away from regulated 
facilities that incur compliance costs, and will shift production to 
either non-regulated facilities, which incur no compliance costs, or 
to regulated facilities that incur relatively lower compliance 
costs. Any of these changes--whether a simple increase in production 
costs for previously dispatched units or changes in the profile of 
generating unit dispatch--mean increased total costs for electricity 
generation, compared to the pre-regulation baseline.
---------------------------------------------------------------------------

    EPA measured the impacts of the final rule as the difference 
between key economic and operational impact metrics between the 
baseline case and the policy case. All analysis results presented below 
are representative of modeled market conditions in the years 2017-2034. 
While costs are in 2011 dollars, they are reflective of costs in the 
modeled years and are not discounted to the start of EPA's analysis 
period of 2013.\131\ In contrast to the earlier statement that the cost 
and economic impact analysis findings presented in this preamble may be 
underestimates because EPA assumed that no facilities with impoundments 
will install compliance technology, the market-based analysis presented 
in this section reflects the opposite assumption. Namely, despite the 
final rule's treatment of impoundments, for purposes of this analysis, 
none of the facilities with impoundments are treated as having closed-
cycle cooling in the baseline. As a result, to the extent that some of 
these facilities may qualify as having closed-cycle recirculating 
systems in the baseline, and thus would not need to install compliance 
technology, the costs and economic impacts reported in this section may 
be overestimated.
---------------------------------------------------------------------------

    \131\ In contrast, the social cost estimated in Section IX.C 
reflects the discounted value of compliance costs over the entire 
51-year analysis period, as of 2013. Additionally, screening-level 
analyses presented in earlier sections are static analyses and do 
not account for interdependence of electric generating units in 
supplying power to the electric transmission grid. In contrast, IPM 
accounts for potential changes in the generation profile of steam 
electric and other units and consequent changes in market-level 
generation costs, as the electric power market responds to higher 
generation costs for steam electric units due to the final rule.
---------------------------------------------------------------------------

i. Analysis Results for the Year 2030--To Reflect Steady State, Post-
Compliance Operations
    For the steady-state analysis (2030), EPA considered impact metrics 
of interest at three levels of aggregation: (1) Impact on national and 
regional electricity markets, (2) impact on the group of 520 regulated 
facilities modeled in IPM, and (3) impact on individual 520 regulated 
facilities.

Impact on National and Regional Electricity Markets

    For the assessment of market-level impacts, EPA considered six 
output metrics: (1) Incremental capacity retirements (closures); (2) 
changes in capacity retirements as a percent of total baseline capacity 
(3) changes in new capacity additions; (4) changes in variable 
production costs per MWh, calculated as the sum of total fuel and 
variable O&M costs divided by net generation; (5) changes in total 
generation costs (fuel, variable O&M, fixed O&M, and capital); and (6) 
changes in wholesale electricity prices.
    As shown in Exhibit IX-10, the final rule has small effects on the 
electricity market, on both the national and regional sub-market basis, 
in 2030. At the national level, the analysis shows a total net increase 
in retired capacity of approximately 1 GW, or less than 0.1 percent of 
the total baseline capacity in 2030 (capacity retirements are discussed 
in greater detail in the next section, Impact on Regulated Facilities 
as a Group). This 1 GW of net capacity loss reflects a combination of 
closures and avoided closures of generating units. ``Avoided closure'' 
means a generating unit that was projected to close in the baseline 
case but remains open in the policy case because of changes in the 
relative operating economics of generating capacity. In some instances 
an avoided closure can result in an avoided full facility closure. 
Overall, the final rule will lead to early retirement of approximately 
4 GW of generating capacity and approximately 3 GW of avoided closure 
of capacity otherwise projected to retire by 2030, resulting in a net 
closure of approximately 1 GW of generating capacity. With only one 
exception, these retirements involve older, less efficient generating 
units with very low capacity utilization rates.
    Five of the eight analyzed NERC regions record modest increases in 
retired capacity, with the largest increase, 0.8 percent of baseline 
retired capacity, projected to occur in TRE. One NERC region--SPP--
avoids capacity closures, where 1.5 percent of capacity otherwise 
projected to retire in the baseline, becomes a more economically viable 
source of electricity in the policy case due to changes in the relative 
economics of electricity production across the full market, and thus 
avoids closure.\132\ Consequently, the final rule is not expected to 
have a material ongoing effect on capacity availability and supply 
reliability at either the national or the NERC region level.
---------------------------------------------------------------------------

    \132\ Avoided closures may occur among facilities that incur no 
compliance costs under the final rule or for which compliance costs 
are low relative to the costs estimated for other regulated 
facilities.
---------------------------------------------------------------------------

    The 1 GW of retired capacity is replaced by new, more efficient, 
and less polluting capacity. Because the new capacity is more efficient 
and less costly to run than the retired capacity, it will run at a 
higher capacity utilization rate than the retired capacity; less new 
capacity is required to meet electricity demand than the retired 
capacity that it replaces. As shown in Exhibit IX-11, under the final 
rule, new capacity additions increase by 1 GW at the national level; 
this increase represents 0.5 percent of new baseline capacity and 0.1 
percent of total baseline capacity (see Exhibit IX-10). This increase 
in new capacity is mostly comprised of combined cycle capacity followed 
by other non-steam capacity, with coal steam capacity additions 
remaining zero in both the baseline case and the policy case. 
Consequently, this analysis shows that the final rule is not likely to 
impede construction of new combined cycle and coal steam generating 
units.\133\
---------------------------------------------------------------------------

    \133\ As described earlier in this preamble, under the new unit 
provision of the final rule, new units as defined at 125.92 include, 
stand-alone fossil fuel and combined cycle units. As described in 
Chapter 6 of the EA, the IPM analysis accounts only for compliance 
costs associated with new units. Further, EPA assigned these costs 
only to coal steam and combined cycle capacity.
---------------------------------------------------------------------------

    As reported in Exhibit IX-10, overall, the final rule has only a 
slight impact on electricity prices. For three out of eight NERC 
regions, electricity prices decline

[[Page 48395]]

slightly--by no more than $0.05 per MWh (0.1 percent) in TRE. 
Electricity prices increase in the remaining five NERC regions, with 
the largest increase, $0.29 per MWh (0.4 percent), occurring in NPCC. 
These very small estimated changes in electricity prices are 
essentially within the analytic ``noise'' of the electricity market 
modeling system.
    At the national level, total generation costs increase by 0.3 
percent of the baseline value--again, a very modest amount. Across 
regions, no NERC region records an increase in total costs exceeding 
0.5 percent. The change in variable production costs ($/MWh)--a 
specific measure of the effect of the final rule on short-run 
electricity generation costs--is nearly zero with no NERC region 
recording a consequential change.

                               Exhibit IX-10--Impact of the Final Rule on National and Regional Markets, at the Year 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Net changes in early       Changes in variable     Changes in total costs    Changes in electricity
                                        Total            retirements                  costs          --------------------------           price
                                       baseline  ----------------------------------------------------                          -------------------------
          NERC region \a\              capacity                % of  total                                             % of
                                         (GW)          GW        baseline    $2011/MWh       % of      Mill 2011$    baseline    $2011/MWh       % of
                                                                 capacity                  baseline                                            baseline
--------------------------------------------------------------------------------------------------------------------------------------------------------
FRCC...............................           68            0         0.30       -$0.03        -0.10          $51         0.30        -0.01         0.00
MRO................................           76            0         0.00         0.01         0.10           62         0.40         0.21         0.30
NPCC...............................           73            0         0.50         0.00         0.00           28         0.20         0.29         0.40
RFC................................          237            0         0.10         0.01         0.00          157         0.30         0.15         0.20
SERC...............................          274            0         0.10         0.02         0.10          182         0.30         0.08         0.10
SPP................................           59           -1        -1.50         0.02         0.10           31         0.30        -0.01         0.00
TRE................................           98            1         0.80        -0.01         0.00           48         0.30        -0.05        -0.10
WECC...............................          220            0         0.00         0.00         0.00            9         0.00         0.03         0.00
                                    --------------------------------------------------------------------------------------------------------------------
    Total..........................        1,106            1         0.10         0.00         0.00          568         0.30  ...........          N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ FRCC (Florida Reliability Coordinating Council), MRO (Midwest Reliability Organization), NPCC (Northeast Power Coordination Council), RFC
  (ReliabilityFirst Corporation), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), TRE (Texas Reliability Entity), and
  WECC (Western Electricity Coordinating Council).


                 Exhibit IX-11--Impact of the Final Rule on New Capacity (GW), at the Year 2030
----------------------------------------------------------------------------------------------------------------
                                                                                    Final rule
                  Capacity type                   Baseline value -----------------------------------------------
                                                                       Value        Difference       % Change
----------------------------------------------------------------------------------------------------------------
Coal Steam......................................               0               0               0              NA
Combined Cycle..................................              75              76               1             0.8
Combustion Turbine..............................               6               6               0             0.0
Hydro...........................................               0               0               0              NA
Nuclear.........................................               0               0               0              NA
O/G Steam.......................................               0               0               0              NA
Other Non-Steam \a\.............................              25              25               0             0.1
Other Steam \b\.................................               9               9               0             0.0
                                                 ---------------------------------------------------------------
    Total.......................................             114             115               1             0.5
----------------------------------------------------------------------------------------------------------------
\a\ Other non-steam capacity includes wind, solar, pumped storage, and fuel cell.
\b\ Other steam capacity includes biomass, geothermal, municipal solid waste, fossil waste, landfill gas, tires,
  and non-fossil waste.

Impact on Regulated Facilities as a Group
    EPA used the same IPM V4.10--MATS analysis results for 2030 as 
those used to assess market-level impacts described above; however, 
this analysis considers the effect of the final rule only on regulated 
facilities modeled in IPM (i.e., 520 facilities). For this analysis, 
EPA considered four output metrics: (1) Incremental capacity closures; 
(2) changes in capacity closures as a percent of total baseline 
capacity; (3) changes in total generation; and (4) changes in variable 
production costs per MWh.
    As shown in Exhibit IX-12, for the group of regulated facilities, 
the impact of the final rule is overall slightly greater than that 
observed over all generating units in the IPM universe (i.e., market-
level analysis discussed in the preceding section). This difference is 
due to the fact that in the electricity market as a whole, impacts on 
regulated facilities, which become less competitive compared to 
facilities that do not incur compliance costs, are offset by changes in 
capacity and energy production at the other electric power facilities. 
Nevertheless, the impact on the group of regulated facilities remains 
small. For instance, while there is essentially no change in total 
available capacity for the overall electricity market at the national 
level, for the group of regulated facilities, total available capacity 
falls by only 0.4 percent (2 GW). At the regional level, five NERC 
regions incur loss in total capacity, with the largest percentage loss 
of 2.8 percent and the largest absolute loss of 0.9 GW occurring in the 
NPCC region.
    The 2 GW of capacity loss at regulated facilities reflects a 
combination of closures and avoided closures of generating units in the 
universe of regulated facilities. Some unit closures result in full 
facility closures (i.e., all generating units at a facility close), 
while others result in only partial facility closures (i.e., some, but 
not all, generating units at a facility close). For avoided closures, a 
generating unit projected to close in the baseline case but remains 
open under the policy case,

[[Page 48396]]

in some instances resulting in an avoided full facility closure. 
Overall, 22 generating units close (4 GW) and 12 generating units avoid 
closure (2 GW) in the policy case, resulting in net closure of 10 
generating units (approximately 2 GW) in Electricity Market Analysis--
Final Rule analysis. The 22 generating unit closures reflect retirement 
of nine units at six full-closure facilities (2 GW) and retirement of 
13 units at six partial-closure facilities (2 GW). With only one 
exception, these retirements involve older, less efficient generating 
units with very low capacity utilization rates.
    At the national level, for the group of regulated facilities, total 
generation at regulated facilities declines by less than 2 GWh or 
approximately 0.1 percent of baseline generation in these facilities. 
The MRO and SERC regions record slight increases in generation 
essentially amounting to zero percent of baseline generation at 
regulated facilities in these regions, with the remaining five NERC 
regions recording a reduction in electricity generation of no more than 
0.4 percent in FRCC.
    Over all regulated facilities, there is essentially no change in 
variable production costs ($/MWh) at the national level, while at the 
NERC region level, the change does not exceed 0.2 percent for any of 
the regions. These findings of very small effects confirm EPA's 
assessment that the assessed capacity closures among regulated 
facilities are of little economic consequence at both the national and 
regional levels.

                   Exhibit IX-12--Impact of Electricity Market Analysis Options on the Group of Regulated Facilities, at the Year 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Net change in early      Change in generation       Change in variable
                                                                 Baseline     retirements/closures   --------------------------      production cost
                       NERC region \a\                           capacity  --------------------------                          -------------------------
                                                                   (MW)       Capacity       % of         GWh          % of                      % of
                                                                                (MW)       baseline                  baseline    $2011/MWh     baseline
--------------------------------------------------------------------------------------------------------------------------------------------------------
FRCC.........................................................       30,794          203          0.7         -527         -0.4        -0.08         -0.2
MRO..........................................................       31,747            0          0.0           30          0.0         0.01          0.1
NPCC.........................................................       30,977          855          2.8          -25          0.0         0.00          0.0
RFC..........................................................      126,905          223          0.2         -619         -0.1         0.00          0.0
SERC.........................................................      142,840          476          0.3            3          0.0         0.02          0.1
SPP..........................................................       24,487         -530         -2.2         -411         -0.3         0.01          0.0
TRE..........................................................       38,378          808          2.1         -163         -0.1        -0.02         -0.1
WECC.........................................................       34,788            0          0.0           -8          0.0         0.00          0.0
                                                              ------------------------------------------------------------------------------------------
    Total....................................................      460,917        2,035          0.4       -1,721         -0.1         0.00          0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ FRCC (Florida Reliability Coordinating Council), MRO (Midwest Reliability Organization), NPCC (Northeast Power Coordination Council), RFC
  (ReliabilityFirst Corporation), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), TRE (Texas Reliability Entity), and
  WECC (Western Electricity Coordinating Council).

Impact on Individual Regulated Facilities
    Results for the group of 520 regulated facilities as a whole may 
mask shifts in economic performance among individual facilities 
incurring compliance costs under the final rule. To assess potential 
facility-level effects, EPA analyzed facility-specific changes between 
the baseline case and the final rule for the following metrics: (1) 
Capacity utilization (defined as annual generation (in MWh) divided by 
[capacity (MW) times 8,760 hours]) (2) electricity generation, and (3) 
variable production costs per MWh.
    Exhibit XI-13 presents the estimated number of regulated facilities 
with specific degrees of change in operations and financial 
performance. Under the final rule, this analysis shows that most 
facilities experience only slight effects--i.e., no change or less than 
a 1 percent reduction or 1 percent increase. Only six facilities are 
estimated to incur a reduction in capacity utilization and 13 
facilities a reduction in generation of at least 1 percent, with only 
five facilities estimated to incur an increase in variable production 
costs per MWh of at least 1 percent. These facilities represent 
approximately 1 percent of 520 regulated facilities analyzed in IPM.

                Exhibit IX-13--Impact of the Electricity Market Analysis--Final Rule on Individual Regulated Facilities at the Year 2030
                                                 [Number of regulated facilities with indicated effect]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Reduction                                    Increase
                                                                 ---------------------------------           ---------------------------------  N/A \b\
                        Economic measures                                     >=1 and              No Change              >=1 and                 \c\
                                                                     >=3%       <3%        <1%                   <1%        <3%        >=3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Capacity Utilization \a\..............................          1          5         45        340         35          2          0         92
Change in Generation............................................          9          4         37        345         29          2          2         92
Change in Variable Production Costs/MWh.........................          2          1         70         86        242          4          1        114
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The change in capacity utilization is the difference between the capacity utilization percentages in the baseline and policy cases. For all other
  measures, the change is expressed as the percentage change between the baseline and post-compliance values.
\b\ Facilities with status changes in either the baseline case or the policy case were excluded from these calculations. Specifically, there are 17 full
  baseline facility closures, 59 partial baseline facility closures, four avoided partial facility closures, six partial policy facility closures, and
  six partial policy facility closures.
\c\ The change in variable production cost per MWh could not be developed for 22 facilities with zero generation in either the baseline case or the
  policy case.


[[Page 48397]]

ii. Analysis Results for 2020--To Capture the Effect of Technology-
Installation Downtime
    This section presents market-level results for the final rule for 
the 2020 IPM run year, which represents 2017 through 2024. As discussed 
above, this IPM run year captures the period when regulated facilities 
are expected to install compliance technologies under the final rule. 
Of particular importance as a potential impact, the additional downtime 
from installation of compliance technologies could manifest as 
increased electricity production costs resulting from the dispatch of 
higher-production-cost generating units during the period when units 
are taken offline to install compliance technologies. Because these 
effects are of most concern in terms of potential impact on national 
and regional electricity markets, this section presents results only 
for the overall electricity market and does not present results for the 
subset of regulated facilities.
    As shown in Exhibit IX-14, the estimated effects of technology-
installation downtime under the final rule are small. At the national 
level, total production costs increase by 0.4 percent. At the regional 
level, these costs increase in all NERC regions, with MRO and SPP 
recording the largest increase of 0.6 percent.
    At the national level, variable production costs ($/MWh) increase 
by approximately 0.2 percent. While the effect on variable production 
costs varies across NERC regions, this effect is small overall, with 
the largest increase of less than 0.4 percent occurring in FRCC. While 
electricity prices increase in all NERC regions, the magnitude of that 
increase is generally small, ranging from $0.15 per MWh (0.3 percent) 
in MRO and WECC to $0.56 per MWh (0.9 percent) in FRCC.

             Exhibit IX-14--Short-Term Effect of Technology Installation Downtime on National Electricity Market Under the Final Rule--2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Change in generation       Change in variable       Change in total costs     Change in electricity
                                                 --------------------------      production cost     --------------------------           price
                 NERC Region \a\                                           --------------------------                          -------------------------
                                                   2011$/MWh       % of                      % of       Million        % of                      % of
                                                                 baseline    2011$/MWh     baseline      2011$       baseline    2011$/MWh     baseline
--------------------------------------------------------------------------------------------------------------------------------------------------------
FRCC............................................         -108          0.0         0.13          0.4           51          0.5         0.56          0.9
MRO.............................................           52          0.0         0.03          0.2           64          0.6         0.15          0.3
NPCC............................................          -88          0.0         0.05          0.2           31          0.3         0.18          0.3
RFC.............................................          447          0.0         0.03          0.1          164          0.4         0.19          0.4
SERC............................................         -369          0.0         0.04          0.1          185          0.4         0.27          0.6
SPP.............................................          -53          0.0         0.08          0.3           56          0.6         0.18          0.4
TRE.............................................            0          0.0         0.08          0.3           64          0.5         0.21          0.4
WECC............................................           33          0.0         0.04          0.2           39          0.1         0.15          0.3
                                                 -------------------------------------------------------------------------------------------------------
    Total.......................................          -88          0.0         0.05          0.2          652          0.4                       N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ FRCC (Florida Reliability Coordinating Council), MRO (Midwest Reliability Organization), NPCC (Northeast Power Coordination Council), RFC
  (ReliabilityFirst Corporation), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), TRE (Texas Reliability Entity), and
  WECC (Western Electricity Coordinating Council).

EPA recognizes any capacity outages estimated to occur in conjunction 
with installation of compliance technologies at existing units will 
require outage coordination by the system operator or other planning 
authority. Where possible, these outages would be scheduled in 
concurrence with normal scheduled maintenance outages. Permit 
authorities are provided flexibility to tailor compliance timelines. 
This flexibility will ensure that any adverse impact on local electric 
reliability as a result of this rule will be avoided. Facilities would 
receive workable construction schedules from permit writers that will 
allow schedule outages for installation without adversely affecting 
electric supply reliability.
2. Manufacturers
    This section presents EPA's estimated economic impacts on 
manufacturers for the final rule and the other options EPA considered. 
These analyses assess the impact of regulatory requirements on the 
financial performance of regulated facilities (facility-level analysis) 
and the entities that own them (entity-level analysis). Similarly to 
the electric generators analysis, for the manufacturers facility-level 
and entity-level analyses, the Agency assumed that facilities would 
pass none of their compliance costs forward to customers as price 
increases, i.e., all compliance costs will be absorbed by regulated 
facilities and their parent entities. For details on the cost-pass-
through (CPT) analysis for information on this assumption, see the EA, 
Appendix K. EPA developed and used sample weights to extrapolate 
impacts assessed initially at the level of a sample of facilities to 
the full population of regulated facilities. For information on the 
development and use of sample weights, see EA Appendix H.
a. Facility-Level Impact Analysis for Manufacturers
    EPA conducted two separate facility-level analyses for 
manufacturers: (1) A stand-alone cost-to-revenue screener analysis and 
(2) a facility closure and financial stress short of closure test. For 
the cost-to revenue screener test, shown in Exhibit IX-15, EPA divided 
the after-tax, annualized compliance cost by facility-level revenue. 
Under the final rule, EPA found that of 500 Primary Manufacturing 
Industry facilities, 496 incur costs less than one percent of revenue, 
four incur costs between one and three percent, and none incur costs 
greater than 3 percent. For the nine Other Industries facilities, EPA 
estimated that eight facilities would incur costs less than one percent 
and one would incur costs between one and three percent of revenue. For 
Proposal Option 4, all Primary Manufacturing Industry facilities (500 
facilities) and Other Industry facilities (nine facilities) incur costs 
less than one percent of revenue. Under Proposal Option 2, 491 Primary 
Manufacturing Industry facilities incur costs less than one percent and 
nine facilities incur costs between one and three percent, while seven 
Other Industry facilities incur costs less than one percent, one 
facility incurs costs between one and three percent, and one facility 
incurs costs greater than three percent.

[[Page 48398]]



     Exhibit IX-15--Facility-Level Cost-To-Revenue Analysis Results
------------------------------------------------------------------------
                                    Number of facilities with a cost-to-
                                            revenue ratio of \a\
              Option              --------------------------------------
                                       <1%      >=1 and <3%      >=3%
------------------------------------------------------------------------
                    Primary manufacturing industries
------------------------------------------------------------------------
Proposal Option 4................          500            0            0
Final Rule.......................          496            4            0
Proposal Option 2................          491            9            0
------------------------------------------------------------------------
                            Other industries
------------------------------------------------------------------------
Proposal Option 4................            9            0            0
Final Rule.......................            8            1            0
Proposal Option 2................            7            1            1
------------------------------------------------------------------------
\a\ EPA conducted this analysis for 579 facilities in the Primary
  Manufacturing Industries and 10 facilities in the Other Industries.
  Note, these facility counts and analysis exclude facilities identified
  as baseline closures in the severe impact analysis, which is described
  below.

    For the second analysis, EPA assessed how compliance costs would 
likely affect financial performance and condition of the 509 
manufacturers \134\ using two measures: (1) Facility closures (severe 
impacts) and associated losses in revenue and employment, and (2) 
financial stress short of closure (moderate impacts).
---------------------------------------------------------------------------

    \134\ This is a sample-weighted estimate of the number of 
manufacturers, calculated using economic weights. This number 
excludes 70 facilities estimated to be at substantial risk of 
financial failure regardless of any additional financial burden that 
might result from the final rule or other options considered in 
development of this rule. For details see EA Appendix H.
---------------------------------------------------------------------------

    For the analysis of severe impacts, EPA identified a facility as a 
regulatory closure if it would have operated under baseline conditions 
but would not be financially viable under the new regulatory 
requirements and the costs of the final rule leading to that finding 
exceeded a threshold of 0.1 percent of revenue. Specifically, the 
Agency examined the facility's going-concern value before and after 
meeting regulatory requirements. EPA used a discounted cash flow 
framework in which after-tax cash flow is discounted at an estimated 
cost of capital to calculate the going concern value of the 
facility.\135\ In conjunction with the discounted cash flow analysis, 
EPA tested whether annualized costs exceeded 0.1 percent of revenue by 
dividing the after-tax, annualized total compliance cost by facility-
level revenue. If this analysis found that the facility's business 
value would become negative as a result of estimated compliance costs 
and the annualized cost of compliance exceeded 0.1 percent of revenue, 
EPA classified the facility as a regulatory closure.
---------------------------------------------------------------------------

    \135\ This after-tax cash flow analysis conducted for 
manufacturers is similar in concept to the cash flow analysis 
conducted for electric generators through the IPM analysis.
---------------------------------------------------------------------------

    For facilities estimated not to close under the severe-impact test, 
EPA conducted a moderate-impact test to assess whether any would 
experience financial stress short of closure as the result of 
regulatory requirements (e.g., higher costs of capital borrowing). EPA 
used two financial performance measures to test for occurrence of 
financial stress: (1) Interest coverage ratio and (2) pre-tax return on 
assets. The Agency compared these measures before and after compliance 
with regulatory requirements against industry-specific performance 
thresholds for the two financial measures. If both measures for a 
facility exceeded the threshold in the baseline, and at least one 
measure fell below the threshold in the post-compliance case, EPA 
counted this as a moderate impact based on the rule.
    Exhibit IX-16 presents the results from the severe-impact and 
moderate-impact analyses. EPA estimated that no facilities would be at 
risk of closure as a result of the final rule and that 12 facilities 
could experience financial stress short of closure. For Proposal Option 
4, EPA also estimated no closures, while moderate impacts are 
significantly lower, estimated at two facilities. Under Proposal Option 
2, EPA estimated that one facility would be at risk of closure, while 
the moderate impact finding is the same as for the final rule: 12 
facilities. Again, this analysis is conducted assuming that all the 
costs are borne by the facility and cannot be passed along, an 
assumption that is highly unlikely to be true, as many of these 
facilities are in industries where there is some market power and 
barriers to entry. Thus, these tests present worst case scenario 
results.

                   Exhibit IX-16--Facility Impacts and Compliance Costs for Manufacturers \d\
----------------------------------------------------------------------------------------------------------------
                                                                     Proposed                        Proposed
                                                                     option 4       Final rule     option 2 \c\
----------------------------------------------------------------------------------------------------------------
                                      Primary manufacturing industries \a\
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in Baseline......................             500             500             500
Number of Closures (Severe Impacts).............................               0               0               1
Percentage of Facilities Closing................................              0%              0%              0%
Number of Facilities with Moderate Impacts......................               2              12              12
Percentage of Facilities with Moderate Impacts..................              1%              3%              3%
----------------------------------------------------------------------------------------------------------------
                                              Other industries \b\
----------------------------------------------------------------------------------------------------------------
Number of Facilities Operating in Baseline......................               9               9               9
Number of Closures (Severe Impacts).............................               0               0               0

[[Page 48399]]

 
Percentage of Facilities Closing................................              0%              0%              0%
Number of Facilities with Moderate Impacts......................               0               0               0
Percentage of Facilities with Moderate Impacts..................              0%              0%              0%
----------------------------------------------------------------------------------------------------------------
\a\ Primary Manufacturing Industries include facilities in the Aluminum, Chemicals and Allied Products, Food and
  Kindred Products, Paper and Allied Products, Petroleum Refining, and Steel industries.
\b\ Other Industries include cooling water-dependent facilities in industries whose principal operations lie in
  businesses other than the electric power industry or the Primary Manufacturing Industries.
\c\ Under Proposal Option 2, the percentage of facilities closing is 0.3 percent.
\d\ The analysis assumes no cost pass through.

b. Entity-Level Impact Analysis
    EPA also examined the impact of regulatory requirements on entities 
that own regulated manufacturers facilities. An entity that owns 
multiple facilities could be adversely affected because of the 
cumulative burden of regulatory requirements the facilities face. For 
this analysis, a parent entity is the domestic parent entity with the 
largest ownership share in a regulated facility. For each identified 
parent entity, EPA aggregated facility-level, annualized, after-tax 
compliance costs to the level of the parent entity and compared these 
entity-level costs to entity-level revenue. Similarly to electric 
generators, EPA used cost-to-revenue thresholds of 1 and 3 percent as 
thresholds for categorizing levels of impacts.
    EPA considered two cases, based on two sets of entity-level. These 
cases, which are described in the EA, Appendix H, provide a range of 
estimates for the number of entities incurring compliance costs and the 
costs incurred by any entity owning a regulated facility. EPA conducted 
this analysis for 509 facilities in the primary manufacturing 
industries and 12 facilities in other industries.\136\ For information 
on the methodology used for the entity-level cost-to-revenue analysis, 
see the EA, Chapter 5.
---------------------------------------------------------------------------

    \136\ This is a sample-weighted estimate of the number of 
manufacturer facilities, calculated using technical weights. This 
number excludes 67 facilities estimated to be at substantial risk of 
closure regardless of any additional financial burden that might 
result from the regulatory options under consideration.
---------------------------------------------------------------------------

    Exhibit IX-17 presents the results from the entity-level analysis 
for these two cases. EPA estimated that between 120 and 337 entities 
own 521 regulated facilities. Under the final rule, between 90 and 95 
percent of all entities are estimated to incur compliance costs of less 
than 1 percent of revenue. This is true also for Proposal Option 2. 
Under Proposal Option 4, more entities are expected to incur compliance 
costs of less than 1 percent of revenue (between 94 and 96 percent of 
all entities).

                                              Exhibit IX-17--Entity-Level Cost-To-Revenue Analysis Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Not analyzed due to lack               Number of entities with a cost-to-revenue ratio of
                                                   of revenue information  -----------------------------------------------------------------------------
                     Option                      --------------------------           < 1%                 >= 1% and < 3%                 >= 3%
                                                                           -----------------------------------------------------------------------------
                                                   #        %        #        %        #        %        #        %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Case 1: Lower bound estimate of number of entities that own regulated facilities; upper bound estimate of total compliance costs that an entity may
 incur \b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal Option 4...............................            5            4          113           94            2            2            0            0
Final Rule......................................            5            4          108           90            6            5            1            1
Proposal Option 2...............................            5            4          108           90            6            5            1            1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Case 2: Upper bound estimate of number of entities that own regulated facilities; lower bound estimate of total compliance costs that an entity may
 incur \c\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal Option 4...............................           12            4          324           96            1        \a\ 0            0            0
Final Rule......................................           12            4          319           95            6            2            0            0
Proposal Option 2...............................           12            4          319           95            6            2            0            0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The percentage of entities with impacts greater than or equal to 1 percent and less than 3 percent is less than 0.5 percent.
\b\ The total number of entities under Case 1 is 120.
\c\ The total number of entities under Case 2 is 337.

E. Employment Effects

    To study employment effects of this rule, EPA considered the 
potential effects of the final rule, focusing on the impacts of meeting 
compliance requirements in the directly regulated industry sectors: The 
Electric Power Industry, and selected Primary Manufacturing Industries, 
including Aluminum, Chemicals and Allied Products, Food and Kindred 
Products, Paper and Allied Products, Petroleum Refining, and Steel 
Manufacturing.
    When the economy is at full employment, an environmental regulation 
is unlikely to have much impact on net overall U.S. employment; 
instead, labor would primarily be shifted from one sector to another. 
These shifts in employment impose an opportunity cost on society, 
approximated by the wages of the employees, as regulation diverts 
workers from other activities in the economy. In this situation, any 
effects on net employment are likely to be transitory as workers change 
jobs (e.g., some workers may need to be retrained or require time to 
search for new jobs,

[[Page 48400]]

while shortages in some sectors or regions could bid up wages to 
attract workers).
    On the other hand, if a regulation comes into effect during a 
period of high unemployment, a change in labor demand due to regulation 
may affect net overall U.S. employment because the labor market is not 
in equilibrium. Schmalansee and Stavins \137\ point out that net 
positive employment effects are possible in the near term when the 
economy is at less than full employment due to the potential hiring of 
idle labor resources by the regulated sector to meet new requirements 
(e.g., to install new equipment) and new economic activity in sectors 
related to the regulated sector. In the longer run, the net effect on 
employment is more difficult to predict and will depend on the way in 
which the related industries respond to the regulatory requirements. As 
Schmalansee and Stavins note, the magnitude of the effect on employment 
could vary over time, region, and sector, and positive effects on 
employment in some regions or sectors could be offset by negative 
effects in other regions or sectors. For this reason, they urge caution 
in reporting partial employment effects because it can ``paint an 
inaccurate picture of net employment impacts if not placed in the 
broader economic context.''
---------------------------------------------------------------------------

    \137\ Schmalansee, Richard, and Robert N. Stavins. ``A Guide to 
Economic and Policy Analysis of EPA's Transport Rule.'' White paper 
commissioned by Exelon Corporation, March 2011 (Docket EPA-HQ-OAR-
2011-0135-0054).
---------------------------------------------------------------------------

    In that spirit, unlike the analysis for the proposed rule, for the 
final rule EPA is not estimating quantitative employment impacts and 
instead, including only a qualitative discussion. The methods used at 
proposal were not sufficiently robust, largely because they relied on 
an input-output analysis that assumed fixed production relationships 
and used historical data to estimate the labor and other inputs 
required for compliance with the rule. Since publication of the 
proposed rule, EPA has concluded that input-output analysis is 
inappropriate for assessing employment impacts of national-level 
regulations. Input-output models are static, do not include prices, and 
assume the supply of all inputs is inexhaustible. They do not model a 
wide variety of adjustments that are expected to occur over time, such 
as changes in production processes, technology or trade patterns.\138\ 
After reviewing the public comments EPA received on the proposed rule, 
the Agency concludes that the commenters have not identified any 
specific improvements to the employment analysis of the proposed rule. 
Thus, today's final rule EA includes a qualitative discussion 
highlighting the variety of potential adjustments in the labor market 
that may follow the rulemaking.
---------------------------------------------------------------------------

    \138\ For a discussion of input-output models see Chapter 8 of 
the EPA Handbook on the Benefits, Costs, and Impacts of Land Cleanup 
and Reuse (2011).
---------------------------------------------------------------------------

    To elaborate on the difficulty of deriving high quality estimates 
of how environmental regulations will impact net employment, the task 
requires consideration of labor demand in both the regulated and 
environmental protection sectors, as well as labor supply more 
generally. Economic theory predicts that the net effect of an 
environmental regulation on labor demand in regulated sectors could be 
positive or negative; the direction of the outcome depends on the 
magnitude of output and substitution effects, explained further in the 
EA. Peer-reviewed econometric studies that use a structural approach, 
applicable to overall net effects in the regulated sectors, indicate 
that such effects, whether positive or negative, have been small and 
have not affected employment in the national economy in a significant 
way (Berman and Bui 2001, Morgenstern, Pizer and Shih 2002). Effects on 
labor demand in the environmental protection sector seem likely to be 
positive.
    In aggregate, the environmental protection sector is likely to 
experience a temporary increase in jobs created as more compliance 
technology systems are designed, manufactured, and installed 
attributable to the final rule. In addition, because of regional 
variation in consumption patterns and the presence of regulated 
facilities and supporting industries, short- and long-run employment 
effects likely will vary across the United States. It is possible that 
positive net employment effects will occur in the near term due to the 
hiring of idle labor resources by the regulated sectors to plan for and 
meet new technology control requirements rather than diverting workers 
from other productive employment. However, it is also possible that in 
the long run, as the economy returns to full employment, any changes in 
employment in the regulated sectors due to the final rule will be 
offset by employment changes in other sectors. These dynamics compound 
the uncertainty in estimating employment effects for a substantial 
number of years into the future.
    Even if regulated facilities are able to reduce the impact of 
regulatory requirements by changing their production processes in the 
post-rule environment, production costs may still be higher compared to 
those before the rule. As a result, regulated facilities may seek to 
increase their product prices in response to the higher production 
costs. For example, attempts by electric generators to recover 
increases in electricity generation costs, however small, are likely to 
result in higher electricity rates. The impact of this increase will 
vary by region, customer group (e.g., industrial, commercial, 
transportation, and residential), and by industry, depending on the 
electricity-use intensity.\139\ Further, the extent to which electric 
generators are able to pass their costs to consumers through higher 
electricity rates, will vary by region. Specifically, electric 
generators operating in regions where electricity prices remain 
regulated under the traditional cost-of-service rate regulation 
framework may be able to recover compliance cost-based increases in 
increased rates.\140\ However, cost recovery is less certain for 
electric generators operating in States where electric power generation 
has been deregulated, and will depend on the competitive circumstances 
of specifically affected facilities.
---------------------------------------------------------------------------

    \139\ See the EA Chapter 6: Electricity Market Analysis for 
assessment of the impacts of increased production costs on wholesale 
electricity prices and Chapter 4: Economic Impact Analysis--Electric 
Generators for analyses of the impacts on retail rates by customer 
group.
    \140\ However, even for electric generators operating under 
traditional rate regulation, the recovery of cost increases through 
increased rates is not certain, and will depend on additional 
factors such as the facility ownership structure and operating 
model, approval of public utility commissions, and the importance 
and role of market mechanisms in dispatching production of 
electricity across generating units. See Chapter 2A of the EA for 
additional discussion.
---------------------------------------------------------------------------

    Overall, the long-run changes in employment will likely depend on 
how the electric power industry, primary manufacturing industries, and 
other industries adjust in response to the new regulatory requirements, 
and on the upstream and downstream effects of those adjustments on the 
rest of the economy, as well as the overall state of the economy and 
labor markets. The long-run employment effects in the directly affected 
sectors will depend on a number of economic factors. These factors 
include changes in labor requirements to operate the infrastructure in 
general and compliance technology in particular at regulated 
facilities, the potential to change production processes to become less 
dependent on cooling water, availability of alternative technologies to 
meet compliance requirements, and changes in demand for the outputs of 
the directly affected sectors. Because

[[Page 48401]]

these and many other interrelated factors include data and methodology 
limitations, it is difficult to fully assess the employment impacts of 
the final rule. However, based on the available evidence from several 
peer-reviewed econometric studies mentioned above that are applicable 
to net effects in the regulated sectors and that closed-cycle 
recirculating systems was rejected as national BTA for entrainment, EPA 
expects that employment impacts of today's rule are not likely to be 
substantial.

X. Benefits Analysis

A. Introduction

    This section presents EPA's estimates of the national environmental 
benefits of the final existing facilities rule and other options 
considered by EPA. This section describes how EPA calculated values for 
those benefits it could monetize. EPA did not rely on the results of 
its stated preference survey in estimating the benefits of today's 
rule. It also presents descriptive information for those benefits for 
which EPA could not develop a monetary value. The benefits EPA assessed 
occur because of reductions in impingement and entrainment at cooling 
water intake structures affected by the rulemaking and changes in 
greenhouse gas emissions at regulated facilities. Impingement occurs 
where fish and other aquatic life are trapped on equipment as they 
enter the cooling water intake structure. Entrainment occurs where 
aquatic organisms, including eggs and larvae, are drawn into the 
cooling system, passed through the heat exchanger, and discharged back 
into the source waterbody. Impingement and entrainment kill or injure 
large numbers of aquatic organisms across all life stages. On the basis 
of entrainment data presented in facility studies, EPA assumes a 
mortality rate of 100 percent for entrained individuals. Mortality is 
then reduced on the basis of the efficiency of technology in place in 
reducing mortality rates, or by reducing levels of impingement and 
entrainment.\141\ By reducing impingement mortality and entrainment, 
the final existing facilities rule is likely to increase the number of 
fish, shellfish, and other aquatic organisms in affected water bodies 
resulting in healthier aquatic environments. In turn, this healthier 
aquatic environment directly improves welfare for individuals using the 
affected aquatic resources, generating use benefits such as increases 
in the value of recreational and commercial fisheries or increases in 
property values. Reductions in impingement mortality and entrainment 
also improve welfare for individuals without use of the affected 
resources, generating nonuse benefits, such as improved ecosystem 
function and resource bequest values. Section D provides an overview of 
the types and sources of benefits EPA anticipated, how EPA estimated 
these benefits, and the level of benefits that the final rule and other 
options EPA considered for the rule would achieve.
---------------------------------------------------------------------------

    \141\ See the discussion in Section III on entrainment mortality 
data and assumptions.
---------------------------------------------------------------------------

    EPA derived national benefit estimates for the final rule and other 
options considered from a series of regional studies representing a 
range of waterbody types and aquatic resources. Section B provides 
detail on the regional study design. Section C describes the 
impingement and entrainment effects and Section D presents the national 
benefits estimates.
    The methodologies used to estimate benefits are largely built on 
those used to estimate benefits for the remanded Phase II and Phase III 
and the proposed existing facilities rules. In addition to updating 
these analyses, EPA more fully investigated the effects of impingement 
mortality and entrainment on T&E species, incorporated benefits from 
greenhouse gas reductions, and improved its estimation of nonuse 
benefits. The Benefits Analysis document for the final existing 
facilities rule (referred to as the BA) provides detailed descriptions 
of the new methodologies EPA used to analyze the benefits of regulatory 
options, and provides references to (i) Part A of the 2004 Regional 
Benefits Analysis for the Final Section 316(b) Phase II Rule, and (ii) 
Part A of the 2006 Regional Benefits Analysis Document for the Final 
Section 316(b) Phase III Existing Facilities Rule for analyses using 
similar methodologies.
    The BA provides EPA's benefit estimates for the final rule and 
considered options. EPA relied on information collected in the 2000 
section 316(b) industry surveys (the Industry Screener Questionnaire 
(SQ) and the Detailed Industry Questionnaire (DQ)) on cooling water 
systems and intake structures already in place to estimate the number 
of regulated facilities under regulatory options considered for the 
final existing facilities rule. For the analysis of regulated electric 
generators, EPA used information from 656 regulated electric generating 
facilities that responded to the section 316(b) industry surveys on 
cooling water systems and intake structures already in place. Because 
the DQs were sent to a sample of the manufacturing industries that use 
cooling water, the respondents were assigned sample weights designed to 
represent other facilities in other manufacturing industries that were 
not covered in the survey. All regulated facilities have a DIF of at 
least 2 mgd. EPA estimated regional benefits from the sample of 
facilities for which EPA has sufficient DQ information to estimate the 
environmental impacts of regulatory options. The environmental impacts 
from the set of explicitly analyzed facilities were then extrapolated 
to the universe of facilities in a region using statistical weights 
developed for this analysis. National benefits are estimated as the sum 
of the regional benefits.
    As described above at Section IX, the findings presented in this 
section assume that all facilities with impoundments will qualify as 
having closed-cycle recirculating systems in the baseline. For purposes 
of this analysis, EPA did not estimate IM&E reductions for these 
facilities under the final rule and other options considered; however, 
these facilities remain subject to today's rule and are assigned 
administrative costs. To the extent that some of these facilities do 
not qualify as having closed-cycle cycle recirculating systems in the 
baseline, the monetized benefits reported in this section may be 
underestimated. EPA notes that the vast majority of these facilities 
occur in the Inland benefits region. Any underestimation in monetized 
benefits due to the treatment of facilities with impoundments is likely 
to be minor because commercial fishing benefits and nonuse benefits are 
not estimated for the Inland region.

B. Regional Study Design

    EPA evaluated the benefits of today's rule in seven study 
regions.\142\ Regions were defined on the basis of ecological 
similarities within regions (e.g., freshwater versus marine, similar 
communities of aquatic species), and on characteristics of commercial 
and recreational fishing activities. The seven study regions are: 
California,\143\ North Atlantic, Mid Atlantic, South Atlantic, Gulf of 
Mexico, Great Lakes, and Inland. The five coastal regions EPA 
identified (California, North Atlantic, Mid-Atlantic, South Atlantic, 
and Gulf of Mexico) correspond to those of the

[[Page 48402]]

National Oceanic and Atmospheric Administration's National Marine 
Fisheries Service. The Great Lakes region includes Lake Ontario, Lake 
Erie, Lake Huron (including Lake St. Clair), Lake Michigan, Lake 
Superior, and the connecting channels (Saint Mary's River, Saint Clair 
River, Detroit River, Niagara River, and Saint Lawrence River to the 
Canadian border) as defined in 33 U.S.C. 1268, Sec. 118(a)(3)(b). The 
Inland region includes all remaining facilities that withdraw water 
from freshwater lakes, rivers, and reservoirs, including inland 
facilities in coastal states. Notably, of the 435 facilities that are 
on freshwater streams or rivers, 30 percent (132) have average actual 
intake flow that is greater than 5 percent of the mean annual flow of 
the source waters, which is a significant amount of the source water 
flow. During periods of low river flow, or during periods of higher 
than average withdrawals of cooling water, the proportionate withdrawal 
of source waters could be much higher. Thus, the potential for adverse 
environmental impacts could increase dramatically during these periods. 
The number and total operational intake flow of all 316(b) facilities 
by study region are presented in Exhibit X-1.
---------------------------------------------------------------------------

    \142\ Benefits associated with changes in greenhouse gas 
emissions were estimated for the nation as whole.
    \143\ The California region includes facilities in State of 
California and four facilities in Hawaii. No coastal facilities are 
in Oregon, and one facility in Washington is classified as a 
baseline closure.

              Exhibit X-1--Number of Surveyed Facilities and Total Mean Operational Flow, by Region
----------------------------------------------------------------------------------------------------------------
                                                                    Flow (billions of gallons per day)
                                          Number of     --------------------------------------------------------
               Region                      surveyed      Non-recirculating    Recirculating
                                        facilities \a\     facilities \b\       facilities         Total flow
----------------------------------------------------------------------------------------------------------------
California \c\......................                 21              10.65               0.00              10.65
Great Lakes.........................                 50              16.24               0.24              16.47
Inland \d\..........................                566             107.56              18.06             125.62
Mid-Atlantic........................                 46              24.69               0.07              24.76
Gulf of Mexico......................                 22              10.14               0.05              10.18
North Atlantic......................                 21               5.93               0.00               5.93
South Atlantic......................                 12               5.91               0.05               5.96
                                     ---------------------------------------------------------------------------
All Regions.........................                738             181.12              18.46             199.58
----------------------------------------------------------------------------------------------------------------
\a\ This table presents unweighted facility counts and flow for surveyed facilities (excluding baseline
  closures). The regional study design for the benefits analysis uses weights based on flow rather than facility
  counts. EPA did not develop weighted facility counts by benefits region. The ``All Regions'' total of 738
  surveyed facilities includes 532 electric generating facilities and 206 manufacturing facilities, excluding
  baseline closures. The total (weighted) estimated universe of facilities, excluding baseline closures, is
  1,065 facilities.
\b\ Recirculating facilities are facilities with closed-cycle cooling or impoundments that qualify as closed-
  cycle cooling. Non-recirculating facilities include facilities with CWIS classified as once-through.
\c\ The California region includes four facilities in Hawaii. There are no coastal facilities in Oregon and the
  one coastal facility in Washington is classified as a baseline closure.
\d\ A facility in Texas has intakes in both the Inland and Gulf of Mexico regions. It is included in the Inland
  region in the table to prevent the double counting of facilities.

    EPA obtained estimates of regional impingement mortality and 
entrainment by extrapolating impingement mortality and entrainment 
observed at 98 facilities with impingement and entrainment studies 
(model facilities) to all regulated facilities in the same region. EPA 
used regional estimates to more accurately estimate impacts by 
accounting for differences in ecosystems, aquatic species, and 
characteristics of commercial and recreational fishing activities 
across regions. Extrapolation was conducted on the basis of AIF 
reported for the period 1996-1998 by facilities in response to EPA's 
Section 316(b) Detailed Questionnaire and Short Technical 
Questionnaire. Chapter 3 of the BA provides details of the 
extrapolation procedure. Because the goal of the analysis was to 
provide estimates of impingement mortality and entrainment at regional 
and national scales, EPA recognizes that these averages may not reflect 
the substantial variability at individual facilities. In spite of this 
variability, EPA determined that this extrapolation is a reasonable 
basis for developing estimates of regional- and national-level benefits 
for the purposes of the final existing facilities rule.

C. Physical Impacts of Impingement Mortality and Entrainment

    EPA based the benefits analysis on facility-provided impingement 
mortality and entrainment monitoring data. Facility data consist of 
records of impinged and entrained organisms sampled at intake 
structures and include organisms of all ages and life stages. Sampling 
protocols were not standardized across facilities. Facility protocols 
differed in sampling methods and equipment used, the number of samples 
taken, sampling duration, and the unit of time and volume of intake 
flow used to express impingement mortality and entrainment. To 
standardize estimates across facilities, EPA converted sampling counts 
into annual impingement mortality and entrainment. Using standard 
fishery modeling techniques,\144\ EPA constructed models that combined 
facility-derived impingement mortality and entrainment counts with life 
history data from the scientific literature to derive annual estimates 
of the following:
---------------------------------------------------------------------------

    \144\ Ricker, W.E. 1975. Computation and interpretation of 
biological statistics of fish populations. Fisheries Research Board 
of Canada, Bulletin 191; Hilborn, R. and C.J. Walters. 1992. 
Quantitative Fisheries Stock Assessment, Choice, Dynamics and 
Uncertainty. Chapman and Hall, London and New York; Quinn, T.J., II. 
and R.B. Deriso. 1999. Quantitative Fish Dynamics. Oxford University 
Press, Oxford and New York; Dixon, D.A. 1999. Catalog of Assessment 
Methods for Evaluating the Effects of Power Plant Operations on 
Aquatic Communities. Electric Power Research Institute (EPRI) Final 
Report. Report number TR-112013.
---------------------------------------------------------------------------

     Individuals--the number of individual organisms impinged 
and entrained by facility intakes. Under this metric, eggs, larvae, 
juvenile, and adult organisms are counted as equivalent individuals.

[[Page 48403]]

     A1Es (age-one equivalent losses)--the number of individual 
organisms of different ages impinged and entrained by facility intakes, 
standardized to equivalent numbers of 1-year-old fish. A conversion 
rate between all life history stages and age 1 is calculated using 
species-specific survival tables based on life history schedule and 
age-specific mortality rates. An individual younger than age 1 is a 
fraction of an age-one equivalent; an individual older than age 1 
represents more than one age-one equivalent. EPA finds it appropriate 
to use the A1E measure because information in the record indicates that 
an overwhelming majority of eggs, larvae and juveniles do not survive 
into adulthood and the A1E calculations adjust for differences in 
survivorship based on species and age-specific mortality rates. EPA 
recognizes that using A1Es simplifies a complex ecological situation, 
because some of the smaller fish would provide an ecological benefit to 
other species as food even if they would not survive to adulthood. 
Recognizing this as one nonmonetized benefit in the analysis, using an 
A1E approach is the most reasonable approach available because to date, 
there is insufficient data to account for the extent to which organisms 
that do not survive to adulthood provide a benefit to other organisms 
which can be reliably monetized.
     Forgone fishery yield--pounds of commercial fish harvest 
and numbers of recreational fish and shellfish that are not harvested 
because of impingement mortality and entrainment. EPA used the 
Thompson-Bell equilibrium yield model \145\ to convert impingement 
mortality and entrainment to forgone fishery yield, assuming that (1) 
impingement mortality and entrainment reduces the future yield of 
harvested adults, and (2) reductions in impingement mortality and 
entrainment rates will lead to an increase in harvested biomass. The 
general procedure involves multiplying age-specific harvest rates by 
age-specific weights to calculate an age-specific expected yield.
---------------------------------------------------------------------------

    \145\ Ricker, W.E. 1975. Computation and interpretation of 
biological statistics of fish populations. Fisheries Research Board 
of Canada, Bulletin 191.
---------------------------------------------------------------------------

     Biomass production forgone--biomass that would have been 
produced had individuals not been impinged or entrained,\146\ 
calculated for all species from species- and age-specific growth rates 
and survival probabilities. It refers to the mass of impinged and 
entrained organisms that would have served as valuable components of 
aquatic food webs, particularly as an important food supply to other 
aquatic species.
---------------------------------------------------------------------------

    \146\ Rago, P.J. 1984. Production forgone: An alternative method 
for assessing the consequences of fish entrainment and impingement 
losses at power plants and other water intakes. Ecological Modeling, 
24(1-2): 79-111.
---------------------------------------------------------------------------

    Estimates of forgone fishery yield include direct and indirect 
losses of impinged and entrained species that are harvested. Indirect 
losses represent the yield of harvested species lost because of 
reductions in prey availability according to a simple trophic transfer 
model (i.e., forage species).\147\ Chapter 3 of the BA contains 
detailed methodology for these analyses.
---------------------------------------------------------------------------

    \147\ Indirect losses account for about 10 percent of commercial 
and recreational harvest reductions at baseline.
---------------------------------------------------------------------------

    Studies from individual facilities may underestimate or 
overestimate impingement mortality and entrainment rates at those 
facilities. For example, facility studies typically focus on a subset 
of fish species affected by impingement mortality and entrainment, 
resulting in other species being ignored. The number of individuals 
lost to impingement mortality and entrainment is then underestimated. 
Estimating the magnitude of this underestimate is not possible because 
of the low number of replicate studies. Moreover, studies often do not 
count early life stages of organisms that are more difficult to 
identify. In addition, many of the impingement mortality and 
entrainment studies used by the Agency were conducted more than 30 
years ago, prior to the improvement of aquatic conditions that have 
resulted from implementation of the CWA as well as State and local laws 
and efforts. In locations where water quality was degraded at the time 
of impingement mortality and entrainment sampling relative to current 
conditions, the abundance and diversity of fish populations might have 
been depressed, resulting in low impingement mortality and entrainment 
estimates. Therefore, use of these data may underestimate the magnitude 
of current impingement mortality and entrainment. Alternatively, 
studies could have been conducted in locations where local fish 
populations are now lower than they were when the study occurred. Such 
a shift in fish populations might have occurred because of natural 
variability in populations, because of other anthropogenic effects 
(i.e., over-harvesting), or because of competition from invasive 
species. In such cases, the use of these data may overestimate the 
magnitude of current impingement mortality and entrainment.
    EPA's use of linear methods for projecting losses to fish and 
shellfish in the waterbody may also overstate or understate impacts. 
Nevertheless, the data from facility studies are the best means to 
estimate the relative magnitude of impingement mortality and 
entrainment nationwide. Exhibit X-2 presents EPA's estimates of 
baseline annual impingement mortality and entrainment, and reductions 
in annual impingement mortality and entrainment estimated to occur 
under the final rule and other options considered. Impingement 
mortality and entrainment reductions under the final rule are less than 
the reductions under Proposal Option 2 and greater than reductions 
under Proposal Option 4. Unlike the analysis of Proposal Option 2, EPA 
did not model the entrainment reductions from cooling tower 
installation under the final rule and Proposal Option 4 because these 
would be based on site-specific determinations of BTA, which are not 
possible to predict with information EPA has today. EPA estimated a 
small amount of entrainment losses under the final rule and Proposal 
Option 4 due to the assumed installation of variable speed pumps at 
some facilities to achieve compliance via the low velocity compliance 
alternative.

[[Page 48404]]



 Exhibit X-2--Baseline Annual IM&E and Annual Reductions in IM&E for Existing Units at All Facilities Subject to
                                                 the Final Rule
----------------------------------------------------------------------------------------------------------------
                                                   Reduction in annual IM&E by regulatory option
                                                                      \b\ \c\
                  Loss mode \a\                  ------------------------------------------------    Baseline
                                                     Proposal      Final rule--      Proposal       annual IM&E
                                                     option 4     existing units     option 2
----------------------------------------------------------------------------------------------------------------
                                             Individuals (millions)
----------------------------------------------------------------------------------------------------------------
IM..............................................           419.9           441.3           511.9           568.6
E...............................................           399.8         1,693.9       335,447.6       497,316.3
IM&E............................................           819.7         2,135.2       335,959.4       497,884.8
----------------------------------------------------------------------------------------------------------------
                                         Age-One Equivalents (millions)
----------------------------------------------------------------------------------------------------------------
IM..............................................           612.8           647.5           748.2           824.2
E...............................................             1.4             4.5           889.3         1,106.7
IM&E............................................           614.2           652.0         1,637.5         1,931.0
----------------------------------------------------------------------------------------------------------------
                                       Forgone Fishery Yield (million lbs)
----------------------------------------------------------------------------------------------------------------
IM..............................................            12.6            13.3            15.4            16.9
E...............................................             0.0             0.1            35.7            52.9
IM&E............................................            12.6            13.4            51.1            69.8
----------------------------------------------------------------------------------------------------------------
                                        Production Forgone (million lbs)
----------------------------------------------------------------------------------------------------------------
IM..............................................           129.7           136.5           157.2           174.8
E...............................................             0.5             2.4           337.0           451.8
IM&E............................................           130.3           138.9           494.2           626.6
----------------------------------------------------------------------------------------------------------------
\a\ IM = impingement mortality; E = entrainment; IM&E = impingement mortality and entrainment.
\b\ IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling
  screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based
  on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow
  commensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement
  mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.
\c\ The totals presented here do not include IM&E reductions associated with new units. Estimated IM&E
  reductions associated with the new unit provision of the final rule are presented in Exhibit X-4.

    Exhibit X-3 presents EPA's estimates of annual impingement 
mortality and entrainment for final rule and other considered options 
by category of fish species. Estimates of annual forgone fishery yield 
include both direct losses of harvested species and indirect losses 
from reductions in prey fish species. Organisms convert (on average) 
only about 10 percent of the mass of food they consume into additional 
tissue mass. Thus, although essential to maintain ecosystem function, 
the vast majority of biomass moving through food webs does not reach 
higher trophic levels associated with commercial and recreational 
species and harvest. Instead, the biomass of prey species is 
metabolized and used for predator locomotion, reproduction, and tissue 
repair. Accordingly, the portion of impingement mortality and 
entrainment that are counted within the forgone harvest metric 
represent only a small percentage of all organisms experiencing 
impingement mortality and entrainment at cooling water intake 
structures. Neither forage species nor the unlanded portion of 
recreational and commercial species were assigned direct use values in 
this analysis, although losses in forage species did contribute to the 
overall losses in recreational and commercial species as noted above. 
Because the majority of annual impingement mortality and entrainment 
include unharvested recreational and commercial fish and forage fish, 
considering nonuse values in the final rule benefits analysis is 
particularly important. If nonuse values were not considered at all, 
only two to three percent of fish losses would be represented in 
monetized benefits.

  Exhibit X-3--Distribution of Annual Baseline IM&E and Reductions in IM&E by Species Category, for Individual
          Organisms and Age-1 Equivalents, at Existing Units for the Final Rule and Options Considered
----------------------------------------------------------------------------------------------------------------
                                                  Reduction in IM&E by regulatory option \b\ \c\
                                                 ------------------------------------------------
                 IM&E Metric \a\                     Proposal      Final rule--      Proposal      Baseline IM&E
                                                     option 4     existing units     option 2
----------------------------------------------------------------------------------------------------------------
                                             Individuals (millions)
----------------------------------------------------------------------------------------------------------------
All Species.....................................           819.7         2,135.2       335,959.4       497,884.8
Forage Species..................................           607.9         1,423.6       224,323.1       325,069.1
Commercial & Recreational Species...............           211.8           711.5       111,636.3       172,815.8
Commercial & Recreational Harvest (millions of              16.1            17.1            44.7            54.0
 fish)..........................................
Lost Individuals with Direct Use Value (%)......           1.97%           0.80%           0.01%           0.01%
----------------------------------------------------------------------------------------------------------------
                                         Age-One Equivalents (millions)
----------------------------------------------------------------------------------------------------------------
All Species.....................................           614.2           652.0         1,637.5         1,931.0

[[Page 48405]]

 
Forage Species..................................           528.2           560.8         1,258.7         1,459.7
Commercial & Recreational Species...............            85.9            91.2           378.8           471.3
Commercial & Recreational Harvest (millions of              16.1            17.1            44.7            54.0
 fish)..........................................
A1E Losses with Direct Use Value (%)............           2.63%           2.62%           2.73%           2.80%
----------------------------------------------------------------------------------------------------------------
\a\ IM&E = impingement and entrainment; A1E= age-one equivalent;
\b\ IM&E Effects by Option: Proposal Option 2 = impingement mortality limitations based on modified traveling
  screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based
  on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow
  commensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement
  mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.
\c\ The totals presented here do not include IM&E reductions associated with new units. Estimated IM&E
  reductions associated with the new unit provision of the final rule are presented in Exhibit X-4.

    In addition to the final rule and other options analyzed for 
existing units (Proposal Option 4 and Proposal Option 2), EPA analyzed 
requirements for new units at existing facilities. EPA's new unit 
provision in the final rule establishes entrainment requirements for 
all new stand-alone units at existing facilities. EPA could not 
directly apply the extrapolation methodology used for existing units 
because facility-specific information was not available for new units. 
Instead, EPA estimated impingement mortality and entrainment reductions 
on the basis of impingement mortality and entrainment reductions per 
million gallons per day from the analysis of existing units. The 
estimated reduction in impingement mortality and entrainment for the 
new unit requirement is summarized in Exhibit X-4.

Exhibit X-4--Annual Reductions in IM&E by Species Category for the Final
                           Rule for New Units
------------------------------------------------------------------------
                                                           Reduction in
                     IM&E metric \a\                         IM&E \b\
------------------------------------------------------------------------
                         Individuals (millions)
------------------------------------------------------------------------
All Species.............................................           867.2
Forage Species..........................................           566.1
Commercial and Recreational Species.....................           301.1
Commercial and Recreational Harvest (millions of fish)..             0.1
Lost Individuals with Direct Use Value (%)..............           0.01%
------------------------------------------------------------------------
                     Age-One Equivalents (millions)
------------------------------------------------------------------------
All Species.............................................             2.3
Forage Species..........................................             1.7
Commercial and Recreational Species.....................             0.7
Commercial and Recreational Harvest (millions of fish)..             0.1
A1E Losses with Direct Use Value (%)....................           2.87%
------------------------------------------------------------------------
\a\ A1E = age-one equivalent; IM&E = impingement mortality and
  entrainment.
\b\ Impingement mortality and entrainment reductions increase throughout
  the compliance period. The values presented here reflect the peak
  reductions achieved in 2059, the final year of the compliance period.
IM&E Effects: Entrainment requirements for all stand-alone or units.

D. National Benefits of the Final Rule and Options Considered

1. Overview
    Economic benefits of the final rule and other options considered 
for regulated facilities can be categorized broadly into use and nonuse 
benefits of goods and services. Use values include benefits that 
pertain to the human use (direct or indirect) of affected fishery 
resources. Use values reflect the value of all current direct and 
indirect uses of a good or service. Direct use benefits can be further 
categorized according to whether affected goods and services are traded 
in the market (i.e. commercially captured fish are traded, recreational 
catch is not). Likewise, indirect use benefits can be linked to direct 
goods and services. For example, reductions in impingement mortality 
and entrainment of forage fish will enhance the biomass of species 
targeted for commercial (market) and recreational (nonmarket) uses. It 
could also affect property values.
    Nonuse benefits are those benefits that are independent of any 
current or anticipated human use of a resource. Nonuse benefits reflect 
human values associated with existence and bequest motives. In other 
words, these values reflect the value the public places on something 
simply as a result of its existence or natural functioning. EPA 
estimated the economic benefits from national regulatory options using 
a range of valuation methods. Commercial fishery benefits were valued 
using market data. Recreational angling benefits were valued using a 
benefits transfer approach based on revealed and stated preference 
data. To estimate indirect use benefits from reduced impingement 
mortality and entrainment of forage species, EPA used a simple

[[Page 48406]]

trophic transfer model. This model translated changes in impingement 
mortality and entrainment of forage fish into changes in the harvest of 
commercial and recreational species. All benefits for fish saved under 
today's final rule are estimates on the basis of projected numbers of 
age-one equivalent fish, converted to harvestable age equivalents on a 
species-by-species basis for those commercial species analyzed.
    EPA calculated the monetary value of use benefits of the final rule 
and other options considered for existing facilities using two discount 
rate values: 3 and 7 percent. All dollar values presented are in 2011 
dollars. Because avoided fish deaths occur mainly in fish that are 
younger than harvestable age (eggs, larvae, and juveniles), the main 
benefits from avoided impingement mortality and entrainment would be 
realized typically 3 to 4 years after their avoided death. A detailed 
description of the approaches used to address this is in Appendix C of 
the BA.
    Neither forage species nor the unlanded portion of recreational and 
commercial species were assigned direct use values in this analysis. 
Their potential value to the public is derived from several alternative 
sources: Their indirect use as both food and breeding population for 
those fish that are harvested; and nonuse value. The nonuse value 
includes individuals' WTP (willingness to pay) for the protection of 
fish based on a sense of altruism, stewardship, bequest, or vicarious 
consumption; and their support of ecosystem stability and function. To 
estimate a subset of nonuse benefits from reducing impingement 
mortality and entrainment of forage species and unlanded commercial and 
recreational species, EPA conducted a benefits transfer using a 
nonmarket valuation study of aquatic ecosystem improvements. This 
effort generated partial estimates of nonuse values for resource 
changes for a species that represents less than one percent of adverse 
environmental impacts.
    EPA developed and fielded an original stated preference survey to 
estimate total WTP for improvements to fishery resources affected by 
impingement mortality and entrainment from regulated 316(b) facilities 
(75 FR 42438, July 21, 2010). Preliminary results of the stated 
preference survey were described in a Notice of Data Availability (77 
FR 34927, June 12, 2012). EPA presents preliminary benefits estimates 
based on the stated preference survey in the BA to demonstrate progress 
on this effort. In the absence of final survey results, EPA estimated 
partial nonuse benefits for the final rule using the benefits transfer 
approach from proposal. EPA updated the proposal results to incorporate 
additional stock assessment data for winter flounder, the species used 
as the basis for the analysis. Due to the challenges associated with 
estimating nonuse benefits, some nonuse benefits are described only 
qualitatively.
2. Timing of Benefits
    Discounting refers to the economic conversion of future benefits 
and costs to their present values, accounting for the fact that 
individuals value future outcomes less than comparable near-term 
outcomes. Discounting enables a valid comparison of benefits and costs 
that occur across different periods. EPA used discounting to account 
for differences in the timing across benefits and costs under the final 
rule and options considered. EPA estimated the expected benefits of the 
final rule once the rule takes full effect, then used discounting to 
account for delays in the realization of benefits. Two different delays 
affect the timing of benefits under the final rule and options 
considered.
    First, facilities will begin to incur costs prior to technology 
installation. Facilities will face regulatory requirements once the 
rule is effective, but it will take time for requirements to be 
developed and for the required technology to be installed. Analyzed 
facilities are assigned a technology installation year which considers 
facility characteristics and technology being installed. EPA assumed 
that facilities installing impingement technology tend to complete 
technology installation sooner than facilities installing closed-cycle 
cooling (for other options considered). The assignment of technology 
installation years is speculative on EPA's part, because EPA does not 
have sufficient data on hand to project the schedules that Directors 
will set for facilities. See Chapter 3 of the EA document for the final 
existing facilities rule for details on EPA's development of technology 
installation years. EPA effectively discounts benefits to a greater 
extent than costs to account for the lag between the incurrence of 
costs and the realization of benefits.
    Second, an additional time lag will result between technology 
implementation and use values via increased fishery yields. This lag 
occurs because several years could pass between the time an organism is 
spared from impingement mortality or entrainment and the time of its 
potential harvest. For example, a larval fish spared from entrainment 
(in effect, at age 0) could be caught by a recreational angler at age 
3, meaning that a 3-year time lag arises between the incurred 
technology cost and the realization of the estimated recreational 
benefit. Likewise, if a 1-year-old fish is spared from impingement and 
is then harvested by a commercial waterman at age 2, there is a 1-year 
lag between the incurred cost and the subsequent commercial fishery 
benefit. To account for this growth period, EPA applied discounting by 
species groups in each regional study. Note that nonuse values 
(depending on how they are measured) do not necessarily need to be 
discounted similarly.
3. Recreational Fishing Valuation
a. Recreational Fishery Methods
    To estimate recreational benefits of the final options, EPA 
developed a benefits transfer approach on the basis of a meta-analysis 
of recreational fishing valuation studies designed to measure the 
various factors that determine WTP for catching an additional fish per 
trip. Regional benefits are summarized as follows (for details, see 
Chapter 7 of the BA):
    1. Estimate the annual forgone catch of recreational fish (number 
of fish) attributable to impingement mortality and entrainment under 
current conditions.
    2. Estimate the marginal value per fish using a benefit transfer 
function based on a meta-analysis of recreational fishing studies.
    3. Multiply the forgone catch by the marginal value per fish to 
estimate the total annual value of the forgone catch.
    4. Estimate the annual value of reductions in the forgone catch 
attributable to the regulatory analysis options.
    5. Discount the time path of benefits at 3 and 7 percent to reflect 
the time lag between impingement mortality and entrainment reductions 
and increased harvests.
b. Estimated Benefits to Recreational Anglers
    Decreasing impingement mortality and entrainment increases the 
number of fish available to be caught by recreational anglers, thereby 
increasing angler welfare. Exhibit X-5 shows the estimated benefits 
resulting from reduced impingement mortality and entrainment under 
today's final existing facilities rule and other options that EPA 
considered. The total annualized recreational fishing benefits for all 
regions at existing units of existing facilities for the final rule 
(impingement mortality and entrainment combined)

[[Page 48407]]

are $18 million using a 3 percent discount rate and $14 million using a 
7 percent discount rate. Annual recreational fishing benefits for other 
options considered range from $17 to $43 million using a 3 percent 
discount rate and $13 million to $30 million using a 7 percent discount 
rate.

    Exhibit X-5--Annual Recreational Fishing Benefits From Eliminating or Reducing IM&E at Existing Units at
                       Existing Facilities for the Final Rule and Other Options Considered
----------------------------------------------------------------------------------------------------------------
                                                         Increased harvest   3% discount rate   7% discount rate
                 Regulatory option \a\                     (million fish)    (million 2011$)    (million 2011$)
----------------------------------------------------------------------------------------------------------------
Proposal Option 4......................................                6.1               17.1               12.6
Final Rule--Existing Units.............................                6.5               18.2               13.5
Proposal Option 2......................................               20.5               43.0               29.5
Baseline...............................................               25.3               78.8               72.0
----------------------------------------------------------------------------------------------------------------
\a\ IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling
  screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based
  on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow
  commensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement
  mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.

4. Commercial Fishing Valuation
    Reductions in impingement mortality and entrainment at cooling 
water intake structures are expected to benefit the commercial fishing 
industry. By reducing the number of fish killed, the number of fish 
available for harvest is expected to increase. The next section 
summarizes the methods EPA used to estimate benefits to the commercial 
fishing sector. The section after that presents the estimated value of 
commercial fishing benefits.
a. Commercial Fishing Valuation Methods
    The total loss to the economy from impingement mortality and 
entrainment impacts on commercially harvested fish species is 
determined by the sum of changes in both producer and consumer surplus. 
EPA assumed a linear relationship between stock and harvest, such that 
if 10 percent of the current commercially targeted stock were 
harvested, 10 percent of the commercially targeted fish lost to 
impingement mortality and entrainment would have been harvested absent 
impingement mortality and entrainment. The percentage of fish harvested 
is based on data of historical fishing mortality rates.
    Producer surplus provides an estimate of the economic damages to 
commercial fishers, but welfare changes can also be expected to accrue 
to final consumers of fish and to commercial consumers (including 
processors, wholesalers, retailers, and middlemen) if the projected 
increase in harvest is accompanied by a change in price. The analysis 
of market impacts involves the following steps (for details, see 
Chapter 6 of the BA):
    1. Assessing the net welfare changes for fish consumers due to 
changes in fish harvest and the corresponding change in fish price.
    2. Assessing net welfare changes for fish harvesters due to the 
change in total revenue, which could be positive or negative.
    3. Calculating the increase in net social benefits when the fish 
harvest changes by combining the welfare changes for consumers and 
harvesters.
    For a more detailed description of the methodology for commercial 
fishing, see Chapter 6 of the BA.
b. Commercial Fishing Valuation Results
    Exhibit X-6 presents the estimated annual commercial fishing 
benefits attributable to the proposed options. The results reported 
include the total reduction in losses in pounds of fish, and the value 
of this reduction discounted at 3 and 7 percent. Total estimated 
annualized commercial fishing benefits for the United States for the 
final rule are $0.9 million using a 3 percent discount rate and $0.7 
million using a 7 percent discount rate. Annual commercial fishing 
benefits for other options considered range from $0.9 million to $3.9 
million using a 3 percent discount rate and $0.7 million to $2.7 
million using a 7 percent discount rate. EPA estimated the expected 
price changes from eliminating baseline levels of impingement mortality 
and entrainment and found them to be small, ranging from 0.2 to 2.5 
percent.

 Exhibit X-6--Annual Commercial Fishing Benefits From Eliminating or Reducing IM&E at Existing Units at Existing
                           Facilities for the Final Rule and Other Options Considered
----------------------------------------------------------------------------------------------------------------
                                                         Increased harvest   3% discount rate   7% discount rate
                 Regulatory option \a\                     (million lbs)     (million 2011$)    (million 2011$)
----------------------------------------------------------------------------------------------------------------
Proposal Option 4......................................                5.3                0.9                0.7
Final Rule--Existing Units.............................                5.7                0.9                0.7
Proposal Option 2......................................               14.0                3.9                2.7
Baseline...............................................               17.3                8.0                7.2
----------------------------------------------------------------------------------------------------------------
\a\ IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling
  screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based
  on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow
  commensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement
  mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.

5. Nonuse Benefits
    Aquatic organisms with no direct use benefits account for the 
majority of cooling water intake structure losses (Exhibit X-3). 
Although many individuals may not use a particular waterbody for 
recreation or fishing, individuals nevertheless may value improvements 
in that waterbody. To quantitatively assess the ecological gains from 
the final rule and other options considered, EPA took both of the only 
two approaches available for quantifying nonuse benefits--a benefits 
transfer approach and a stated

[[Page 48408]]

preference survey. It is not necessary to use a stated preference 
survey approach to calculate benefits; however, important nonuse 
benefits can be missed by not using a stated preference survey 
approach. So EPA took both approaches, but relied on only the benefits 
transfer approach for the benefits analysis supporting the final rule. 
The benefits transfer approach relies on the existence of previously 
published studies with values that can be transferred; in instances 
where nonuse is potentially significant, as is the case here, 
previously published studies would only include nonuse value if they 
adopted a stated preference approach.
    EPA used a benefit transfer approach to partially monetize nonuse 
benefits associated with reductions in impingement mortality and 
entrainment of fish, shellfish, and other aquatic organisms under the 
regulatory options for the North Atlantic and Mid-Atlantic benefits 
regions. EPA applied estimated values from a study conducted in Rhode 
Island; these estimates are likely to be more representative of nonuse 
values held by individuals residing in the Northeast United States and 
less accurate in other regions. EPA was unable to identify comparable 
studies conducted in other regions that could be used to estimate 
nonuse values. Chapter 8 of the BA provides further detail on this 
analysis.
    The preferred techniques used to estimate total values (including 
both use and nonuse values), in general, are benefits transfer or to 
conduct a stated preference survey. There are many studies in the 
environmental economics literature that quantify benefits or WTP 
associated with various types of water quality and aquatic habitat 
changes. However, none of these studies allows the isolation of non-
market WTP associated with quantified reductions in impingement 
mortality and entrainment for forage fish or unlanded portion of 
commercial and recreational species.
a. Nonuse Benefits Transfer
    EPA identified a recent stated preference survey of Rhode Island 
residents that is closely related to the 316(b) policy context. The 
study results have been published in multiple scientific journals and 
books including Johnston et al.\148\ and Zhao et al.\149\ Both the 
Rhode Island study and the present context address policy changes that 
increase the number of forage fish in aquatic habitat with unknown 
effects on overall fish populations. The Rhode Island study was 
developed originally as a case study addressing Rhode Island residents' 
preferences for the restoration of migratory fish passage over dams in 
Rhode Island's Pawtuxet and Wood-Pawcatuck watersheds. It estimates 
nonuse values by asking respondents to consider changes in ecological 
indicators reflecting quantity of habitat, abundance of wildlife, 
ecological condition, and abundance of migratory fish species. Within 
this study, estimated values were based on the relative change in 
abundance of fish species most affected by restoration.
---------------------------------------------------------------------------

    \148\ Johnston, R.J., E.T. Schultz, E.T., K. Segerson, E.Y. 
Besedin, and M. Ramachandran. 2012. Enhancing the content validity 
of stated preference valuation: The structure and function of 
ecological indicators. Land Economics, 1: 102-120.
    \149\ Zhao, M., Johnson, R.J. and Schultz, E.T. 2013. What to 
Value and How? Ecological Indicator Choices in Stated Preference 
Valuation. Environmental Resource Economics. Published online, 
February 8, 2013.
---------------------------------------------------------------------------

    Estimating benefit functions from the Rhode Island choice 
experiment survey \150\ allows one to distinguish benefits associated 
with resource uses from those associated primarily with nonuse motives. 
Within the benefit transfer application, WTP is quantified for 
increases in non-harvested fish alone on the basis of the implicit 
price for migratory fish changes. This transfer holds constant all 
effects related to identifiable human uses (e.g., effects on catchable 
fish, public access, and observable wildlife). The remaining welfare 
effect--derived purely from effects on forage fish with little or no 
direct human use--may therefore be most accurately characterized as a 
nonuse benefit realized by households.
---------------------------------------------------------------------------

    \150\ Johnston, R.J., E.T. Schultz, E.T., K. Segerson, E.Y. 
Besedin, and M. Ramachandran. 2012. Enhancing the content validity 
of stated preference valuation: The structure and function of 
ecological indicators. Land Economics, 1: 102-120; Zhao, M., 
Johnson, R.J. and Schultz, E.T. 2013. What to Value and How? 
Ecological Indicator Choices in Stated Preference Valuation. 
Environmental Resource Economics. Published online, February 8, 
2013.
---------------------------------------------------------------------------

    The estimation of nonuse values involved the following steps:
    1. Use a model published by Zhao et al.\151\ to estimate household 
WTP per percent increase in the number of fish in a given watershed. 
The household WTP values reflect a survey version that characterizes 
effects on the number of migratory fish passing upstream.
---------------------------------------------------------------------------

    \151\ Op cit.
---------------------------------------------------------------------------

    2. Calculate the relative change in abundance for the fish species 
most affected by the regulation. The structure of the transfer study 
dictates that WTP should be evaluated based on the single species that 
would experience the greatest relative increase in abundance from 
restoration and that WTP estimates from multiple species impacted by 
IM&E should not be treated as strictly additive. After reviewing 
available stock assessment data, current stock size, and the magnitude 
of IM&E, EPA determined winter flounder to be the species likely to 
experience the greatest percent increase in abundance among those 
species with sufficient stock information to conduct the analysis 
within the boundaries of the North Atlantic and Mid-Atlantic benefits 
regions. This species is harvested; however, early life stages of 
recreational and commercial species may be eaten by other organisms and 
therefore have nonuse values.
    3. Estimate total household WTP by applying model results for WTP 
per percentage of estimated winter flounder impingement mortality and 
entrainment. Total regional WTP is the product of household WTP and the 
number of households in the affected region (for details, see Chapter 8 
of the BA).
b. Estimated Nonuse Benefits for the North Atlantic and Mid-Atlantic 
Regions
    EPA expects that a decrease in impingement mortality and 
entrainment will lead to increased fish abundance in affected water 
bodies, thus increasing nonuse benefits. Exhibit X-7 shows the benefits 
that would result from reducing impingement mortality and entrainment 
through today's final rule and other options considered. Application of 
the transfer study requires that the increases be expressed as a 
percent improvement relative to a maximum number of fish that could be 
supported. EPA calculated estimates of WTP on the basis of the increase 
in age-1 equivalent winter flounder relative to the estimated number of 
age-1 fish when the stock is at maximum sustainable yield, thus 
assuming that the population structure of the current stock is similar 
to the larger stock. The total annualized nonuse benefits for the North 
Atlantic and Mid-Atlantic regions for the existing unit provision of 
the final rule are $1 million using a 3 percent discount rate and $0.8 
million using a 7 percent discount rate. For other options considered, 
annualized nonuse benefits range from $0.3 to $51 million using a 3 
percent discount rate and $0.3 to $37 million using a 7 percent 
discount rate.

[[Page 48409]]



 Exhibit X-7--Annual Nonuse Benefits From Eliminating or Reducing IM&E at Existing Units at Existing Facilities
          in the North Atlantic and Mid-Atlantic Regions for the Final Rule and Options Considered \a\
----------------------------------------------------------------------------------------------------------------
                                       Winter flounder    Increased winter
        Regulatory option \b\           IM&E (million       flounder A1E     3% discount rate   7% discount rate
                                             A1E)          abundance (%)     (millions 2011$)   (millions 2011$)
----------------------------------------------------------------------------------------------------------------
Proposal Option 4...................               0.03               0.02                0.3                0.3
Final Rule--Existing Units..........               0.08               0.07                1.0                0.8
Proposal Option 2...................               4.78               4.18               51.1               37.3
Baseline............................               6.23               5.44               99.1               96.9
----------------------------------------------------------------------------------------------------------------
\a\ IM&E = impingement and entrainment; A1E = age-one equivalent.
\b\ IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling
  screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based
  on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow
  commensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement
  mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.

c. Stated Preference Survey
    EPA conducted a stated preference survey to calculate benefits 
associated with minimizing adverse impacts to aquatic ecosystems from 
cooling water intakes. Refer to Sections VI.F.1 and X.D.1 for 
additional discussion of the stated preference survey. EPA did not rely 
on the results of its stated preference survey in estimating the 
benefits of today's rule.
6. Threatened and Endangered Species
    This section summarizes methods and results of EPA's analysis of 
benefits from improved protection of T&E species from today's final 
rule and options considered. Chapter 5 of the BA provides further 
detail on this analysis.
    Even if levels of mortality due to impingement and entrainment from 
cooling water intake structures of T&E species are low in absolute 
numbers, they may represent a substantial portion of annual 
reproduction because of the reduced population levels that cause a 
species to be protected. Consequently, impingement mortality and 
entrainment may either lengthen recovery time, or hasten the demise of 
these species. Adverse effects of cooling water intake structures on 
T&E species can occur in several ways:
     Populations of T&E species may suffer direct harm as a 
consequence of impingement mortality and entrainment.
     T&E species may suffer indirect harm if a cooling water 
intake structure alters food webs.
     Cooling water intake structures can alter habitat 
designated as critical to the long-term survival of T&E species.
    Consequently, the 316(b) regulation will help preserve threatened 
and endangered species.
a. Qualitative Assessment of Impingement Mortality and Entrainment 
Impacts on T&E Species
    By definition, T&E species are characterized by low population 
levels. As such, it is unlikely that these species are recorded in 
significant number, if recorded at all, in impingement mortality and 
entrainment monitoring studies. Thus, losses are difficult to identify 
and quantify in a framework developed for non-listed species. 
Consequently, EPA developed a qualitative methodology to estimate the 
number of T&E species affected by impingement mortality and 
entrainment.
    To qualitatively assess the potential for cooling water intake 
structure impacts on aquatic T&E species, EPA constructed a database 
that assessed the geographical overlap of cooling water intake 
structure and habitat used by aquatic T&E species. This database 
identified the number of T&E species potentially affected by each 
regulated 316(b) facility, and the number of facilities potentially 
affecting each T&E species. Additional details are in Chapter 5 of the 
BA.
    Using this database, EPA found 99 Federally-listed aquatic T&E 
species that overlap with at least one covered cooling water intake 
structure (an interaction in Exhibit X-8). T&E species included 
freshwater, marine, and anadromous fish, freshwater mussels, and sea 
turtles. On average, the habitat of each T&E species overlapped with 22 
covered facilities (Exhibit X-8), suggesting that the 316(b) rule may 
have substantial positive benefits of ensuring the long-term 
sustainability and recovery of T&E species.

Exhibit X-8--Number of Regulated 316(b) Cooling Water Intake Structures in Aquatic T&E Species Habitat on a Per-
                                                  Species Basis
----------------------------------------------------------------------------------------------------------------
                                                                               Facilities per T&E species \c\
 Subset of affected species \a\ \b\        Species        Interactions \b\ -------------------------------------
                                                                                   Avg                Max
----------------------------------------------------------------------------------------------------------------
All T&E Species.....................                 99              2,158               21.8                103
T&E Freshwater Mussels..............                 53              1,176               21.8                103
T&E Anadromous Fish.................                 12                235               19.6                101
T&E Freshwater Fish.................                 21                 65                3.1                  7
T&E Snails..........................                  7                199               28.4                 49
Sea Turtles.........................                  6                483               80.5                102
----------------------------------------------------------------------------------------------------------------
\a\ Aquatic T&E species includes species listed as threatened or endangered by the U.S. Fish and Wildlife
  Service (freshwater) or National Oceanic and Atmospheric Administration National Marine Fisheries Service
  (marine). Only aquatic species overlapping with a minimum of one cooling water intake structure are included.
\b\ Each interaction represents an overlap between the range of a T&E species and cooling water intake
  structure.
\c\ Avg = average, Max = maximum.


[[Page 48410]]

b. Quantitative Assessment of Impingement Mortality and Entrainment 
Impacts on T&E Species
    Although difficult to observe and quantify, EPA identified 14 T&E 
species with confirmed impingement mortality and entrainment based on 
facility impingement mortality and entrainment studies. EPA notes that 
some impingement mortality and entrainment studies identifying T&E 
losses were conducted prior to the listing of the species under the 
ESA. In addition to documented species-level instances of T&E 
mortality, EPA identified impingement mortality and entrainment at the 
level of genera \152\ when these genera contain a T&E species whose 
habitat range overlapped the reporting facility's cooling water intake 
structure. Although these are not confirmed impingement mortality and 
entrainment of T&E species, they provide evidence that additional T&E 
species are likely to be directly affected by impingement mortality and 
entrainment. EPA found seven genus-level matches, suggesting that the 
14 T&E species suffering impingement mortality and entrainment may be 
inaccurate.
---------------------------------------------------------------------------

    \152\ Genera is the plural of genus. Genus is the rank superior 
to species in taxonomic biological classification. For example, the 
genus of Atlantic salmon (Salmo falar) is Salmo.
---------------------------------------------------------------------------

    Of the 14 Federally-listed T&E species for which EPA was able to 
document losses in impingement mortality and entrainment studies, EPA 
was able to quantify impingement mortality and entrainment for two 
species (pallid sturgeon and Topeka shiner). The documented impingement 
mortality and entrainment occurred before these species were Federally-
listed. Data were either qualitative or of insufficient quality to 
quantify local or regional impingement mortality and entrainment for 
the remaining 12 Federally-listed T&E species. EPA also quantified 
impingement mortality and entrainment for the American paddlefish 
(Polyodon spathula), listed by several states as threatened or 
endangered under State law, using facility impingement mortality and 
entrainment studies. Exhibit X-9 presents EPA's estimates of baseline 
annual impingement mortality and entrainment, and reductions in 
impingement mortality and entrainment which EPA estimates will occur 
under the final rule and other options considered.

   Exhibit X-9--Baseline Annual IM&E for T&E Species and Reductions for Existing Units at Existing Facilities
                                                 (A1Es) \a\ \b\
----------------------------------------------------------------------------------------------------------------
                                                            Final rule--
               Species                Proposal option 4    existing units   Proposal option 2       Baseline
----------------------------------------------------------------------------------------------------------------
Paddlefish \c\......................            7,930.1            8,245.4           15,659.7           18,841.4
Pallid Sturgeon.....................               65.4               67.6               78.0               89.5
Topeka Shiner.......................            2,910.9            3,009.8            3,471.9            3,984.9
                                     ---------------------------------------------------------------------------
    Total...........................           10,906.4           11,322.8           19,209.5           22,915.7
----------------------------------------------------------------------------------------------------------------
\a\ IM&E = impingement and entrainment; A1E = age-one equivalent.
\b\ IM&E Effects by Option: Proposal Option 2 = impingement mortality limitations based on modified traveling
  screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based
  on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow
  commensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement
  mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.
\c\ The American paddlefish is not a Federally-listed T&E species but is listed as threatened or endangered on
  several state lists.
\d\ This analysis is based solely on IM controls.

    Impingement mortality and entrainment is only one of many factors 
that adversely affect T&E species. Estimating total population impacts 
from changes in impingement mortality and entrainment requires 
estimates of current populations of these fish and estimates of other 
anthropogenic effects which were not readily available for all T&E 
species with quantified impingement mortality and entrainment at the 
time of this analysis. Therefore, EPA was unable to quantify effects on 
T&E populations from the 316(b) regulation.
c. Valuation Methods of T&E Fish Species
    EPA had sufficient data from impingement mortality and entrainment 
studies to quantify impingement mortality and entrainment estimates for 
three T&E species, Topeka shiner, pallid sturgeon, and paddlefish 
(Exhibit X-9). Two of these species (pallid sturgeon and paddlefish) 
have potential use values. A limited recreational fishery (mostly catch 
and release) exists for paddlefish in several states; although 
harvesting pallid sturgeon is illegal, the species is sometimes caught 
by recreational anglers. EPA estimated recreational use values for 
pallid sturgeon and paddlefish by applying transfer values from a 
Random Utility Model analysis it conducted to evaluate recreational 
fishing benefits of the 316(b) Phase II regulation to quantified 
impingement mortality and entrainment (for details, see Chapter 5 of 
the BA).
    EPA was unable to generate estimates of nonuse values for T&E fish 
species because reliable population estimates needed to transfer the 
values were unavailable. However, EPA emphasizes that nonuse values for 
T&E fish species are likely to be significantly greater than any use 
values. Harvest of these species is prohibited, reflecting a societal 
judgment that protection and preservation of these species is of 
greater value than harvest.
d. Estimated Monetary Benefits From Reduced Mortality of T&E Fish 
Species
    Exhibit X-10 presents the estimated annualized benefits for a 
subset of T&E species. For existing units under the final rule, EPA 
estimates total annualized use benefits for T&E species with quantified 
impingement mortality and entrainment of $0.4 million using a 3 percent 
discount rate and $0.3 million using a 7 percent discount rate. For 
other options considered, annualized benefits range from $0.4 to $0.7 
million using a 3 percent discount rate and $0.3 to $0.5 million using 
a 7 percent discount rate.

[[Page 48411]]



Exhibit X-10--Annual Use Benefits From Eliminating or Reducing IM&E of T&E Species at Existing Units of Existing
                     Facilities for The Final Rule and Other Options Considered \a\ \b\ \c\
----------------------------------------------------------------------------------------------------------------
                                                         Increased harvest   3% discount rate   7% discount rate
                   Regulatory option                      (number of fish)   (million 2011$)    (million 2011$)
----------------------------------------------------------------------------------------------------------------
Proposal Option 4......................................            7,995.5                0.4                0.3
Final Rule--Existing Units.............................            8,313.0                0.4                0.3
Proposal Option 2......................................           15,737.7                0.7                0.5
Baseline...............................................           18,930.9                1.2                1.3
----------------------------------------------------------------------------------------------------------------
\a\ IM&E = impingement and entrainment; T&E = threatened and endangered. Values are included for pallid sturgeon
  and paddlefish in the Inland region.
\b\ IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling
  screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based
  on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow
  commensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement
  mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.
\c\ This analysis is based solely on impingement mortality controls.

    EPA notes that the benefit values presented in Exhibit X-10 
represent only a fraction of values for T&E species potentially 
affected by the final existing facilities rule. The Agency was able to 
obtain only use values and for only a small subset of all affected T&E 
species. Moreover, because of the nature of T&E species, even a small 
increase in population could yield economic and ecological benefits 
(e.g., Richardson and Loomis; \153\ Bell et al.; \154\ Berrens et 
al.\155\)
---------------------------------------------------------------------------

    \153\ Richardson, L., and J. Loomis. 2009. The total economic 
value of threatened, endangered and rare species: An updated meta-
analysis. Ecological Economics, 68(5): 1535-1548.
    \154\ Bell, K.P., D. Huppert, and R.L. Johnson. 2003. 
Willingness to pay for local coho salmon enhancement in coastal 
communities. Marine Resource Economics, 18: 15-31.
    \155\ Berrens, R.P., P. Ganderton, and C.L. Silva. 1996. Valuing 
the protection of minimum instream flow in New Mexico. Journal of 
Agricultural and Resource Economics 21(2): 294-309.
---------------------------------------------------------------------------

e. Valuation Methods for T&E Sea Turtles
    In addition to estimating values of T&E fish with quantitative 
estimates of impingement mortality and entrainment, EPA estimated the 
WTP for sea turtle conservation. In this analysis, EPA applied 
estimates from a study using a stated preference valuation approach to 
estimate total economic value of a management program that reduces the 
risk of extinction of loggerhead sea turtles.\156\
---------------------------------------------------------------------------

    \156\ Whitehead, J.C. 1993. Total economic values for coastal 
and marine wildlife: specification, validity, and valuation issues. 
Marine Resource Economics, 8(2): 119-132.
---------------------------------------------------------------------------

    Although impingement mortality and entrainment of turtles is 
relatively low compared to mortality from shrimp trawling and other 
fisheries,\157\ it is known that reducing turtle mortality during 
juvenile and subadult life stages can have a substantial positive 
effect on population growth.\158\ The marginal change in extinction 
probability of sea turtles due to 316(b) regulatory options is likely 
to be at least 0.01, or a 1 percent decrease in the probability of 
extinction over 25 years. This assessment is based on reports that 
impingement mortality and entrainment may result in the loss of more 
than 100 turtles per year and because turtle population growth rates 
are known to be sensitive to changes in juvenile and subadult life 
stages.\159\
---------------------------------------------------------------------------

    \157\ Plotkin, P.T., (Ed). 1995. National Marine Fisheries 
Service and U. S. Fish and Wildlife Service Status Reviews for Sea 
Turtles Listed under the Endangered Species Act of 1973. National 
Marine Fisheries Service. Silver Spring, MD.
    \158\ Crouse, D.T., L.B. Crowder, and H. Caswell. 1987. A 
stated-based population model for loggerhead sea turtles and 
implications for conservation. Ecology, 68(5): 1412-1423.
    \159\ Ibid.
---------------------------------------------------------------------------

f. Benefits From Reduced Mortality of T&E Sea Turtles
    The U.S. range of loggerhead sea turtles includes the Gulf of 
Mexico, South Atlantic, Mid-Atlantic, and North Atlantic 316(b) 
regions.\160\ To calculate national WTP for an increased 25-year 
survival probability of loggerhead sea turtles, EPA assumed the 
affected population to include households in States with 316(b) 
facilities that are in loggerhead sea turtle habitat. EPA determined 
that 54.8 million households would be willing to pay for improved 
protection of loggerhead sea turtles. Although incidences of mortality 
have been reported at facilities in California, Texas, Florida, South 
Carolina, North Carolina, and New Jersey, EPA does not have sufficient 
information to quantify total sea turtle losses due to intakes or the 
reductions in such losses that might occur from the final rule or 
options considered. But as an illustrative example, assuming that the 
survival probability of loggerhead sea turtles over 25 years were 
increased by 1 percent, and applying a mean household value of $0.37 
(2011 dollars), the monetized value would be $19.3 million and $18.8 
million using discount rates of 3 percent and 7 percent, respectively. 
EPA is presenting these estimates only to demonstrate the potential 
range of benefits, and is not including them in national benefits 
totals for the final rule and options considered. Actual household 
values and total benefits may be higher or lower than these estimates, 
with Proposal Option 2 likely to provide substantially greater benefits 
than the final rule and Proposal Option 4.
---------------------------------------------------------------------------

    \160\ U.S. Fish and Wildlife Service (USFWS) (2010c). ``North 
Florida Ecological Services Office: Loggerhead Sea Turtle 
(Caretta).'' Available at http://www.fws.gov/northflorida/seaturtles/turtle%20factsheets/loggerhead-sea-turtle.htm.
---------------------------------------------------------------------------

    Because EPA does not currently have accurate national estimates of 
impingement mortality and entrainment for turtle species, nor are 
population models available that estimate the effect of 316(b) 
regulation on population size and extinction risk, these estimates are 
presented only as an illustrative example and are not included in 
national totals.
g. Other Indications of Society's WTP for Protection of T&E Species
    Many sources provide information that indicates that society places 
significant value on protecting T&E species. These include, but are not 
limited to:
     The Endangered Species Act of 1973, which provides for the 
conservation of T&E species of fish and wildlife. Federal and State 
expenditures on T&E species were $593 million during fiscal year 2011 
just on protection of those Federally-listed T&E species that have 
habitat overlapping cooling water intake structures. This accounted for 
68 percent of the $869 million spent on fish, marine reptiles, 
crustaceans, corals, clams, aquatic snails and marine mammals listed 
under the Endangered Species Act.\161\
---------------------------------------------------------------------------

    \161\ U.S. Fish and Wildlife Service. 2012. Federal and State 
Endangered and Threatened Species Expenditures. Fiscal Year 2011.

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

[[Page 48412]]

     Restrictions on activities in the habitat occupied by T&E 
species. For example, water diversions on the San Joaquin-Sacramento 
River delta, in place to protect the Delta Smelt (Hypomesus 
transpacificus), limit the extraction of water for drinking and 
agriculture.
     The willingness of individuals to volunteer their time to 
conserve T&E species. For example, dozens of organizations recruit 
thousands of volunteers every year to participate in sea turtle 
conservation and research projects. Volunteers are often required to 
undergo substantial training and commit to long hours.
    While costs to replace, protect, or enhance stocks, and costs to 
users affected by efforts to conserve stocks are not direct measures of 
economic benefits, they indicate that society is willing to pay 
significant sums to protect and restore populations of T&E species. 
Although impingement mortality and entrainment is only one of many 
stressors on these species, reducing the amount of impingement 
mortality and entrainment could contribute to the recovery of 
populations over time, thereby eliminating some costs associated with 
conserving T&E species.
7. Assessment of Thermal Discharge Impacts
    In addition to reducing total impingement mortality and 
entrainment, closed-cycle cooling reduces thermal pollution. Most 
retrofit installations of cooling towers at electric generating 
facilities have been required by NPDES permits to reduce thermal 
discharges. Since thermal discharges are a product of cooling water 
intake structures, the impacts of thermal discharges are a relevant 
benefit to consider when assessing appropriate technologies to reduce 
the effects of cooling water intakes. The installation of technologies, 
such as closed-cycle cooling systems, can reduce thermal pollution 
significantly. Thermal pollution has long been recognized to cause harm 
to the structure and function of aquatic ecosystems. Concerns about the 
impacts of thermal discharges are addressed by State water quality 
standards that, when implemented through NPDES permits, limit the 
amount of heat that can be discharged to a receiving water and result, 
in some cases, in technology-based permit conditions. Section 316(a) of 
the CWA applies to point sources with thermal discharges. It authorizes 
the NPDES permitting authority to impose alternative effluent 
limitations for the control of the thermal component of a discharge in 
lieu of the effluent limitations that would otherwise be required under 
sections 301 or 306 of the CWA. Before such a ``thermal variance'' can 
be granted, the permittee must demonstrate that the alternative limit 
will assure the protection and propagation of a balanced, indigenous 
population of shellfish, fish and wildlife in and on the body of water 
into which the discharge is to be made. 40 CFR 125.73(a).
    EPA did not quantify nationally the impacts of thermal discharges. 
However, numerous studies have shown that thermal discharges may 
substantially alter the structure of aquatic communities by modifying 
photosynthetic, metabolic, and growth rates. Thermal discharges also 
harm aquatic life by reducing levels of dissolved oxygen, altering the 
location and timing of fish behavior such as spawning, aggregation, and 
migration, and may cause thermal shock-induced mortality for some 
species. Adverse temperature effects may also be more pronounced in 
aquatic ecosystems that are already subject to other environmental 
stressors such as high levels of biochemical oxygen demand, nutrient 
and sediment contamination, or pathogens. Within mixing zones, which 
often extend several miles downstream from outfalls, thermal discharges 
may impair efforts to restore and protect the waterbody. For example, 
permit requirements to limit nitrogen discharges in a watershed, and 
thereby reduce harmful algal blooms, may be counteracted by thermal 
discharges which promote growth of harmful algae. Thermal discharges 
may have indirect effects on fish and other vertebrate populations 
through increasing pathogen growth and infection rates.
    Thermal discharges may thus alter the ecological services, and 
reduce the benefits, of aquatic ecosystems that receive heated 
effluent. The magnitude of thermal effects on ecosystem services is 
related to facility-specific factors, including the volume of the 
waterbody from which cooling water is withdrawn and returned, other 
heat loads, the rate of water exchange, the presence of nearby refugia, 
and the assemblage of nearby fish species.
8. Assessment of Social Cost of Carbon
    The social cost of carbon reflects the estimated increase in the 
burden of global warming to society in future years due to higher 
greenhouse gas (GHG) emissions, measured as CO2 equivalents, 
associated with additional energy requirements--energy penalty, 
auxiliary energy requirements, and compliance technology installation--
of regulatory options. EPA estimated positive or negative benefits 
associated with the social cost of carbon for decreases or increases, 
respectively for Proposal Option 4 and Final Rule or Proposal Option 2, 
in energy requirements at regulated facilities under the final rule and 
other options considered.
    EPA's estimates of changes in CO2 emissions were based 
on results from the electricity market analysis using IPM.\162\ For 
electric generators, EPA estimated the change in CO2 
resulting from the energy penalty associated with close-cycle 
recirculating technology, auxiliary energy requirement for operating 
compliance technology, and technology installation downtime. For 
manufacturers, EPA estimated the change in carbon emissions resulting 
from the energy penalty and auxiliary energy requirement. For 
compliance technology installation downtime at manufacturers, EPA 
assumed no change in carbon emissions as the short-term replacement of 
energy by electric power generating facilities that would otherwise be 
produced at manufacturers could either increase or decrease emissions.
---------------------------------------------------------------------------

    \162\ For this analysis, EPA used the Integrated Planning Model 
(IPM[supreg]), a comprehensive electricity market optimization model 
that assesses such impacts within the context of regional and 
national electricity markets.
---------------------------------------------------------------------------

    To estimate benefits associated with the reductions in carbon 
emissions, EPA used social cost of carbon values calculated from the 
2013 document titled, Technical Support Document: Technical Update of 
the Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866, developed by the U.S. Government Interagency 
Working Group on Social Cost of Carbon. The Agency used the Working+ 
Group's annual social cost of carbon values for 2010 through 2050 based 
on the 3 percent average discount rate, which EPA has concluded is the 
most appropriate discount rate for intergenerational benefits such as 
the social cost of carbon. See Chapter 9 of the BA for annual social 
cost of carbon values based on discount rates of 2.5, 3 (high) and 5 
percent. Benefits for each year of the analysis period were calculated 
by multiplying the change CO2 emissions by the SCC value for 
that year. Similar to the treatment of other benefits, EPA discounted 
all year-specific social cost of carbon values to the beginning of 2013 
and calculated an annualized value over 51 years using a 3-percent 
discount rate. EPA acknowledges that it is mixing estimates of benefits 
categories analyzed at different discount rates, but finds in this

[[Page 48413]]

case that using different discount rates is justified by the 
intergenerational nature of the social cost of carbon, for purposes of 
the sensitivity analysis based on a 7 percent discount rate to discount 
other benefit categories.
    Exhibit X-11 presents annualized benefits for existing units for 
the final rule and options considered. Included in the monetized 
benefits is EPA's estimate that the final rule will reduce greenhouse 
gas emissions by 9.3 million tons of CO2-equivalent 
emissions over the 40-year compliance period for this analysis. Both 
the final rule and Proposal Option 4 result in a net reduction in 
CO2 emissions for existing units during the analysis period. 
Proposal Option 2 would result in a net increase in emissions and 
negative benefits for existing units. Using a 3 percent discount rate, 
annualized benefits under the final rule for existing units are $12 
million. Using a 7 percent discount rate, annualized benefits under 
final rule for existing units are $13 million.

    Exhibit X-11--Benefits Associated With Social Cost of Carbon for
     Existing Units for the Final Rule and Other Options Considered
                    [In millions of 2011 dollars] \a\
------------------------------------------------------------------------
                                                3% Discount  7% Discount
             Regulatory option \b\                  rate         rate
------------------------------------------------------------------------
Proposal Option 4.............................         12.4         13.4
Final Rule--Existing Units....................         12.4         13.4
Proposal Option 2.............................     -1,643.1     -1,218.2
------------------------------------------------------------------------
\a\ Benefits are based on the workgroup's average social cost of carbon
  values using 3 percent rate.

9. Benefits for New Units
    In addition to the final rule and other options considered for 
existing units, EPA analyzed the benefits of the requirements for new 
units at existing facilities. EPA could not directly apply the benefits 
methodology used for IM&E (impingement mortality and entrainment) 
reductions at existing units to new units because it lacks facility-
specific information to estimate regional impingement mortality and 
entrainment reductions for new units. Instead, EPA estimated benefits 
associated with IM&E reductions for the new unit requirements on the 
basis of the monetary benefits per million gallons per day from the 
analysis of existing units. EPA also estimated benefits associated with 
changes in GHG emissions as the result of the energy penalty associated 
with operating cooling towers using the social cost of carbon. Exhibit 
X-12 below presents the estimates of monetized benefits for the new 
unit requirements. Monetized benefits are -$0.2 million discounted at 3 
percent and -$0.1 million discounted at 7 percent.

                                Exhibit X-12--National Benefits Under the Final Rule for New Units at Existing Facilities
                                                                    [In 2011 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Monetized benefit categories
                                                         -----------------------------------------------------------------------------------------------
                  Regulatory option \a\                    Recreational     Commercial                      T&E species   Social cost of
                                                              fishing         fishing         Nonuse            \b\         carbon \c\         Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            3% discount rate (millions 2011$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Rule--New Units...................................             0.0             0.0             0.1             0.0            -0.3            -0.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            7% discount rate (millions 2011$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Rule--New Units...................................             0.0             0.0             0.0             0.0            -0.2            -0.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ IM&E Effects: Final Rule--New Units--entrainment requirements for all stand-alone facilities.
\b\ Benefits estimates for T&E species are restricted to recreational fishing benefits from increased catch of T&E species. They do not include benefits
  for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.
\c\ Benefits are based on the Work Group's average social cost of carbon values using the 3 percent rate.

10. National Monetized Benefits
    Quantifying and monetizing reductions in impingement mortality and 
entrainment attributable to the final rule and other options considered 
is challenging. National benefit estimates are subject to uncertainties 
inherent in valuation approaches used to assess the benefits categories 
(see Chapters 5, 6, 7, 8, 9, and 12 of the BA). While EPA has no data 
to indicate that the results for each benefit category are atypical or 
unreasonable, some potentially significant benefit categories have not 
been fully monetized, and thus the national monetized benefits 
presented below likely underestimate total benefits.
    Exhibit X-13 presents EPA's estimates of the partial monetized 
benefits from impingement mortality and entrainment reduction and the 
social cost of carbon for the final rule and other options considered. 
These monetized values represent use values from increased commercial 
and recreational catch, benefits transfer of recreational fishing 
benefits of threatened and endangered species, nonuse values associated 
with an increase in fish abundance (those fish that are not caught) in 
the Northeast and Mid-Atlantic benefit regions, and national benefits 
estimates associated with the social cost of carbon. For the final rule 
for existing and new units, partial estimated benefits from reducing 
impingement mortality and entrainment at existing units are $33 million 
using a 3 percent discount rate and $29 million using a 7 percent 
discount rate. EPA was not able to fully monetize the benefits for the 
final rule. Thus, the estimates represent a conservative (i.e., low) 
estimate of total regulatory benefits of the final rule.

[[Page 48414]]



                               Exhibit X-13--Summary of National Benefits for All Regulated Facilities for the Final Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Monetized benefit categories
                                                         -----------------------------------------------------------------------------------------------
                  Regulatory option \a\                    Recreational     Commercial                      T&E species   Social cost of
                                                              fishing         fishing         Nonuse            \b\         carbon \c\         Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            3% discount rate (millions 2011$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Rule--Existing Units..............................            18.2             0.9             1.0             0.4            12.4            33.0
Final Rule--New Units...................................             0.0             0.0             0.1             0.0            -0.3            -0.2
Final Rule (Existing Units + New Units).................            18.3             0.9             1.1             0.4            12.1            32.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            7% discount rate (millions 2011$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Rule--Existing Units..............................            13.5             0.7             0.8             0.3            13.4            28.7
Final Rule--New Units...................................             0.0             0.0             0.1             0.0            -0.2            -0.1
Final Rule (Existing Units + New Units).................            13.5             0.7             0.9             0.3            13.2            28.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ IM&E Effects: Final Rule-Existing Units = impingement mortality standards based on modified traveling screens for all facilities with flow greater
  than 2 mgd; Final Rule-New Units: Entrainment requirements for all stand-alone facilities where the turbine and condenser are newly built or replaced.
\b\ Benefits estimates for T&E species are restricted to benefit transfer of recreational fishing benefits from T&E species. They do not include
  benefits for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.
\c\ Baseline does not include potential benefits associated with the social cost of carbon.

    Exhibit X-14 presents total monetized benefits for the final rule 
and other options EPA considered for existing units by benefit category 
using a 3 percent discount rate. Annual monetized benefits are slightly 
higher for the final rule than Proposal Option 4, and are negative for 
Proposal Option 2. Including both existing and new units, annual 
monetized benefits are $32.8 million for the final rule, $30.8 million 
for Proposal Option 4 and -$1,542.8 million for Proposal Option 2.

Exhibit X-14--Summary of National Benefits for All Regulated Facilities for the Final Rule and Other Options EPA
                                                   Considered
                                               [3% Discount rate]
----------------------------------------------------------------------------------------------------------------
                                                             Annual benefits by regulatory option \a\  (millions
                                                                                   2011$)
               Monetized benefit categories                -----------------------------------------------------
                                                             Proposal option    Final rule--     Proposal option
                                                                    4          existing units           2
----------------------------------------------------------------------------------------------------------------
                                                 Existing Units
----------------------------------------------------------------------------------------------------------------
Recreational Fishing......................................              17.1              18.2              43.0
Commercial Fishing........................................               0.9               0.9               3.9
Nonuse....................................................               0.3               1.0              51.1
T&E Species \b\...........................................               0.4               0.4               0.7
Social Cost of Carbon.....................................              12.4              12.4          -1,641.3
                                                           -----------------------------------------------------
    Total.................................................              31.0              33.0          -1,542.6
----------------------------------------------------------------------------------------------------------------
                                              Final Rule--New Units
----------------------------------------------------------------------------------------------------------------
    Total.................................................              -0.2              -0.2              -0.2
----------------------------------------------------------------------------------------------------------------
                                             Existing and New Units
----------------------------------------------------------------------------------------------------------------
    Total.................................................              30.8              32.8          -1,542.8
----------------------------------------------------------------------------------------------------------------
\a\ IM&E Effects: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for
  all facilities with flow greater than 50 mgd; Final Rule--Existing Units = impingement mortality limitations
  based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 =
  impingement mortality limitations based on modified traveling screens for all facilities with flow greater
  than 2 mgd and entrainment mortality limitations commensurate with closed-cycle recirculating systems for all
  facilities with flow greater than 125 DIF; Final Rule--New Units: entrainment requirements for all stand-alone
  facilities.
\b\ Benefits estimates for T&E species are restricted to benefit transfer of recreational fishing benefits from
  T&E species. They do not include benefits for reduced mortality of T&E sea turtles and other nonuse values
  associated with T&E species.

EPA recognizes that its estimates of ecological and economic benefits 
projected to occur under regulation are affected by uncertainty at many 
levels.
     Not all ecological goods and services affected by cooling 
water intake structures at regulated 316(b) facilities are modeled or 
monetized, suggesting that the total benefits of regulation may be 
underestimated. For example, potential increases in ecosystem stability 
that might occur as a result of regulation is not explicitly estimated 
nor monetized.
     When particular ecological goods and services are 
monetized, data is not always available at the national level. For 
example, EPA was only able to estimate the nonuse benefits transfer for 
a species that represents less than one

[[Page 48415]]

percent of adverse environmental impacts.
     For the proposed rule, EPA used a habitat-based method to 
assess potential WTP for reducing fish mortality at CWIS based on the 
approximate area of habitat required to produce and support the number 
of organisms lost to impingement mortality and entrainment.\163\ EPA 
did not consider the habitat-based approach appropriate for primary 
analysis of benefits for the proposed rule, and did not include it in 
its analysis for the final rule. However, the results for the proposed 
rule illustrate that total benefits may be substantially greater than 
benefits estimated using the methodologies described in Section D.
---------------------------------------------------------------------------

    \163\ U.S. EPA. 2011. Environmental and Economic Benefits 
Analysis for the Proposed Section 316(b) Existing Facilities Rule.
---------------------------------------------------------------------------

    Because EPA was able to only partially monetize nonuse benefits 
using the benefits transfer approach, EPA expects that the actual 
benefits will be greater than those presented here.

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

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

    Under section 3(f)(1) of E.O. 12866 (58 FR 51735, October 4, 1993), 
this action is an economically significant regulatory action because it 
is likely to have an annual effect of $100 million or more on the 
economy. Accordingly, EPA submitted this action to the Office of 
Management and Budget for review under E.O. 12866 and 13563 (76 FR 
3821, January 21, 2011), and any changes made in response to Office of 
Management and Budget recommendations have been documented in the 
docket for this action.
    In addition, EPA prepared an analysis of the costs and benefits 
associated with this action; this analysis is discussed in detail in 
the Chapter 8 of the EA. A copy of the EA is available in the docket 
for this action, and the analysis is briefly summarized here.
    Exhibit XI-1 (drawn from Chapter 8 of the EA) provides the results 
of the benefit-cost analysis.\164\ Placeholders for option-specific 
non-monetized benefits are represented by BP4 for Proposal 
Option 4, BFR for the final rule and BP2 for 
Proposal Option 2. While preliminary, and not yet reviewed by EPA's 
Science Advisory Board, the preliminary results of EPA's stated 
preference survey (see BA, Chapter 11) suggest that BP4, 
BFR, and BP2 have the potential to be 
significantly different from zero. EPA is therefore using placeholders 
for additional benefits that are not captured by its analysis of use 
benefits and the benefits transfer for nonuse benefits. However, EPA 
did not rely on the results of its stated preference survey in 
estimating the benefits of today's rule. EPA has concluded that the 
benefits of the rule justify the costs.
---------------------------------------------------------------------------

    \164\ The costs and benefits presented in this section assume 
that facilities with impoundments will qualify as having closed-
cycle recirculating systems in the baseline EPA also conducted the 
costs and impacts analysis where impoundments were not assumed to 
meet the definition of closed-cycle recirculating. EPA did not find 
that this assumption would change EPA's final rule decision; see DCN 
12-2501.
---------------------------------------------------------------------------

    EPA also analyzed the employment effects of the final rule and 
other options considered in development of this rule. The results of 
that analysis are summarized in Section IX.E of this preamble and 
Chapter 9 of the EA.

  Exhibit XI-1--Annualized Benefits and Costs of the Regulatory Options
                     [In millions, 2011 dollars] \a\
------------------------------------------------------------------------
                                        Total social
               Option                     costs \b\       Benefits \c\
------------------------------------------------------------------------
Proposal Option 4...................            $251.8       $31.0 + BP4
Final Rule..........................             274.9        32.8 + BFR
Proposal Option 2...................           3,643.2    -1,542.6 + BP2
------------------------------------------------------------------------
\a\ Social costs and benefits were annualized over 51 years and
  discounted using 3 percent rate.
\b\ Total social costs include compliance costs to facilities and
  government administrative costs. See EA Chapter 7.
\c\ Benefits include social cost of carbon from changes in greenhouse
  gas emissions due to the final rule.

B. Paperwork Reduction Act

    The information collection requirements in this rule will be 
submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
supporting statement in EPA's information collection request estimates 
the burden to permitted facilities; burden is defined at 5 CFR 
1320.3(b). The 60-day comment period will commence after publication of 
the draft ICR. The information collection requirements are not 
enforceable until they are approved by OMB.
    Today's rule requires several distinct types of information 
collection as part of the NPDES permit application. In general, the 
information will be used to assist EPA in regulating environmental 
impacts, namely impingement mortality and entrainment, at cooling water 
intake structures and to identify how a cooling water intake structure 
at an existing facility or a new unit at an existing facility will meet 
the impingement mortality and entrainment requirements. Today's rule 
also requires other reporting and recordkeeping requirements to 
demonstrate and document compliance with the requirements. Compliance 
with the applicable information collection requirements established 
under this final rule is mandatory (see Sec. Sec.  122.21(r), 125.136, 
125.137, 125, and 138).
    EPA does not consider the specific data that will be collected 
under this final rule to be confidential business information. However, 
if a respondent does consider this information to be confidential, the 
respondent may request that such information be treated as 
confidential. All confidential data submitted to EPA will be handled in 
accordance with 40 CFR 122.7, 40 CFR part 2, and EPA's Security Manual 
Part III, Chapter 9, dated August 9, 1976.
    This final rule modifies regulations at Sec.  122.21 to require 
each existing facility and new unit at an existing facility to prepare 
and submit information as part of the facility's NPDES permit 
application. A detailed list of required data items is provided below.
    EPA estimates an average annual burden of 634,596 hours for the 
final rule's information collection requirements. Of this total, EPA 
estimates that 1,068 regulated facilities

[[Page 48416]]

will incur an annual average burden of 588 hours per respondent (for a 
total of 627,666 burden hours). EPA estimates that Directors in 46 
States and one territory with NPDES permitting authority, will incur an 
annual average burden for the review, oversight, and administration of 
the rule, of 6,930 hours, or an annual average of 147 hours per 
permitting authority. Slight differences in calculations are due to 
rounding.
    The corresponding estimate of costs other than labor (labor and 
non-labor costs are included in the total cost of the final rule 
discussed in Section IX of this preamble) during the first three years 
after promulgation of the rule is an annual average of $8.5 million. 
Non-labor costs include activities such as capital costs for sampling 
equipment, remote monitoring devices, laboratory services, 
photocopying, and the purchase of supplies. The burden and costs are 
for the information collection, reporting, and recordkeeping 
requirements for the three-year period beginning with the assumed 
effective date of this rule. Additional information collection 
requirements will occur after this initial three-year period as (1) 
existing facilities will continue to gather and submit required permit 
application materials and (2) new units at existing facilities commence 
operations and are issued permits.
    Information and studies to be submitted under this final rule (as 
required by Sec. Sec.  122.21(r) and 125.95) by existing facilities and 
new units at existing facilities are listed below. For more 
information, see Section VIII in the preamble.
     Source Water Physical Data (Sec.  122.21(r)(2))
     Cooling Water Intake Structure Data (Sec.  122.21(r)(3))
     Source Water Baseline Biological Characterization Data 
(Sec.  122.21(r)(4))
     Cooling Water System Data (Sec.  122.21(r)(5))
     Chosen Method of Compliance With Impingement Mortality 
Standards (Sec.  122.21(r)(6))
     Performance Studies (Sec.  122.21(r)(7))
     Operational Status (Sec.  122.21(r)(8))
     Entrainment Characterization Study (Sec.  122.21(r)(9))
     Comprehensive Technical Feasibility and Cost Evaluation 
Study (Sec.  122.21(r)(10))
     Benefits Valuation Study (Sec.  122.21(r)(11))
     Non-Water Quality and Other Environmental Impacts Study 
(Sec.  122.21(r)(12))
    In addition to the information requirements of the permit 
application, NPDES permits normally specify monitoring and reporting 
requirements to be met by the permitted entity. Existing facilities and 
new units at existing facilities are required to perform monitoring as 
determined by the requirements in Sec.  125.94 and in accordance with 
Sec. Sec.  125.96 and 125.97.
    Finally, in accordance with Sec.  125.95(e), facilities are 
required to maintain records of all submissions that are part of its 
permit application for a minimum of five years. If the Director 
approves a request for reduced permit application studies under Sec.  
125.95(a) or Sec.  125.98(g), the facility must keep records of all 
submissions that are part of a previous permit application for an 
additional five years. Also, facilities must keep records of all 
submissions that are part of the permit reporting requirements for a 
period of at least five years from the date of permit issuance, in 
accordance with Sec.  125.97(d).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act generally requires an agency to 
prepare a regulatory flexibility analysis of any rule subject to notice 
and comment rulemaking requirements under the Administrative Procedure 
Act or any other statute unless the agency certifies that the rule will 
not have a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small organizations, 
and small governmental jurisdictions.
1. Definition of Small Entities and Estimation of the Number of Small 
Entities Subject to Today's Final Regulation
    For EPA's assessment of the impact of today's final rule on small 
entities, small entity is defined as either (1) a small business as 
defined by SBA (Small Business Administration) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district, or special district with a 
population of fewer than 50,000; or (3) a small organization that is 
any not-for-profit enterprise that is independently owned and operated 
and is not dominant in its field. Federal or State entities owning 
regulated facilities are not small entities.
    EPA performed this assessment separately for the two classes of 
facilities and their owner entities--electric generators and 
manufacturers--that are subject to today's rule.
a. Electric Generators
    EPA followed the SBA criteria for identifying small, non-government 
entities in the electric power industry, as follows:
     For non-government entities with electric power generation 
as a primary business, small entities were designated using employment 
size thresholds specific to each 6-digit NAICS code.
     For government entities other than Federal or State 
governments, small entities are those with a population of fewer than 
50,000.
     For entities with a primary business other than electric 
power generation, the relevant size criteria are based on revenue or 
number of employees by NAICS sector (see Exhibit XI-2).

Exhibit XI-2--NAICS Codes and SBA Entity Size Standards for Entities That Own Electric Generators With a Primary
                                  Business Other Than Electric Power Generation
----------------------------------------------------------------------------------------------------------------
             NAICS code                      NAICS description                     SBA size standard
----------------------------------------------------------------------------------------------------------------
212111..............................  Bituminous Coal and Lignite     500 employees.
                                       Surface Mining.
221210..............................  Natural Gas Distribution......  500 employees.
331110..............................  Iron and Steel Mills and        1,000 employees.
                                       Ferroalloy Manufacturing.
331315..............................  Aluminum Sheet, Plate, and      750 employees.
                                       Foil Manufacturing.
333611..............................  Turbine and Turbine Generator   1,000 employees.
                                       Set Units Manufacturing.
488320..............................  Marine Cargo Handling.........  $35.5 million in revenue.
491110..............................  Postal Service................  $7 million in revenue.
522110..............................  Commercial Banking............  $175 million in assets.
523910..............................  Miscellaneous Intermediation..  $7 million in revenue.
524126..............................  Direct Property and Casualty    1,500 employees.
                                       Insurance Carriers.

[[Page 48417]]

 
525910..............................  Open-End Investment Funds.....  $7 million in revenue.
525990..............................  Other Financial Vehicles......  $7 million in revenue.
541990..............................  All Other Professional,         $14 million in revenue.
                                       Scientific, and Technical
                                       Services.
551112..............................  Offices of Other Holding        $7 million in revenue.
                                       Companies.
562212..............................  Solid Waste Landfill..........  $35.5 million in revenue.
562219..............................  Other Nonhazardous Waste        $35.5 million in revenue.
                                       Treatment and Disposal.
562920..............................  Materials Recovery Facilities.  $19 million in revenue.
611310..............................  Colleges, Universities, and     $25.5 million in revenue.
                                       Professional Schools.
----------------------------------------------------------------------------------------------------------------

    EPA conducted this analysis for the same set of parent entities it 
analyzed in the general entity-level cost-to-revenue analysis discussed 
in Section IX.D. To determine whether these are small entities on the 
basis of the size criteria outlined above, EPA compared the relevant 
measure for the identified parent entities to the appropriate SBA size 
criterion. EPA conducted this analysis using (1) facility-level weights 
without using entity-level weights, and (2) entity-level weights 
without using facility-level weights (for information on these two 
weighting approaches, see Appendix H of the EA).
    EPA estimates that between 31 and 52 small entities own electric 
generators that are subject to the rule. They represent approximately 
25 to 32 percent of entities that own electric generators (see Exhibit 
XI-3).

                                    Exhibit XI-3--Number of Entities That Own Electric Generators, by Ownership Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Using facility-level weights                   Using entity-level weights \b\
                   Ownership type \a\                    -----------------------------------------------------------------------------------------------
                                                               Total           Small          % Small          Total           Small          % Small
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooperative.............................................              13              11            84.6              21              18            85.7
Federal.................................................               1               0             0.0               1               0             0.0
Investor-owned..........................................              57               6            10.5              60               7            11.7
Municipality............................................              19               7            36.8              38              19            50.0
Nonutility..............................................              26               7            26.9              30               8            26.7
Other Political Subdivision.............................               4               0             0.0               6               0             0.0
State...................................................               3               0             0.0               3               0             0.0
All Entity Types........................................             123              31            25.2             159              52            32.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ State and Federal entities are considered large.
\b\ In addition to the 52 small parent entities on an unweighted basis, one additional entity is an ``other political subdivision entity'' for a total
  of 53. This entity owns only implicitly analyzed facilities; consequently, there is no explicitly analyzed entity in the other political subdivision
  ownership category to represent this implicitly analyzed small parent entity. As the result, weighted entity counts do not include one small other
  political subdivision entity.

b. Manufacturers
    EPA also used the SBA criteria for identifying small, non-
government entities in the manufacturing sector. Exhibit XI-4 lists the 
SBA size threshold guidelines for entities that own manufacturers.

           Exhibit XI-4--NAICS Codes and SBA Entity Size Standards for Entities That Own Manufacturers
----------------------------------------------------------------------------------------------------------------
          NAICS code                 NAICS description                         SBA size standard
----------------------------------------------------------------------------------------------------------------
111930.......................  Sugarcane Farming............  $0.75 million in revenue.
113110.......................  Timber Tract Operations......  $7 million in revenue.
211111.......................  Crude Petroleum and Natural    500 employees.
                                Gas Extraction.
212210.......................  Iron Ore Mining..............  500 employees.
212391.......................  Potash, Soda, and Borate       500 employees.
                                Mineral Mining.
221122.......................  Electric Power Distribution..  4,000,000 MWh of electric generation.
311221.......................  Wet Corn Milling.............  750 employees.
311314.......................  Cane Sugar Manufacturing.....  750 employees.
311313.......................  Beet Sugar Manufacturing.....  750 employees.
311942.......................  Spice and Extract              500 employees.
                                Manufacturing.
313210.......................  Broadwoven Fabric Mills......  1,000 employees.
321113.......................  Sawmills.....................  500 employees.
322121.......................  Paper (except Newsprint)       750 employees.
                                Mills.
322122.......................  Newsprint Mills..............  750 employees.
322130.......................  Paperboard Mills.............  750 employees.
322211.......................  Corrugated and Solid Fiber     500 employees.
                                Box Manufacturing.
322220.......................  Paper Bag and Coated and       500 employees.
                                Treated Paper Manufacturing.
322291.......................  Sanitary Paper Product         500 employees.
                                Manufacturing.
324110.......................  Petroleum Refineries.........  1,500 employees.

[[Page 48418]]

 
324191.......................  Petroleum Lubricating Oil and  500 employees.
                                Grease Manufacturing.
325120.......................  Industrial Gas Manufacturing.  1,000 employees.
325180.......................  Other Basic Inorganic          1,000 employees.
                                Chemical Manufacturing.
325199.......................  All Other Basic Organic        1,000 employees.
                                Chemical Manufacturing.
325211.......................  Plastics Material and Resin    750 employees.
                                Manufacturing.
325311.......................  Nitrogenous Fertilizer         1,000 employees.
                                Manufacturing.
325320.......................  Pesticide and Other            500 employees.
                                Agricultural Chemical
                                Manufacturing.
325412.......................  Pharmaceutical Preparation     750 employees.
                                Manufacturing.
325510.......................  Paint and Coating              500 employees.
                                Manufacturing.
325992.......................  Photographic Film, Paper,      500 employees.
                                Plate and Chemical
                                Manufacturing.
325998.......................  All Other Miscellaneous        500 employees.
                                Chemical Product and
                                Preparation Manufacturing.
331110.......................  Iron and Steel Mills and       1,000 employees.
                                Ferroalloy Manufacturing.
331210.......................  Iron and Steel Pipe and Tube   1,000 employees.
                                Manufacturing from Purchased
                                Steel.
331221.......................  Rolled Steel Shape             1,000 employees.
                                Manufacturing.
331222.......................  Steel Wire Drawing...........  1,000 employees.
331313.......................  Alumina Refining and Primary   1,000 employees.
                                Aluminum Production.
331315.......................  Aluminum Sheet, Plate and      750 employees.
                                Foil Manufacturing.
331410.......................  Nonferrous Metal (except       1,000 employees.
                                Aluminum) Smelting and
                                Refining.
332312.......................  Fabricated Structural Metal    500 employees.
                                Manufacturing.
337910.......................  Mattress Manufacturing.......  500 employees.
339999.......................  All Other Miscellaneous        500 employees.
                                Manufacturing.
423310.......................  Lumber, Plywood, Millwork,     100 employees.
                                and Wood Panel Merchant
                                Wholesalers.
423930.......................  Recyclable Material Merchant   100 employees.
                                Wholesalers.
424510.......................  Grain and Field Bean Merchant  100 employees.
                                Wholesalers.
424690.......................  Other Chemical and Allied      100 employees.
                                Products Merchant
                                Wholesalers.
424710.......................  Petroleum Bulk Stations and    100 employees.
                                Terminals.
447190.......................  Other Gasoline Stations......  $14 million in revenue.
522220.......................  Sales Financing..............  $7 million in revenue.
523910.......................  Miscellaneous Intermediation.  $7 million in revenue.
523930.......................  Investment Advice............  $7 million in revenue.
524126.......................  Direct Property and Casualty   1,500 employees.
                                Insurance Carriers.
525990.......................  Other Financial Vehicles.....  $7 million in revenue.
531110.......................  Lessors of Residential         $25 million in revenue.
                                Buildings and Dwellings.
551112.......................  Offices of Other Holding       $7 million in revenue.
                                Companies.
561110.......................  Office Administrative          $7 million in revenue.
                                Services.
----------------------------------------------------------------------------------------------------------------

    Similar to the analysis conducted for electric generators, EPA 
conducted this analysis for the same set of parent entities as analyzed 
in the general, entity-level, cost-to-revenue analysis discussed in 
Section IX.D. To determine which entities are small, EPA compared the 
relevant measure for the identified parent entities to the appropriate 
SBA size criterion. EPA used two sample-weighting schemes in this 
analysis; these provide a range of counts of small entities that own 
regulated facilities and the number of regulated facilities that they 
own that will incur costs under the final rule. EPA does not find 
either of these sample-weighting schemes to be superior to the other in 
the quality of the resulting estimates of small entity counts and 
occurrence of impacts. The different weighting approaches reflect the 
fact that EPA used sample facilities for the impact analysis and lacks 
precise information on the profile of ownership of the total population 
of regulated manufacturers facilities--in terms of the number of small 
entities owning regulated facilities and the number of regulated 
facilities that any small entity would own. EPA developed the weighting 
schemes using alternative bounding assumptions about the profile of 
ownership of regulated facilities by small entities. The weighting 
schemes provide lower and upper bound estimates of the numbers of small 
entities, and the numbers of regulated facilities that they own, and 
accordingly, the number of small entities in each of the cost-to-
revenue impact categories (for information on the weighting schemes, 
see Appendix H of the EA).
    From this analysis, EPA estimates that 17 to 52 small entities own 
regulated facilities in the six Primary Manufacturing Industries, 
representing approximately 16 percent of all entities that own 
regulated facilities in these industries (see Exhibit XI-5).The 
presence of small entities varies by industry sector.

                Exhibit XI-5--Number of Small Entities That Own Regulated Facilities, by Industry
----------------------------------------------------------------------------------------------------------------
                                      Lower-bound estimate of number of      Upper-bound estimate of number of
                                         entities that own regulated            entities that own regulated
             Industry                             facilities                             facilities
                                   -----------------------------------------------------------------------------
                                       Total        Small       % Small       Total        Small       % Small
----------------------------------------------------------------------------------------------------------------
Aluminum..........................            4            2         50.0           11            4         40.6
Chemicals and Allied Products.....           30            5         16.7          121           21         17.7
Food and Kindred Products.........            6            0          0.0           20            0          0.0
Paper and Allied Products.........           37            7         18.9          104           23         21.8
Petroleum Refining................           16            2         12.5           25            2          8.4

[[Page 48419]]

 
Steel.............................           13            1          7.7           32            2          5.2
Multiple Industries \a\...........            4            0          0.0           14            0          0.0
                                   -----------------------------------------------------------------------------
    Primary Manufacturing                   110           17         15.5          327           52         16.0
     Industries \b\--Total........
----------------------------------------------------------------------------------------------------------------
\a\ These are small entities that own regulated facilities from multiple industries.
\b\ EPA did not compile comparable information for Other Industries facilities and the entities that own them
  because it did not have a statistically valid sample of facilities from which to develop such estimates.

c. Total Number of Small Entities That Own Regulated Facilities
    EPA estimates that between 48 and 104 small entities own regulated 
facilities in the electric power industry and six primary manufacturing 
industries together.
2. Statement of Basis
    As described above, EPA began the small entity impact assessment by 
first estimating the number of small entities in the two industry 
segments subject to the final rule: Electric generators and 
manufacturers. EPA next assessed whether these small entities would be 
expected to incur costs that constitute a significant impact and, 
finally, assessed whether those entities represent a substantial number 
of small entities.
    EPA summed annualized after-tax compliance costs for regulated 
facilities that are assumed to be owned by a given small entity and 
calculated the costs as a percentage of entity revenue (cost-to-revenue 
test). EPA compared the resulting percentages to impact criteria of 1 
and 3 percent of revenue. EPA assumed that small entities estimated to 
incur costs below 1 percent of revenue will not face significant 
economic impacts, while small entities with costs of at least 1 percent 
of revenue have a chance of facing economic impacts. EPA assumed that 
entities incurring costs of at least 3 percent of revenue have a higher 
likelihood of economic impacts.
    For both electric generators and manufacturers, EPA used sample-
weighting approaches that provide a range of estimates of the numbers 
of small entities and regulated facilities that they own.
    Exhibit XI-6 summarizes the Regulatory Flexibility Act analysis 
results under both weighting approaches for each regulated facilities 
segment. Overall, the RFA analysis for electric generators found that 
no small entities would potentially incur a significant impact under 
the final rule. Specifically, for electric generators, EPA estimates 
that zero to three small entities will incur costs exceeding 1 percent 
of revenue, while no small entity will incur costs exceeding 3 percent 
of revenue. Following EPA's guidance on conducting RFA analyses, the 
number of small entities above the threshold as a percent of all small 
entities subject to the rule are zero to 10 percent at the 1 percent of 
revenue threshold, and zero percent at the 3 percent of revenue 
threshold.
    The findings for manufacturers are comparable. Specifically, EPA 
estimates that three to four small parent entities will incur costs 
exceeding 1 percent of revenue, and zero to one small parent entity 
will incur costs exceeding 3 percent of revenue. The associated 
percentages of small entities subject to the final rule are 8 percent 
to 18 percent at the 1 percent threshold, and zero percent to 6 percent 
at the 3 percent threshold.
    Combining the electric generators and manufacturers segments, EPA 
estimates that three to seven small entities will incur costs exceeding 
1 percent of revenue, while zero to one small entity will incur costs 
exceeding 3 percent of revenue. The corresponding percentages of small 
entities are 4 to 13 percent at the 1 percent threshold, and zero to 2 
percent at the 3 percent threshold.
    In summary, under the final rule, EPA estimates that a small number 
of small parent entities will incur a potentially significant cost 
impact in the individual regulated industry segments, and overall, for 
both segments. The maximum number of small entities estimated to incur 
costs exceeding 1 percent is seven, overall, with three of these small 
entities in the electric generators segment and four in the 
manufacturers segment. The maximum number of small entities with costs 
exceeding 3 percent is one, overall, with no small entities in the 
electric generators segment and one small entity in the manufacturers 
segments. In each case, the maximum value reflects the high end of an 
uncertainty range that is based on different sample weighting 
approaches. EPA judges that values in the interior of these ranges 
represent more reasonable estimates of the number of small entities 
incurring significant impacts. The estimated numbers of entities with 
significant impacts also represent small percentages of the estimated 
number of small entities, overall, and in the individual segments. The 
maximum percentage values at the 1 percent of revenue threshold are 13 
percent, overall, 10 percent for electric generators, and 18 percent 
for manufacturers. At the 3 percent threshold, the maximum percentage 
values are 2 percent, overall, zero percent for electric generators, 
and 6 percent for manufacturers. Again, these values reflect the high 
end of an uncertainty range.
    In view of these very modest impacts, EPA judges that the final 
rule is not consequential in terms of potential impacts for small 
entities.

[[Page 48420]]



                     Exhibit XI-6--Estimated Cost-To-Revenue Impact for Small Entities That Own Facilities Subject to the Regulation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Cost impact category
                                     -------------------------------------------------------------------------------------------------------------------
                                                      Cost >=1% of revenue \a\                                  Cost >=3% of revenue \a\
          Regulated Segment          -------------------------------------------------------------------------------------------------------------------
                                                                       % of small regulated       Number of small entities       % of small regulated
                                        Number of small entities           entities \b\                     \c\                      entities \b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Generators.................  0 to 3                       0% to 10%                    0                            0%
Manufacturers \d\...................  3 to 4                       8% to 18%                    0 to 1                       0% to 6%
Electric Generators and               3 to 7                       4% to 13%                    0 to 1                       0% to 2%
 Manufacturers \d\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ For both electric generators and manufacturers, EPA used sample-weighting approaches that provide a range of estimates of the numbers of small
  entities and regulated facilities they own (see Section VII(D)(a)(iv) for manufactures and see Section VII(D)(b)(1)(b) for electric generator
  weighting approaches).
\b\ Percentage of small entities incurring a cost-to-revenue impact involves range estimates in both the numerator (number of affected entities) and
  denominator (number of regulated entities).
\c\ Entities with cost-to-revenue ratios of at least 3 percent are included in the number of entities with cost-to-revenue such ratios of at least 1
  percent.
\d\ Entity counts used in these calculations exclude manufacturers in other industries. EPA estimated that one small parent entity that owns regulated
  facilities in other industries would incur costs exceeding 1 percent of revenue.

3. Certification Statement
    Given these findings of very small absolute numbers of small 
entities estimated to incur significant impacts under the final rule, 
and low percentages of estimated small entities incurring impacts, I 
certify that the final rule will not have ``a significant impact on a 
substantial number of small entities'' (no SISNOSE), overall and by 
individual industry segment.

D. Unfunded Mandates Reform Act (UMRA)

    Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1531-1538, requires Federal agencies, unless otherwise prohibited by 
law, to assess the effects of their regulatory actions on State, local, 
and Tribal governments and the private sector. Today's rule contains a 
Federal mandate that may result in expenditures by State, local, and 
Tribal governments, in the aggregate, or the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. 
Accordingly, under Unfunded Mandates Reform Act section 202, EPA has 
prepared a written statement, which follows below (see Chapter 11 of 
the EA).
1. Summary of Written Statement
a. Authorizing Legislation
    Today's rule is issued under the authority of CWA sections 101, 
301, 304, 306, 308, 316, 401, 402, 501, and 510, (33 U.S.C. 1251, 1311, 
1314, 1316, 1318, 1326, 1341, 1342, 1361, and 1370). For detailed 
information on the legal authority of this rule, see Section III of 
this preamble.
b. Benefit-Cost Analysis
    As described above, the costs, benefits and economic impacts 
reported in this section may be underestimated due to EPA's assumption 
that facilities with impoundments will qualify as having closed-cycle 
recirculating systems in the baseline and thus, unless additional 
controls are required to protect listed species, will incur no 
technology-related costs. Likewise, for this analysis, because these 
facilities are assumed not to install compliance technology, EPA also 
assumed they would achieve no benefits. Accordingly, the benefits 
reported in this section may be underestimated, based on the assumption 
of no technology installation for facilities with impoundments.\165\ 
The existing and new unit provisions of today's rule are expected to 
have total annualized pre-tax (social) costs of $274.9 million. These 
costs include direct costs incurred by facilities and implementation 
costs incurred by Federal, State, and local governments. The monetized 
use and nonuse benefits of the final rule, accounting for the existing 
and new unit provisions, are estimated to be $32.8 million.\166\ EPA 
notes that these differences are based on a comparison of a partial 
measure of benefits with a more complete measure of costs; therefore, 
the results must be interpreted with caution. For a more detailed 
comparison of the costs and benefits of the final rule, see Chapter 8 
of the EA.
---------------------------------------------------------------------------

    \165\ This factor in potential underestimation of benefits is 
separate from other considerations that likely lead to benefits 
underestimation, as described in this section and in the EA and BA 
reports.
    \166\ Both cost and benefit values were annualized over 51 years 
and discounted at 3 percent. Values include costs and benefits 
estimated for new units. EPA generated partial estimates of nonuse 
benefits for resource changes for a species that represents less 
than one percent of adverse environmental impacts.
---------------------------------------------------------------------------

    EPA notes that States may be able to use existing sources of 
financial assistance to revise and implement today's rule. CWA section 
106 authorizes EPA to award grants to States, Tribes, intertribal 
consortia, and interstate agencies for administering programs for the 
prevention, reduction, and elimination of water pollution. These grants 
may be used for various activities to develop and carry out a water 
pollution control program, including permitting, monitoring, and 
enforcement. Thus, State and Tribal NPDES permit programs represent one 
type of State program that can be funded by CWA section 106 grants.
c. Summary of State, Local, and Tribal Government Input
    EPA consulted with State governments and representatives of local 
governments in developing the rule. The outreach activities are 
discussed in Section III.A.3 of the preamble to the proposed rule (see 
76 FR 22268, April 20, 2011) and Chapter 2 of the TDD. EPA has also 
conducted additional outreach since the proposed rule, including 
several conference calls with the Association of Clean Water 
Administrators (including numerous states) and small business 
representatives (including some local government officials). EPA also 
combined its efforts and collected input from State and local 
government entities during development of the proposed Effluent 
Limitations Guidelines and Standards for the Steam Electric Power 
Generating Point Source Category, which shares many of the same 
affected facilities as today's final rule; see 78 FR 34530 (June 7, 
2013) for more information. State and local officials attended numerous 
site visits with

[[Page 48421]]

EPA's staff, enabling EPA to gather their input; see DCNs 10-6510, 10-
6518, 10-6520, 10-6521, 10-6523 and 10-6524. EPA also responded to 
requests for information from multiple State and local governments. EPA 
also attended conferences and participated in workgroups (such as 
NARUC's 2013 Winter Committee Meetings) where additional information 
about State and local government interests were presented. 
Historically, EPA has also conducted a great deal of outreach in 
developing the previous 316(b) regulations over the past decade; for 
example, see the Phase I final preamble (66 FR 65331, December 18, 
2001), the Phase II final preamble (69 FR 41677, July 9, 2004), and the 
Phase III final preamble (71 FR 35037, June 16, 2006).
d. Regulatory Option Selected
    EPA considered and analyzed several regulatory options to determine 
the best technology available for minimizing adverse environmental 
impact. These regulatory options are discussed in Section VI of this 
preamble. These options included a range of technology-based 
approaches, from impingement mortality technology at all facilities 
with a DIF of greater than 50 mgd, to requiring additional impingement 
mortality controls and intake flow commensurate with closed-cycle 
cooling for all facilities. As discussed in detail in Section VI, EPA 
did not select options exclusively because they are the most cost-
effective among the options that fulfill the requirements of section 
316(b). EPA selected the final rule because it meets the requirement of 
CWA section 316(b) that the location, design, construction, and 
capacity of cooling water intake structures reflect the best technology 
available for minimizing adverse environmental impacts. In addition, 
EPA has determined that the benefits of the final rule justify the 
costs, taking into account quantified and qualitative benefits and 
costs. EPA selected a flexible approach for the final rule from among 
the options considered; it allows consideration of costs and benefits 
on a site-specific basis in determining BTA for reducing entrainment 
and has flexible requirements for reducing impingement mortality.
2. Impact of Compliance Requirements on Small Governments
    This rule is not subject to Unfunded Mandates Reform Act section 
203 requirements because it contains no regulatory requirements that 
could significantly or uniquely affect small governments (i.e., 
governments with a population of fewer than 50,000). For its assessment 
of the impact of compliance requirements on small governments, EPA 
compared the estimated total costs and costs per facility that small 
governments would incur with the costs that large governments would 
incur. EPA also compared costs for regulated facilities owned by small-
government entities with costs of regulated facilities owned by non-
government entities. The Agency evaluated costs per facility on the 
basis of both average and maximum annualized cost. The costs for 
facilities owned by small government entities are less than those 
estimated for facilities owned by large government entities, or owned 
by small or large non-government entities. EPA interprets these 
findings to indicate that the final rule will not uniquely or 
disproportionately affect small governments.
    Because no manufacturer is government-owned, EPA conducted this 
analysis for electric generators only.
a. Government-Owned Electric Generators by Ownership and Entity-Size 
Category
    Exhibit XI-7 provides an estimate of the number of non-Federal 
government entities that own electric generators, by ownership type and 
size of government entity. As presented in Exhibit XI-7, large 
government entities own 45 electric generators, and small government 
entities own 20 electric generators. Of the 65 facilities owned by 
government entities, 48 are owned by municipalities, six are owned by 
States and 11 are owned by other political subdivisions. Tribal 
governments own no regulated facilities.

Exhibit XI-7--Number of Government-Owned Electric Generators, by Size of
                             Government \a\
------------------------------------------------------------------------
                   Entity type                     Large   Small   Total
------------------------------------------------------------------------
Municipality....................................      29      19      48
State Government................................       6       0       6
Other Political Subdivision.....................      10       1      11
Tribal Government...............................       0       0       0
                                                 -----------------------
  Total.........................................      45      20      65
------------------------------------------------------------------------
\a\ Counts of explicitly and implicitly analyzed electric generators;
  these are not weighted estimates. For details, see EA Appendix H.

b. Compliance Costs for Electric Generators Owned by Small Government 
Entities
    Exhibit XI-8 presents total, average annualized compliance costs, 
and maximum annualized compliance costs of the final rule for regulated 
facilities owned by government (State, local, and Tribal governments) 
and non-government entities by entity-size category. For the existing 
unit provision of the final rule, EPA estimates that small government 
entities will incur a total annualized cost of $2.6 million, compared 
to the total cost of $8.6 million incurred by large government entities 
and $8.5 million incurred by small private entities. On a per facility 
basis, EPA estimates that a facility owned by a small government entity 
will on average incur a cost of $0.2 million with a maximum of $0.5 
million. The Agency estimates that for a facility owned by large 
government entity, the average cost of the existing provision of the 
final rule will be $0.2 million per facility with a maximum of $1.3 
million, while for a facility owned by a small private entity the 
average cost will be $0.2 million per facility with a maximum of $1.4 
million.\167\ Again, overall, EPA concludes that the compliance 
requirements of the existing unit provision of today's rule do not 
significantly or uniquely affect small governments in comparison to 
either large governments or small private entities. For details of this 
analysis, see the EA Chapter 11.
---------------------------------------------------------------------------

    \167\ Excluding Federal government entities and regulated 
facilities they own.

                                    Exhibit XI-8--Electric Generators and Compliance Costs by Ownership Type and Size
                                                               [In millions, 2011 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Number of         Total        Average cost       Maximum
                 Ownership type                                Entity size                 facilities       compliance     per facility   facility  cost
                                                                                         (weighted) \a\       costs             \d\             \e\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final Rule:
    Government (excluding Federal)..............  Small................................              16             $2.6            $0.2            $0.5

[[Page 48422]]

 
                                                  Large................................              37              8.6             0.2             1.3
    Private \b\.................................  Small................................              53              8.5             0.2             1.4
                                                  Large................................             423            184.3             0.4             5.0
All Facilities \c\..............................  .....................................             544            220               0.4             5.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Facility counts are weighted estimates and differ from the values reported in Exhibit XI-7, which are un-weighted counts and reflect information for
  both explicitly and implicitly analyzed electric generators. Sample-weighted values are reported in this table because costs were developed only for
  the explicitly analyzed electric generators. For details on development of sample weights, see EA Appendix H.
\b\ Facility counts and cost estimates reported for the private sector include facilities owned by rural electric cooperatives.
\c\ Facility counts and cost estimates reported for All Facilities include facilities owned by the Federal government and costs estimated for these
  facilities.
\d\ EPA calculated average cost per facility using the total number of regulated facilities owned by entities in a given ownership category.
\e\ Reflects maximum of un-weighted costs to explicitly analyzed facilities only.

3. Administrative Costs
    Section 316(b) requirements are implemented through the NPDES 
permit program. EPA estimates that 46 States and one territory--the 
relevant jurisdictions with NPDES permitting authority under CWA 
section 402(b)--will incur costs to administer the final rule.\168\ EPA 
estimates that States and territories will incur costs for implementing 
the requirements of today's rule in four activity categories: (1) 
Start-up activities to learn and understand the requirements of today's 
regulation and to implement administrative structures and procedures 
for administering the regulation; (2) initial permit issuance 
activities; (3) annual activities, including monitoring, reporting and 
recordkeeping; and (4) non-annually recurring permit-related 
activities. Exhibit XI-9 presents total annualized costs for each type 
of administrative activity. EPA estimates that State and local 
government entities will incur annualized costs of $0.9 million to 
administer the final rule for electric generators and manufacturers. 
Monitoring, reporting and recordkeeping costs compose the largest share 
of administrative costs.
---------------------------------------------------------------------------

    \168\ Federal government permitting authorities will also incur 
costs to administer the rule. As stated earlier in this section, 
consistent with UMRA analysis requirements, EPA did not account for 
costs to Federal entities in the UMRA analysis.

                            Exhibit XI-9--Annualized Government Administrative Costs
                                           [In millions, 2011 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                               Cost
                                                                 --------------------------------
                            Activity                                 Electric                          Total
                                                                    generators     Manufacturers
----------------------------------------------------------------------------------------------------------------
Start-up Activities.............................................              NA              NA        \a\ $0.0
Initial Permit Issuance Activities..............................            $0.2            $0.2             0.4
Annual Monitoring, Reporting and Recordkeeping Activities.......             0.2             0.2             0.5
Non-Annually Recurring Permit-Related Activities \b\............         \b\ 0.0             0.0             0.1
                                                                 -----------------------------------------------
    Total.......................................................             0.5             0.4             0.9
----------------------------------------------------------------------------------------------------------------
\a\ Costs associated with start-up activities are estimated for both electric generators and manufacturers;
  these costs are less than $20,000.
\b\ Costs are less than $50,000.

E. Executive Order 13132: Federalism

    Under E.O. 13132, EPA may not issue an action that has federalism 
implications, that imposes substantial direct compliance costs on the 
State and local governments, and that is not required by statute, 
unless the Federal government provides the funds necessary to pay the 
direct compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the final rule.
    The 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 E.O. 13132.This final rule would not alter the basic 
State-Federal scheme established in the CWA under which EPA authorizes 
States to carry out the NPDES permitting program. Prior to this rule, 
authorized States were required to issue NPDES permits including 
requirements for CWISs on a case-by-case BPJ basis. 40 CFR 125.90(b). 
EPA expects that today's rule will have little to no effect on the 
relationship between, or the distribution of power and responsibilities 
among, the Federal and State governments.
    EPA estimates an average annual burden of $0.9 million, for State 
and local governments to collectively administer the existing unit 
provision of the final rule.\169\ The rule will also impose a 
compliance cost burden on State and local governments, if those 
government entities own facilities that are subject to today's rule. 
EPA has identified 554 regulated facilities that are owned by State or 
local government entities; the Agency estimates that under the existing 
unit provision of the final rule these facilities will incur an average 
annual compliance cost of

[[Page 48423]]

approximately $0.2 million per facility.\170\ Because this rule does 
not have federalism implications, the requirements of section 6 of E.O. 
13132 do not apply to this rule.
---------------------------------------------------------------------------

    \169\ This estimate does not include costs to administer the new 
unit provision of the final rule; however, EPA expects these costs 
to be small.
    \170\ Cost values were calculated over the 51-year analysis 
period used for analysis of social costs, discounted and annualized 
using a rate of 7 percent (see EA Chapters 7 and 11).
---------------------------------------------------------------------------

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

    This action does not have Tribal implications, as specified in E.O. 
13175 (65 FR 67249, November 9, 2000). It would not have substantial 
direct effects on Tribal governments, on the relationship between the 
Federal government and the Tribes, or the distribution of power and 
responsibilities between the Federal government and Tribes as specified 
in E.O. 13175. The national cooling water intake structure standards 
would be implemented through permits issued under the NPDES program. No 
Tribal governments are authorized pursuant to CWA section 402(b) to 
implement the NPDES program. In addition, EPA's analyses show that 
Tribal governments own no facilities subject to today's rule; thus, 
this rule does not affect Tribes in any way now or in the foreseeable 
future. Thus, E.O. 13175 does not apply to this action.

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

    This action is not subject to E.O. 13045 because it does not 
establish an environmental standard intended to mitigate health or 
safety risks. This rule establishes requirements for cooling water 
intake structures to protect the environment.

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

    E.O. 13211 (66 FR 28355, May 22, 2001) requires EPA to prepare and 
submit a Statement of Energy Effects to the Administrator of the Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
for actions identified as significant energy actions. On the basis of 
the Office of Management and Budget's guidance for assessing the 
potential energy impact of regulations, the Agency anticipates that 
today's rule may have a significant adverse effect on the supply, 
distribution, or use of energy, thus requiring EPA to include a 
Statement of Energy Effects.
    The Agency assessed the energy effects of today's rule, 
specifically, the rule's effect on energy supply, distribution or use 
in the electric power sector, as required under E.O. 13211. In its 
energy-effects assessment, EPA relied on Integrated Planning Model 
(IPM) analyses undertaken by EPA for the final rule. Based on that 
analysis, described in Section IX(D)(1)(d) of this preamble (Assessment 
of the Impacts in the Context of Electricity Markets) and in more 
detail in Chapter 6 of the EA report, EPA finds that the compliance 
requirements of the final rule may affect the electric power sector in 
ways that would constitute a significant adverse effect under E.O. 
13211, and thus includes a Statement of Energy Effects in the economic 
analysis.
    The Agency's analysis found that the final rule will not reduce 
electricity production in excess of 1 billion kWh hours per year (or 
one thousand GWh), will not increase the cost of energy production in 
excess of 1 percent, will not increase dependence on foreign supply of 
energy, and will not significantly affect domestic coal production. 
However, the final rule will result in net retirement of 998 MW of 
generating capacity, which exceeds 500 MW of installed capacity, the 
threshold of significant adverse effect identified in the OMB 
Implementation Guidance for E.O. 13211. EPA notes that, with only one 
exception, these retirements involve older, less efficient generating 
units with very low capacity utilization rates. The 998 MW of net 
retired capacity is replaced by 589 MW of new capacity; therefore, 
because older and less efficient capacity is replaced by new, more 
energy-efficient, and less polluting capacity, these retirements mean 
that 409 MW less capacity is needed to fulfill the same demand.
    For more detail on the estimated energy effects of the final rule, 
see Chapter 12 of the EA, which is in the public docket.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995, Public Law 104-113, 12(d) (15 U.S.C. 272 note) directs EPA 
to use voluntary consensus standards in its regulatory activities 
unless doing 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 National Technology Transfer and 
Advancement Act directs EPA to provide Congress, through the Office of 
Management and Budget, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This final rulemaking may involve technical standards, for example, 
in measuring impingement and entrainment. Nothing in this final rule 
would prevent the use of voluntary consensus standards for such 
measurements. EPA encourages permitting authorities and regulated 
entities to use voluntary consensus standards, where they are 
available.

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

    E.O. 12898 (59 FR 7629, February 16, 1994) establishes Federal 
executive policy on environmental justice. Its main provision directs 
Federal agencies, to the greatest extent practicable and permitted by 
law, to make environmental justice part of their mission by identifying 
and addressing, as appropriate, disproportionately high and adverse 
human health or environmental effects of their programs, policies, and 
activities on minority populations and low-income populations in the 
United States.
    EPA has determined that today's rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations. Specifically, the final 
rule increases the level of environmental protection for all affected 
populations and has no high and adverse human health or environmental 
effects on any population, including any minority or low-income 
population. Because EPA expects that this final rule will help to 
preserve the health of aquatic ecosystems near regulated facilities, 
EPA expects that all populations, including minority and low-income 
populations, will benefit from improved environmental conditions.
    To meet the objectives of E.O. 12898, EPA assessed whether today's 
rule could distribute benefits among population subgroups in a way that 
is significantly less favorable to low-income and minority populations. 
EPA compared key demographic characteristics of affected substate 
populations to those demographic characteristics at the State level. If 
EPA had found that the demographic profile of the substate benefit 
population is composed of a significantly lower share of low-income 
and/or minority populations than the State's general population, EPA 
might have assessed the final rule as yielding an unfavorable

[[Page 48424]]

distribution of benefits, from the perspective of the public policy 
principles of E.O. 12898. The two sets of demographic variables of 
interest for this environmental justice analysis are race and 
ethnicity, and annual household income, which are the variables in the 
Fish Consumption Pathway Module that best capture the minority and low-
income aspects of the affected populations.171 172 EPA 
compared variable averages at the substate and State levels to 
determine whether the demographic profile of the affected population is 
consistent with the State profile (for details, see EA Chapter 12).
---------------------------------------------------------------------------

    \171\ Annual household income data in the FCP Module are 
available for the following categories: less than $10,000; $10,000 
to $19,999; $20,000 to $24,999; $25,000 to $29,999; $30,000 to 
$34,999; $35,000 to $39,999; $40,000 to $49,999; $50,000 to $74,999; 
$75,000 to $99,999; and more than $100,000. For this analysis and 
previous 316(b) rule analyses, these categories were combined into 
low- and not low-income groups based on the U.S. Department of 
Health and Human Services' poverty guidelines for a family of four 
living in the contiguous United States or DC The current (2013) 
poverty guideline is $23,550, which falls near the upper end of the 
$20,000 to $24,999 income range (U.S. HHS, 2013). For the current 
analysis, EPA used $25,000 as the threshold for separating 
populations into low- and not low-income groups.
    \172\ Race and ethnic categories used in the analysis include 
white non-Hispanic, white Hispanic, black or African American, Asian 
or Native Hawaiian or Other Pacific Island, and American Indian and 
Alaska Native.
---------------------------------------------------------------------------

    The comparison of minority populations affected by the regulated 
facilities to the affected States' overall populations showed no 
statistically significant difference between these groups. While low-
income populations constitute a lower fraction of the benefit 
population than of the State's overall population in many States, the 
two groups are not significantly different. EPA thus determined that 
the final rule does not systematically discriminate against, or exclude 
or deny participation of, the lower income population group or the 
minority population group in the benefits of the final rule in a way 
that would be contrary to the intent of E.O. 12898. Overall, EPA thus 
concluded that the final rule is consistent with the policy intent of 
E.O. 12898. Anecdotally, minority (e.g., Native American) and low-
income populations might be more likely to include a larger proportion 
of subsistence fishermen. Because this rule will increase abundance of 
all fish species in the areas affected by cooling water intakes, it 
might provide a benefit to subsistence fishermen. To the extent that 
minority and low-income populations are over-represented in this group, 
they might especially benefit from this rule.

K. Executive Order 13158: Marine Protected Areas

    E.O. 13158 (65 FR 34909, May 31, 2000) requires EPA to 
``expeditiously propose new science-based regulations, as necessary, to 
ensure appropriate levels of protection for the marine environment.'' 
EPA may take action to enhance or expand protection of existing marine 
protected areas and to establish or recommend, as appropriate, new 
marine protected areas. The purpose of this executive order is to 
protect significant natural and cultural resources in the marine 
environment, which means ``those areas of coastal and ocean waters, the 
Great Lakes and their connecting waters, and submerged lands 
thereunder, over which the United States exercises jurisdiction, 
consistent with international law.''
    Today's rule recognizes the biological sensitivity of tidal rivers, 
estuaries, oceans, and the Great Lakes, and their susceptibility to 
adverse environmental impacts from cooling water intake structures. The 
rule provides requirements to minimize adverse environmental impacts 
for cooling water intake structures on these types of waterbodies.
    EPA used GIS data of the locations of MPAs (Marine Protected Areas) 
from the national MPA program (http://www.mpa.gov/helpful_resources/inventory.html) to locate regulated facilities in MPAs. Under the final 
rule, 60 percent of regulated facilities in MPAs obtain reductions in 
impingement mortality. As noted above, because of EPA's assumption that 
facilities with impoundments will not need to install compliance 
technology, this may be an underestimate. EPA cannot estimate 
reductions in entrainment because they would be based on site-specific 
determinations of BTA. Therefore, EPA expects that today's rule will 
advance the objective of the executive order to protect marine areas. 
For more details on this analysis and analysis results, see BA Chapter 
8.

L. 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 a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective October 14, 2014.

List of Subjects

40 CFR Part 122

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

40 CFR Part 125

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

    Dated: May 19, 2014.
Gina McCarthy,
Administrator.
    For reasons set out in the preamble, Chapter I of Title 40 of the 
Code of Federal Regulations is amended as follows:

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

0
1. The authority citation for part 122 continues to read as follows:

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

0
2. The suspension of 40 CFR 122.21(r)(1)(ii) and (r)(5), published on 
July 9, 2007 (72 FR 37109) is lifted.

0
3. Section 122.21 is amended as follows:
0
a. Revising paragraph (r)(1).
0
b. Adding paragraphs (r)(4)(ix) through (xii).
0
c. Revising paragraph (r)(5).
0
d. Adding paragraphs (r)(6) through (14).


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

* * * * *
    (r) * * *
    (1) * * *
    (i) New facilities with new or modified cooling water intake 
structures. New facilities (other than offshore oil and gas extraction 
facilities) with cooling water intake structures as defined in part 
125, subpart I of this chapter, must submit to the Director for review 
the information required under paragraphs (r)(2) (except (r)(2)(iv)), 
(3), and (4) (except (r)(4)(ix), (x), (xi), and (xii)) of this section 
and Sec.  125.86 of this chapter as part of the

[[Page 48425]]

permit application. New offshore oil and gas extraction facilities with 
cooling water intake structures as defined in part 125, subpart N, of 
this chapter that are fixed facilities must submit to the Director for 
review the information required under paragraphs (r)(2) (except 
(r)(2)(iv)), (3), and (4) (except (r)(4)(ix), (x), (xi), and (xii)) of 
this section and Sec.  125.136 of this chapter as part of their permit 
application.
    (ii) Existing facilities. (A) All existing facilities. The owner or 
operator of an existing facility defined at 40 CFR 125.92(k) must 
submit to the Director for review the information required under 
paragraphs (r)(2) and (3) of this section and applicable provisions of 
paragraphs (r)(4), (5), (6), (7), and (8) of this section.
    (B) Existing facilities greater than 125 mgd AIF. In addition, the 
owner or operator of an existing facility that withdraws greater than 
125 mgd actual intake flow (AIF), as defined at 40 CFR 125.92 (a), of 
water for cooling purposes must also submit to the Director for review 
the information required under paragraphs (r)(9), (10), (11), (12), and 
(13) of this section. If the owner or operator of an existing facility 
intends to comply with the BTA (best technology available) standards 
for entrainment using a closed-cycle recirculating system as defined at 
40 CFR 125.92(c), the Director may reduce or waive some or all of the 
information required under paragraphs (r)(9) through (13) of this 
section.
    (C) Additional information. The owner or operator of an existing 
facility must also submit such additional information as the Director 
determines is necessary pursuant to 40 CFR 125.98(i).
    (D) New units at existing facilities. The owner or operator of a 
new unit at an existing facility, as defined at 40 CFR 125.92(u), must 
submit or update any information previously provided to the Director by 
submitting the information required under paragraphs (r)(2), (3), (5), 
(8), and (14) of this section and applicable provisions of paragraphs 
(r)(4), (6), and (7) of this section. Requests for and approvals of 
alternative requirements sought under 40 CFR 125.94(e)(2) or 
125.98(b)(7) must be submitted with the permit application.
    (E) New units at existing facilities not previously subject to Part 
125. The owner or operator of a new unit as defined at 40 CFR 125.92(u) 
at an existing facility not previously subject to part 125 of this 
chapter that increases the total capacity of the existing facility to 
more than 2 mgd DIF must submit the information required under 
paragraphs (r)(2), (3), (5), and (8) of this section and applicable 
provisions of paragraphs (r)(4), (6), and (7) of this section at the 
time of the permit application for the new unit. Requests for 
alternative requirements under 40 CFR 125.94(e)(2) or 125.98(b)(7) must 
be submitted with the permit application. If the total capacity of the 
facility will increase to more than 125 mgd AIF, the owner or operator 
must also submit the information required in paragraphs (r)(9) through 
(13) of this section. If the owner or operator of an existing facility 
intends to comply with the BTA (best technology available) standards 
for entrainment using a closed-cycle recirculating system as defined at 
40 CFR 125.92(c), the Director may reduce or waive some or all of the 
information required under paragraphs (r)(9) through (13) of this 
section.
    (F) If the owner or operator of an existing facility plans to 
retire the facility before the current permit expires, then the 
requirements of paragraphs (r)(1)(ii)(A), (B), (C), (D), and (E) of 
this section do not apply.
    (G) If the owner or operator of an existing facility plans to 
retire the facility after the current permit expires but within one 
permit cycle, then the Director may waive the requirements of 
paragraphs (r)(7), (9), (10), (11), (12), and (13) of this section 
pending a signed certification statement from the owner or operator of 
the facility specifying the last operating date of the facility.
    (H) All facilities. The owner or operator of any existing facility 
or new unit at any existing facility must also submit with its permit 
application all information received as a result of any communication 
with a Field Office of the Fish and Wildlife Service and/or Regional 
Office of the National Marine Fisheries Service.
* * * * *
    (4) * * *
    (ix) In the case of the owner or operator of an existing facility 
or new unit at an existing facility, the Source Water Baseline 
Biological Characterization Data is the information in paragraphs 
(r)(4)(i) through (xii) of this section.
    (x) For the owner or operator of an existing facility, 
identification of protective measures and stabilization activities that 
have been implemented, and a description of how these measures and 
activities affected the baseline water condition in the vicinity of the 
intake.
    (xi) For the owner or operator of an existing facility, a list of 
fragile species, as defined at 40 CFR 125.92(m), at the facility. The 
applicant need only identify those species not already identified as 
fragile at 40 CFR 125.92(m). New units at an existing facility are not 
required to resubmit this information if the cooling water withdrawals 
for the operation of the new unit are from an existing intake.
    (xii) For the owner or operator of an existing facility that has 
obtained incidental take exemption or authorization for its cooling 
water intake structure(s) from the U.S. Fish and Wildlife Service or 
the National Marine Fisheries Service, any information submitted in 
order to obtain that exemption or authorization may be used to satisfy 
the permit application information requirement of paragraph 40 CFR 
125.95(f) if included in the application.
    (5) Cooling Water System Data. The owner or operator of an existing 
facility must submit the following information for each cooling water 
intake structure used or intended to be used:
    (i) A narrative description of the operation of the cooling water 
system and its relationship to cooling water intake structures; the 
proportion of the design intake flow that is used in the system; the 
number of days of the year the cooling water system is in operation and 
seasonal changes in the operation of the system, if applicable; the 
proportion of design intake flow for contact cooling, non-contact 
cooling, and process uses; a distribution of water reuse to include 
cooling water reused as process water, process water reused for 
cooling, and the use of gray water for cooling; a description of 
reductions in total water withdrawals including cooling water intake 
flow reductions already achieved through minimized process water 
withdrawals; a description of any cooling water that is used in a 
manufacturing process either before or after it is used for cooling, 
including other recycled process water flows; the proportion of the 
source waterbody withdrawn (on a monthly basis);
    (ii) Design and engineering calculations prepared by a qualified 
professional and supporting data to support the description required by 
paragraph (r)(5)(i) of this section; and
    (iii) Description of existing impingement and entrainment 
technologies or operational measures and a summary of their 
performance, including but not limited to reductions in impingement 
mortality and entrainment due to intake location and reductions in 
total water withdrawals and usage.
    (6) Chosen Method(s) of Compliance with Impingement Mortality 
Standard. The owner or operator of the facility must identify the 
chosen compliance

[[Page 48426]]

method for the entire facility; alternatively, the applicant must 
identify the chosen compliance method for each cooling water intake 
structure at its facility. The applicant must identify any intake 
structure for which a BTA determination for Impingement Mortality under 
40 CFR 125.94 (c)(11) or (12) is requested. In addition, the owner or 
operator that chooses to comply via 40 CFR 125.94 (c)(5) or (6) must 
also submit an impingement technology performance optimization study as 
described below:
    (i) If the applicant chooses to comply with 40 CFR 125.94(c)(5), 
subject to the flexibility for timing provided in 40 CFR 125.95(a)(2), 
the impingement technology performance optimization study must include 
two years of biological data collection measuring the reduction in 
impingement mortality achieved by the modified traveling screens as 
defined at 40 CFR 125.92(s) and demonstrating that the operation has 
been optimized to minimize impingement mortality. A complete 
description of the modified traveling screens and associated equipment 
must be included, including, for example, type of mesh, mesh slot size, 
pressure sprays and fish return mechanisms. A description of any 
biological data collection and data collection approach used in 
measuring impingement mortality must be included:
    (A) Collecting data no less frequently than monthly. The Director 
may establish more frequent data collection;
    (B) Biological data collection representative of the impingement 
and the impingement mortality at the intakes subject to this provision;
    (C) A taxonomic identification to the lowest taxon possible of all 
organisms collected;
    (D) The method in which naturally moribund organisms are identified 
and taken into account;
    (E) The method in which mortality due to holding times is taken 
into account;
    (F) If the facility entraps fish or shellfish, a count of 
entrapment, as defined at 40 CFR 125.92(j), as impingement mortality; 
and
    (G) The percent impingement mortality reflecting optimized 
operation of the modified traveling screen and all supporting 
calculations.
    (ii) If the applicant chooses to comply with 40 CFR 125.94(c)(6), 
the impingement technology performance optimization study must include 
biological data measuring the reduction in impingement mortality 
achieved by operation of the system of technologies, operational 
measures and best management practices, and demonstrating that 
operation of the system has been optimized to minimize impingement 
mortality. This system of technologies, operational measures and best 
management practices may include flow reductions, seasonal operation, 
unit closure, credit for intake location, and behavioral deterrent 
systems. The applicant must document how each system element 
contributes to the system's performance. The applicant must include a 
minimum of two years of biological data measuring the reduction in 
impingement mortality achieved by the system. The applicant must also 
include a description of any sampling or data collection approach used 
in measuring the rate of impingement, impingement mortality, or flow 
reductions.
    (A) Rate of Impingement. If the demonstration relies in part on a 
credit for reductions in the rate of impingement in the system, the 
applicant must provide an estimate of those reductions to be used as 
credit towards reducing impingement mortality, and any relevant 
supporting documentation, including previously collected biological 
data, performance reviews, and previously conducted performance studies 
not already submitted to the Director. The submission of studies more 
than 10 years old must include an explanation of why the data are still 
relevant and representative of conditions at the facility and explain 
how the data should be interpreted using the definitions of impingement 
and entrapment at 40 CFR 125.92(n) and (j), respectively. The estimated 
reductions in rate of impingement must be based on a comparison of the 
system to a once-through cooling system with a traveling screen whose 
point of withdrawal from the surface water source is located at the 
shoreline of the source waterbody. For impoundments that are waters of 
the United States in whole or in part, the facility's rate of 
impingement must be measured at a location within the cooling water 
intake system that the Director deems appropriate. In addition, the 
applicant must include two years of biological data collection 
demonstrating the rate of impingement resulting from the system. For 
this demonstration, the applicant must collect data no less frequently 
than monthly. The Director may establish more frequent data collection.
    (B) Impingement Mortality. If the demonstration relies in part on a 
credit for reductions in impingement mortality already obtained at the 
facility, the applicant must include two years of biological data 
collection demonstrating the level of impingement mortality the system 
is capable of achieving. The applicant must submit any relevant 
supporting documentation, including previously collected biological 
data, performance reviews, and previously conducted performance studies 
not already submitted to the Director. The applicant must provide a 
description of any sampling or data collection approach used in 
measuring impingement mortality. In addition, for this demonstration 
the applicant must:
    (1) Collect data no less frequently than monthly. The Director may 
establish more frequent data collection;
    (2) Conduct biological data collection that is representative of 
the impingement and the impingement mortality at an intake subject to 
this provision. In addition, the applicant must describe how the 
location of the cooling water intake structure in the waterbody and the 
water column are accounted for in the points of data collection;
    (3) Include a taxonomic identification to the lowest taxon possible 
of all organisms to be collected;
    (4) Describe the method in which naturally moribund organisms are 
identified and taken into account;
    (5) Describe the method in which mortality due to holding times is 
taken into account; and
    (6) If the facility entraps fish or shellfish, a count of the 
entrapment, as defined at 40 CFR 125.92(j), as impingement mortality.
    (C) Flow reduction. If the demonstration relies in part on flow 
reduction to reduce impingement, the applicant must include two years 
of intake flows, measured daily, as part of the demonstration, and 
describe the extent to which flow reductions are seasonal or 
intermittent. The applicant must document how the flow reduction 
results in reduced impingement. In addition, the applicant must 
describe how the reduction in impingement has reduced impingement 
mortality.
    (D) Total system performance. The applicant must document the 
percent impingement mortality reflecting optimized operation of the 
total system of technologies, operational measures, and best management 
practices and all supporting calculations. The total system performance 
is the combination of the impingement mortality performance reflected 
in paragraphs (r)(6)(ii)(A), (B), and (C) of this section.
    (7) Entrainment Performance Studies. The owner or operator of an 
existing facility must submit any previously conducted studies or 
studies obtained from other facilities addressing technology efficacy, 
through-facility entrainment survival, and other

[[Page 48427]]

entrainment studies. Any such submittals must include a description of 
each study, together with underlying data, and a summary of any 
conclusions or results. Any studies conducted at other locations must 
include an explanation as to why the data from other locations are 
relevant and representative of conditions at your facility. In the case 
of studies more than 10 years old, the applicant must explain why the 
data are still relevant and representative of conditions at the 
facility and explain how the data should be interpreted using the 
definition of entrainment at 40 CFR 125.92(h).
    (8) Operational Status. The owner or operator of an existing 
facility must submit a description of the operational status of each 
generating, production, or process unit that uses cooling water, 
including but not limited to:
    (i) For power production or steam generation, descriptions of 
individual unit operating status including age of each unit, capacity 
utilization rate (or equivalent) for the previous 5 years, including 
any extended or unusual outages that significantly affect current data 
for flow, impingement, entrainment, or other factors, including 
identification of any operating unit with a capacity utilization rate 
of less than 8 percent averaged over a 24-month block contiguous 
period, and any major upgrades completed within the last 15 years, 
including but not limited to boiler replacement, condenser replacement, 
turbine replacement, or changes to fuel type;
    (ii) Descriptions of completed, approved, or scheduled uprates and 
Nuclear Regulatory Commission relicensing status of each unit at 
nuclear facilities;
    (iii) For process units at your facility that use cooling water 
other than for power production or steam generation, if you intend to 
use reductions in flow or changes in operations to meet the 
requirements of 40 CFR 125.94(c), descriptions of individual production 
processes and product lines, operating status including age of each 
line, seasonal operation, including any extended or unusual outages 
that significantly affect current data for flow, impingement, 
entrainment, or other factors, any major upgrades completed within the 
last 15 years, and plans or schedules for decommissioning or 
replacement of process units or production processes and product lines;
    (iv) For all manufacturing facilities, descriptions of current and 
future production schedules; and
    (v) Descriptions of plans or schedules for any new units planned 
within the next 5 years.
    (9) Entrainment Characterization Study. The owner or operator of an 
existing facility that withdraws greater than 125 mgd AIF, where the 
withdrawal of cooling water is measured at a location within the 
cooling water intake structure that the Director deems appropriate, 
must develop for submission to the Director an Entrainment 
Characterization Study that includes a minimum of two years of 
entrainment data collection. The Entrainment Characterization Study 
must include the following components:
    (i) Entrainment Data Collection Method. The study should identify 
and document the data collection period and frequency. The study should 
identify and document organisms collected to the lowest taxon possible 
of all life stages of fish and shellfish that are in the vicinity of 
the cooling water intake structure(s) and are susceptible to 
entrainment, including any organisms identified by the Director, and 
any species protected under Federal, State, or Tribal law, including 
threatened or endangered species with a habitat range that includes 
waters in the vicinity of the cooling water intake structure. 
Biological data collection must be representative of the entrainment at 
the intakes subject to this provision. The owner or operator of the 
facility must identify and document how the location of the cooling 
water intake structure in the waterbody and the water column are 
accounted for by the data collection locations;
    (ii) Biological Entrainment Characterization. Characterization of 
all life stages of fish, shellfish, and any species protected under 
Federal, State, or Tribal law (including threatened or endangered 
species), including a description of their abundance and their temporal 
and spatial characteristics in the vicinity of the cooling water intake 
structure(s), based on sufficient data to characterize annual, 
seasonal, and diel variations in entrainment, including but not limited 
to variations related to climate and weather differences, spawning, 
feeding, and water column migration. This characterization may include 
historical data that are representative of the current operation of the 
facility and of biological conditions at the site. Identification of 
all life stages of fish and shellfish must include identification of 
any surrogate species used, and identification of data representing 
both motile and non-motile life-stages of organisms;
    (iii) Analysis and Supporting Documentation. Documentation of the 
current entrainment of all life stages of fish, shellfish, and any 
species protected under Federal, State, or Tribal law (including 
threatened or endangered species). The documentation may include 
historical data that are representative of the current operation of the 
facility and of biological conditions at the site. Entrainment data to 
support the facility's calculations must be collected during periods of 
representative operational flows for the cooling water intake 
structure, and the flows associated with the data collection must be 
documented. The method used to determine latent mortality along with 
data for specific organism mortality or survival that is applied to 
other life-stages or species must be identified. The owner or operator 
of the facility must identify and document all assumptions and 
calculations used to determine the total entrainment for that facility 
together with all methods and quality assurance/quality control 
procedures for data collection and data analysis. The proposed data 
collection and data analysis methods must be appropriate for a 
quantitative survey.
    (10) Comprehensive Technical Feasibility and Cost Evaluation Study. 
The owner or operator of an existing facility that withdraws greater 
than 125 mgd AIF must develop for submission to the Director an 
engineering study of the technical feasibility and incremental costs of 
candidate entrainment control technologies. In addition, the study must 
include the following:
    (i) Technical feasibility. An evaluation of the technical 
feasibility of closed-cycle recirculating systems as defined at 40 CFR 
125.92(c), fine mesh screens with a mesh size of 2 millimeters or 
smaller, and water reuse or alternate sources of cooling water. In 
addition, this study must include:
    (A) A description of all technologies and operational measures 
considered (including alternative designs of closed-cycle recirculating 
systems such as natural draft cooling towers, mechanical draft cooling 
towers, hybrid designs, and compact or multi-cell arrangements);
    (B) A discussion of land availability, including an evaluation of 
adjacent land and acres potentially available due to generating unit 
retirements, production unit retirements, other buildings and equipment 
retirements, and potential for repurposing of areas devoted to ponds, 
coal piles, rail yards, transmission yards, and parking lots;
    (C) A discussion of available sources of process water, grey water, 
waste water, reclaimed water, or other waters of appropriate quantity 
and quality for use as some or all of the cooling water needs of the 
facility; and
    (D) Documentation of factors other than cost that may make a 
candidate

[[Page 48428]]

technology impractical or infeasible for further evaluation.
    (ii) Other entrainment control technologies. An evaluation of 
additional technologies for reducing entrainment may be required by the 
Director.
    (iii) Cost evaluations. The study must include engineering cost 
estimates of all technologies considered in paragraphs (r)(10)(i) and 
(ii) of this section. Facility costs must also be adjusted to estimate 
social costs. All costs must be presented as the net present value 
(NPV) and the corresponding annual value. Costs must be clearly labeled 
as compliance costs or social costs. The applicant must separately 
discuss facility level compliance costs and social costs, and provide 
documentation as follows:
    (A) Compliance costs are calculated as after-tax, while social 
costs are calculated as pre-tax. Compliance costs include the 
facility's administrative costs, including costs of permit application, 
while the social cost adjustment includes the Director's administrative 
costs. Any outages, downtime, or other impacts to facility net revenue, 
are included in compliance costs, while only that portion of lost net 
revenue that does not accrue to other producers can be included in 
social costs. Social costs must also be discounted using social 
discount rates of 3 percent and 7 percent. Assumptions regarding 
depreciation schedules, tax rates, interest rates, discount rates and 
related assumptions must be identified;
    (B) Costs and explanation of any additional facility modifications 
necessary to support construction and operation of technologies 
considered in paragraphs (r)(10)(i) and (ii) of this section, including 
but not limited to relocation of existing buildings or equipment, 
reinforcement or upgrading of existing equipment, and additional 
construction and operating permits. Assumptions regarding depreciation 
schedules, interest rates, discount rates, useful life of the 
technology considered, and any related assumptions must be identified; 
and
    (C) Costs and explanation for addressing any non-water quality 
environmental and other impacts identified in paragraph (r)(12) of this 
section. The cost evaluation must include a discussion of all 
reasonable attempts to mitigate each of these impacts.
    (11) Benefits Valuation Study. The owner or operator of an existing 
facility that withdraws greater than 125 mgd AIF must develop for 
submission to the Director an evaluation of the benefits of the 
candidate entrainment reduction technologies and operational measures 
evaluated in paragraph (r)(10) of this section including using the 
Entrainment Characterization Study completed in paragraph (r)(9) of 
this section. Each category of benefits must be described narratively, 
and when possible, benefits should be quantified in physical or 
biological units and monetized using appropriate economic valuation 
methods. The benefits valuation study must include, but is not limited 
to, the following elements:
    (i) Incremental changes in the numbers of individual fish and 
shellfish lost due to impingement mortality and entrainment as defined 
in 40 CFR 125.92, for all life stages of each exposed species;
    (ii) Description of basis for any estimates of changes in the stock 
sizes or harvest levels of commercial and recreational fish or 
shellfish species or forage fish species;
    (iii) Description of basis for any monetized values assigned to 
changes in the stock size or harvest levels of commercial and 
recreational fish or shellfish species, forage fish, and to any other 
ecosystem or non use benefits;
    (iv) A discussion of mitigation efforts completed prior to October 
14, 2014 including how long they have been in effect and how effective 
they have been;
    (v) Discussion, with quantification and monetization, where 
possible, of any other benefits expected to accrue to the environment 
and local communities, including but not limited to improvements for 
mammals, birds, and other organisms and aquatic habitats;
    (vi) Discussion, with quantification and monetization, where 
possible, of any benefits expected to result from any reductions in 
thermal discharges from entrainment technologies.
    (12) Non-water Quality Environmental and Other Impacts Study. The 
owner or operator of an existing facility that withdraws greater than 
125 mgd AIF must develop for submission to the Director a detailed 
facility-specific discussion of the changes in non-water quality 
environmental and other impacts attributed to each technology and 
operational measure considered in paragraph (r)(10) of this section, 
including both impacts increased and impacts decreased. The study must 
include the following:
    (i) Estimates of changes to energy consumption, including but not 
limited to auxiliary power consumption and turbine backpressure energy 
penalty;
    (ii) Estimates of air pollutant emissions and of the human health 
and environmental impacts associated with such emissions;
    (iii) Estimates of changes in noise;
    (iv) A discussion of impacts to safety, including documentation of 
the potential for plumes, icing, and availability of emergency cooling 
water;
    (v) A discussion of facility reliability, including but not limited 
to facility availability, production of steam, impacts to production 
based on process unit heating or cooling, and reliability due to 
cooling water availability;
    (vi) Significant changes in consumption of water, including a 
facility-specific comparison of the evaporative losses of both once-
through cooling and closed-cycle recirculating systems, and 
documentation of impacts attributable to changes in water consumption; 
and
    (vii) A discussion of all reasonable attempts to mitigate each of 
these factors.
    (13) Peer Review. If the applicant is required to submit studies 
under paragraphs (r)(10) through (12) of this section, the applicant 
must conduct an external peer review of each report to be submitted 
with the permit application. The applicant must select peer reviewers 
and notify the Director in advance of the peer review. The Director may 
disapprove of a peer reviewer or require additional peer reviewers. The 
Director may confer with EPA, Federal, State and Tribal fish and 
wildlife management agencies with responsibility for fish and wildlife 
potentially affected by the cooling water intake structure, independent 
system operators, and state public utility regulatory agencies, to 
determine which peer review comments must be addressed. The applicant 
must provide an explanation for any significant reviewer comments not 
accepted. Peer reviewers must have appropriate qualifications and their 
names and credentials must be included in the peer review report.
    (14) New Units. The applicant must identify the chosen compliance 
method for the new unit. In addition, the owner or operator that 
selects the BTA standards for new units at 40 CFR 125.94 (e)(2) as its 
route to compliance must submit information to demonstrate entrainment 
reductions equivalent to 90 percent or greater of the reduction that 
could be achieved through compliance with 40 CFR 125.94(e)(1). The 
demonstration must include the Entrainment Characterization Study at 
paragraph (r)(9) of this section. In addition, if data specific to your 
facility indicates that compliance with the requirements of Sec.  
125.94 of this chapter for each new unit would result in compliance 
costs wholly out of proportion to the costs EPA considered in 
establishing the requirements at

[[Page 48429]]

issue, or would result in significant adverse impacts on local air 
quality, significant adverse impacts on local water resources other 
than impingement or entrainment, or significant adverse impacts on 
local energy markets, you must submit all supporting data as part of 
paragraph (r)(14) of this section. The Director may determine that 
additional data and information, including but not limited to 
monitoring, must be included as part of paragraph (r)(14) of this 
section.

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

0
4. The authority citation for part 125 continues to read as follows:

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

Subpart I--[Amended]

0
5. Section 125.84 is amended by revising paragraphs (c) introductory 
text and (d)(1) to read as follows:


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

* * * * *
    (c) Track I requirements for new facilities that withdraw greater 
than 2 mgd and less than 10 mgd and that choose not to comply with 
paragraph (b) of this section. You must comply with all the following 
requirements:
* * * * *
    (d) * * *
    (1) You must demonstrate to the Director that the technologies 
employed will reduce the level of adverse environmental impact from 
your cooling water intake structures to a level comparable to that 
which you would achieve were you to implement the requirements of 
paragraphs (b)(1) and (2) of this section. This demonstration must 
include a showing that the impacts to fish and shellfish, including 
important forage and predator species, within the watershed will be 
comparable to those which would result if you were to implement the 
requirements of paragraphs (b)(1) and (2) of this section. The Director 
will consider information provided by any fishery management agency and 
may also consider data and information from other sources.
* * * * *

0
6. Section 125.86 is amended as follows:
0
a. Revise paragraphs (a)(1)(ii), (b)(3) introductory text, and 
(b)(4)(iii) introductory text.
0
b. Remove and reserve paragraphs (c)(2)(ii), (c)(2)(iv)(C), and 
(c)(2)(iv)(D)(2).


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

    (a) * * *
    (1) * * *
    (ii) The Track I requirements for new facilities that withdraw 
greater than 2 mgd and less than 10 mgd in Sec.  125.84(c);
* * * * *
    (b) * * *
    (3) Source waterbody flow information. You must submit to the 
Director the following information to demonstrate that your cooling 
water intake structure meets the flow requirements in Sec.  
125.84(b)(3) or (c)(2).
* * * * *
    (4) * * *
    (iii) The owner or operator of a new facility required to install 
design and construction technologies and/or operational measures must 
develop a plan which explains the technologies and measures selected; 
this plan shall be based on information collected for the Source Water 
Biological Baseline Characterization required by 40 CFR 122.21(r)(4). 
Examples of appropriate technologies include, but are not limited to, 
wedgewire screens, fine mesh screens, fish handling and return systems, 
barrier nets, aquatic filter barrier systems, etc. Examples of 
appropriate operational measures include, but are not limited to, 
seasonal shutdowns or reductions in flow, and continuous operations of 
screens, etc. The plan must contain the following information:
* * * * *

0
7. Section 125.87 is amended by revising paragraphs (a) introductory 
text and (a)(2) to read as follows:


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

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

0
8. Section 125.89 is amended by revising paragraphs (a) introductory 
text and (b)(1)(i) and (ii) to read as follows:


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

    (a) Permit application. As the Director, you must review materials 
submitted by the applicant under 40 CFR 122.21(r)(4) and Sec.  125.86 
at the time of the initial permit application and before each permit 
renewal or reissuance.
* * * * *
    (b) * * *
    (1) * * *
    (i) If an owner or operator of a facility chooses Track I, you must 
review the Design and Construction Technology Plan required in Sec.  
125.86(b)(4) to evaluate the suitability and feasibility of the 
technology proposed to minimize impingement mortality and entrainment 
of all life stages of fish and shellfish. In the first permit issued, 
you must put a condition requiring the facility to reduce impingement 
mortality and entrainment commensurate with the implementation of the 
technologies in the permit. Under subsequent permits, the Director must 
review the performance of the technologies implemented and require 
additional or different design and construction technologies, if needed 
to minimize impingement mortality and entrainment

[[Page 48430]]

of all life stages of fish and shellfish. In addition, you must 
consider whether more stringent conditions are reasonably necessary in 
accordance with Sec.  125.84(e).
    (ii) If an owner or operator of a facility chooses Track II, you 
must review the information submitted with the Comprehensive 
Demonstration Study required in Sec.  125.86(c)(2) and evaluate the 
suitability of the proposed design and construction technologies and 
operational measures to determine whether they will reduce both 
impingement mortality and entrainment of all life stages of fish and 
shellfish to 90 percent or greater of the reduction that could be 
achieved through Track I. In addition, you must review the Verification 
Monitoring Plan in Sec.  125.86(c)(2)(iv)(D) and require that the 
proposed monitoring begin at the start of operations of the cooling 
water intake structure and continue for a sufficient period of time to 
demonstrate that the technologies and operational measures meet the 
requirements in Sec.  125.84(d)(1). Under subsequent permits, the 
Director must review the performance of the additional and/or different 
technologies or measures used and determine that they reduce the level 
of adverse environmental impact from the cooling water intake 
structures to a comparable level that the facility would achieve were 
it to implement the requirements of Sec.  125.84(b)(1) and (2).
* * * * *

0
9. The suspension of 40 CFR 125.90(a), (c), and (d), and 125.91 through 
125.99, published on July 9, 2007 (72 FR 37109) is lifted.

0
10. Subpart J to part 125 is revised to read as follows:
Subpart J--Requirements Applicable to Cooling Water Intake Structures 
for Existing Facilities Under Section 316(b) of the Clean Water Act
Sec.
125.90 Purpose of this subpart.
125.91 Applicability.
125.92 Special definitions.
125.93 [Reserved]
125.94 As an owner or operator of an existing facility, what must I 
do to comply with this subpart?
125.95 Permit application and supporting information requirements.
125.96 Monitoring requirements.
125.97 Other permit reporting and recordkeeping requirements.
125.98 Director requirements.
125.99 [Reserved]

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


Sec.  125.90  Purpose of this subpart.

    (a) This subpart establishes the section 316(b) requirements that 
apply to cooling water intake structures at existing facilities that 
are subject to this subpart. These requirements include a number of 
components. These include standards for minimizing adverse 
environmental impact associated with the use of cooling water intake 
structures and required procedures (e.g., permit application 
requirements, information submission requirements) for establishing the 
appropriate technology requirements at certain specified facilities as 
well as monitoring, reporting, and recordkeeping requirements to 
demonstrate compliance. In combination, these components represent the 
best technology available for minimizing adverse environmental impact 
associated with the use of cooling water intake structures at existing 
facilities. These requirements are to be established and implemented in 
National Pollutant Discharge Elimination System (NPDES) permits issued 
under the Clean Water Act (CWA).
    (b) Cooling water intake structures not subject to requirements 
under Sec. Sec.  125.94 through 125.99 or subparts I or N of this part 
must meet requirements under section 316(b) of the CWA established by 
the Director on a case-by-case, best professional judgment (BPJ) basis.
    (c) Nothing in this subpart shall be construed to preclude or deny 
the right under section 510 of the CWA of any State or political 
subdivision of a State or any interstate agency to adopt or enforce any 
requirement with respect to control or abatement of pollution that is 
more stringent than required by Federal law.
    Note to Sec.  125.90. This regulation does not authorize take, as 
defined by the Endangered Species Act, 16 U.S.C. 1532(19). The U.S. 
Fish and Wildlife Service and National Marine Fisheries Service have 
determined that any impingement (including entrapment) or entrainment 
of Federally-listed species constitutes take. Such take may be 
authorized pursuant to the conditions of a permit issued under 16 
U.S.C. 1539(a) or where consistent with an Incidental Take Statement 
contained in a Biological Opinion pursuant to 16 U.S.C. 1536(o).


Sec.  125.91  Applicability.

    (a) The owner or operator of an existing facility, as defined in 
Sec.  125.92(k), is subject to the requirements at Sec. Sec.  125.94 
through 125.99 if:
    (1) The facility is a point source;
    (2) The facility uses or proposes to use one or more cooling water 
intake structures with a cumulative design intake flow (DIF) of greater 
than 2 million gallons per day (mgd) to withdraw water from waters of 
the United States; and
    (3) Twenty-five percent or more of the water the facility withdraws 
on an actual intake flow basis is used exclusively for cooling 
purposes.
    (b) Use of a cooling water intake structure includes obtaining 
cooling water by any sort of contract or arrangement with one or more 
independent suppliers of cooling water if the independent supplier 
withdraws water from waters of the United States but is not itself a 
new or existing facility as defined in subparts I or J of this part, 
except as provided in paragraphs (c) and (d) of this section. An owner 
or operator of an existing facility may not circumvent these 
requirements by creating arrangements to receive cooling water from an 
entity that is not itself a facility subject to subparts I or J of this 
part.
    (c) Obtaining cooling water from a public water system, using 
reclaimed water from wastewater treatment facilities or desalination 
plants, or recycling treated process wastewater effluent as cooling 
water does not constitute use of a cooling water intake structure for 
purposes of this subpart.
    (d) This subpart does not apply to offshore seafood processing 
facilities, offshore liquefied natural gas terminals, and offshore oil 
and gas extraction facilities that are existing facilities as defined 
in Sec.  125.92(k). The owners and operators of such facilities must 
meet requirements established by the Director on a case-by-case, best 
professional judgment (BPJ) basis.


Sec.  125.92  Special definitions.

    In addition to the definitions provided in 40 CFR 122.2, the 
following special definitions apply to this subpart:
    (a) Actual Intake Flow (AIF) means the average volume of water 
withdrawn on an annual basis by the cooling water intake structures 
over the past three years. After October 14, 2019, Actual Intake Flow 
means the average volume of water withdrawn on an annual basis by the 
cooling water intake structures over the previous five years. Actual 
intake flow is measured at a location within the cooling water intake

[[Page 48431]]

structure that the Director deems appropriate. The calculation of 
actual intake flow includes days of zero flow. AIF does not include 
flows associated with emergency and fire suppression capacity.
    (b) All life stages of fish and shellfish means eggs, larvae, 
juveniles, and adults. It does not include members of the infraclass 
Cirripedia in the subphylum Crustacea (barnacles), green mussels (Perna 
viridis), or zebra mussels (Dreissena polymorpha). The Director may 
determine that all life stages of fish and shellfish does not include 
other specified nuisance species.
    (c) Closed-cycle recirculating system means a system designed and 
properly operated using minimized make-up and blowdown flows withdrawn 
from a water of the United States to support contact or non-contact 
cooling uses within a facility, or a system designed to include certain 
impoundments. A closed-cycle recirculating system passes cooling water 
through the condenser and other components of the cooling system and 
reuses the water for cooling multiple times.
    (1) Closed-cycle recirculating system includes a facility with wet, 
dry, or hybrid cooling towers, a system of impoundments that are not 
waters of the United States, or any combination thereof. A properly 
operated and maintained closed-cycle recirculating system withdraws new 
source water (make-up water) only to replenish losses that have 
occurred due to blowdown, drift, and evaporation. If waters of the 
United States are withdrawn for purposes of replenishing losses to a 
closed-cycle recirculating system other than those due to blowdown, 
drift, and evaporation from the cooling system, the Director may 
determine a cooling system is a closed-cycle recirculating system if 
the facility demonstrates to the satisfaction of the Director that 
make-up water withdrawals attributed specifically to the cooling 
portion of the cooling system have been minimized.
    (2) Closed-cycle recirculating system also includes a system with 
impoundments of waters of the U.S. where the impoundment was 
constructed prior to October 14, 2014 and created for the purpose of 
serving as part of the cooling water system as documented in the 
project purpose statement for any required Clean Water Act section 404 
permit obtained to construct the impoundment. In the case of an 
impoundment whose construction pre-dated the CWA requirement to obtain 
a section 404 permit, documentation of the project's purpose must be 
demonstrated to the satisfaction of the Director. This documentation 
could be some other license or permit obtained to lawfully construct 
the impoundment for the purposes of a cooling water system, or other 
such evidence as the Director finds necessary. For impoundments 
constructed in uplands or not in waters of the United States, no 
documentation of a section 404 or other permit is required. If waters 
of the United States are withdrawn for purposes of replenishing losses 
to a closed-cycle recirculating system other than those due to 
blowdown, drift, and evaporation from the cooling system, the Director 
may determine a cooling system is a closed-cycle recirculating system 
if the facility demonstrates to the satisfaction of the Director that 
make-up water withdrawals attributed specifically to the cooling 
portion of the cooling system have been minimized.
    (d) Contact cooling water means water used for cooling which comes 
into direct contact with any raw material, product, or byproduct. 
Examples of contact cooling water may include but are not limited to 
quench water at facilities, cooling water in a cracking unit, and 
cooling water directly added to food and agricultural products 
processing.
    (e) Cooling water means water used for contact or non-contact 
cooling, including water used for equipment cooling, evaporative 
cooling tower makeup, and dilution of effluent heat content. The 
intended use of the cooling water is to absorb waste heat rejected from 
the process or processes used, or from auxiliary operations on the 
facility's premises. Cooling water obtained from a public water system, 
reclaimed water from wastewater treatment facilities or desalination 
plants, treated effluent from a manufacturing facility, or cooling 
water that is used in a manufacturing process either before or after it 
is used for cooling as process water, is not considered cooling water 
for the purposes of calculating the percentage of a facility's intake 
flow that is used for cooling purposes in Sec.  125.91(a)(3).
    (f) Cooling water intake structure means the total physical 
structure and any associated constructed waterways used to withdraw 
cooling water from waters of the United States. The cooling water 
intake structure extends from the point at which water is first 
withdrawn from waters of the United States up to, and including the 
intake pumps.
    (g) Design intake flow (DIF) means the value assigned during the 
cooling water intake structure design to the maximum instantaneous rate 
of flow of water the cooling water intake system is capable of 
withdrawing from a source waterbody. The facility's DIF may be adjusted 
to reflect permanent changes to the maximum capabilities of the cooling 
water intake system to withdraw cooling water, including pumps 
permanently removed from service, flow limit devices, and physical 
limitations of the piping. DIF does not include values associated with 
emergency and fire suppression capacity or redundant pumps (i.e., back-
up pumps).
    (h) Entrainment means any life stages of fish and shellfish in the 
intake water flow entering and passing through a cooling water intake 
structure and into a cooling water system, including the condenser or 
heat exchanger. Entrainable organisms include any organisms potentially 
subject to entrainment. For purposes of this subpart, entrainment 
excludes those organisms that are collected or retained by a sieve with 
maximum opening dimension of 0.56 inches. Examples of sieves meeting 
this definition include but are not limited to a \3/8\ inch square 
mesh, or a \1/2\ by \1/4\ inch mesh. A facility must use the same mesh 
size when counting entrainment as is used when counting impingement.
    (i) Entrainment mortality means death as a result of entrainment 
through the cooling water intake structure, or death as a result of 
exclusion from the cooling water intake structure by fine mesh screens 
or other protective devices intended to prevent the passage of 
entrainable organisms through the cooling water intake structure.
    (j) Entrapment means the condition where impingeable fish and 
shellfish lack the means to escape the cooling water intake. Entrapment 
includes but is not limited to: Organisms caught in the bucket of a 
traveling screen and unable to reach a fish return; organisms caught in 
the forebay of a cooling water intake system without any means of being 
returned to the source waterbody without experiencing mortality; or 
cooling water intake systems where the velocities in the intake pipes 
or in any channels leading to the forebay prevent organisms from being 
able to return to the source waterbody through the intake pipe or 
channel.
    (k) Existing facility means any facility that commenced 
construction as described in 40 CFR 122.29(b)(4) on or before January 
17, 2002 (or July 17, 2006 for an offshore oil and gas extraction 
facility) and any modification of, or any addition of a unit at such a 
facility. A facility built adjacent to another facility would be a new 
facility while the original facility would remain as an exiting 
facility for purposes of this subpart. A facility cannot both be an 
existing facility and a new facility as defined at Sec.  125.83.

[[Page 48432]]

    (l) Flow reduction means any modification to a cooling water intake 
structure or its operation that serves to reduce the volume of cooling 
water withdrawn. Examples include, but are not limited to, variable 
speed pumps, seasonal flow reductions, wet cooling towers, dry cooling 
towers, hybrid cooling towers, unit closures, or substitution for 
withdrawals by reuse of effluent from a nearby facility.
    (m) Fragile species means those species of fish and shellfish that 
are least likely to survive any form of impingement. For purposes of 
this subpart, fragile species are defined as those with an impingement 
survival rate of less than 30 percent, including but not limited to 
alewife, American shad, Atlantic herring, Atlantic long-finned squid, 
Atlantic menhaden, bay anchovy, blueback herring, bluefish, butterfish, 
gizzard shad, grey snapper, hickory shad, menhaden, rainbow smelt, 
round herring, and silver anchovy.
    (n) Impingement means the entrapment of any life stages of fish and 
shellfish on the outer part of an intake structure or against a 
screening device during periods of intake water withdrawal. For 
purposes of this subpart, impingement includes those organisms 
collected or retained on a sieve with maximum distance in the opening 
of 0.56 inches, and excludes those organisms that pass through the 
sieve. Examples of sieves meeting this definition include but are not 
limited to a \3/8\ inch square mesh, or a \1/2\ by \1/4\ inch mesh. 
This definition is intended to prevent the conversion of entrainable 
organisms to counts of impingement or impingement mortality. The owner 
or operator of a facility must use a sieve with the same mesh size when 
counting entrainment as is used when counting impingement.
    (o) Impingement mortality (IM) means death as a result of 
impingement. Impingement mortality also includes organisms removed from 
their natural ecosystem and lacking the ability to escape the cooling 
water intake system, and thus subject to inevitable mortality.
    (p) Independent supplier means an entity, other than the regulated 
facility, that owns and operates its own cooling water intake structure 
and directly withdraws water from waters of the United States. The 
supplier provides the cooling water to other facilities for their use, 
but may itself also use a portion of the water. An entity that provides 
potable water to residential populations (e.g., public water system) is 
not a supplier for purposes of this subpart.
    (q) Latent mortality means the delayed mortality of organisms that 
were initially alive upon being impinged or entrained but that do not 
survive the delayed effects of impingement and entrainment during an 
extended holding period. Delayed effects of impingement and entrainment 
include but are not limited to temperature change, physical stresses, 
and chemical stresses.
    (r) Minimize means to reduce to the smallest amount, extent, or 
degree reasonably possible.
    (s) Modified traveling screen means a traveling water screen that 
incorporates measures protective of fish and shellfish, including but 
not limited to: Screens with collection buckets or equivalent 
mechanisms designed to minimize turbulence to aquatic life; addition of 
a guard rail or barrier to prevent loss of fish from the collection 
system; replacement of screen panel materials with smooth woven mesh, 
drilled mesh, molded mesh, or similar materials that protect fish from 
descaling and other abrasive injury; continuous or near-continuous 
rotation of screens and operation of fish collection equipment to 
ensure any impinged organisms are recovered as soon as practical; a low 
pressure wash or gentle vacuum to remove fish prior to any high 
pressure spray to remove debris from the screens; and a fish handling 
and return system with sufficient water flow to return the fish 
directly to the source water in a manner that does not promote 
predation or re-impingement of the fish, or require a large vertical 
drop. The Director may approve of fish being returned to water sources 
other than the original source water, taking into account any 
recommendations from the Services with respect to endangered or 
threatened species. Examples of modified traveling screens include, but 
are not limited to: Modified Ristroph screens with a fish handling and 
return system, dual flow screens with smooth mesh, and rotary screens 
with fish returns or vacuum returns.
    (t) Moribund means dying; close to death.
    (u) New unit means a new ``stand-alone'' unit at an existing 
facility where construction of the new unit begins after October 14, 
2014 and that does not otherwise meet the definition of a new facility 
at Sec.  125.83 or is not otherwise already subject to subpart I of 
this part. A stand-alone unit is a separate unit that is added to a 
facility for either the same general industrial operation or another 
purpose. A new unit may have its own dedicated cooling water intake 
structure, or the new unit may use an existing or modified cooling 
water intake structure.
    (v) Offshore velocity cap means a velocity cap located a minimum of 
800 feet from the shoreline. A velocity cap is an open intake designed 
to change the direction of water withdrawal from vertical to 
horizontal, thereby creating horizontal velocity patterns that result 
in avoidance of the intake by fish and other aquatic organisms. For 
purposes of this subpart, the velocity cap must use bar screens or 
otherwise exclude marine mammals, sea turtles, and other large aquatic 
organisms.
    (w) Operational measure means a modification to any operation that 
serves to minimize impact to all life stages of fish and shellfish from 
the cooling water intake structure. Examples of operational measures 
include, but are not limited to, more frequent rotation of traveling 
screens, use of a low pressure wash to remove fish prior to any high 
pressure spray to remove debris, maintaining adequate volume of water 
in a fish return, and debris minimization measures such as air sparging 
of intake screens and/or other measures taken to maintain the design 
intake velocity.
    (x) Social benefits means the increase in social welfare that 
results from taking an action. Social benefits include private benefits 
and those benefits not taken into consideration by private decision 
makers in the actions they choose to take, including effects occurring 
in the future. Benefits valuation involves measuring the physical and 
biological effects on the environment from the actions taken. Benefits 
are generally treated one or more of three ways: A narrative containing 
a qualitative discussion of environmental effects, a quantified 
analysis expressed in physical or biological units, and a monetized 
benefits analysis in which dollar values are applied to quantified 
physical or biological units. The dollar values in a social benefits 
analysis are based on the principle of willingness-to-pay (WTP), which 
captures monetary benefits by measuring what individuals are willing to 
forgo in order to enjoy a particular benefit. Willingness-to-pay for 
nonuse values can be measured using benefits transfer or a stated 
preference survey.
    (y) Social costs means costs estimated from the viewpoint of 
society, rather than individual stakeholders. Social cost represents 
the total burden imposed on the economy; it is the sum of all 
opportunity costs incurred associated with taking actions. These 
opportunity costs consist of the value lost to society of all the goods 
and services that will not be produced and consumed as a facility 
complies with permit requirements, and society reallocates

[[Page 48433]]

resources away from other production activities and towards minimizing 
adverse environmental impacts.


Sec.  125.93  [Reserved]


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

    (a) Applicable Best Technology Available for Minimizing Adverse 
Environmental Impact (BTA) standards. (1) On or after October 14, 2014, 
the owner or operator of an existing facility with a cumulative design 
intake flow (DIF) greater than 2 mgd is subject to the BTA (best 
technology available) standards for impingement mortality under 
paragraph (c) of this section, and entrainment under paragraph (d) of 
this section including any measures to protect Federally-listed 
threatened and endangered species and designated critical habitat 
established under paragraph (g) of this section.
    (2) Prior to October 14, 2014, the owner or operator of an existing 
facility with a cumulative design intake flow (DIF) greater than 2 mgd 
is subject to site-specific impingement mortality and entrainment 
requirements as determined by the Director on a case-by-case Best 
Professional Judgment basis. The Director's BTA determination may be 
based on consideration of some or all of the factors at Sec.  
125.98(f)(2) and (3) and the requirements of Sec.  125.94(c). If the 
Director requires additional information to make the decision on what 
BTA requirements to include in the applicant's permit for impingement 
mortality and entrainment, the Director should consider whether to 
require any of the information at 40 CFR 122.21(r).
    (3) The owner or operator of a new unit is subject to the 
impingement mortality and entrainment standards under paragraph (e) of 
this section for all cooling water intake flows used by the new unit. 
The remainder of the existing facility is subject to the impingement 
mortality standard under paragraph (c) of this section, and the 
entrainment standard under paragraph (d) of this section. The entire 
existing facility including any new units is subject to any measures to 
protect Federally-listed threatened and endangered species and 
designated critical habitat established under paragraph (g) of this 
section.
    (b) Compliance with BTA standards. (1) Aligning compliance 
deadlines for impingement mortality and entrainment requirements. After 
issuance of a final permit that establishes the entrainment 
requirements under Sec.  125.94(d), the owner or operator of an 
existing facility must comply with the impingement mortality standard 
in Sec.  125.94(c) as soon as practicable. The Director may establish 
interim compliance milestones in the permit.
    (2) After issuance of a final permit establishing the entrainment 
requirements under Sec.  125.94(d), the owner or operator of an 
existing facility must comply with the entrainment standard as soon as 
practicable, based on a schedule of requirements established by the 
Director. The Director may establish interim compliance milestones in 
the permit.
    (3) The owner or operator of a new unit at an existing facility 
must comply with the BTA standards at Sec.  125.94(e) with respect to 
the new unit upon commencement of the new unit's operation.
    (c) BTA Standards for Impingement Mortality. The owner or operator 
of an existing facility must comply with one of the alternatives in 
paragraphs (c)(1) through (7) of this section, except as provided in 
paragraphs (c)(11) or (12) of this section, when approved by the 
Director. In addition, a facility may also be subject to the 
requirements of paragraphs (c)(8), (c)(9), or (g) of this section if 
the Director requires such additional measures.
    (1) Closed-cycle recirculating system. A facility must operate a 
closed-cycle recirculating system as defined at Sec.  125.92(c). In 
addition, you must monitor the actual intake flows at a minimum 
frequency of daily. The monitoring must be representative of normal 
operating conditions, and must include measuring cooling water 
withdrawals, make-up water, and blow down volume. In lieu of daily 
intake flow monitoring, you may monitor your cycles of concentration at 
a minimum frequency of daily; or
    (2) 0.5 Feet Per Second Through-Screen Design Velocity. A facility 
must operate a cooling water intake structure that has a maximum design 
through-screen intake velocity of 0.5 feet per second. The owner or 
operator of the facility must submit information to the Director that 
demonstrates that the maximum design intake velocity as water passes 
through the structural components of a screen measured perpendicular to 
the screen mesh does not exceed 0.5 feet per second. The maximum 
velocity must be achieved under all conditions, including during 
minimum ambient source water surface elevations (based on BPJ using 
hydrological data) and during periods of maximum head loss across the 
screens or other devices during normal operation of the intake 
structure; or
    (3) 0.5 Feet Per Second Through-Screen Actual Velocity. A facility 
must operate a cooling water intake structure that has a maximum 
through-screen intake velocity of 0.5 feet per second. The owner or 
operator of the facility must submit information to the Director that 
demonstrates that the maximum intake velocity as water passes through 
the structural components of a screen measured perpendicular to the 
screen mesh does not exceed 0.5 feet per second. The maximum velocity 
must be achieved under all conditions, including during minimum ambient 
source water surface elevations (based on best professional judgment 
using hydrological data) and during periods of maximum head loss across 
the screens or other devices during normal operation of the intake 
structure. The Director may authorize the owner or operator of the 
facility to exceed the 0.5 fps velocity at an intake for brief periods 
for the purpose of maintaining the cooling water intake system, such as 
backwashing the screen face. If the intake does not have a screen, the 
maximum intake velocity perpendicular to the opening of the intake must 
not exceed 0.5 feet per second during minimum ambient source water 
surface elevations. In addition, you must monitor the velocity at the 
screen at a minimum frequency of daily. In lieu of velocity monitoring 
at the screen face, you may calculate the through-screen velocity using 
water flow, water depth, and the screen open areas; or
    (4) Existing offshore velocity cap. A facility must operate an 
existing offshore velocity cap as defined at Sec.  125.92(v) that was 
installed on or before October 14, 2014. Offshore velocity caps 
installed after October 14, 2014 must make either a demonstration under 
paragraph (c)(6) of this section or meet the performance standard under 
paragraph (c)(7) of this section. In addition, you must monitor your 
intake flow at a minimum frequency of daily; or
    (5) Modified traveling screens. A facility must operate a modified 
traveling screen that the Director determines meets the definition at 
Sec.  125.92(s) and that, after review of the information required in 
the impingement technology performance optimization study at 40 CFR 
122.21(r)(6)(i), the Director determines is the best technology 
available for impingement reduction at the site. As the basis for the 
Director's determination, the owner or operator of the facility must 
demonstrate the technology is or will be optimized to minimize 
impingement mortality of all non-fragile species. The Director must 
include verifiable and enforceable permit conditions that ensure the

[[Page 48434]]

technology will perform as demonstrated; or
    (6) Systems of technologies as the BTA for impingement mortality. A 
facility must operate a system of technologies, management practices, 
and operational measures, that, after review of the information 
required in the impingement technology performance optimization study 
at 40 CFR 122.21(r)(6)(ii), the Director determines is the best 
technology available for impingement reduction at your cooling water 
intake structures. As the basis for the Director's determination, the 
owner or operator of the facility must demonstrate the system of 
technology has been optimized to minimize impingement mortality of all 
non-fragile species. In addition, the Director's decision will be 
informed by comparing the impingement mortality performance data under 
40 CFR 122.21(r)(6)(ii)(D) to the impingement mortality performance 
standard that would otherwise apply under paragraph (c)(7) of this 
section. The Director must include verifiable and enforceable permit 
conditions that ensure the system of technologies will perform as 
demonstrated; or
    (7) Impingement mortality performance standard. A facility must 
achieve a 12-month impingement mortality performance standard of all 
life stages of fish and shellfish of no more than 24 percent mortality, 
including latent mortality, for all non-fragile species together that 
are collected or retained in a sieve with maximum opening dimension of 
0.56 inches and kept for a holding period of 18 to 96 hours. The 
Director may, however, prescribe an alternative holding period. You 
must conduct biological monitoring at a minimum frequency of monthly to 
demonstrate your impingement mortality performance. Each month, you 
must use all of the monitoring data collected during the previous 12 
months to calculate the 12-month survival percentage. The 12-month 
impingement mortality performance standard is the total number of fish 
killed divided by the total number of fish impinged over the course of 
the entire 12 months. The owner or operator of the facility must choose 
whether to demonstrate compliance with this requirement for the entire 
facility, or for each individual cooling water intake structure for 
which this paragraph (c)(7) is the selected impingement mortality 
requirement.
    (8) Additional measures for shellfish. The owner or operator must 
comply with any additional measures, such as seasonal deployment of 
barrier nets, established by the Director to protect shellfish.
    (9) Additional measures for other species. The owner or operator 
must comply with any additional measures, established by the Director, 
to protect fragile species.
    (10) Reuse of other water for cooling purposes. This impingement 
mortality standard does not apply to that portion of cooling water that 
is process water, gray water, waste water, reclaimed water, or other 
waters reused as cooling water in lieu of water obtained by marine, 
estuarine, or freshwater intakes.
    (11) De minimis rate of impingement. In limited circumstances, 
rates of impingement may be so low at a facility that additional 
impingement controls may not be justified. The Director, based on 
review of site-specific data submitted under 40 CFR 122.21(r), may 
conclude that the documented rate of impingement at the cooling water 
intake is so low that no additional controls are warranted. For 
threatened or endangered species, all unauthorized take is prohibited 
by the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.). Notice 
of a determination that no additional impingement controls are 
warranted must be included in the draft or proposed permit and the 
Director's response to all comments on this determination must be 
included in the record for the final permit.
    (12) Low capacity utilization power generating units. If an 
existing facility has a cooling water intake structure used for one or 
more existing electric generating units, each with an annual average 
capacity utilization rate of less than 8 percent averaged over a 24-
month block contiguous period, the owner or operator may request the 
Director consider less stringent requirements for impingement mortality 
for that cooling water intake structure. The Director may, based on 
review of site-specific data concerning cooling water system data under 
40 CFR 122.21(r)(5), establish the BTA standards for impingement 
mortality for that cooling water intake structure that are less 
stringent than paragraphs (c)(1) through (7) of this section.
    (d) BTA standards for entrainment for existing facilities. The 
Director must establish BTA standards for entrainment for each intake 
on a site-specific basis. These standards must reflect the Director's 
determination of the maximum reduction in entrainment warranted after 
consideration of the relevant factors as specified in Sec.  125.98. The 
Director may also require periodic reporting on your progress towards 
installation and operation of site-specific entrainment controls. These 
reports may include updates on planning, design, and construction or 
other appropriate topics as required by the Director. If the Director 
determines that the site-specific BTA standard for entrainment under 
this paragraph requires performance equivalent to a closed-cycle 
recirculating system as defined at Sec.  125.92(c), then under Sec.  
125.94(c)(1) your facility will comply with the impingement mortality 
standard for that intake.
    (e) BTA standards for impingement mortality and entrainment for new 
units at existing facilities. The owner or operator of a new unit at an 
existing facility must achieve the impingement mortality and 
entrainment standards provided in either paragraph (e)(1) or (2) of 
this section, except as provided in paragraph (e)(4) of this section, 
for each cooling water intake structure used to provide cooling water 
to the new unit.
    (1) Requirements for new units. The owner or operator of the 
facility must reduce the design intake flow for the new unit, at a 
minimum, to a level commensurate with that which can be attained by the 
use of a closed-cycle recirculating system for the same level of 
cooling for the new unit.
    (2) Alternative requirements for new units. The owner or operator 
of a new unit at an existing facility must demonstrate to the Director 
that the technologies and operational measures employed will reduce the 
level of adverse environmental impact from any cooling water intake 
structure used to supply cooling water to the new unit to a comparable 
level to that which would be achieved under Sec.  125.94(e)(1). This 
demonstration must include a showing that the entrainment reduction is 
equivalent to 90 percent or greater of the reduction that could be 
achieved through compliance with Sec.  125.94(e)(1). In addition this 
demonstration must include a showing that the impacts to fish and 
shellfish, including important forage and predator species, within the 
watershed will be comparable to those which would result under the 
requirements of Sec.  125.94(e)(1).
    (3) This standard does not apply to:
    (i) Process water, gray water, waste water, reclaimed water, or 
other waters reused as cooling water in lieu of water obtained by 
marine, estuarine, or freshwater intakes;
    (ii) Cooling water used by manufacturing facilities for contact 
cooling purposes;
    (iii) Portions of those water withdrawals for auxiliary plant 
cooling uses comprising less than two mgd of the facility's flow; and
    (iv) Any quantity of emergency back-up water flows.
    (4) The owner or operator of a facility must comply with any 
alternative

[[Page 48435]]

requirements established by the Director pursuant to Sec.  
125.98(b)(7).
    (5) For cooling water flows excluded by paragraph (e)(3) of this 
section, the Director may establish additional BTA standards for 
impingement mortality and entrainment on a site-specific basis.
    (f) Nuclear facilities. If the owner or operator of a nuclear 
facility demonstrates to the Director, upon the Director's consultation 
with the Nuclear Regulatory Commission, the Department of Energy, or 
the Naval Nuclear Propulsion Program, that compliance with this subpart 
would result in a conflict with a safety requirement established by the 
Commission, the Department, or the Program, the Director must make a 
site-specific determination of best technology available for minimizing 
adverse environmental impact that would not result in a conflict with 
the Commission's, the Department's, or the Program's safety 
requirement.
    (g) Additional measures to protect Federally-listed threatened and 
endangered species and designated critical habitat. The Director may 
establish in the permit additional control measures, monitoring 
requirements, and reporting requirements that are designed to minimize 
incidental take, reduce or remove more than minor detrimental effects 
to Federally-listed species and designated critical habitat, or avoid 
jeopardizing Federally-listed species or destroying or adversely 
modifying designated critical habitat (e.g., prey base). Such control 
measures, monitoring requirements, and reporting requirements may 
include measures or requirements identified by an appropriate Field 
Office of the U.S. Fish and Wildlife Service and/or Regional Office of 
the National Marine Fisheries Service during the 60 day review period 
pursuant to Sec.  125.98(h) or the public notice and comment period 
pursuant to 40 CFR 124.10. Where established in the permit by the 
Director, the owner or operator must implement any such requirements.
    (h) Interim BTA requirements. An owner or operator of a facility 
may be subject to interim BTA requirements established by the Director 
in the permit on a site-specific basis.
    (i) More stringent standards. The Director must establish more 
stringent requirements as best technology available for minimizing 
adverse environmental impact if the Director determines that compliance 
with the applicable requirements of this section would not meet the 
requirements of applicable State or Tribal law, including compliance 
with applicable water quality standards (including designated uses, 
criteria, and antidegradation requirements).
    (j) The owner or operator of a facility subject to this subpart 
must:
    (1) Submit and retain permit application and supporting information 
as specified in Sec.  125.95;
    (2) Conduct compliance monitoring as specified in Sec.  125.96; and
    (3) Report infor