§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Ec onomic Analyses for Existing and New Facilities Appendix to Chapter D2

D2A-1 

# Appendix to Chapter D2

This appendix presents the results of the UMRA analys is for the other five options considered for Phase III existing facilities, combined with the proposed option for new offshore oil and gas extraction facilities. For all options, results only include those Phase III existing faciliti es that are (1) non-baseline closures and (2) subject to national categorical requirements under the option. See th e main body of this chapter for a description of data sources and methodologies used in these analyses. In Table D2A-1 below, the other evaluated options fo r Phase III existing facilities, combined with the proposed option for new offshore oil and gas extraction facilities, are presented in order of increasing stringency and/or applicability (e.g., the largest number of facilities would be subject to the national requirements under Option 6, compared to any of the other evaluated options).

Table D2A-1: Summary of UMRA Costs for Other Evaluated Options (in millions, 2003$)

Sector Total Annualized Cost Maximum One-Year Cost Facility Compliance Costs Government Implementation Costs Total Facility Compliance Costs Government Implementation Costs Total
Option 3 for Existing Facilities / Proposed Option for New OOGE Facilities Government Sector (excl. Federal) $1.0 $0.9 $1.9 $1.8 $4.5 $6.3 Private Sector $61.9 n/a $61.9 $712.2 n/a $712.2 Option 4 for Existing Facilities / Proposed Option for New OOGE Facilities Government Sector (excl. Federal) $0.8 $0.8 $1.6 $1.7 $4.6 $6.4 Private Sector $66.0 n/a $66.0 $722.9 n/a $722.9 Option 2 for Existing Facilities / Proposed Option for New OOGE Facilities Government Sector (excl. Federal) $1.4 $1.0 $2.4 $2.4 $5.6 $7.9 Private Sector $70.5 n/a $70.5 $730.7 n/a $730.7 Option 1 for Existing Facilities / Proposed Option for New OOGE Facilities Government Sector (excl. Federal) $1.5 $1.1 $2.6 $2.4 $5.6 $8.1 Private Sector $72.3 n/a $72.3 $737.2 n/a $737.2 Option 6 for Existing Facilities / Proposed Option for New OOGE Facilities Government Sector (excl. Federal) $1.8 $1.7 $3.5 $2.8 $7.6 $10.5 Private Sector $91.7 n/a $91.7 $922.3 n/a $922.3 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Ec onomic Analyses for Existing and New Facilities Appendix to Chapter D2

D2A-2 

## T HIS 

## PAGE 

## I NTENTIONALLY 

## L EFT 

## B LANK§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

D3-1 

## C HAPTER 

## C ONTENTS D3-1 E.O. 12866: Regulatory Planning and Review . . . . D3-1 D3-2 Paperwork Reduction Act of 1995 . . . . . . . . . . . . . . D3-1 D3-3 E.O. 13132: Federalism . . . . . . . . . . . . . . . . . . . . . . D3-2 D3-4 E.O. 13175: Consultation and Coordination with Indian Tribal Governments . . . . . . . . . . . . . . . . . . . D3-4 D3-5 E.O. 13045: Protection of Children from Environmental Health Risks and Safety Risks . . . . . . . . . . . . . . . . . D3-4 D3-6 E.O. 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D3-5 D3-6.1 Existing Electric Generators . . . . . . . . . . . D3-6 D3-6.2 New Offshore Oil and Gas Extraction Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . D3-7 D3-7 National Technology Transfer and Advancement Act of 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D3-7 D3-8 E.O. 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D3-7 D3-9 E.O. 13158: Marine Protected Areas . . . . . . . . . . . . D3-8 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D3-9 

# Chapter D3: Other Administrative Requirements

I NTRODUCTION 

### This chapter presents several other analyses conducted in developing this proposed rule. These analyses address the requirements of Executive Orders and Acts applicable to Phase III regulation.



## D3-1 E XECUTIVE 

## O RDER 

## 12866: REGULATORY 

## P LANNING AND 

## REVIEW 

### Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether the regulatory action is “significant” and therefore subject to OMB review and the requirements of the Executive Order. The order defines a “significant regulatory action” as one that is likely to result in a rule that may:

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### have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, compe tition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; or

< 

### create a serious inconsistency or otherwise interfere w ith an action taken or planned by another agency; or

< 

### materially alter the budgetary impact of entitlements, gr ants, user fees, or loan programs or the rights and obligations of recipients thereof; or

< 

### raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Executive Order. Pursuant to the terms of Executive Order 12866, EPA de termined that this proposed rule is a “significant regulatory action.” As such, this action was submitted to OMB for review. Changes made in response to OMB suggestions or recommendations are documented in the public record.



## D3-2 PAPERWORK 

## REDUCTION 

## A CT OF 

## 1995 The Paperwork Reduction Act of 1995 (P RA) (superseding the PRA of 1980) is implemented by the Office of Management and Budget (OMB) and requires that ag encies submit a supporting statement to OMB for any information collection that solicits the same data from mo re than nine parties. The PRA seeks to ensure that Federal agencies balance their need to collect information with the paperwork burden imposed on the public by the collection.§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

D3-2 

### The definition of “information collection” includes activ ities required by regulations, such as permit development, monitoring, record keeping, and reporting. The term “burden” refers to the “time, effort, or financial resources” the public expends to provide information to or for a Federal agency, or to otherwise fulfill statutory or regulatory requirements. PRA paperwork burden is measured in terms of annual time and financial resources the public devotes to meet one-time and recurring information requests (44 U.S.C. 3502(2); 5 C.F.R. 1320.3(b)). Information collection activities may include:

< 

### reviewing instructions;

< 

### using technology to collect, process, and disclose information;

< 

### adjusting existing practices to comply with requirements;

< 

### searching data sources;

< 

### completing and reviewing the response; and

< 

### transmitting or disclosing information. Agencies must provide information to OMB on the parties affected, the annual reporting burden, the annualized cost of responding to the information collection, and whether the request significantly impacts a substantial number of small entities. An agency may not conduct or sponsor, and a person is not required to respond to, an information collection unless it displays a currently valid OMB control number. EPA’s estimate of the information collection requirements imposed by the proposed Phase III regulation are documented in the Information Collection Request (I CR) which accompanies this regulation (U.S. EPA, 2004).



## D3-3 E XECUTIVE 

## O RDER 

## 13132: F EDERALISM 

### Executive Order 13132 (64 FR 43255, August 10, 1999) re quires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” Polic ies that have federalism implications are defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under section 6 of Executive Order 13132, EPA may not issu e a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments or unless EPA consults with State and local officials early in th e process of developing the regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the regulation. This proposed rule does not have federalism implications. It would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Rather, this proposed rule would result in minimal administrative co sts on States that have an authorized NPDES program. EPA expects the following annual burden for States to coll ectively administer one of the three proposed options:

< 

### 50 MGD for All Waterbodies option: 16,972 hours with a cost of $754,804 ($747,981 in labor costs and $6,823 in non-labor costs);

< 

### 200 MGD for All Waterbodies option: 4,677 hours with a cost of $201,092 ($198,932 in labor costs and $2,160 in non-labor costs);

< 

### 100 MGD for Certain Waterbodies option: 6,528 hours with a cost of $286,597 ($284,624 in labor costs and $1,973 in non-labor costs). It is noted that States do not incur any burden hours and co sts to administer the proposed rule for the new offshore oil and gas extraction facilities because the EPA Regions administer their permits; these facilities are therefore§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

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### outside the jurisdiction of the States. In addition, EPA has identified zero Phase III existing facilities that are owned by Federal, State or local government entities therefore the annual impacts on these facilities is zero. The proposed national cooling water intake structure re quirements would be implemented through permits issued under the NPDES program. Forty-five States and one territory are currently authorized pursuant to section 402(b) of the CWA to implement the NPDES program. In Stat es not authorized to implement the NPDES program, EPA issues NPDES permits. Under the CWA, States are not requi red to become authorized to administer the NPDES program. Rather, such authorization is available to St ates if they operate their programs in a manner consistent with section 402(b) and applicable re gulations. Generally, these provisions require that State NPDES programs include requirements that are as stringent as Federal program requirements. States retain the ability to implement requirements that are broader in scope or more stringe nt than Federal requirements. (See section 510 of the CWA.) EPA does not expect this proposed ruleto have substantial direct effect s on either authorized or nonauthorized States or on local governments because it would not change how EPA and the States and local governments interact or their respective authority or responsib ilities for implementing the NPDES program. This rule establishes national requirements for Phase III facilities with cooling water intake structures. NPDES-authorized States that currently do not comply with the proposed regul ations based on this rule might need to amend their regulations or statutes to ensure that their NPD ES programs are consistent with Federal section 316(b) requirements. (See 40 CFR 123.62(e).) For purposes of this rule, the relationship and distribution of power and responsibilities between the Federal government and the State and local governments are established under the CWA (e.g., sections 402(b) and 510); nothing in this rule alters that. Thus, the requirements of section 6 of the Executive Order do not apply to this rule. Although section 6 of Executive Order 13132 does not apply to this rule, EPA did consult with State governments and representatives of local governments in developing de finitions and concepts relevant to the section 316(b) rulemaking and this proposed rule:

< 

### During the development of the proposed section 316(b) rule for new facilities (Phase I), EPA conducted several outreach activities through which State and localofficials were informed about the section 316(b) rulemaking effort. These officials then provided in formation and comments to the Agency. The outreach activities were intended to provide EPA with feedb ack on issues such as adverse environmental impact, BTA, and the potential cost associated with various regulatory alternatives.

< 

### EPA has made presentations on the section 316(b) rulemaking effort in general at eleven professional and industry association meetings. EPA also conducted tw o public meetings in June and September of 1998 to discuss issues related to the section 316(b) rule making effort. In September 1998 and April 1999, EPA staff participated in technical workshops sponsoredby the Electric Power Research Institute on issues relating to the definition and assessment of adverse e nvironmental impact. EPA staff have worked with numerous States such as New York, New Jersey, California, Rhode Island, and Massachusetts and regions such as Region 1 and Region 9. EPA further organi zed a meeting of technical experts (May 23, 2001) and a Symposium on Technologies for Protecting Aquatic Organisms from Cooling Water Intake Structures (BTA symposium, May 6-7, 2003).

< 

### EPA met with the Association of State and In terstate Water Pollution Control Administrators (ASIWPCA) and, with the assistance of ASIWPCA, conducted a conference call in which representatives from 17 States or interstate organizations participated.

< 

### EPA met with OMB and utility representatives and other Federal agencies (the Department of Energy, the Small Business Administration, the Tennessee Valley Authority, the National Oceanic and Atmospheric Administration’s National Marine Fisheries Service and the Department of Interior’s U.S. Fish and Wildlife Service).§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

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### < 

### EPA received more than 130 comments on the Phase I proposed rule and Notice of Data Availability (NODA). State and local government representatives from the following States submitted comments: Alaska, California, Florida, Louisiana, Maryland, Michigan, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Penns ylvania, and Texas. In addition, EPA received more than 170 comments on the Phase II proposed ru le and NODA, including comments from State and local government representatives from Arkansas, Alab ama, Indiana, Tennessee, and Rhode Island. In some cases these comments have informed the de velopment of the Phase III rulemaking effort.

< 

### On May 23, 2001, EPA held a day-long forum to discu ss specific issues associatedwith the development of regulations under section 316(b). At the meeting, 17 experts from industry, public interest groups, States, and academia reviewed and discussed the Ag ency’s preliminary data on cooling water intake structure technologies that are in place at existing facilities and the costs associated with the use of available technologies for reducing impingement and entrainment. Over 120 people attended the meeting. In the spirit of this Executive Order and consistent with EPA policy to promote communications between EPA and State and local governments, the preamble to this proposed rule specifically solicits comment from State and local officials.



## D3-4 E XECUTIVE 

## O RDER 

## 13175: C ONSULTATION AND 

## C OORDINATION 

## W ITH 

## I NDIAN 

## T RIBAL 

## G OVERNMENTS 

### Executive Order 13175 (65 FR 67249, November 6, 2000) requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more IndianTribes, on the relationship between the Federal government and the Indian Tribes, or on the distribution of power and responsibilities between the Federal government and Indian Tribes.” This proposed rule does not have tribal im plications. It would not havesubstantial direct effects on tribal governments, on the relationship between th e Federal government and Indian Tribes, or on the distribution of power and responsibilities between the Fe deral government and Indian Tribes, as specified in Executive Order 13175. EPA’s analyses show that no fac ility subject to Phase III regulation is owned by tribal governments. This proposed rule does not affect Tribes inany way in the foreseeable future. Accordingly, the requirements of Executive Order 13175 do not apply to this rule.



## D3-5 E XECUTIVE 

## O RDER 

## 13045: P ROTECTION OF 

## C HILDREN FROM 

## E NVIRONMENTAL 

## H EALTH 

## R ISKS AND 

## S AFETY 

## R ISKS 

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



## D3-6 E XECUTIVE 

## O RDER 

## 13211: A CTIONS 

## C ONCERNING 

## REGULATIONS 

## T HAT 

## S IGNIFICANTLY 

## A FFECT 

## E NERGY 

## S UPPLY 

## , D ISTRIBUTION 

## , OR 

## U SE§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

D3-5 

### Executive Order 13211, (“Actions Concerning Regulations Th at Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001)) requires EPA to prepare a Statement of Energy Effects when undertaking regulatory actions identified as “significant energy actions.” For the purposes of Executive Order 13211, “significant energy action” means: “any action by an agency (normally published inthe Federal Register) that promulgates or is expected to lead to the promulgation of a proposed rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1) (i) that is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs (OIRA) as a significant energy action.” For those regulatory actions identified as “significant energy actions,” a Statement of Energy Effects must include a detailed statement relating to (1) any adverse effects on en ergy supply, distribution, or use (including a shortfall in supply, price increases, and increased use of foreign s upplies) and (2) reasonable alternatives to the action with adverse energy effects and the expected effects of su ch alternatives on energy supply, distribution, and use. This rule is not a “significant energy action” as define d in Executive Order 13211 because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The proposed rule does not contain any compliance requirements that would:

< 

### reduce crude oil supply in excess of 10,000 barrels per day;

< 

### reduce fuel production in excess of 4,000 barrels per day;

< 

### reduce coal production in excess of 5 million tons per day;

< 

### reduce electricity production in excess of 1 billion kilowatt hours per day or in excess of 500 megawatts of installed capacity;

< 

### increase energy prices in excess of 10 percent;

< 

### increase the cost of energy distribution in excess of 10 percent;

< 

### significantly increase dependence on foreign supplies of energy; or

< 

### have other similar adverse outcomes, particularly unintended ones. Of the potential significant adverse effects on the supply, di stribution, or use of energy (listed above) only a few apply to this proposed rule. Regulation of Electric Generators, through increases in the cost of generating electricity and shifts in the types of generators em ployed, might affect (1) the production of coal, (2) the production of electricity, (3) the amount of installed capacity, (4) energy prices, and (5) the dependence on foreign supplies of energy. Regulation of new offshore o il and gas facilities might affect (1) the production of oil and gas, (2) energy prices, and (3) the dependence on foreign supplies of energy. While facilities in the Manufacturing industry segments generate electricity, their contribution to the overall supply of electricity is insignificant (less than 0.02%); therefore, compliance with the 316(b) Phase III regulation by this industry segment would not perceptibly affect the supply, distribution, or use of energy. Potential energy effects associated with the regulation of existing Electric Generators and new offshore oil and gas extraction facilities are describedin the following two subsections. D3-6.1 Existing Electric Generators The three proposed options for Electric Generators have design intake flow (DIF) applicability thresholds for national categorical requirements of 50 MGD or greater, 100 MGD or greater, and 200 MGD or greater. Since Electric Generators with a DIF of 50 MGD or greater were covered by the final Phase II rule, no Phase III§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

1 This conversion assumes an average energy c ontent of 10,115 Btu per pound of coal (U.S. DOE, 2000).

D3-6 

### Generator would be subject to the national requirements under the three proposed options; therefore there would be no impacts on any measures of energy supply, distribution, or use under the proposed rule. To assess potential energy effect of alternative evaluate d options for Electric Generators, EPA used the results from its electricity market model analysis (see the Appendix to Chapter B5: Economic Impact Analysis for Electric Generators ). EPA compared the post-compliance scenario (after the implementation of Phase III compliance requirements) with Base Case 2 (incl uding Phase II compliance costs but excluding Phase III compliance costs). This comparison allows EPA to id entify the incremental market-level effects of Phase III regulation, beyond the effects of Phase II regulation. It should be noted that this analysis was only conducted for Option 6, the most inclusive option with the highest regul atory costs and potential for energy effects. Therefore, the potential energy effects of all other options evaluated by EPA would be lower. 

##  ̃ Production of coal EPA estimates that Option 6 would decrease the annual use of coal for electricity generation by 53.8 trillion Btu (TBtu), or 0.25%. This reduction converts to 2.66 million tons of coal per year or 7,286 tons of coal per day. 1 

### Assuming that a reduction in the use of coal for electri city generation results in a similar reduction in coal production, EPA concludes that Option 6 would not havea significant impact on the national production of coal as defined by the thresholds listed above. 

##  ̃ Production of electricity EPA’s electricity market analysis did not allow for an explicit consideration of the changes in the production of electricity. However, based on the small effects on inst alled capacity and electricity prices, EPA concludes that Option 6 would not reduce electricity production in excess of 1 billion kilowatt hours per day. 

##  ̃ Installed capacity None of the evaluated options contain requirements that would permanently reduce installed capacity, for example through parasitic losses or auxiliary power require ments. However, the rule does contain requirements that may lead to one-time temporary downtimes of up to ni ne weeks of steam electric generators subject to Phase III regulation. EPA estimates that under Option 6 approximately four facilities, accounting for 145 megawatts (MW) of generating capacity, would experience such dow ntimes. However, EPA’s analyses indicate that these downtimes would not have a significant adverse effect on the supply, distribution, or use of energy (see the Appendix to Chapter B5: Economic Impact Analysis for Electric Generators ). In addition, EPA estimates that Option 6 would lead to only 173 MW in incremental permanent capacity closures, well below the 500 MW impact threshold. 

##  ̃ Energy prices Option 6 would not significantly affect energy prices in either the long run or the short run. EPA estimates that, in the long run, energy prices would rise by less than 1% in all but one North American Electric Reliability Council (NERC) regions. The Electric Reliability Council of Texas (ERCOT) is estimated to have the largest increase in electricity prices with 1.1% in 2010 and 5.2% in 2013. No other region would experience energy price increases of more than 0.2% as a result of Phase III regulation. 

##  ̃ Dependence on foreign supplies of energy EPA’s electricity market analysis did not allow for anexplicit consideration of effects on foreign imports of energy. However, Electric Generators which are generallynot subject to significant foreign competition. (Only Canada and Mexico are connected to the U.S. electri city grid, and transmission losses are substantial when electricity is transmitted over long distances.) In addition, the effects on installed capacity and electricity prices, are estimated to be small. EPA therefore concludes that Option 6 would not significantly increase dependence on foreign supplies of energy.§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

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### D3-6.2 New Offshore Oil and Gas Extraction Facilities This rule applies only to new offshore oil and gas ex traction facilities and not existing ones. Hence the rule would have no impact on existing produc tion of oil and gas, energy prices, installed capacity, nor would it significantly increase dependence on foreign supplies of energy. EPA’s analysis identified no barriers to entry or energy effects. EPA therefore concludes that the propo sed rule would not significantly affect new offshore oil and gas production, energy prices, or dependence on foreign supplies of energy. Based on these analyses for potentially regulated existing and new facilities, EPA concludes that this proposed rule would have minimal energy effects at a national and regional level. As a result, EPA did not prepare a Statement of Energy Effects.



## D3-7 N ATIONAL 

## T ECHNOLOGY 

## T RANSFER AND 

## A DVANCEMENT 

## A CT OF 

## 1995 Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) of 1995, Pub L. No. 104- 113, Sec. 12(d) directs EPA to use voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicablelaw 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 standardbodies. The NTTAA directs EPA to provide Congress, through the Office of Management and Budget (OMB), e xplanations when the Agency decides not to use available and applicable voluntary consensus standards. This proposed rule does not involve such technical standard s. Therefore, EPA is not considering the use of any voluntary consensus standards.



## D3-8 E XECUTIVE 

## O RDER 

## 12898: F EDERAL 

## A CTIONS TO 

## A DDRESS 

## E NVIRONMENTAL 

## J USTICE IN 

## M INORITY 

## P OPULATIONS AND 

## L OW 

## -I NCOME 

## P OPULATIONS 

### Executive Order 12898 (59 FR 7629, February 11, 1994) requi res that, to the greatest extent practicable and permitted by law, each Federal agency must make achieving environmental justice part of its mission. E.O. 12898 provides that each Federal agency must conduct its programs, policies, and activities that substantially affect human health or the environment in a manner th at ensures such programs, policies, and activities do not have the effect of (1) excluding persons (including populations) from partic ipation in, or (2) denying persons (including populations) the benefits of, or (3) subjecting persons (includi ng populations) to discrimination under such programs, policies, and activities because of their race, color, or national origin. Today’s proposed rule requires that the location, desi gn, construction, and capacity of cooling water intake structures (CWIS) at Phase III facilities reflect the best technology available for minimizing adverse environmental impact. For several reasons, EPA does not expect that this proposed rule would have an exclusionary effect, deny persons the benefits of the participation in a program, or subject persons to discrimination because of their race, color, or national origin. In fact, because EPA expects that this proposed rule would help to preserve the health of aquatic ecosy stems located in reasonable proximity to Phase III facilities, it believes that all populations, including minority and low-income populations, would benefit from improved environmental conditions as a result of this rule.



## D3-9 E XECUTIVE 

## O RDER 

## 13158: M ARINE 

## P ROTECTED 

## A REAS 

### Executive Order 13158 (65 FR 34909, May 31, 2000) requir es 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 protecti on of existing marine protected areas and to establish or recommend, as§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

D3-8 

### appropriate, new marine protected areas. The purpose of the Executive Order is to protect the significant natural and cultural resources within the marine environment, wh ich 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 intern ational law.” EPA expects that the Proposed Section 316(b) Rule for Phase III Facilities would advance the objective of Executive Order 13158. Marine protected areas (MPAs) include designated areas withvarying levels of protection, from fishery closure areas, to aquatic National Parks, Marine Sanctuaries, and Wildlife Refuges (NOAA, 2002). The Departments of Commerce and the Interior are developing an inventory of MPAs in the U.S. that are protected and managed under Federal, State, Territorial, Tribal, or local laws. This list has not been completed, but it currently includes 32 Federal sites in the New England region, 31 in the Middl e Atlantic region, 43 in the South Atlantic region, 45 in the Gulf of Mexico region, 12 in the Caribbean regi on, 15 in the Great Lakes region, and 46 in the U.S. West Coast region. Examples of marine protected areas in clude the Great Bay National Wildlife Refuge in New Hampshire, the Cape Cod Bay Northern Right Whale Critical Habitat in Massachusetts, the Narragansett Bay National Estuarine Research Reserve in Rhode Island, Everglades National Park and the Tortugas Shrimp Sanctuary in Florida, and the Point Reyes National Seashore in California. Marine protected areas can help address problems related to the depletion of marine resources by prohibiting, or severely curtailing, activities that are permitted or regulated by law outside of marine protected areas. Such activities include oil exploration, dredging, dumping, fish ing, certain types of vessel traffic, and the focus of section 316(b) rulemaking, the impingement and entrainment of aquatic organisms by cooling water intake structures. Impingement and entrainment affects many kinds of aquatic organisms, including fish, shrimp, crabs, birds, sea turtles, and marine mammals. Aquatic environments are harmed both directly and indirectly by impingement and entrainment of these organisms. In addition to the harm that results from the direct removal of organisms by impingement and entrainment, there are the indirect e ffects on aquatic food webs that result from the impingement and entrainment of organisms that serve as prey for predator species. There are also cumulative impacts that result from multiple intake structures operating in the same local area, or when multiple intakes affect individuals within the same population over a broad geographic range. Decreased numbers of aquatic organisms resulting from th e direct and indirect effects of impingement and entrainment can have a number of consequences for marine resources, including impairment of food webs, disruption of nutrient cycling and energy transfer withinaquatic ecosystems, loss of native species, and reduction of biodiversity. By reducing the impingement and entrainment of aquatic organisms, this proposed rule would not only help protect individual species but also the overall marine environment, thereby advancing the objective of Executive Order 13158 to protect marine areas.§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

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## REFERENCES


### Executive Office of the President. 2001. Executive Order 13211. “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.” 66 FR 28355. May 22, 2001.
Executive Office of the President. 2000a. Executive Order 13175. “Consultation and Coordination with Indian Tribal Governments.” 65 FR 67249, November 6, 2000. Executive Office of the President. 2000b. Executive Order 13158. “Marine Protected Areas.” 65 FR 34909, May 31, 2000. Executive Office of the President. 1999. Executive Order 13132. “Federalism.” 64 FR 43255. August 10, 1999.
Executive Office of the President. 1997. Executive Order 13045. “Protection of Children from Environmental Health Risks and Safety Risks.” 62 FR 19885, April 23, 1997.
Executive Office of the President. 1994. Executive Order 12898. “Federal Actions to Address Environmental Justice in Minority Populations and Low-IncomePopulations.” 59 FR 7629, February 11, 1994.
Executive Office of the President. 1993. Executive Or der 12866. “Regulatory Planning and Review.” 58 FR 51735. October 4, 1993. National Oceanic and Atmospheric (NOAA) and U.S. Depa rtment of Commerce. 2002. Marine Protected Areas of the United States. http://mpa.gov/welcome.html. Accessed 2/22/02. Paperwork Reduction Act (PRA). 44 U.S.C. 3501 et seq. U.S. Department of Commerce (U.S. DOC), Bureau of the Census. 2000. 2000 Census of Population and Housing

. U.S. Department of Commerce (U.S. DOC), Bureau of the Census. 1998. 1998 Small Area Income and Poverty Estimates

. U.S. Department of Energy (U.S. DOE), Energy Information Administration (EIA). 2000. Coal Industry Annual 2000 Data Tables, Table 106 Average Quality of Coal Received at Electric Utilities by Census Division and State, 1991, 1996-2000. Table data from Federal Energy Regulatory Commission, FERC Form 423, Monthly Report of Cost and Quality of Fuels for Electric Plants . Accessed 11/24/03. U.S. Department of the Interior (U.S. DOI), Fish and Wildlife Service, and U.S. Department of Commerce, Bureau of the Census. 1997. 1996 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation

. U.S. Environmental Protection Agency (U.S. EPA). 2004. Information Collection Request (ICR) for Cooling Water Intake Structures Phase III Proposed Rule. ICR Number 2169.01. October 2004.§ 316(b) Proposed Rule: Phase III – EA, Part D: Additional Economic Analyses D3: Other Administrative Requirements

D3-10 

## T HIS 

## PAGE 

## I NTENTIONALLY 

## L EFT 

## B LANK§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-1 

# Chapter E1: Summary of Social Costs

I NTRODUCTION 

### This chapter presents EPA’s estimates of the costs to society associated with the options evaluated for the proposed rule for Phase III facilities. The social costs of regulatory actions are the opportunity costs to society of employing scarce resources to reduce environmental damages. The social costs of regulation include both monetary and non-monetary outlays made by society. Monetary outlays include the resource costs of compliance, government administrative costs, and other adjustme nt costs, such as the cost of relocating displaced workers. Non-monetary outlays, some of which can be assigned monetary values, include losses in consumers’ and producers’ surplus in affected product markets, the adverse effects of involuntary unemployment, possible loss of time (e.g., delays in investment decisions), and possible adverse impacts on the rate of innovation.
EPA’s estimates of social costs for the evaluated section 316(b) Phase III options include three components: 1. direct costs of complying with the regulation within each regulated industry segment, 2. cost to State governments in administering the regulation, and 3. cost to the Federal government in administering the regulation. This chapter presents the social cost analysis for the three proposed options for existing facilities: the “50 MGD for All Waterbodies” option (“50 MGD All”), the “200 MGD for All Waterbodies” option (“200 MGD All”), and the “100 MGD for Certain Waterbodies” Option (“100 MGD CW B”). These options differ with regard to (1) their design intake flow (DIF) applicability thresholds: 50, 100, and 200 MGD, respectively; and (2) the type of waterbodies to which they would apply: the options with the 50 and 200 MGD applicability thresholds would apply to all waterbody types while the option with the 100 MGD applicability threshold would apply only to facilities withdrawing cooling water from certain waterbody types (i.e., an ocean, estuary, tidal river/stream or one of the Great Lakes). Facilities meeting these applicability criteria would be required to meet similar performance standards to those required in the final 316(b) Ph ase II rule, including a 80-95% reduction in impingement mortality and a 60-90% reduction in entrainment. Facilities not meeting these applicability criteria would continue to be subject to permit requirements based on the Director’s Best Professional Judgment (BPJ). As a result, the number of facilities that would be required to meet the national requirements would vary among the three proposed options. Of the three options presente d here, the 100 MGD for Certain Waterbodies Option would apply national categorical requirements to the smallest number of facilities, with the 200 MGD for All Waterbodies Option and 50 MGD for All Waterbodies Op tion applying to successively larger numbers of facilities. This chapter also presents social co sts for new offshore oil and gas extraction facilities (also abbreviated as “new OOGE facilities”). The proposed requirements for this industry segment are based on a 2 MGD DIF applicability threshold and would apply to an estimated 124 new offshore oil and gas extraction facilities.



## E1-1 C OSTS OF 

## C OMPLIANCE BY 

## REGULATED 

## I NDUSTRY 

## S EGMENT 

### The compliance costs used to estimate total social costs differ in their c onsideration of taxes from those in Part B: Economic Analysis for Phase III Existing Facilities , and Part C: Economic Analysis for Phase III New Offshore Oil and Gas Extraction Facilities , which were calculated for the purpose of estimating the private costs and 

## C HAPTER 

## C ONTENTS E1-1 Costs of Compliance by Regulated Industry Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E1-1 E1-2 State and Federal Administrative Costs . . . . . . E1-4 E1-3 Total Social Cost . . . . . . . . . . . . . . . . . . . . . . . E1-4 E1-4 Limitations and Uncertainties . . . . . . . . . . . . E1-12 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E1-13 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E1-14 Appendix to Chapter E1 . . . . . . . . . . . . . . . . . . . . . E1A-1§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

1 Because government facilities and cooperatives are not subject to income taxes, their costs are not adjusted for taxes.

2To the extent such impacts occur under any of the options analyzed.

3 Including costs for regulatory closures yields an estimate of social costs assuming that all facilities, except those assesse d as baseline closures, would incur the costs of regulatory compliance and continue to operate post-regulation. Calculating costs a s if all facilities continue operating will overstate soci al costs if the social cost of compliance is greater than the net economic los s to society from facility closure. Whether this result w ill hold depends, in part, on the difference be tween social and private discount rates, and the marginal cost to society to replace the lost production of goods and services in closing facilities.

E1-2 

### impacts of the evaluated options. For the impact an alyses, compliance costs are measured according to their effect on the financial performance of the regulated faciliti es and firms. The analyses therefore explicitly consider the tax deductibility of compliance outlays. 1 

### In the analysis of costs to so ciety, however, these compliance costs are considered on a pre-tax basis. The costs to society are the full value of the resources used, whether they are paid for by the regulated facilities or by all taxpayers in the form of lost tax revenues.
EPA included no costs for facilities that were assessed as baseline closures or that are subject to permit specifications based on best professional judgement (BPJ), instead of the proposed rule’s national categorical requirements. However, EPA’s estimates do include comp liance costs for facilities es timated to close because of the rule. 2

### This approach may overstate the social costs of compliance, to the extent that the net economic loss to society in facility closures is less than th e estimated cost to society of compliance. 3 

### To assess the cost to society of complying with Phase III re gulation, EPA estimated the costs to facilities for the labor, equipment, materials, and other economic resources n eeded to comply with each evaluated option. In this analysis, EPA assumed that the market prices for labor, equipment, materials, and other compliance resources represent the opportunity costs to society for u se of those resources in regulatory compliance. For the analysis of installation downtime in the El ectric Generators and Manufacturers segment, EPA assumed that the cost of society is equal to the increase in produc tion cost for providing the electricity or other replacement goods and services not provided by the facilities that incur downtime in reaching compliance with the 316(b) Phase III regulation. For both Electric Generators and Manufacturers, this cost is approximated as the lost revenue from installation downtime lessthe variable cost of producing the electricity or other goods and services not produced due to the installation downtime. Implicit inthis assumption is that the variable production cost of replacing the electricity or other lost goods and services is essentially the same as the price received for the sale of the electricity or other goods and services not produced by the facilities incurring the installation downtime. For electricity, this assumption is consistent with the electricitymarket concept that the variable production cost of the last generating unit to be dispatched is approximate ly the same as the price received for the last unit of production. For the goods and services not produced by affected Manufacturers facilities, the assumption is likewise consistent with a competitive market model of increasing marginal production cost, such that the production cost of the “last” or highest cost goods and services produced and sold in any period is approximately equal to the price received for those goods and services in the market. For Manufacturers – which do not necessarily produce and sell goods in as orderly markets as electric generators and where, as a result, the cost of producing replacement goods and services may be less than selling price – this assumption may overstate the cost to society of installation downtime. Absent specific knowledge of the overall production cost structure of the affected industries, EPA adopted this conservative assump tion for its analysis of the social cost of Phase III regulation. EPA estimates that the offshore oil and gas extraction i ndustry segment would not incur cost from installation downtime because only new offshore oil and gas extraction facilities would be regulated under this proposed rule. The potential disruption in ongoing business operation es timated for existing Manufacturers and Electric Generators is not relevant for new facilities. Finally, EPA assumes in its social cost analysis that noneof the evaluated options would affect the aggregate quantity of goods and services sold to consumers by produ cers in the affected industry segments. The resource costs of compliance therefore manifest only as a reduction in the total of producers’ surplus and consumers’§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

4Tables E1-4 through E1-6 below present the time profiles of re gulatory costs associated with each of the proposed options for existing facilities, combined with the proposed option for new offshore oil and gas extraction facilities.

E1-3 

### surplus , with no change in the quantity of goods and servi ces produced and consumed. In the impact analyses, specific assumptions are made about the distribution of this effect between producers and consumers (i.e., the impact analyses of all analyzed section 316(b) Phase III industry segments – Manufacturers, Electric Generators, and new offshore oil and gas extraction facilities – assume that all compliance costs are absorbed by complying businesses with no increase in prices to consumers). However, for the social cost analysis, the distribution of this effect between producers and consumers is irrelevant. Gi ven the very small impact of the options on total costs within the industry segments, EPA believes the assumpti on of no effect on total quantity of goods and services produced and consumed is reasonable. Table E1-1 below summarizes total direct facility costs fo r the proposed rule new offshore oil and gas extraction facilities combined with the three proposed opti ons for existing facilities. As described in Chapter B1: Summary of Cost Categories and Key Analysis Elements for Existing Facilitiesand Chapter C1: Summary of Cost Categories and Key Analysis Elements for Ne w Offshore Oil and Gas Extraction Facilities , costs were first tallied on an as-incurred, year-by-year basis over the total time period of analysis, considering the latest year in which any affected facility is assumed to reach compliance (2014 for existing facilities, 2026 for new offshore oil and gas extraction facilities) and for a period of 30 years in which facilities are assumed to continue compliance, for the purposes of the social cost analysis. Thus, for the so cial cost analysis, the analysis period extends to 2055 for new facilities and to 2043 for existing facilities. 4

### These profiles of costs by year were then discounted to the assumed year when this proposed rule would take eff ect, beginning of year 2007, at two values of the discount rate, 3% and 7%. These discount ratevalues reflect guidance from the Office of Management and Budget (OMB) regulatory analysis guidance document, Circular A-4 (OMB, 2003). After calculating the present value of these cost streams, EPA calculated their constant annual equi valent value (annualized valu e) using the annualization formula presented in Chapter B1, again using th e two values of the discount rate, 3% and 7%.

Table E1-1: Summary of Annualized DirectCosts by Regulated Industry Segments (in millions, 2003 $) 50 MGD All (Existing) / 2 MGD All (New) 200 MGD All (Existing) / 2 MGD All (New) 100 MGD CWB (Existing) / 2 MGD All (New) 3% 7% 3% 7% 3% 7% Existing Manufacturing Facilities Primary Manufacturing Industrie s $42.7 $45.1 $21.7 $23.1 $16.7 $17.4 Other Industries $4.1 $4.4 $1.0 $0.9 $0.7 $0.7 Existing Electric Generators $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Total Existing Facilities a $46.8 $49.5 $22.6 $24.0 $17.5 $18.1 New Oil & Gas Facilities $3. 2 $2.7 $3.2 $2.7 $3.2 $2.7 Total Direct Facility Costs a $50.0 $52.2 $25.9 $26.7 $20.7 $20.8

aIndividual numbers may not add up tototals due to independent rounding. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-4 

## E1-2 S TATE AND 

## F EDERAL 

## A DMINISTRATIVE 

## C OSTS


### Social costs also include costs to State and Federal governments of administering the permitting and compliance monitoring activities under the proposed regulation. St ate and Federal permitting authorities incur costs to administer the rule, including labor costs to write permits and to conduct compliance monitoring and enforcement activities. Chapter D2: UMRA Analysispresents more information on State and Federal implementation costs. EPA’s estimate of State and Federal government cost for administering the proposed rule is comparatively minor in relation to the estimated direct cost of regulatory compliance. At a 3% discount rate, EPA estimates administrative costs of $0.98 million (50 MGD All Option), $0.54 million (200 MGD All Option), and $0.57 million (100 MGD CWB Option). At a 7% discount rate, these costs amount to $0.89 million (50 MGD All Option), $0.45 million (200 MGD All Option), and $0.48 million (100 MGD CWB Option).

Table E1-2: Summary of Annualized Government Costs (in millions, 2003 $) 50 MGD All (Existing) / 2 MGD All (New) 200 MGD All (Existing) / 2 MGD All (New) 100 MGD CWB (Existing) / 2 MGD All (New) 3% 7% 3% 7% 3% 7% Existing Facilities: State Admin. Costs $0. 55 $0.55 $0.12 $0.12 $0.15 $0.16 Federal Admin. Costs $0.01 $0. 01 <$0.01 < $0.01 < $0.01 < $0.01 Total Existing Facilities Admin. Cost a $0.56 $0.56 $0.12 $0.13 $0.15 $0.16 New OOGE Facilities:
State Admin. Costs n/a n/a n/a n/a n/a n/a Federal Admin. Costs $0. 42 $0.32 $0.42 $0.32 $0.42 $0.32 Total New OOGE Facilities Admin. Cost $0.42 $0.32 $0.42 $0.32 $0.42 $0.32 Total Gov. Admin. Costs a $0.98 $0.89 $0.54 $0.45 $0.57 $0.48

a Individual numbers may not add up to totals due to independent rounding. Source: U.S. EPA Analysis, 2004.



## E1-3 T OTAL 

## S OCIAL 

## C OST 

### Table E1-3 combines the information presented above by industry segment and major cost category – direct facility costs and administrative costs – and reports the to tal social costs of the three proposal options, discounted at a 3% and 7% rate. At a 3% discount rate the estimated total annualized social costs are $51.0 million for the 50 MGD All Option, $26.4 million for the 200 MGD All Option, and $21.3 million for the 100 MGD CWB Option. At a 7% discount rate the estimated total annualized social costs are $53.1 million for the 50 MGD All Option, $27.2 million for the 200 MGD All Option, and $21.3 million for the 100 MGD CWB Option (all values in 2003$). As shown in Table E1-3, existing facilities account for the s ubstantial majority of total social cost under all three proposal options. Since no Electric Generators would besubject to the national requirements under any of the three proposed options, Manufacturers account for all cost s in the existing facilities segment. At a 3% discount rate, annualized pre-tax costs per facilityin the Manufacturers segment amount to $349,000 for the 50 MGD All option, $920,000 for the 200 MGD All option, and $929,000 for the 100 MGD CWB option. At a 7% discount§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-5 

### rate, annualized pre-tax costs in the Manufacturers segment amount to $369,000 for the 50 MGD All option, $974,000 for the 200 MGD All option, and $962,000 for the 100 MGD CWB option. Because the 200 MGD option and the 100 MGD option apply national categorical re quirements to a smaller number of facilities than the 50 MGD option, they result in a lower total national costbut a higher cost per regulated facility. Facilities that are subject to the national requirements of the 200 MGD option and the 100 MGD option incur the same compliance costs as under the 50 MGD option; however, the average costs per regulated facility are higher under the 200 MGD and 100 MGD options because only the higher fl ow, and therefore higher cost, facilities incur costs under these options. For facilities in the new offshore oil and gas extraction industry segment, per facilitycosts under the proposed rule are approximately $30,000 at a 3% discount rate and $24,000 at a 7% discount rate.

Table E1-3: Summary of Annualized Social Costs (in millions, 2003 $)
50 MGD All (Existing) / 2 MGD All (New) 200 MGD All (Existing) / 2 MGD All (New) 100 MGD CWB (Existing) / 2 MGD All (New) 3% 7% 3% 7% 3% 7% Existing Facilities: Total Direct Facility Costs $46.8 $49.5 $22.6 $24.0 $17.5 $18.1 Total Government Administrative Costs $0.6 $0.6 $0.1 $0.1 $0.2 $0.2 Total Existing Facilities Social Cost $47.3 $50.1 $22.8 $24.1 $17.6 $18.3 New OOGE Facilities: Total Direct Facility Costs $3.2 $2.7 $3.2 $2.7 $3.2 $2.7 Total Government Administrative Costs $0.4 $0.3 $0.4 $0.3 $0.4 $0.3 Total New OOGE Facilities Social Cost $3.7 $3.0 $3.7 $3.0 $3.7 $3.0 Total Social Cost $51.0 $53.1 $26.4 $27.2 $21.3 $21.3

a Individual numbers may not add up to totals due to independent rounding. Source: U.S. EPA Analysis, 2004



### .
Tables E1-4 through E1-6, starting on the following page, provide additional detail on the compliance cost calculations. The tables compile, for each of the three proposed options for existing facilities and the proposed option for new offshore oil and gas extraction facilities, the time profiles of costs incurred by the regulated industry segments, administrative costs, and total cost s. The tables also report the calculated present and annualized values of costs at 3% and 7% discount rates. Time profiles for other options evaluated for existing facilities are presented in the appendix to this chapter.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-6 

### Table E1-4: Time Profile of Compliance Costs for the 50 MGD for All Waterbodies Option for Existing Facilities and the Proposed Option for New OOGE Facilities (in millions; 2003$)

Year Existing Facilities New OOGE Facilities

Total Regulated Industry Segments Administrative Costs Total O&G Facilities Administrative Costs Total Man. Generators 2007 $3.2 $0.0 $0.2 $3.3 $1.9 $0.0 $1.9 $5.2 2008 $10.2 $0.0 $0.0 $10.2 $1.7 $0.0 $1.7 $12.0 2009 $15.4 $0.0 $0.0 $15.4 $1.8 $0.0 $1.8 $17.2 2010 $171.6 $0.0 $1.1 $172.6 $1.1 $0.0 $1.1 $173.7 2011 $178.4 $0.0 $2.1 $180.5 $1.6 $0.0 $1.6 $182.2 2012 $73.4 $0.0 $1.1 $74.4 $1.9 $0.5 $2.4 $76.8 2013 $109.9 $0.0 $0.9 $110.8 $2.2 $0.1 $2.4 $113.2 2014 $21.9 $0.0 $0.3 $22.2 $2.1 $0.7 $2.7 $24.9 2015 $22.2 $0.0 $0.4 $22.7 $1.8 $0.3 $2.0 $24.7 2016 $17.8 $0.0 $0.7 $18.6 $1.6 $0.3 $1.9 $20.5 2017 $18.2 $0.0 $0.4 $18.6 $4.1 $0.5 $4.6 $23.2 2018 $14.9 $0.0 $0.4 $15.3 $2.7 $0.3 $3.0 $18.2 2019 $18.8 $0.0 $0.2 $19.0 $3.7 $0.5 $4.2 $23.2 2020 $44.1 $0.0 $0.4 $44.5 $2.8 $0.3 $3.2 $47.7 2021 $81.0 $0.0 $0.7 $81.7 $2.8 $0.4 $3.2 $85.0 2022 $28.8 $0.0 $0.4 $29.2 $4.8 $0.7 $5.5 $34.7 2023 $57.9 $0.0 $0.4 $58.2 $2.9 $0.4 $3.3 $61.5 2024 $21.9 $0.0 $0.2 $22.1 $4.4 $0.7 $5.1 $27.2 2025 $22.2 $0.0 $0.4 $22.7 $3.0 $0.4 $3.4 $26.1 2026 $17.8 $0.0 $0.7 $18.6 $2.9 $0.4 $3.3 $21.9 2027 $18.2 $0.0 $0.4 $18.6 $4.9 $0.7 $5.6 $24.2 2028 $14.9 $0.0 $0.4 $15.3 $2.8 $0.3 $3.1 $18.4 2029 $18.8 $0.0 $0.2 $19.0 $4.1 $0.7 $4.7 $23.7 2030 $44.1 $0.0 $0.4 $44.5 $2.8 $0.3 $3.1 $47.7 2031 $81.0 $0.0 $0.7 $81.7 $2.8 $0.3 $3.1 $84.9 2032 $28.8 $0.0 $0.4 $29.2 $5.1 $0.7 $5.8 $35.0 2033 $57.9 $0.0 $0.4 $58.2 $2.8 $0.3 $3.1 $61.4 2034 $21.9 $0.0 $0.2 $22.1 $4.6 $0.7 $5.2 $27.3 2035 $22.2 $0.0 $0.4 $22.7 $2.8 $0.3 $3.1 $25.8 2036 $17.8 $0.0 $0.7 $18.6 $2.8 $0.3 $3.1 $21.7§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs


### Table E1-4: Time Profile of Compliance Costs for the 50 MGD for All Waterbodies Option for Existing Facilities and the Proposed Option for New OOGE Facilities (in millions; 2003$)

Year Existing Facilities New OOGE Facilities

Total Regulated Industry Segments Administrative Costs Total O&G Facilities Administrative Costs Total Man. Generators

E1-7 2037 $18.2 $0.0 $0.4 $18.6 $3.9 $0.7 $4.6 $23.2 2038 $14.9 $0.0 $0.4 $15.3 $1.8 $0.3 $2.1 $17.4 2039 $14.2 $0.0 $0.2 $14.4 $3.0 $0.6 $3.6 $18.0 2040 $12.0 $0.0 $0.1 $12.1 $1.7 $0.3 $2.0 $14.1 2041 $6.2 $0.0 $0.1 $6.3 $1.7 $0.2 $1.9 $8.2 2042 $4.1 $0.0 $0.0 $4.1 $3.6 $0.5 $4.1 $8.3 2043 $0.5 $0.0 $0.0 $0.5 $1.6 $0.2 $1.8 $2.4 2044 $2.4 $0.4 $2.8 $2.8 2045 $1.5 $0.2 $1.7 $1.7 2046 $1.5 $0.2 $1.6 $1.6 2047 $2.1 $0.3 $2.4 $2.4 2048 $0.5 $0.1 $0.6 $0.6 2049 $1.0 $0.2 $1.3 $1.3 2050 $0.3 $0.1 $0.4 $0.4 2051 $0.2 $0.1 $0.3 $0.3 2052 $1.5 $0.1 $1.6 $1.6 2053 $0.1 $0.0 $0.2 $0.2 2054 $0.6 $0.1 $0.7 $0.7 2055 $0.0 $0.0 $0.1 $0.1 PV 3% $944.6 $0.0 $11.2 $955. 8 $65.4 $8.5 $74.0 $1,029.8 Annualized 3% $46.8 $0.0 $0. 6 $47.3 $3.2 $0.4 $3.7 $51.0 PV 7% $657.5 $0.0 $7.5 $665.0 $36.0 $4.3 $40.3 $705.3 Annualized 7% $49.5 $0.0 $0. 6 $50.1 $2.7 $0.3 $3.0 $53.1 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-8



### Table E1-5: Time Profile of Compliance Costs for the 200 MGD for All Waterbodies Option for Existing Facilities and the Proposed Option for New OOGE Facilities (in millions; 2003$)

Year Existing Facilities New OOGE Facilities
Total Regulated Industry Segments Administrative Costs Total O&G Facilities Administrative Costs Total Man. Generators 2007 $0.0 $0.0 $0.2 $0.2 $1.9 $0.0 $1.9 $2.1 2008 $1.4 $0.0 $0.0 $1.4 $1.7 $0.0 $1.7 $3.1 2009 $2.1 $0.0 $0.0 $2.1 $1.8 $0.0 $1.8 $3.9 2010 $129.1 $0.0 $0.0 $129.1 $1.1 $0.0 $1.1 $130.2 2011 $83.4 $0.0 $0.5 $83.8 $1.6 $0.0 $1.6 $85.4 2012 $12.1 $0.0 $0.1 $12.3 $1.9 $0.5 $2.4 $14.6 2013 $45.4 $0.0 $0.4 $45.8 $2.2 $0.1 $2.4 $48.1 2014 $7.4 $0.0 $0.1 $7.5 $2.1 $0.7 $2.7 $10.2 2015 $8.5 $0.0 $0.1 $8.5 $1.8 $0.3 $2.0 $10.6 2016 $7.4 $0.0 $0.2 $7.5 $1.6 $0.3 $1.9 $9.5 2017 $8.9 $0.0 $0.1 $9.0 $4.1 $0.5 $4.6 $13.5 2018 $7.4 $0.0 $0.1 $7.5 $2.7 $0.3 $3.0 $10.5 2019 $7.2 $0.0 $0.1 $7.3 $3.7 $0.5 $4.2 $11.5 2020 $12.7 $0.0 $0.0 $12.7 $2.8 $0.3 $3.2 $15.9 2021 $39.8 $0.0 $0.2 $40.0 $2.8 $0.4 $3.2 $43.2 2022 $14.6 $0.0 $0.1 $14.6 $4.8 $0.7 $5.5 $20.1 2023 $45.7 $0.0 $0.1 $45.8 $2.9 $0.4 $3.3 $49.1 2024 $7.3 $0.0 $0.1 $7.4 $4.4 $0.7 $5.1 $12.5 2025 $8.5 $0.0 $0.0 $8.5 $3.0 $0.4 $3.4 $11.9 2026 $7.4 $0.0 $0.2 $7.5 $2.9 $0.4 $3.3 $10.9 2027 $8.9 $0.0 $0.1 $9.0 $4.9 $0.7 $5.6 $14.6 2028 $7.4 $0.0 $0.1 $7.5 $2.8 $0.3 $3.1 $10.6 2029 $7.2 $0.0 $0.1 $7.3 $4.1 $0.7 $4.7 $12.0 2030 $12.7 $0.0 $0.0 $12.7 $2.8 $0.3 $3.1 $15.9 2031 $39.8 $0.0 $0.2 $40.0 $2.8 $0.3 $3.1 $43.1 2032 $14.6 $0.0 $0.1 $14.6 $5.1 $0.7 $5.8 $20.4 2033 $45.7 $0.0 $0.1 $45.8 $2.8 $0.3 $3.1 $48.9 2034 $7.3 $0.0 $0.1 $7.4 $4.6 $0.7 $5.2 $12.7 2035 $8.5 $0.0 $0.0 $8.5 $2.8 $0.3 $3.1 $11.6 2036 $7.4 $0.0 $0.2 $7.5 $2.8 $0.3 $3.1 $10.7 2037 $8.9 $0.0 $0.1 $9.0 $3.9 $0.7 $4.6 $13.6§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs 

### Table E1-5: Time Profile of Compliance Costs for the 200 MGD for All Waterbodies Option for Existing Facilities and the Proposed Option for New OOGE Facilities (in millions; 2003$)

Year Existing Facilities New OOGE Facilities
Total Regulated Industry Segments Administrative Costs Total O&G Facilities Administrative Costs Total Man. Generators

E1-9 2038 $7.4 $0.0 $0.1 $7.5 $1.8 $0.3 $2.1 $9.6 2039 $7.0 $0.0 $0.1 $7.1 $3.0 $0.6 $3.6 $10.6 2040 $6.7 $0.0 $0.0 $6.8 $1.7 $0.3 $2.0 $8.8 2041 $3.9 $0.0 $0.0 $3.9 $1.7 $0.2 $1.9 $5.9 2042 $3.0 $0.0 $0.0 $3.1 $3.6 $0.5 $4.1 $7.2 2043 $0.4 $0.0 $0.0 $0.4 $1.6 $0.2 $1.8 $2.2 2044 $2.4 $0.4 $2.8 $2.8 2045 $1.5 $0.2 $1.7 $1.7 2046 $1.5 $0.2 $1.6 $1.6 2047 $2.1 $0.3 $2.4 $2.4 2048 $0.5 $0.1 $0.6 $0.6 2049 $1.0 $0.2 $1.3 $1.3 2050 $0.3 $0.1 $0.4 $0.4 2051 $0.2 $0.1 $0.3 $0.3 2052 $1.5 $0.1 $1.6 $1.6 2053 $0.1 $0.0 $0.2 $0.2 2054 $0.6 $0.1 $0.7 $0.7 2055 $0.0 $0.0 $0.1 $0.1 PV 3% $457.2 $0.0 $2.5 $459.7 $65.4 $8.5 $74.0 $533.6 Annualized 3% $22.6 $0.0 $0. 1 $22.8 $3.2 $0.4 $3.7 $26.4 PV 7% $318.7 $0.0 $1.7 $320.3 $36.0 $4.3 $40.3 $360.6 Annualized 7% $24.0 $0.0 $0. 1 $24.1 $2.7 $0.3 $3.0 $27.2 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-10 

### Table E1-6: Time Profile of Compliance Costs fo r the 100 MGD for Certain Waterbodies Option for Existing Facilities and the Proposed Opti on for New OOGE Facilities (in millions; 2003$)

Year Existing Facilities New OOGE Facilities
Total Regulated Industry Segments Administrative Costs Total O&G Facilities Administrative Costs Total Man. Generators 2007 $0.4 $0.0 $0.2 $0.6 $1.9 $0.0 $1.9 $2.5 2008 $3.8 $0.0 $0.0 $3.8 $1.7 $0.0 $1.7 $5.6 2009 $3.9 $0.0 $0.0 $3.9 $1.8 $0.0 $1.8 $5.7 2010 $8.8 $0.0 $0.2 $9.0 $1.1 $0.0 $1.1 $10.1 2011 $138.9 $0.0 $0.8 $139.7 $1.6 $0.0 $1.6 $141.4 2012 $11.4 $0.0 $0.1 $11.5 $1.9 $0.5 $2.4 $13.9 2013 $34.9 $0.0 $0.4 $35.3 $2.2 $0.1 $2.4 $37.7 2014 $5.3 $0.0 $0.0 $5.4 $2.1 $0.7 $2.7 $8.1 2015 $8.2 $0.0 $0.1 $8.3 $1.8 $0.3 $2.0 $10.4 2016 $5.2 $0.0 $0.3 $5.4 $1.6 $0.3 $1.9 $7.4 2017 $6.5 $0.0 $0.1 $6.6 $4.1 $0.5 $4.6 $11.2 2018 $5.2 $0.0 $0.1 $5.3 $2.7 $0.3 $3.0 $8.3 2019 $5.2 $0.0 $0.0 $5.2 $3.7 $0.5 $4.2 $9.5 2020 $8.2 $0.0 $0.1 $8.3 $2.8 $0.3 $3.2 $11.5 2021 $41.1 $0.0 $0.3 $41.4 $2.8 $0.4 $3.2 $44.6 2022 $12.2 $0.0 $0.1 $12.2 $4.8 $0.7 $5.5 $17.7 2023 $35.3 $0.0 $0.1 $35.4 $2.9 $0.4 $3.3 $38.7 2024 $5.3 $0.0 $0.0 $5.4 $4.4 $0.7 $5.1 $10.5 2025 $8.2 $0.0 $0.1 $8.3 $3.0 $0.4 $3.4 $11.7 2026 $5.2 $0.0 $0.3 $5.4 $2.9 $0.4 $3.3 $8.8 2027 $6.5 $0.0 $0.1 $6.6 $4.9 $0.7 $5.6 $12.2 2028 $5.2 $0.0 $0.1 $5.3 $2.8 $0.3 $3.1 $8.4 2029 $5.2 $0.0 $0.0 $5.2 $4.1 $0.7 $4.7 $10.0 2030 $8.2 $0.0 $0.1 $8.3 $2.8 $0.3 $3.1 $11.4 2031 $41.1 $0.0 $0.3 $41.4 $2.8 $0.3 $3.1 $44.5 2032 $12.2 $0.0 $0.1 $12.2 $5.1 $0.7 $5.8 $18.0 2033 $35.3 $0.0 $0.1 $35.4 $2.8 $0.3 $3.1 $38.6 2034 $5.3 $0.0 $0.0 $5.4 $4.6 $0.7 $5.2 $10.6 2035 $8.2 $0.0 $0.1 $8.3 $2.8 $0.3 $3.1 $11.4 2036 $5.2 $0.0 $0.3 $5.4 $2.8 $0.3 $3.1 $8.6 2037 $6.5 $0.0 $0.1 $6.6 $3.9 $0.7 $4.6 $11.2 2038 $5.2 $0.0 $0.1 $5.3 $1.8 $0.3 $2.1 $7.4 2039 $4.8 $0.0 $0.0 $4.8 $3.0 $0.6 $3.6 $8.4 2040 $4.7 $0.0 $0.0 $4.7 $1.7 $0.3 $2.0 $6.7 2041 $2.2 $0.0 $0.0 $2.2 $1.7 $0.2 $1.9 $4.1 2042 $1.3 $0.0 $0.0 $1.3 $3.6 $0.5 $4.1 $5.4 2043 $0.4 $0.0 $0.0 $0.4 $1.6 $0.2 $1.8 $2.2§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs 

### Table E1-6: Time Profile of Compliance Costs fo r the 100 MGD for Certain Waterbodies Option for Existing Facilities and the Proposed Opti on for New OOGE Facilities (in millions; 2003$)

Year Existing Facilities New OOGE Facilities
Total Regulated Industry Segments Administrative Costs Total O&G Facilities Administrative Costs Total Man. Generators

E1-11 2044 $2.4 $0.4 $2.8 $2.8 2045 $1.5 $0.2 $1.7 $1.7 2046 $1.5 $0.2 $1.6 $1.6 2047 $2.1 $0.3 $2.4 $2.4 2048 $0.5 $0.1 $0.6 $0.6 2049 $1.0 $0.2 $1.3 $1.3 2050 $0.3 $0.1 $0.4 $0.4 2051 $0.2 $0.1 $0.3 $0.3 2052 $1.5 $0.1 $1.6 $1.6 2053 $0.1 $0.0 $0.2 $0.2 2054 $0.6 $0.1 $0.7 $0.7 2055 $0.0 $0.0 $0.1 $0.1 PV 3% $352.8 $0.0 $3.1 $355.9 $65.4 $8.5 $74.0 $429.9 Annualized 3% $17.5 $0.0 $0. 2 $17.6 $3.2 $0.4 $3.7 $21.3 PV 7% $240.4 $0.0 $2.1 $242.5 $36.0 $4.3 $40.3 $282.8 Annualized 7% $18.1 $0.0 $0. 2 $18.3 $2.7 $0.3 $3.0 $21.3 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-12 

## E1-4 L IMITATIONS AND 

## U NCERTAINTIES


### EPA did not include in its estimate of social costs th e cost associated with unemp loyment that may result from facility closures. Potential unemployment-related costs would include the cost of administering unemployment programs for workers who are projected to lose employment(but not the cost of unemployment benefits, which are a transfer payment within society); and an estimate of the amount that workers would be willing to pay to avoid involuntary unemployment. However, from its f acility impact analysis, EPA estimates that no facilities would close as a result of the proposed rule. EPA also did not recognize any possible savings in unemploymentrelated costs from jobs created by the rule as a negativ e cost (benefit) of the regulation. Accordingly, EPA estimates a zero cost of unemployment for the proposed rule. Another key uncertainty factor in the analysis of costs to society is EPA’s estimate of the cost of installation downtime in Manufacturers facilities. As described a bove, EPA adopted the conservative assumption that the production cost for replacing the goods and services not provided by complying facilities due to installation downtime would be approximately equal to the price recei ved for those goods and services in the market. To the extent that these replacement goods and services are producedat a cost less than selling price, this assumption would lead to an overestimate of the cost to soci ety of installation downtime. The amount of potential overestimation is not known.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-13 

## G LOSSARY 

### consumer surplus: The value that consumers derive from goods and services above the price they have to pay to obtain the goods and services. opportunity cost: The lost value of alternative uses of resources (capital, labor, and raw materials) used in regulatory compliance. producer surplus: The difference between what producers’ earn on their output and the economic costs of producing that output, including a normal return on capital. social cost: The costs incurred by society as a whole as a result of the proposed rule. Social costs do not include costs that are transfers among parties that do not represent a new cost overall.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E1: Summary of Social Costs

E1-14 

## REFERENCES 

### Office of Management and Budget (OMB). 2003. Circ ular A-4, Regulatory Analysis. September 17, 2003. Available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-1 

# Appendix to Chapter E1

I NTRODUCTION 

### This appendix presents the social cost results for five other options evaluated for potential Phase III existing facilities. For all options, facility counts and other results only include those potential Phase III existing facilities that are (1) non-baseline closures and (2) subject to national categorical requirements under the option. See Chapter B3: Economic Impact Analysis for Manufacturersand Chapter B5: Summary of Electric Generator Costs for more information on baseline closures and counts of facilities subject to national categorical requirements under each option. See the main body of this chapter for a description of data sources and methodologies used in these analyses.



## E1A-1 C OSTS OF 

## C OMPLIANCE BY 

## REGULATED 

## I NDUSTRY 

## S EGMENT 

### Table E1A-1 below summarizes total direct facility cost s for the five other options evaluated for existing facilities, at a 3% and a 7% discount rate. For a description of this analysis, see section E1-1 above.

Table E1A-1: Summary of Annualized DirectCosts by Regulated Industry Segments Existing Facilities (in millions, 2003$) Option 3 Option 4 Option 2 Option 1 Option 6 3% Discount Rate Manufacturers Primary Manufacturing Industries $58.2 $62.1 $66.2 $68.3 $85.9 Other Industries $4.4 $4.3 $4.4 $4.4 $5.2 Electric Generators $1.5 $0.7 $1.9 $2.2 $2.9 Total Direct Facility Costs a $64.1 $67.1 $72.6 $75.0 $94.0 7% Discount Rate Manufacturers Primary Manufacturing Industries $62.5 $67.8 $71.7 $73.8 $92.5 Other Industries $4.7 $4.6 $4.7 $4.7 $5.5 Electric Generators $1.5 $0.7 $1.8 $2.1 $2.8 Total Direct Facility Costs a $68.7 $73.0 $78.3 $80.7 $100.8

aIndividual numbers may not add up tototals due to independent rounding. Source: U.S. EPA Analysis, 2004. 

## A PPENDIX 

## C ONTENTS 

### E1A-1 Costs of Compliance by Regulated Industry Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . E1A-1 E1A-2 State and Federal Administrative Costs . . . . E1A-2 E1A-3 Total Social Cost . . . . . . . . . . . . . . . . . . . . . E1A-2§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-2 

## E1A-2 S TATE AND 

## F EDERAL 

## A DMINISTRATIVE 

## C OSTS 

### Table E1A-2 presents annualized costs to State and Fe deral governments of administering the permitting and compliance monitoring activities for the five other options evaluated for existing facilities, at a 3% and a 7% discount rate. For a description of this analysis, see section E1-2 above. Table E1A-2: Summary of Annualized Government Costs for Existing Facilities (in millions, 2003$) Option 3 Option 4 Option 2 Option 1 Option 6
3% Discount Rate State Admin. Costs $0.91 $0.81 $1.05 $1.08 $1.66 Federal Admin. Costs $0.02 $0.01 $0.02 $0.02 $0.03 Total Gov. Admin. Costs a $0.92 $0.83 $1.07 $1.10 $1.69 7% Discount Rate State Admin. Costs $0.90 $0.81 $1.05 $1.08 $1.65 Federal Admin. Costs $0.02 $0.02 $0.02 $0.02 $0.04 Total Gov. Admin. Costs a $0.92 $0.83 $1.07 $1.10 $1.69

a Individual numbers may not add up to totals due to independent rounding. Source: U.S. EPA Analysis, 2004.



## E1A-3 T OTAL 

## S OCIAL 

## C OST 

### Table E1A-3 presents the total social costs of the fiveother options evaluated for existing facilities, including direct facility costs and government administrative costs, at a 3% and a 7% discount rate. Tables E1A-4 through E1A-8 present the time profiles for the five other opti ons. For a description of these analyses, see section E1-3 above. Table E1A-3: Summary of Annualized Social Costs for Existing Facilities (in millions, 2003$) Option 3 Option 4 Option 2 Option 1 Option 6
3% Discount Rate Total Direct Facility Costs $64.1 $67.1 $72.6 $75.0 $94.0 Total Government Administrativ e Costs $0.9 $0.8 $1.1 $1.1 $1.7 Total Social Costa $65.0 $67.9 $73.7 $76.1 $95.7 7% Discount Rate Total Direct Facility Costs $68.7 $73.0 $78.3 $80.7 $100.8 Total Government Administrativ e Costs $0.9 $0.8 $1.1 $1.1 $1.7 Total Social Costa $69.6 $73.9 $79.3 $81.8 $102.5

a Individual numbers may not add up to totals due to independent rounding. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-3 

### Table E1A-4: Time Profile of Compliance Costs fo r Existing Facilities - Option 3 (in millions; 2003$)

Year Costs of Compliance by Regulated Industry Segments Administrative Costs Total Cost Manufacturers Generators 2007 $3.5 $0.2 $0.2 $3.9 2008 $14.0 $0.9 $0.0 $14.9 2009 $23.4 $1.4 $0.0 $24.8 2010 $184.6 $1.8 $1.6 $188.0 2011 $190.4 $3.0 $2.7 $196.1 2012 $277.3 $2.0 $2.3 $281.5 2013 $116.4 $1.0 $1.6 $119.0 2014 $28.1 $2.2 $0.8 $31.0 2015 $28.9 $1.0 $0.7 $30.6 2016 $26.7 $1.4 $1.0 $29.1 2017 $24.3 $0.7 $0.9 $25.9 2018 $18.6 $1.1 $0.7 $20.4 2019 $23.2 $1.4 $0.4 $25.0 2020 $52.9 $1.5 $0.7 $55.1 2021 $91.8 $2.8 $1.0 $95.6 2022 $36.8 $1.7 $0.9 $39.4 2023 $64.4 $1.1 $0.7 $66.1 2024 $28.0 $2.2 $0.4 $30.6 2025 $28.9 $1.0 $0.7 $30.6 2026 $26.7 $1.4 $1.0 $29.1 2027 $24.3 $0.7 $0.9 $25.9 2028 $18.6 $1.1 $0.7 $20.4 2029 $23.2 $1.4 $0.4 $25.0 2030 $52.9 $1.5 $0.7 $55.1 2031 $91.8 $2.8 $1.0 $95.6 2032 $36.8 $1.7 $0.9 $39.4 2033 $64.4 $1.1 $0.7 $66.1 2034 $28.0 $2.2 $0.4 $30.6 2035 $28.9 $1.0 $0.7 $30.6 2036 $26.7 $1.4 $1.0 $29.1 2037 $24.3 $0.7 $0.9 $25.9 2038 $18.6 $1.1 $0.7 $20.4 2039 $17.3 $0.6 $0.4 $18.3 2040 $14.6 $0.4 $0.2 $15.3 2041 $8.3 $0.3 $0.1 $8.8 2042 $5.1 $0.1 $0.1 $5.3 2043 $0.8 $0.1 $0.0 $1.0 PV 3% $1,263.6 $30.9 $18.7 $1,313.2 Annualized 3% $62.6 $1.5 $0.9 $65.0 PV 7% $892.1 $19.5 $12.2 $923.8 Annualized 7% $67.2 $1.5 $0.9 $69.6 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-4 

### Table E1A-5: Time Profile of Compliance Costs fo r Existing Facilities - Option 4 (in millions; 2003$)

Year Costs of Compliance by Regulated Industry Segments Administrative Costs Total Cost Manufacturers Generators 2007 $3.2 $0.0 $0.2 $3.3 2008 $13.6 $0.3 $0.0 $13.9 2009 $22.4 $0.6 $0.0 $23.0 2010 $180.9 $0.6 $1.1 $182.6 2011 $291.4 $2.0 $3.0 $296.5 2012 $282.0 $0.5 $2.1 $284.6 2013 $115.6 $0.5 $1.5 $117.7 2014 $25.1 $1.3 $0.6 $27.0 2015 $28.8 $0.6 $0.5 $29.9 2016 $25.0 $0.7 $1.1 $26.8 2017 $23.7 $0.3 $0.8 $24.8 2018 $19.5 $0.6 $0.5 $20.7 2019 $22.0 $0.3 $0.3 $22.6 2020 $50.6 $0.6 $0.5 $51.8 2021 $89.8 $1.0 $1.1 $91.9 2022 $39.7 $0.3 $0.8 $40.8 2023 $64.0 $0.6 $0.5 $65.2 2024 $25.1 $1.2 $0.3 $26.6 2025 $28.8 $0.6 $0.5 $29.9 2026 $25.0 $0.7 $1.1 $26.8 2027 $23.7 $0.3 $0.8 $24.8 2028 $19.5 $0.6 $0.5 $20.7 2029 $22.0 $0.3 $0.3 $22.6 2030 $50.6 $0.6 $0.5 $51.8 2031 $89.8 $1.0 $1.1 $91.9 2032 $39.7 $0.3 $0.8 $40.8 2033 $64.0 $0.6 $0.5 $65.2 2034 $25.1 $1.2 $0.3 $26.6 2035 $28.8 $0.6 $0.5 $29.9 2036 $25.0 $0.7 $1.1 $26.8 2037 $23.7 $0.3 $0.8 $24.8 2038 $19.5 $0.6 $0.5 $20.7 2039 $17.4 $0.3 $0.3 $18.0 2040 $15.2 $0.3 $0.2 $15.7 2041 $8.4 $0.2 $0.1 $8.7 2042 $5.1 $0.1 $0.1 $5.2 2043 $0.8 $0.1 $0.0 $0.9 PV 3% $1,340.4 $14.1 $16.7 $1,371.2 Annualized 3% $66.4 $0.7 $0.8 $67.9 PV 7% $960.9 $8.9 $11.0 $980.8 Annualized 7% $72.4 $0.7 $0.8 $73.9 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-5 

### Table E1A-6: Time Profile of Compliance Costs fo r Existing Facilities - Option 2 (in millions; 2003$)

Year Costs of Compliance by Regulated Industry Segments Administrative Costs Total Cost Manufacturers Generators 2007 $3.5 $0.2 $0.2 $3.9 2008 $15.0 $1.0 $0.0 $16.0 2009 $25.6 $1.8 $0.0 $27.4 2010 $187.5 $2.2 $1.6 $191.4 2011 $298.4 $3.8 $3.3 $305.5 2012 $286.1 $2.2 $2.9 $291.2 2013 $120.9 $1.2 $2.0 $124.1 2014 $30.2 $3.3 $0.9 $34.4 2015 $31.7 $1.2 $0.7 $33.6 2016 $29.5 $1.9 $1.2 $32.7 2017 $26.9 $0.9 $1.1 $28.8 2018 $22.1 $1.4 $0.7 $24.2 2019 $25.3 $1.6 $0.5 $27.3 2020 $55.6 $1.8 $0.7 $58.2 2021 $96.0 $2.8 $1.2 $100.0 2022 $43.6 $1.9 $1.1 $46.6 2023 $69.4 $1.4 $0.7 $71.4 2024 $30.1 $3.3 $0.5 $33.9 2025 $31.7 $1.2 $0.7 $33.6 2026 $29.5 $1.9 $1.2 $32.7 2027 $26.9 $0.9 $1.1 $28.8 2028 $22.1 $1.4 $0.7 $24.2 2029 $25.3 $1.6 $0.5 $27.3 2030 $55.6 $1.8 $0.7 $58.2 2031 $96.0 $2.8 $1.2 $100.0 2032 $43.6 $1.9 $1.1 $46.6 2033 $69.4 $1.4 $0.7 $71.4 2034 $30.1 $3.3 $0.5 $33.9 2035 $31.7 $1.2 $0.7 $33.6 2036 $29.5 $1.9 $1.2 $32.7 2037 $26.9 $0.9 $1.1 $28.8 2038 $22.1 $1.4 $0.7 $24.2 2039 $19.4 $0.8 $0.5 $20.7 2040 $16.7 $0.6 $0.2 $17.6 2041 $9.7 $0.5 $0.2 $10.3 2042 $5.9 $0.2 $0.1 $6.2 2043 $1.1 $0.2 $0.0 $1.3 PV 3% $1,427.1 $38.6 $21.6 $1,487.3 Annualized 3% $70.7 $1.9 $1.1 $73.7 PV 7% $1,014.8 $24.3 $14.2 $1,053.3 Annualized 7% $76.4 $1.8 $1.1 $79.3 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-6 

### Table E1A-7: Time Profile of Compliance Costs fo r Existing Facilities - Option 1 (in millions; 2003$)

Year Costs of Compliance by Regulated Industry Segments Administrative Costs Total Cost Manufacturers Generators 2007 $3.5 $0.2 $0.2 $3.9 2008 $15.1 $1.0 $0.0 $16.1 2009 $26.1 $1.8 $0.0 $27.9 2010 $201.3 $3.1 $1.7 $206.0 2011 $299.7 $4.0 $3.3 $306.9 2012 $290.1 $2.6 $3.1 $295.9 2013 $122.0 $1.4 $2.0 $125.3 2014 $31.3 $3.8 $1.0 $36.1 2015 $32.7 $1.4 $0.8 $34.9 2016 $31.1 $2.2 $1.2 $34.5 2017 $27.9 $1.1 $1.1 $30.2 2018 $23.1 $1.6 $0.7 $25.4 2019 $26.4 $1.8 $0.5 $28.6 2020 $58.6 $2.4 $0.7 $61.7 2021 $97.6 $3.0 $1.2 $101.8 2022 $47.7 $2.3 $1.1 $51.2 2023 $70.4 $1.6 $0.7 $72.7 2024 $31.2 $3.3 $0.5 $35.0 2025 $32.7 $1.4 $0.7 $34.9 2026 $31.1 $2.2 $1.2 $34.5 2027 $27.9 $1.1 $1.1 $30.2 2028 $23.1 $1.6 $0.7 $25.4 2029 $26.4 $1.8 $0.5 $28.6 2030 $58.6 $2.4 $0.7 $61.7 2031 $97.6 $3.0 $1.2 $101.8 2032 $47.7 $2.3 $1.1 $51.2 2033 $70.4 $1.6 $0.7 $72.7 2034 $31.2 $3.3 $0.5 $35.0 2035 $32.7 $1.4 $0.7 $34.9 2036 $31.1 $2.2 $1.2 $34.5 2037 $27.9 $1.1 $1.1 $30.2 2038 $23.1 $1.6 $0.7 $25.4 2039 $20.4 $1.0 $0.5 $21.9 2040 $17.6 $0.8 $0.2 $18.6 2041 $10.6 $0.6 $0.2 $11.4 2042 $5.9 $0.3 $0.1 $6.2 2043 $1.1 $0.3 $0.0 $1.4 PV 3% $1,469.5 $43.9 $22.3 $1,535.7 Annualized 3% $72.8 $2.2 1.1 $76.1 PV 7% $1,043.3 $27.6 $14.6 $1,085.6 Annualized 7% $78.6 $2.1 $1.1 $81.8 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-7 

### Table E1A-8: Time Profile of Compliance Costs fo r Existing Facilities - Option 6 (in millions; 2003$)

Year Costs of Compliance by Regulated Industry Segments Administrative Costs Total Cost Manufacturers Generators 2007 $5.5 $0.2 $0.2 $6.0 2008 $22.8 $1.0 $0.0 $23.8 2009 $36.7 $2.0 $0.0 $38.7 2010 $259.6 $3.5 $3.0 $266.2 2011 $400.0 $5.2 $5.0 $410.1 2012 $308.6 $4.0 $4.1 $316.7 2013 $131.9 $2.6 $3.1 $137.6 2014 $42.8 $4.9 $1.9 $49.6 2015 $43.7 $1.8 $1.3 $46.8 2016 $40.1 $2.5 $1.9 $44.5 2017 $37.6 $2.0 $1.5 $41.1 2018 $31.6 $2.8 $1.1 $35.5 2019 $36.5 $2.2 $0.8 $39.6 2020 $72.5 $2.7 $1.3 $76.5 2021 $124.3 $3.4 $1.8 $129.5 2022 $65.0 $3.2 $1.5 $69.7 2023 $80.3 $2.9 $1.1 $84.3 2024 $42.6 $4.2 $0.8 $47.7 2025 $43.7 $1.8 $1.3 $46.7 2026 $40.1 $2.5 $1.8 $44.5 2027 $37.6 $2.0 $1.5 $41.1 2028 $31.6 $2.8 $1.1 $35.5 2029 $36.5 $2.2 $0.8 $39.6 2030 $72.5 $2.7 $1.3 $76.5 2031 $124.3 $3.4 $1.8 $129.5 2032 $65.0 $3.2 $1.5 $69.7 2033 $80.3 $2.9 $1.1 $84.3 2034 $42.6 $4.2 $0.8 $47.7 2035 $43.7 $1.8 $1.3 $46.7 2036 $40.1 $2.5 $1.8 $44.5 2037 $37.6 $2.0 $1.5 $41.1 2038 $31.6 $2.8 $1.1 $35.5 2039 $26.5 $1.3 $0.8 $28.7 2040 $22.2 $1.1 $0.3 $23.6 2041 $13.0 $0.9 $0.2 $14.2 2042 $7.5 $0.5 $0.1 $8.1 2043 $1.7 $0.5 $0.0 $2.2 PV 3% $1,839.0 $58.8 $34.2 $1,932.0 Annualized 3% $91.1 $2.9 $1.7 $95.7 PV 7% $1,301.3 $36.6 $22.4 $1,360.3 Annualized 7% $98.0 $2.8 $1.7 $102.5 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E1

E1A-8 

## T HIS 

## PAGE 

## I NTENTIONALLY 

## L EFT 

## B LANKSection 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-1 

# Chapter E2: Summary of Benefits

I NTRODUCTION 

### This chapter summarizes the EPA’s benefits analysis conducted in developing the Proposed Section 316(b) Rule for Phase III Facilities and presents the total monetary value of regional and national baseline losses and of benefits of the three proposed options for Phase III existing facilities:

< 

### the “50 MGD for All Waterbodies” option (“50 MGD All”),

< 

### the “200 MGD for All Waterbodies” option (“200 MGD All”), and

< 

### the “100 MGD for Certain Waterbodies” option (“100 MGD CWB”). Benefits results for five other opti ons evaluated by EPA, but not proposed, are presented in the appendix to this chapter.
The Regional Benefits Assessment for the Proposed Section 316(b) Rule for Phase III Facilities(RBA) provides greater detail on the methods and data used in the re gional analyses (U.S. EPA, 2004). See Chapter A1 for a discussion of the methods used to estimate impingement and entrainment (I&E), and see Chapters A2 through A9 for discussion of the methods used to estimate the value of I&E losses and the benefits of the options evaluated for the proposed rule. The results of the regional analyses are presented in Parts B through G of the RBA. EPA was unable to assess benefits of reducing I&E at new offshore oil and gas extraction facilities due to significant data gaps at the time of proposal. Therefore, the benefits estimates presented in this section are underestimates because they do not reflect benefits associ ated with reducing I&E at new offshore oil and gas extraction facilities.



## E2-1 C ALCULATING 

## L OSSES AND 

## B ENEFITS 

### EPA’s analysis of national baseline losses and benefits under the evaluated options includes 603 sample-weighted facilities in seven case study regions, excluding facilities that are expected to close in the baseline. The Agency calculated baseline losses by summing losses from all 603 fac ilities. EPA’s estimates of benefits are based on only those facilities that have requirements under each option. Quantifying and monetizing reductions inI&E due to the evaluated options considered for the proposed rule is challenging. As described in Chapters A3 and A6 of the RBA, EPA has estimated non-use values only qualitatively and, as a result, the estimated total benefits of the evaluated options reflect use values only. The RBA discusses specific limitations and uncertainties associated with estimation of commercial and recreational benefits at the regional level. Nati onal benefit estimates, which are based on the regional estimates, are subject to the same uncertainties. The overall effect of these uncertainties is of unknown magnitude and direction (i.e., the estimates may over- or understate the anticipated national- level of use benefits); however, EPA has no data to indicate that the results for any of the benefit categories are atypical or unreasonable. 

## C HAPTER 

## C ONTENTS E2-1 Calculating Losses and Benefits . . . . . . . . . . . E2-1 E2-2 Summary of Baseline Losses and Expected Reductions in I&E . . . . . . . . . . . . . . . . . . . . . . E2-2 E2-3 Time Profile of Benefits . . . . . . . . . . . . . . . . . . E2-4 E2-4 Total Annualized Monetary Value of Losses and Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . E2-10 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E2-15 Appendix to Chapter E2 . . . . . . . . . . . . . . . . . . . . . . E2A-1Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-2 

## E2-2 S UMMARY OF 

## B ASELINE 

## L OSSES AND 

## E XPECTED 

## REDUCTIONS IN 

## I&E Based on the results of the regional analyses, EPA calcu lated total baseline I&E losses and the amount by which these losses would be reduced under each of the evaluate d options. Losses are presented using two measures of I&E: 1. Age-one equivalent losses – the number of individual fish of different ages impinged and entrained by facility intakes, expressed as age-one equivalents; and 2. Foregone fishery yield – pounds of commercial harvest and numbers of recreational fish and shellfish that are not harvested due to I&E, including indirect losses of harvested species due to losses of forage species. Table E2-1 presents baseline I&E losses for both measures. As reported in Table E2-1, EPA estimates total national losses of age-one equivalents for all 603 faciliti es of 120 million fish. Nationwide, EPA estimates that 4.2 million pounds of fishery yield per year is foregone under current rates of I&E. Approximately 37% of all age-one equivalent losses, or 44.2 million fish, occur in the Inland region. The Gulf of Mexico region has the highest foregone fishery yields with approximately 2 million pounds, followed by the Mid-Atlantic region with approximately 0.9 million pounds. More detailed discussi ons of the I&E losses in each region are provided in Parts B through G of the RBA.

Table E2-1: Total Annual Baselin e I&E Losses for Potential Phase III Existing Facilities by Region (thousands) Region Age-One Equivalents Foregone Fishery Yield (lbs) California 1,310 96 North Atlantic 2,340 45 Mid-Atlantic 23,200 920 South Atlantic 1,520 123 Gulf of Mexico 12,700 1,990 Great Lakes 34,400 489 Inland 44,200 495 National Total 120,000 4,160 Source: U.S. EPA Analysis, 2004.



### To gauge the expected benefits of the proposed options , EPA estimated the extent to which these options would reduce the estimated baseline losses. These avoided losses are based on the expected reductions in I&E at each facility from implementation of the required compliance technologies. Table E2-2 reports, by region and option, the expected percent reductions in I&E, and the es timated quantities of reduction in (1) losses in age-one equivalents and (2) foregone fishery yield. At the national level, EPA estimates that the 50 MGD All option would reduce age-one equivalent losses by 49.5 million fish and fishery yield loss by 2.2 million pounds. In comparison, the 200 MGD All option and the 100 MGD CWB option apply to smaller numbers of facilities and would result in slightly smaller reductions in I&E. The 200 MGD All option would reduce age-one equivalent losses by 34.0 million fish and fishery yield losses by 1.4 million pounds. The 100 MGD All option would reduce age-one equivalent losses by 29.8 million fish and fishery yield losses by 1.9 million pounds.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-3 

### The study regions show substantial variation in the estimated reductions in I&E losses and avoided losses in ageone equivalents and foregone fishery yiel d. As reported in Table E2-2, the largest percentage reductions in I&E occur in the Gulf of Mexico for both the 50 MGD All and 100 MGD CWB options with 76% and 57%, respectively. The 200 MGD All option has the largest reduc tions in I&E in the Mid-Atlantic region with 65% and 49%, respectively. Percentage reductions in entrainment are less substantial, overall, than the impingement reductions. However, the Great Lakes region shows larger percentage reductions inentrainment than impingement for each of the three proposed options, where entrainment reductions range fro m 37% to 43%, and impingement reductions are 21% to 33%. In terms of avoided age-one equivalent losses, the In land region accounts for the largest reductions for the 50 MGD All option with approximately 30% of avoide d losses. Under the 200 MGD All and the 100 MGD CWB options, the Mid-Atlantic region accounts for the largest reductions in total avoide d age-one equivalent losses with 35% and 40%, respectively. On the basis of avoided losses in fishery yield, the Gulf of Mexico generates the greatest benefits under each of the three options, followed by the Mid-Atlantic region. Together, these two regions account for 83%, 84%, and 92% of the avoided fishery yield losses achieved by the 50 MGD All, the 200 MGD All, and the 100 MGD CWB options, respectively.
More detailed discussions of re gional benefits are provided in Parts B through G of the RBA.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-4 

### Table E2-2: Expected Reduction in I&E for Pha se III Existing Facilities by Option and Region

Region Number of Facilities Installing Technology Impingement Entrainment Age-One Equivalents (thousands) Foregone Fishery Yield (thousands; lbs) 50 MGD All Option California 1 39% 29% 383 28 North Atlantic 4 43% 40% 930 18 Mid-Atlantic 3 73% 55% 13,400 600 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 7 76% 57% 8,380 1,250 Great Lakes 19 33% 43% 11,600 169 Inland 69 37% 27% 14,800 157 National Total 103 49,493 2,222 200 MGD All Option Californiab 0 0% 0% 0 0 North Atlantic 1 11% 8% 198 4 Mid-Atlantic 2 65% 49% 11,900 534 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 2 41% 31% 4,580 682 Great Lakes 5 21% 37% 7,710 116 Inland 12 22% 21% 9,650 107 National Total 22 34,038 1,443 100 MGD CWB Option Californiab 0 0% 0% 0 0 North Atlantic 3 43% 32% 754 15 Mid-Atlantic 2 65% 49% 11,900 534 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 7 76% 57% 8,380 1,250 Great Lakes 6 24% 40% 8,740 130 Inland c 0 0% 0% 0 0 National Total 18 29,774 1,929

aNo I&E reductions are expected in the South Atlantic region because all potentially regulated facilities in this region withdraw less than 50 MGD and therefore would not be required to inst all technologies to comply with the proposed options. bNo I&E reductions are expected in the California region becauseall potentially regulated facilities in this region withdraw l ess than 100 MGD and therefore would not be required to install technologies to comply with the 200 MGD All and the 100 MGD CWB options.

cThe 100 MGD CWB option would not apply national categorical requirements to facilities located on freshwater rivers and lakes/reservoirs. Thus, no I&E reductions are expected at the potentially regulated facilities in the Inland region. Source: U.S. EPA Analysis, 2004.



## E2-3 T IME 

## P ROFILE OF 

## B ENEFITS 

### To account for the difference in timing of benefits and co sts, EPA developed a time profile of total benefits from all Phase III facilities that reflects when benefits from eachfacility would be realized. For each study region,Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-5 

### EPA first calculated the undiscounted commercial and recreational fishing benefits from the expected annual I&E reductions under the proposed options, based on the assumpti ons that all facilities in each region have achieved compliance with the rule and that benefits are realizedimmediately following compliance. Then, since there are regulatory and biological time lags between promulgation of the rule and the realization of benefits, EPA created a time profile of benefits that takes into account the fact that benefits do not begin immediately. The development of the time profile of benefits is discussed in detail in Chapter A8: Discounting Benefits

. Table E2-3 below provides the time profile of the m onetary value of baseline I&E losses, by region. EPA developed similar time profiles for monetary benefits for the three proposed options for Phase III existing facilities (see Tables E2-4, E2-5, and E2-6).Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-6 

### Table E2-3: Time Profile of Mean Monetary Value of Total Baseline I&E Losses (thousands; 2003$) a Year California North Atlantic MidAtlantic South Atlantic Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $111 $118 $112 $341 2008 $12 $20 $111 $8 $222 $236 $224 $833 2009 $23 $41 $222 $16 $887 $945 $897 $3,031 2010 $93 $163 $889 $65 $998 $1,063 $1,009 $4,280 2011 $105 $183 $1,001 $73 $1,054 $1,122 $1,065 $4,602 2012 $110 $194 $1,056 $77 $1,109 $1,181 $1,121 $4,848 2013 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2014 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2015 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2016 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2017 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2018 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2019 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2020 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2021 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2022 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2023 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2024 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2025 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2026 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2027 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2028 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2029 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2030 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2031 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2032 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2033 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2034 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2035 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2036 $116 $204 $1,112 $81 $1,109 $1,181 $1,121 $4,924 2037 $116 $204 $1,112 $81 $998 $1,063 $1,009 $4,583 2038 $105 $183 $1,001 $73 $887 $945 $897 $4,090 2039 $93 $163 $889 $65 $222 $236 $224 $1,892 2040 $23 $41 $222 $16 $111 $118 $112 $644 2041 $12 $20 $111 $8 $55 $59 $56 $322 2042 $6 $10 $56 $4 $0 $0 $0 $76 2043 $0 $0 $0 $0 $0 $0 $0 $0 2044 $0 $0 $0 $0 $0 $0 $0 $0 2045 $0 $0 $0 $0 $0 $0 $0 $0 2046 $0 $0 $0 $0 $0 $0 $0 $0 2047 $0 $0 $0 $0 $0 $0 $0 $0 2048 $0 $0 $0 $0 $0 $0 $0 $0 PV 3% b $2,143 $3,761 $20,519 $1,498 $21,088 $22,452 $21,306 $92,769 Annualized 3% c $109 $192 $1,047 $76 $1,076 $1,146 $1,087 $4,733 PV 7% b $1,258 $2,207 $12,042 $879 $12,857 $13,688 $12,990 $55,921 Annualized 7% c $101 $178 $970 $71 $1,036 $1,103 $1,047 $4,506

aBecause EPA estimated non-use benefits onl y qualitatively, the total monetary value of I&E losses includes only losses in use values. b The present value (PV) is es timated by discounting individual annual values to 2007, using the stated discount rate.

c Annualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-7 

### Table E2-4: Time Profile of Mean Total U se Benefits - 50 MGD All Option (thousands; 2003$) a Year California North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $0 e $7 $7 2011 $3 $0 $7 $0 $0 $11 $33 $54 2012 $7 $5 $14 $0 $76 $26 $96 $223 2013 $27 $10 $99 $0 $152 $106 $231 $625 2014 $31 $42 $164 $0 $608 $160 $275 $1,280 2015 $32 $50 $439 $0 $684 $291 $329 $1,826 2016 $34 $72 $571 $0 $722 $371 $349 $2,120 2017 $34 $78 $607 $0 $760 $391 $354 $2,225 2018 $34 $79 $636 $0 $760 $406 $358 $2,272 2019 $34 $81 $643 $0 $760 $410 $358 $2,286 2020 $34 $81 $643 $0 $760 $410 $358 $2,286 2021 $34 $81 $643 $0 $760 $410 $358 $2,286 2022 $34 $81 $643 $0 $760 $410 $358 $2,286 2023 $34 $81 $643 $0 $760 $410 $358 $2,286 2024 $34 $81 $643 $0 $760 $410 $358 $2,286 2025 $34 $81 $643 $0 $760 $410 $358 $2,286 2026 $34 $81 $643 $0 $760 $410 $358 $2,286 2027 $34 $81 $643 $0 $760 $410 $358 $2,286 2028 $34 $81 $643 $0 $760 $410 $358 $2,286 2029 $34 $81 $643 $0 $760 $410 $358 $2,286 2030 $34 $81 $643 $0 $760 $410 $358 $2,286 2031 $34 $81 $643 $0 $760 $410 $358 $2,286 2032 $34 $81 $643 $0 $760 $410 $358 $2,286 2033 $34 $81 $643 $0 $760 $410 $358 $2,286 2034 $34 $81 $643 $0 $760 $410 $358 $2,286 2035 $34 $81 $643 $0 $760 $410 $358 $2,286 2036 $34 $81 $643 $0 $760 $410 $358 $2,286 2037 $34 $81 $643 $0 $760 $410 $358 $2,286 2038 $34 $81 $643 $0 $760 $410 $358 $2,286 2039 $34 $81 $643 $0 $760 $410 $358 $2,286 2040 $34 $81 $643 $0 $760 $410 $351 $2,279 2041 $31 $81 $636 $0 $760 $400 $324 $2,232 2042 $27 $76 $629 $0 $684 $384 $262 $2,063 2043 $7 $71 $543 $0 $608 $304 $127 $1,661 2044 $3 $39 $479 $0 $152 $250 $83 $1,006 2045 $2 $31 $203 $0 $76 $120 $28 $460 2046 $0 $9 $71 $0 $38 $39 $8 $166 2047 $0 $3 $36 $0 $0 $19 $4 $61 2048 $0 $2 $7 $0 $0 $5 $0 e $14 PV 3% c $577 $1,298 $10,239 $0 $12,463 $6,602 $5,998 $37,177 Annualized 3% d $29 $66 $522 $0 $636 $337 $306 $1,897 PV 7% c $302 $635 $4,973 $0 $6,280 $3,252 $3,113 $18,556 Annualized 7% d $24 $51 $401 $0 $506 $262 $251 $1,495

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. bNo I&E reductions are expected in the South Atlantic region because all potentially regulated facilities in this region withdraw less than 50 MGD and therefore would not be required to install technologies to comply with this option.

c The present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate. dAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period.

ePositive non-zero value less than $500. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-8 

### Table E2-5: Time Profile of Mean Total Use Benefits - 200 MGD All Option (thousands; 2003$) a Year California b North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $0 $3 $3 2011 $0 $0 $0 $0 $0 $4 $23 $27 2012 $0 $0 $0 $0 $42 $8 $58 $108 2013 $0 $0 $43 $0 $83 $48 $168 $343 2014 $0 $2 $100 $0 $332 $77 $191 $702 2015 $0 $3 $372 $0 $374 $185 $225 $1,159 2016 $0 $14 $501 $0 $394 $251 $238 $1,398 2017 $0 $15 $537 $0 $415 $267 $240 $1,474 2018 $0 $16 $565 $0 $415 $279 $242 $1,518 2019 $0 $17 $572 $0 $415 $283 $242 $1,530 2020 $0 $17 $572 $0 $415 $283 $242 $1,530 2021 $0 $17 $572 $0 $415 $283 $242 $1,530 2022 $0 $17 $572 $0 $415 $283 $242 $1,530 2023 $0 $17 $572 $0 $415 $283 $242 $1,530 2024 $0 $17 $572 $0 $415 $283 $242 $1,530 2025 $0 $17 $572 $0 $415 $283 $242 $1,530 2026 $0 $17 $572 $0 $415 $283 $242 $1,530 2027 $0 $17 $572 $0 $415 $283 $242 $1,530 2028 $0 $17 $572 $0 $415 $283 $242 $1,530 2029 $0 $17 $572 $0 $415 $283 $242 $1,530 2030 $0 $17 $572 $0 $415 $283 $242 $1,530 2031 $0 $17 $572 $0 $415 $283 $242 $1,530 2032 $0 $17 $572 $0 $415 $283 $242 $1,530 2033 $0 $17 $572 $0 $415 $283 $242 $1,530 2034 $0 $17 $572 $0 $415 $283 $242 $1,530 2035 $0 $17 $572 $0 $415 $283 $242 $1,530 2036 $0 $17 $572 $0 $415 $283 $242 $1,530 2037 $0 $17 $572 $0 $415 $283 $242 $1,530 2038 $0 $17 $572 $0 $415 $283 $242 $1,530 2039 $0 $17 $572 $0 $415 $283 $242 $1,530 2040 $0 $17 $572 $0 $415 $283 $239 $1,527 2041 $0 $17 $572 $0 $415 $279 $219 $1,503 2042 $0 $17 $572 $0 $374 $275 $184 $1,422 2043 $0 $17 $529 $0 $332 $235 $74 $1,188 2044 $0 $15 $472 $0 $83 $207 $51 $828 2045 $0 $14 $200 $0 $42 $99 $17 $371 2046 $0 $3 $71 $0 $21 $32 $4 $132 2047 $0 $2 $36 $0 $0 $16 $2 $56 2048 $0 $1 $7 $0 $0 $4 $0 $12 PV 3% c $0 $266 $9,047 $0 $6,810 $4,513 $4,063 $24,698 Annualized 3% d $0 $14 $462 $0 $347 $230 $207 $1,260 PV 7% c $0 $124 $4,349 $0 $3,431 $2,192 $2,113 $12,209 Annualized 7% d $0 $10 $350 $0 $277 $177 $170 $984

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. bNo I&E reductions are expected in the South Atlantic region because all potentially regulated facilities in this region withdr aw less than 200 MGD and therefore would not be required to install technologies to comply with this option.

cThe present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate. dAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-9 

### Table E2-6: Time Profile of Mean Total Use Benefits - 100 MGD CWB Option (thousands; 2003$) a

Year California b North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland c National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $0 $0 $0 2011 $0 $0 $0 $0 $0 $6 $0 $6 2012 $0 $5 $0 $0 $76 $12 $0 $93 2013 $0 $10 $43 $0 $152 $66 $0 $270 2014 $0 $40 $100 $0 $608 $98 $0 $846 2015 $0 $47 $372 $0 $684 $212 $0 $1,316 2016 $0 $60 $501 $0 $722 $284 $0 $1,566 2017 $0 $64 $537 $0 $760 $301 $0 $1,661 2018 $0 $65 $565 $0 $760 $314 $0 $1,703 2019 $0 $66 $572 $0 $760 $318 $0 $1,716 2020 $0 $66 $572 $0 $760 $318 $0 $1,716 2021 $0 $66 $572 $0 $760 $318 $0 $1,716 2022 $0 $66 $572 $0 $760 $318 $0 $1,716 2023 $0 $66 $572 $0 $760 $318 $0 $1,716 2024 $0 $66 $572 $0 $760 $318 $0 $1,716 2025 $0 $66 $572 $0 $760 $318 $0 $1,716 2026 $0 $66 $572 $0 $760 $318 $0 $1,716 2027 $0 $66 $572 $0 $760 $318 $0 $1,716 2028 $0 $66 $572 $0 $760 $318 $0 $1,716 2029 $0 $66 $572 $0 $760 $318 $0 $1,716 2030 $0 $66 $572 $0 $760 $318 $0 $1,716 2031 $0 $66 $572 $0 $760 $318 $0 $1,716 2032 $0 $66 $572 $0 $760 $318 $0 $1,716 2033 $0 $66 $572 $0 $760 $318 $0 $1,716 2034 $0 $66 $572 $0 $760 $318 $0 $1,716 2035 $0 $66 $572 $0 $760 $318 $0 $1,716 2036 $0 $66 $572 $0 $760 $318 $0 $1,716 2037 $0 $66 $572 $0 $760 $318 $0 $1,716 2038 $0 $66 $572 $0 $760 $318 $0 $1,716 2039 $0 $66 $572 $0 $760 $318 $0 $1,716 2040 $0 $66 $572 $0 $760 $318 $0 $1,716 2041 $0 $66 $572 $0 $760 $312 $0 $1,710 2042 $0 $61 $572 $0 $684 $306 $0 $1,623 2043 $0 $56 $529 $0 $608 $252 $0 $1,445 2044 $0 $25 $472 $0 $152 $220 $0 $870 2045 $0 $19 $200 $0 $76 $105 $0 $400 2046 $0 $6 $71 $0 $38 $34 $0 $150 2047 $0 $2 $36 $0 $0 $17 $0 $55 2048 $0 $1 $7 $0 $0 $4 $0 $12 PV 3% d $0 $1,059 $9,047 $0 $12,463 $5,079 $0 $27,647 Annualized 3% e $0 $54 $462 $0 $636 $259 $0 $1,411 PV 7% d $0 $524 $4,349 $0 $6,280 $2,479 $0 $13,632 Annualized 7% e $0 $42 $350 $0 $506 $200 $0 $1,099

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. bNo I&E reductions are expected in the South Atlantic region because all potentially regulated facilities in this region withdraw less than 100 MGD and therefore would not be required to install technologies to comply with this option.

cThe 100 MGD CWB option would not apply national categoricalrequirements to facilities located on freshwater rivers and lakes/reservoirs. Thus, no I&E reductions are expected at the potentially regulated facilities in the Inland region. d The present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate.

eAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

1 See Chapter A6 of the RBA for a detailed description of the ecological benefits from reduced I&E.

E2-10 

## E2-4 T OTAL 

## A NNUALIZED 

## M ONETARY 

## V ALUE OF 

## L OSSES AND 

## B ENEFITS 

### EPA used the profiles of benefits, by region, to calculate a total present value of benefits and then to calculate a constant annual equivalent value (annualized value) of the present value. EPA performed the calculations of present value and annualized value using two discount rate values: a real rateof 3% and a real rate of 7%. Although the total period for analysis of benefits extends from 2007 through 2048, a 42-year period, EPA annualized the value of benefits over 30 years, which is the assumed length of each facility’s compliance period for the social cost an alysis, as described in Chapter E1: Summary of Social Costs . Using the same annualization period as in the cost analysis is necessary to provide a c onceptually and mathematically consistent comparison of annualized benefit and cost values. EPA estimated mean values, as well as lower and upper bound values reflecting uncertainty in the recreational benefits estimates. Table E2-7 presents the value of baseline I&E losses for each region and for the nation as a whole. Tables E2-8 and E2-9 present I&E losses for each region and the nation under the 50 MGD All, 200 MGD All, and 100 MGD CWB options discounted at 3% and 7%, respectively. Because EPA did not estimate non-use benefits quantitatively, the monetary value of national losses and benefits presented in these tables reflects only use values. 1 

### As described in Chapter A3 of the RBA, the Agency was not able to monetize benefits for 96.7% of the age-one equivalent losses of all commerc ial, recreational, and forage species analyzed for the evaluated options for existing facilities. This means th at the estimates of losses and benefits presented in this section represent the losses and benefits associated with less th an 3.3% of the total age-one equivalents lost due to I&E by cooling water intake structures, and should be interpreted with caution. Table E2-7 reports the monetized value of baseline lo sses as outlined above. EPA estimates the national value of these losses at $0.3 million in commercial fishing losses and $4.4 million in recreational fishing losses (2003$, discounted to 2007 at 3%). The total use value of fishery resources lost is $4.7 million per year, with lower and upper bounds of $2.4 million and $9.5 million, respectively ( 2003$, discounted at 3%). At a 7% discount rate, EPA estimates total annual national value of losses at $0.3 million in commercial fishing losses and $4.2 million in recreational fishing losses (2003$). The total use valu e of fishery resources lost, discounted at 7%, is $4.5 million per year, with lower and upper bounds of $2.3 million and $9.0 million, respectively (2003$). Total monetized losses are greatest in the Great Lakes region. Mo re detailed discussions of the valuation of recreational and commercial fishing losses under the baseline conditions in each region are provided in Parts B through G of the RBA.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-11 

### Table E2-7: Summary of Monetary Va lues of Baseline I&E Losses (thousands; 2003$) a

Region Annualized Use Value of Baseline I&E Losses
Commercial

Fishing Recreational Fishing Total Use Value b Low Mean High Low Mean High 3% discount rate California $0 - $20 $38 $90 $211 $58 $109 $231 North Atlantic $0 - $9 $84 $183 $401 $93 $192 $409 Mid-Atlantic $0 - $47 $473 $1,000 $2,124 $520 $1,047 $2,171 South Atlantic $0 $34 $76 $171 $34 $76 $171 Gulf of Mexico $0 - $139 $419 $937 $2,105 $558 $1,076 $2,244 Great Lakes $0 - $70 $534 $1,076 $2,109 $604 $1,146 $2,179 Inland c n/a $576 $1,087 $2,047 $576 $1,087 $2,047 National Total $0 - $284 $2, 159 $4,449 $9,168 $2,443 $4,733 $9,452 7% discount rate California $0 - $18 $35 $83 $196 $54 $101 $214 North Atlantic $0 - $8 $78 $170 $371 $86 $178 $379 Mid-Atlantic $0 - $44 $438 $927 $1,969 $482 $970 $2,012 South Atlantic $0 $32 $71 $158 $32 $71 $158 Gulf of Mexico $0 - $133 $404 $903 $2,028 $537 $1,036 $2,161 Great Lakes $0 - $67 $515 $1,036 $2,031 $582 $1,103 $2,099 Inland c n/a $555 $1,047 $1,971 $555 $1,047 $1,971 National Total $0 - $271 $2, 057 $4,236 $8,724 $2,328 $4,506 $8,995

a All losses presented in this table are annualized. These estimated annualized losses represent the value of all losses generated over the time frame of the analysis, discounted to 2007, and then annualized over a 30-year period. bThe total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. A range of recreational fishing benefits is provided, ba sed on the Krinsky and Robb technique to estimated the 95 thand 5 thpercentile limits on the marginal value per fish predicted by EPA’s meta-analysis (see chapter A5 of the RBA). Commercial fishing benefit s are computed based on a range from 0% to 40% of the change in gross revenue (see Chapter A4 of the RBA). To calculate the total use value columns (low, mean, and high), the high end value for commercial fishing benef its is added to the low, mean, and high values for recreational fishing benefits, respectively.

cNo significant commercial fishing takes place in the Inland regi on. Thus, this region is excluded from the commercial fishing analysis. Source: U.S. EPA Analysis, 2004.



### Tables E2-8 and E2-9 present EPA’s estimates of the national and regional values of avoided I&E losses (all values are in 2003$, discounted at 3% and 7% to beginni ng of year 2007, and annualized over a 30-year period). National values of avoided I&E losses at a 3% discount rate are as follows:

< 

### For the 50 MGD All option, a mean value of $1.9 million per year, with lower and upper bounds of $1.0 million and $3.8 million (see Table E2-8);

< 

### For the 200 MGD All option, a mean value of $1.3 million per year, with lower and upper bounds of $0.6 million and $2.5 million (see Table E2-8); and

< 

### For the 100 MGD CWB option, a mean value of $1.4 million per year, with lower and upper bounds of $0.7 million and $2.9 million (see Table E2-8).Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-12 

### The 7% discount rate calculations yield smaller values as follows:

< 

### For the 50 MGD All option, a mean value of $1.5 million per year, with lower and upper bounds of $0.8 million and $3.0 million (see Table E2-9);

< 

### For the 200 MGD All option, a mean value of $1.0 million per year, with lower and upper bounds of $0.5 million and $2.0 million (see Table E2-9); and

< 

### For the 100 MGD CWB option, a mean value of $1.1 million per year, with lower and upper bounds of $0.6 million and $2.3 million (see Table E2-9). EPA also considered how benefits might increase if fac ilities that meet technology requirements in the baseline optimize their operation and maintenance (O&M) proce dures (e.g., by rotating screens more often to reduce impingement mortality due to the proposed regulation). For this analysis, EPA evaluated facilities that are expected to (1) install no new technology and (2) meet im pingement standards with a 0.5 fps screen. If there was a 5% increase in the efficacy of O&M at these facilities, the total annualized national benefits from the proposed regulation would increase by approximately $19,000 fo r the 50 MGD All option, from $1.897 million to $1.916 million (using the 3% discount rate). If there was a 15% increase in efficacy, the estimated annualized benefits would increase by over $58,000, to $1.955 million (using the 3% discount rate). Using the 7% discount rate, total annualized national benefits from the proposed regul ation would increase by approximately $18,000 and $55,000, for the 5% and 15% increases in efficacy, respectively. Therefore, optimization of O&M procedures would result in 1.0% to 3.5% increase in the estimated total use be nefits of the proposed regulation, depending on the assumed increase in efficacy and the discount rate being used. Optimization of O&M procedures would result in similar increases in the estimated use benefits under “200 MGD for All Waterbodies” and “100 MGD for Certain Waterbodies” options. The majority of the use benefit value is attributable to benefits to recreational anglers from improved catch rates. As shown in Tables E2-8 and E2-9, use benefits are largest in the Gulf of Mexico for the 50 MGD All and 100 MGD CWB options and the Mid-Atlantic region under th e 200 MGD All option. More detailed discussions of regional benefits under each option are provided in Parts B through G of the RBA.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-13 

### Table E2-8: Summary of Monetized Benefits by Option (thousands; 2003$; discounted at 3%) a

Region Annualized Commercial Fishing Benefits Annualized Recreational Fishing Benefits Total Annualized Value of Monetized Impingement and Entrainment Reductions b Low Mean High Low Mean High 50 MGD All Option California $0 - $5 $10 $24 $57 $16 $29 $62 North Atlantic $0 - $3 $29 $63 $138 $32 $66 $141 Mid-Atlantic $0 - $25 $235 $497 $1,057 $260 $522 $1,082 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $78 $249 $558 $1,254 $327 $636 $1,332 Great Lakes $0 - $20 $157 $316 $621 $178 $337 $641 Inland d n/a $162 $306 $577 $162 $306 $577 National Total $0 - $132 $843 $1,765 $3,704 $975 $1,897 $3,836 200 MGD All Option California e $0 $0 $0 $0 $0 $0 $0 North Atlantic $0 - $1 $6 $13 $28 $7 $14 $29 Mid-Atlantic $0 - $22 $208 $440 $934 $230 $462 $956 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $43 $136 $305 $685 $179 $347 $728 Great Lakes $0 - $14 $108 $216 $425 $122 $230 $439 Inland d n/a $110 $207 $390 $110 $207 $390 National Total $0 - $79 $567 $1,181 $2,463 $647 $1,260 $2,542 100 MGD CWB Option California e $0 $0 $0 $0 $0 $0 $0 North Atlantic $0 - $2 $24 $52 $113 $26 $54 $115 Mid-Atlantic $0 - $22 $208 $440 $934 $230 $462 $956 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $78 $249 $558 $1,254 $327 $636 $1,332 Great Lakes $0 - $16 $121 $243 $478 $137 $259 $494 Inland d,f n/a $0 $0 $0 $0 $0 $0 National Total $0 - $118 $602 $1,292 $2,779 $720 $1,411 $2,897

aAll benefits presented in this table are annualized. These annualized benefits represent the value of all losses generated ov er the time frame of the analysis, discounted to 2007, and then annualized over a 30-year period. bThe total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. A range of recreational fishing benefits is provided, based on the Krinsky and Robb technique to estimated the 95th and 5th percentile limits on the marginal value per fish predicted by EPA’s meta-analysis (see chapter A5 of the RBA). Commercial fishing benefits are computed based on a range from 0% to 40% of the change in gross revenue (see Chapter A4 of the RBA). To calculate the total use value columns (low, mean, and high), the high end value for commercial fish ing benefits is added to thelow, mean, and high values for recreati onal fishing benefits, respectively.

cNo I&E reductions are expected in the South Atlantic regi on because all potentially regulated facilities in this region withdraw less than 50 MGD and therefore would not be required to inst all technologies to comply with the proposed options. d No significant commercial fishing takes place in the Inland region. Thus, this region is excluded from the commercial fishing analysis.

eNo I&E reductions are expected in the California region becau se all potentially regulated facilities in this region withdraw less than 100 MGD and therefore would not be required to install technologies to comply with the 200 MGD All and the 100 MGD CWB options. f The 100 MGD CWB option would not apply national categoricalrequirements to facilities located on freshwater rivers and lakes/reservoirs. Thus, no I&E reductions are expected at the potentially regulated facilities in the Inland region. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-14 

### Table E2-9: Summary of Monetized Benefits by Option (thousands; 2003$; discounted at 7%) a

Region Annualized Commercial Fishing Benefits Annualized Recreational Fishing Benefits Total Annualized Value of Monetized Impingement and Entrainment Reductions b Low Mean High Low Mean High 50 MGD All Option California $0 - $4 $9 $20 $47 $13 $24 $51 North Atlantic $0 - $2 $22 $49 $107 $25 $51 $109 Mid-Atlantic $0 - $19 $181 $382 $811 $200 $401 $830 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $62 $198 $444 $998 $260 $506 $1,061 Great Lakes $0 - $16 $122 $246 $483 $138 $262 $499 Inland d n/a $133 $251 $473 $133 $251 $473 National Total $0 - $104 $665 $1,391 $2,919 $769 $1,495 $3,023 200 MGD All Option California e $0 $0 $0 $0 $0 $0 $0 North Atlantic $0 $4 $10 $21 $5 $10 $21 Mid-Atlantic $0 - $17 $158 $334 $709 $175 $350 $726 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $34 $108 $243 $545 $142 $277 $579 Great Lakes $0 - $11 $83 $166 $326 $93 $177 $337 Inland d n/a $90 $170 $321 $90 $170 $321 National Total $0 - $62 $443 $922 $1,922 $505 $984 $1,984 100 MGD CWB Option California e $0 $0 $0 $0 $0 $0 $0 North Atlantic $0 - $2 $19 $40 $88 $20 $42 $90 Mid-Atlantic $0 - $17 $158 $334 $709 $175 $350 $726 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $62 $198 $444 $998 $260 $506 $1,061 Great Lakes $0 - $12 $93 $188 $368 $105 $200 $381 Inland d,f n/a $0 $0 $0 $0 $0 $0 National Total $0 - $93 $468 $1,006 $2,164 $561 $1,099 $2,257

aAll benefits presented in this table are annualized. These annualized benefits represent the value of all losses generated ov er the time frame of the analysis, discounted to 2007, and then annualized over a 30-year period. bThe total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. A range of recreational fishing benefits is provided, based on the Krinsky and Robb technique to estimated the 95th and 5th percentile limits on the marginal value per fish predicted by EPA’s meta-analysis (see chapter A5 of the RBA). Commercial fishing benefits are computed based on a range from 0% to 40% of the change in gross revenue (see Chapter A4 of the RBA). To calculate the total use value columns (low, mean, and high), the high end value for commercial fish ing benefits is added to thelow, mean, and high values for recreati onal fishing benefits, respectively.

cNo I&E reductions are expected in the South Atlantic regi on because all potentially regulated facilities in this region withdraw less than 50 MGD and therefore would not be required to inst all technologies to comply with the proposed options. d No significant commercial fishing takes place in the Inland region, and thus this region is excluded from the commercial fishin g benefits analysis.

eNo I&E reductions are expected in the California region becau se all potentially regulated facilities in this region withdraw less than 100 MGD and therefore would not be required to install technologies to comply with the 200 MGD All and the 100 MGD CWB options. f The 100 MGD CWB option would not apply national categoricalrequirements to facilities located on freshwater rivers and lakes/reservoirs. Thus, no I&E reductions are expected at the potentially regulated facilities in the Inland region. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-15 

## REFERENCES 

### U.S. Environmental Protection Agency (U.S. EPA). 2004. The Regional Benefits Assessment for the Proposed Section 316(b) Rule for Phase III Facilities . EPA-821-R-04-017. November 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Co sts, Benefits, and Benefit-Cost Analysis E2: Summary of Benefits

E2-16 

## T HIS 

## PAGE 

## I NTENTIONALLY 

## L EFT 

## B LANKSection 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-1 

# Appendix to Chapter E2

I NTRODUCTION 

### This appendix supplements Chapter E2 by presenting the results of the benefits analysis for five other options evaluated for potential Phase III existing facilities. For all options, facility counts and other results only include those potential Phase III existing facilities that are (1) non-baseline closures and (2) subject to national categorical requirements under the op tion. The options are presented in increasing order based on design intake flow (DIF) applicability threshold and th e stringency of compliance requirements. See the main body of this chapter for a description of methodologies used in this analysis.



## E2A-1 S UMMARY OF 

## E XPECTED 

## REDUCTIONS IN 

## I&E Table E2A-1 presents the number of facilities with tec hnology requirements under the other options, by region, and EPA’s estimates of the percentage by which I&E w ould be reduced. The table also presents estimates of regional and national reductions in I&E losses under each option, expressed as age-one equivalents lost and foregone fishery yield.

Table E2A-1: Expected Reductions in I&E for Existing Phase III Facilities by Option

Region Number of Facilities Installing Technology Impingement Entrainment Age-One Equivalents (thousands) Foregone Fishery Yield (thousands; lbs) Option 3 California 4 78% 29% 391 28 North Atlantic 4 43% 40% 930 18 Mid-Atlantic 4 74% 55% 13,400 606 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 11 80% 57% 8,650 1,270 Great Lakes 38 38% 43% 13,200 190 Inland 130 43% 27% 16,600 171 National Total 190 53,171 2,283 Option 4 California 4 78% 59% 771 56 North Atlantic 4 43% 40% 930 18 Mid-Atlantic 4 74% 55% 13,600 610 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 11 80% 60% 8,860 1,320 Great Lakes 38 38% 46% 13,300 192 Inland 69 37% 27% 14,800 157 National Total 130 52,261 2,353 Option 2 

## A PPENDIX 

## C ONTENTS 

### E2A-1 Summary of Expected Reductions in I&E . E2A-1 E2A-2 Time Profile of Benefits . . . . . . . . . . . . . . . E2A-3 E2A-3 Total Annualized Monetary Value of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . E2A-9Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2


### Table E2A-1: Expected Reductions in I&E for Existing Phase III Facilities by Option

Region Number of Facilities Installing Technology Impingement Entrainment Age-One Equivalents (thousands) Foregone Fishery Yield (thousands; lbs)

E2A-2

California 4 78% 59% 771 56 North Atlantic 4 43% 40% 930 18 Mid-Atlantic 4 74% 55% 13,600 610 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 11 80% 60% 8,860 1,320 Great Lakes 38 38% 46% 13,300 192 Inland 69 37% 27% 14,800 157 National Total 130 52,261 2,353 Option 1 California 4 78% 59% 771 56 North Atlantic 4 43% 40% 930 18 Mid-Atlantic 4 74% 55% 13,600 610 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 11 80% 60% 8,860 1,320 Great Lakes 38 38% 46% 13,300 192 Inland 134 43% 29% 16,900 177 National Total 194 54,361 2,373 Option 6 California 4 78% 59% 771 56 North Atlantic 4 43% 40% 930 18 Mid-Atlantic 5 75% 56% 13,700 615 South Atlantic a 0 0% 0% 0 0 Gulf of Mexico 11 80% 60% 8,860 1,320 Great Lakes 61 41% 48% 14,300 206 Inland 203 45% 30% 17,600 183 National Total 288 56,161 2,398

a No I&E reductions are expected in the South Atlantic region b ecause all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h these options. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-3 

## E2A-2 T IME 

## P ROFILE OF 

## B ENEFITS 

### Tables E2A-2 through E2A-6 below provide the time profiles of regional benefits for Option 3, Option 4, Option 2, Option 1, and Option 6.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-4 

### Table E2A-2: Time Profile of Mean Total Use Benefits - Option 3 (thousands; 2003$) a Year California North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $0 e $7 $8 2011 $2 $0 $7 $0 $0 $12 $34 $55 2012 $4 $5 $15 $0 $79 $31 $101 $234 2013 $14 $10 $100 $0 $158 $121 $238 $641 2014 $18 $42 $170 $0 $631 $193 $292 $1,346 2015 $20 $50 $443 $0 $710 $331 $354 $1,909 2016 $32 $72 $574 $0 $750 $418 $380 $2,226 2017 $34 $78 $610 $0 $789 $440 $387 $2,338 2018 $35 $79 $638 $0 $789 $455 $391 $2,387 2019 $36 $81 $645 $0 $789 $460 $391 $2,403 2020 $36 $81 $645 $0 $789 $460 $391 $2,403 2021 $36 $81 $645 $0 $789 $460 $391 $2,403 2022 $36 $81 $645 $0 $789 $460 $391 $2,403 2023 $36 $81 $645 $0 $789 $460 $391 $2,403 2024 $36 $81 $645 $0 $789 $460 $391 $2,403 2025 $36 $81 $645 $0 $789 $460 $391 $2,403 2026 $36 $81 $645 $0 $789 $460 $391 $2,403 2027 $36 $81 $645 $0 $789 $460 $391 $2,403 2028 $36 $81 $645 $0 $789 $460 $391 $2,403 2029 $36 $81 $645 $0 $789 $460 $391 $2,403 2030 $36 $81 $645 $0 $789 $460 $391 $2,403 2031 $36 $81 $645 $0 $789 $460 $391 $2,403 2032 $36 $81 $645 $0 $789 $460 $391 $2,403 2033 $36 $81 $645 $0 $789 $460 $391 $2,403 2034 $36 $81 $645 $0 $789 $460 $391 $2,403 2035 $36 $81 $645 $0 $789 $460 $391 $2,403 2036 $36 $81 $645 $0 $789 $460 $391 $2,403 2037 $36 $81 $645 $0 $789 $460 $391 $2,403 2038 $36 $81 $645 $0 $789 $460 $391 $2,403 2039 $36 $81 $645 $0 $789 $460 $391 $2,403 2040 $36 $81 $645 $0 $789 $460 $384 $2,395 2041 $34 $81 $638 $0 $789 $448 $357 $2,348 2042 $32 $76 $630 $0 $710 $429 $291 $2,169 2043 $21 $71 $545 $0 $631 $339 $153 $1,762 2044 $18 $39 $475 $0 $158 $267 $99 $1,057 2045 $15 $31 $202 $0 $79 $129 $37 $493 2046 $4 $9 $71 $0 $39 $42 $11 $176 2047 $2 $3 $35 $0 $0 $20 $5 $65 2048 $1 $2 $7 $0 $0 $5 $1 $15 PV 3% c $574 $1,298 $10,281 $0 $12,945 $7,416 $6,542 $39,056 Annualized 3% d $29 $66 $525 $0 $660 $378 $334 $1,993 PV 7% c $285 $635 $4,996 $0 $6,523 $3,661 $3,384 $19,484 Annualized 7% d $23 $51 $403 $0 $526 $295 $273 $1,570

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. b No I&E reductions are expected in the South Atlantic region b ecause all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option.

cThe present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate. dAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period.

ePositive non-zero value less than $500. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-5 

### Table E2A-3: Time Profile of Mean Total Use Benefits - Option 4 (thousands; 2003$) a Year California North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $1 $7 $7 2011 $3 $0 $7 $0 $0 $12 $33 $56 2012 $7 $5 $15 $0 $80 $31 $96 $234 2013 $27 $10 $101 $0 $161 $122 $231 $652 2014 $34 $42 $172 $0 $642 $195 $275 $1,360 2015 $39 $50 $449 $0 $723 $334 $329 $1,924 2016 $62 $72 $581 $0 $763 $422 $349 $2,250 2017 $65 $78 $617 $0 $803 $445 $354 $2,362 2018 $67 $79 $646 $0 $803 $460 $358 $2,413 2019 $69 $81 $653 $0 $803 $465 $358 $2,428 2020 $69 $81 $653 $0 $803 $465 $358 $2,428 2021 $69 $81 $653 $0 $803 $465 $358 $2,428 2022 $69 $81 $653 $0 $803 $465 $358 $2,428 2023 $69 $81 $653 $0 $803 $465 $358 $2,428 2024 $69 $81 $653 $0 $803 $465 $358 $2,428 2025 $69 $81 $653 $0 $803 $465 $358 $2,428 2026 $69 $81 $653 $0 $803 $465 $358 $2,428 2027 $69 $81 $653 $0 $803 $465 $358 $2,428 2028 $69 $81 $653 $0 $803 $465 $358 $2,428 2029 $69 $81 $653 $0 $803 $465 $358 $2,428 2030 $69 $81 $653 $0 $803 $465 $358 $2,428 2031 $69 $81 $653 $0 $803 $465 $358 $2,428 2032 $69 $81 $653 $0 $803 $465 $358 $2,428 2033 $69 $81 $653 $0 $803 $465 $358 $2,428 2034 $69 $81 $653 $0 $803 $465 $358 $2,428 2035 $69 $81 $653 $0 $803 $465 $358 $2,428 2036 $69 $81 $653 $0 $803 $465 $358 $2,428 2037 $69 $81 $653 $0 $803 $465 $358 $2,428 2038 $69 $81 $653 $0 $803 $465 $358 $2,428 2039 $69 $81 $653 $0 $803 $465 $358 $2,428 2040 $69 $81 $653 $0 $803 $464 $351 $2,421 2041 $65 $81 $646 $0 $803 $453 $324 $2,373 2042 $62 $76 $638 $0 $723 $434 $262 $2,195 2043 $41 $71 $552 $0 $642 $343 $127 $1,776 2044 $35 $39 $481 $0 $161 $270 $83 $1,068 2045 $29 $31 $205 $0 $80 $131 $28 $504 2046 $7 $9 $72 $0 $40 $42 $8 $179 2047 $3 $3 $36 $0 $0 $20 $4 $66 2048 $2 $2 $7 $0 $0 $5 $0 e $16 PV 3% c $1,112 $1,298 $10,407 $0 $13,167 $7,494 $5,998 $39,475 Annualized 3% d $57 $66 $531 $0 $672 $382 $306 $2,014 PV 7% c $552 $635 $5,057 $0 $6,635 $3,699 $3,113 $19,692 Annualized 7% d $44 $51 $408 $0 $535 $298 $251 $1,587

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. b No I&E reductions are expected in the South Atlantic region b ecause all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option.

cThe present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate. dAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period.

ePositive non-zero value less than $500. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-6 

### Table E2A-4: Time Profile of Mean Total Use Benefits - Option 2 (thousands; 2003$) a Year California North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $1 $7 $7 2011 $3 $0 $7 $0 $0 $12 $33 $56 2012 $7 $5 $15 $0 $80 $31 $96 $234 2013 $27 $10 $101 $0 $161 $122 $231 $652 2014 $34 $42 $172 $0 $642 $195 $275 $1,360 2015 $39 $50 $449 $0 $723 $334 $329 $1,924 2016 $62 $72 $581 $0 $763 $422 $349 $2,250 2017 $65 $78 $617 $0 $803 $445 $354 $2,362 2018 $67 $79 $646 $0 $803 $460 $358 $2,413 2019 $69 $81 $653 $0 $803 $465 $358 $2,428 2020 $69 $81 $653 $0 $803 $465 $358 $2,428 2021 $69 $81 $653 $0 $803 $465 $358 $2,428 2022 $69 $81 $653 $0 $803 $465 $358 $2,428 2023 $69 $81 $653 $0 $803 $465 $358 $2,428 2024 $69 $81 $653 $0 $803 $465 $358 $2,428 2025 $69 $81 $653 $0 $803 $465 $358 $2,428 2026 $69 $81 $653 $0 $803 $465 $358 $2,428 2027 $69 $81 $653 $0 $803 $465 $358 $2,428 2028 $69 $81 $653 $0 $803 $465 $358 $2,428 2029 $69 $81 $653 $0 $803 $465 $358 $2,428 2030 $69 $81 $653 $0 $803 $465 $358 $2,428 2031 $69 $81 $653 $0 $803 $465 $358 $2,428 2032 $69 $81 $653 $0 $803 $465 $358 $2,428 2033 $69 $81 $653 $0 $803 $465 $358 $2,428 2034 $69 $81 $653 $0 $803 $465 $358 $2,428 2035 $69 $81 $653 $0 $803 $465 $358 $2,428 2036 $69 $81 $653 $0 $803 $465 $358 $2,428 2037 $69 $81 $653 $0 $803 $465 $358 $2,428 2038 $69 $81 $653 $0 $803 $465 $358 $2,428 2039 $69 $81 $653 $0 $803 $465 $358 $2,428 2040 $69 $81 $653 $0 $803 $464 $351 $2,421 2041 $65 $81 $646 $0 $803 $453 $324 $2,373 2042 $62 $76 $638 $0 $723 $434 $262 $2,195 2043 $41 $71 $552 $0 $642 $343 $127 $1,776 2044 $35 $39 $481 $0 $161 $270 $83 $1,068 2045 $29 $31 $205 $0 $80 $131 $28 $504 2046 $7 $9 $72 $0 $40 $42 $8 $179 2047 $3 $3 $36 $0 $0 $20 $4 $66 2048 $2 $2 $7 $0 $0 $5 $0 e $16 PV 3% c $1,112 $1,298 $10,407 $0 $13,167 $7,494 $5,998 $39,475 Annualized 3% d $57 $66 $531 $0 $672 $382 $306 $2,014 PV 7% c $552 $635 $5,057 $0 $6,635 $3,699 $3,113 $19,692 Annualized 7% d $44 $51 $408 $0 $535 $298 $251 $1,587

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. b No I&E reductions are expected in the South Atlantic region b ecause all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option.

cThe present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate. dAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period.

ePositive non-zero value less than $500. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-7 

### Table E2A-5: Time Profile of Mean Total Use Benefits - Option 1 (thousands; 2003$) a Year California North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $1 $7 $8 2011 $3 $0 $7 $0 $0 $12 $35 $57 2012 $7 $5 $15 $0 $80 $31 $104 $242 2013 $27 $10 $101 $0 $161 $122 $245 $666 2014 $34 $42 $172 $0 $642 $195 $302 $1,387 2015 $39 $50 $449 $0 $723 $334 $366 $1,961 2016 $62 $72 $581 $0 $763 $422 $392 $2,292 2017 $65 $78 $617 $0 $803 $445 $399 $2,407 2018 $67 $79 $646 $0 $803 $460 $403 $2,458 2019 $69 $81 $653 $0 $803 $465 $404 $2,474 2020 $69 $81 $653 $0 $803 $465 $404 $2,474 2021 $69 $81 $653 $0 $803 $465 $404 $2,474 2022 $69 $81 $653 $0 $803 $465 $404 $2,474 2023 $69 $81 $653 $0 $803 $465 $404 $2,474 2024 $69 $81 $653 $0 $803 $465 $404 $2,474 2025 $69 $81 $653 $0 $803 $465 $404 $2,474 2026 $69 $81 $653 $0 $803 $465 $404 $2,474 2027 $69 $81 $653 $0 $803 $465 $404 $2,474 2028 $69 $81 $653 $0 $803 $465 $404 $2,474 2029 $69 $81 $653 $0 $803 $465 $404 $2,474 2030 $69 $81 $653 $0 $803 $465 $404 $2,474 2031 $69 $81 $653 $0 $803 $465 $404 $2,474 2032 $69 $81 $653 $0 $803 $465 $404 $2,474 2033 $69 $81 $653 $0 $803 $465 $404 $2,474 2034 $69 $81 $653 $0 $803 $465 $404 $2,474 2035 $69 $81 $653 $0 $803 $465 $404 $2,474 2036 $69 $81 $653 $0 $803 $465 $404 $2,474 2037 $69 $81 $653 $0 $803 $465 $404 $2,474 2038 $69 $81 $653 $0 $803 $465 $404 $2,474 2039 $69 $81 $653 $0 $803 $465 $404 $2,474 2040 $69 $81 $653 $0 $803 $464 $396 $2,467 2041 $65 $81 $646 $0 $803 $453 $369 $2,417 2042 $62 $76 $638 $0 $723 $434 $300 $2,232 2043 $41 $71 $552 $0 $642 $343 $159 $1,809 2044 $35 $39 $481 $0 $161 $270 $102 $1,087 2045 $29 $31 $205 $0 $80 $131 $38 $514 2046 $7 $9 $72 $0 $40 $42 $12 $182 2047 $3 $3 $36 $0 $0 $20 $5 $67 2048 $2 $2 $7 $0 $0 $5 $1 $16 PV 3% c $1,112 $1,298 $10,407 $0 $13,167 $7,494 $6,748 $40,225 Annualized 3% d $57 $66 $531 $0 $672 $382 $344 $2,052 PV 7% c $552 $635 $5,057 $0 $6,635 $3,699 $3,490 $20,068 Annualized 7% d $44 $51 $408 $0 $535 $298 $281 $1,617

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. b No I&E reductions are expected in the South Atlantic region b ecause all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option.

cThe present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate. dAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-8 

### Table E2A-6: Time Profile of Mean Total Use Benefits - Option 6 (thousands; 2003$) a Year California North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total 2007 $0 $0 $0 $0 $0 $0 $0 $0 2008 $0 $0 $0 $0 $0 $0 $0 $0 2009 $0 $0 $0 $0 $0 $0 $0 $0 2010 $0 $0 $0 $0 $0 $1 $8 $9 2011 $3 $0 $7 $0 $0 $15 $36 $61 2012 $7 $5 $15 $0 $80 $41 $106 $254 2013 $27 $10 $101 $0 $161 $140 $251 $690 2014 $34 $42 $172 $0 $642 $216 $311 $1,418 2015 $39 $50 $449 $0 $723 $361 $377 $1,999 2016 $62 $72 $582 $0 $763 $455 $406 $2,340 2017 $65 $78 $622 $0 $803 $478 $413 $2,460 2018 $67 $79 $651 $0 $803 $494 $418 $2,512 2019 $69 $81 $659 $0 $803 $499 $419 $2,529 2020 $69 $81 $659 $0 $803 $499 $419 $2,529 2021 $69 $81 $659 $0 $803 $499 $419 $2,529 2022 $69 $81 $659 $0 $803 $499 $419 $2,529 2023 $69 $81 $659 $0 $803 $499 $419 $2,529 2024 $69 $81 $659 $0 $803 $499 $419 $2,529 2025 $69 $81 $659 $0 $803 $499 $419 $2,529 2026 $69 $81 $659 $0 $803 $499 $419 $2,529 2027 $69 $81 $659 $0 $803 $499 $419 $2,529 2028 $69 $81 $659 $0 $803 $499 $419 $2,529 2029 $69 $81 $659 $0 $803 $499 $419 $2,529 2030 $69 $81 $659 $0 $803 $499 $419 $2,529 2031 $69 $81 $659 $0 $803 $499 $419 $2,529 2032 $69 $81 $659 $0 $803 $499 $419 $2,529 2033 $69 $81 $659 $0 $803 $499 $419 $2,529 2034 $69 $81 $659 $0 $803 $499 $419 $2,529 2035 $69 $81 $659 $0 $803 $499 $419 $2,529 2036 $69 $81 $659 $0 $803 $499 $419 $2,529 2037 $69 $81 $659 $0 $803 $499 $419 $2,529 2038 $69 $81 $659 $0 $803 $499 $419 $2,529 2039 $69 $81 $659 $0 $803 $499 $419 $2,529 2040 $69 $81 $659 $0 $803 $498 $411 $2,520 2041 $65 $81 $652 $0 $803 $484 $383 $2,468 2042 $62 $76 $644 $0 $723 $458 $312 $2,275 2043 $41 $71 $557 $0 $642 $359 $168 $1,839 2044 $35 $39 $487 $0 $161 $283 $107 $1,112 2045 $29 $31 $210 $0 $80 $138 $41 $530 2046 $7 $9 $77 $0 $40 $45 $13 $190 2047 $3 $3 $37 $0 $0 $21 $5 $70 2048 $2 $2 $8 $0 $0 $5 $1 $17 PV 3% c $1,112 $1,298 $10,492 $0 $13,167 $8,063 $6,993 $41,124 Annualized 3% d $57 $66 $535 $0 $672 $411 $357 $2,098 PV 7% c $552 $635 $5,095 $0 $6,635 $3,990 $3,614 $20,521 Annualized 7% d $44 $51 $411 $0 $535 $322 $291 $1,654

aBecause EPA estimated non-use benefits only qualitatively, the monetary value of benefits includes use values only. b No I&E reductions are expected in the South Atlantic region b ecause all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option.

cThe present value (PV) is estimated by discounting individual annual valu es to 2007, using the stated discount rate. dAnnualized benefits represent the value of all benefits generated over the time frameof the analysis, discounted to 2007, and then annualized over a 30-year period. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-9 

## E2A-3 T OTAL 

## A NNUALIZED 

## M ONETARY 

## V ALUE OF 

## B ENEFITS 

### Tables E2A-7 and E2A-8 present EPA’s estimates of the value of national and regional reductions in I&E under the other options analyzed for the proposed rule, using 3% and 7% discount rates. The tables shows for all other options, that benefits to recreational anglers account for th e majority of use benefits. National use benefits are largest in the Gulf of Mexico region under all five opti ons. More detailed discussions of regional benefits under each option are provided in Sections B through G of the RBA.

Table E2A-7: Summary of Monetized Be nefits for Existing Phase III Facilities a 

### (thousands; 2003$; discounted at 3%)

Region Annualized Use Benefits of I&E Reductions Annualized Commercial

Fishing Recreational Fishing Total Use Value b Low Mean High Low Mean High Option 3 California $0 - $5 $10 $24 $57 $15 $29 $62 North Atlantic $0 - $3 $29 $63 $138 $32 $66 $141 Mid-Atlantic $0 - $25 $236 $499 $1,061 $261 $525 $1,086 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $80 $259 $580 $1,305 $339 $660 $1,385 Great Lakes $0 - $23 $177 $355 $697 $200 $378 $720 Inland d n/a $176 $334 $630 $176 $334 $630 National Total $0 - $137 $888 $1,856 $3,888 $1,024 $1,993 $4,025 Option 4 California $0 - $10 $20 $47 $110 $30 $57 $120 North Atlantic $0 - $3 $29 $63 $138 $32 $66 $141 Mid-Atlantic $0 - $25 $239 $506 $1,074 $265 $531 $1,100 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $83 $263 $589 $1,325 $346 $672 $1,408 Great Lakes $0 - $23 $178 $359 $704 $202 $382 $728 Inland d n/a $162 $306 $577 $162 $306 $577 National Total $0 - $144 $892 $1,870 $3,929 $1,036 $2,014 $4,073 Option 2 California $0 - $10 $20 $47 $110 $30 $57 $120 North Atlantic $0 - $3 $29 $63 $138 $32 $66 $141 Mid-Atlantic $0 - $25 $239 $506 $1,074 $265 $531 $1,100 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $83 $263 $589 $1,325 $346 $672 $1,408 Great Lakes $0 - $23 $178 $359 $704 $202 $382 $728 Inland d n/a $162 $306 $577 $162 $306 $577 National Total $0 - $144 $892 $1,870 $3,929 $1,036 $2,014 $4,073Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2


### Table E2A-7: Summary of Monetized Be nefits for Existing Phase III Facilities a 

### (thousands; 2003$; discounted at 3%)

Region Annualized Use Benefits of I&E Reductions Annualized Commercial

Fishing Recreational Fishing Total Use Value b Low Mean High Low Mean High

E2A-10 Option 1

California $0 - $10 $20 $47 $110 $30 $57 $120 North Atlantic $0 - $3 $29 $63 $138 $32 $66 $141 Mid-Atlantic $0 - $25 $239 $506 $1,074 $265 $531 $1,100 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $83 $263 $589 $1,325 $346 $672 $1,408 Great Lakes $0 - $23 $178 $359 $704 $202 $382 $728 Inland d n/a $182 $344 $649 $182 $344 $649 National Total $0 - $144 $912 $1,908 $4,001 $1,056 $2,052 $4,146 Option 6 California $0 - $10 $20 $47 $110 $30 $57 $120 North Atlantic $0 - $3 $29 $63 $138 $32 $66 $141 Mid-Atlantic $0 - $26 $241 $510 $1,083 $267 $535 $1,109 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $83 $263 $589 $1,325 $346 $672 $1,408 Great Lakes $0 - $25 $192 $386 $758 $217 $411 $783 Inland d n/a $189 $357 $673 $189 $357 $673 National Total $0 - $146 $934 $1,952 $4,087 $1,080 $2,098 $4,233

aAll benefits presented in this table are annualized. These annualized benefits represent the value of all benefits generated over the time frame of the analysis, discounted to 2007, and then annualized over a 30-year period. bThe total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. A range of recreational fishing benefits is provided, based on the Krinsky and Robb technique to estimated the 95th and 5th percentile limits on the marginal value per fish predicted by EPA’s meta-analysis (see chapter A5 of the RBA). Commercial fishing benefits are computed based on a range from 0% to 40% of the change in gross revenue (see Chapter A4 of the RBA). To calculate the total use value columns (low, mean, and high), the high end value for commercial fish ing benefits is added to thelow, mean, and high values for recreati onal fishing benefits, respectively.

cNo I&E reductions are expected in the South Atlantic region because all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h these options. dNo significant commercial fishing takes place in the Inland regi on, and thus this region is excluded from the commercial fishi ng benefits analysis. Source: U.S. EPA Analysis, 2004.Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2

E2A-11 

### Table E2A-8: Summary of Monetized Be nefits for Existing Phase III Facilities a 

### (thousands; 2003$, discounted at 7%)

Region Annualized Use Benefits of I&E Reductions Annualized Commercial

Fishing Recreational Fishing Total Use Value b Low Mean High Low Mean High Option 3 California $0 - $4 $8 $19 $45 $12 $23 $49 North Atlantic $0 - $2 $22 $49 $107 $25 $51 $109 Mid-Atlantic $0 - $19 $181 $383 $814 $201 $403 $834 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $64 $206 $462 $1,038 $270 $526 $1,102 Great Lakes $0 - $18 $138 $277 $543 $156 $295 $561 Inland d n/a $144 $273 $515 $144 $273 $515 National Total $0 - $107 $700 $1,463 $3,063 $807 $1,570 $3,170 Option 4 California $0 - $8 $16 $37 $86 $24 $44 $94 North Atlantic $0 - $2 $22 $49 $107 $25 $51 $109 Mid-Atlantic $0 - $19 $184 $388 $825 $203 $408 $844 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $66 $209 $469 $1,055 $275 $535 $1,120 Great Lakes $0 - $18 $139 $280 $549 $157 $298 $567 Inland d n/a $133 $251 $473 $133 $251 $473 National Total $0 - $114 $703 $1,473 $3,095 $816 $1,587 $3,208 Option 2 California $0 - $8 $16 $37 $86 $24 $44 $94 North Atlantic $0 - $2 $22 $49 $107 $25 $51 $109 Mid-Atlantic $0 - $19 $184 $388 $825 $203 $408 $844 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $66 $209 $469 $1,055 $275 $535 $1,120 Great Lakes $0 - $18 $139 $280 $549 $157 $298 $567 Inland d n/a $133 $251 $473 $133 $251 $473 National Total $0 - $114 $703 $1,473 $3,095 $816 $1,587 $3,208 Option 1 California $0 - $8 $16 $37 $86 $24 $44 $94 North Atlantic $0 - $2 $22 $49 $107 $25 $51 $109 Mid-Atlantic $0 - $19 $184 $388 $825 $203 $408 $844 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $66 $209 $469 $1,055 $275 $535 $1,120 Great Lakes $0 - $18 $139 $280 $549 $157 $298 $567 Inland d n/a $149 $281 $531 $149 $281 $531Section 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis Appendix to Chapter E2


### Table E2A-8: Summary of Monetized Be nefits for Existing Phase III Facilities a 

### (thousands; 2003$, discounted at 7%)

Region Annualized Use Benefits of I&E Reductions Annualized Commercial

Fishing Recreational Fishing Total Use Value b Low Mean High Low Mean High

E2A-12

National Total $0 - $114 $719 $1,504 $3,152 $832 $1,617 $3,266 Option 6 California $0 - $8 $16 $37 $86 $24 $44 $94 North Atlantic $0 - $2 $22 $49 $107 $25 $51 $109 Mid-Atlantic $0 - $20 $185 $391 $831 $205 $411 $850 South Atlantic c $0 $0 $0 $0 $0 $0 $0 Gulf of Mexico $0 - $66 $209 $469 $1,055 $275 $535 $1,120 Great Lakes $0 - $20 $150 $302 $592 $170 $322 $612 Inland d n/a $154 $291 $549 $154 $291 $549 National Total $0 - $115 $736 $1,539 $3,220 $852 $1,654 $3,335

aAll benefits presented in this table are annualized. These annualized benefits represent the value of all benefits generated over the time frame of the analysis, discounted to 2007, and then annualized over a 30-year period. bThe total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. A range of recreational fishing benefits is provided, based on the Krinsky and Robb technique to estimated the 95th and 5th percentile limits on the marginal value per fish predicted by EPA’s meta-analysis (see chapter A5 of the RBA). Commercial fishing benefits are computed based on a range from 0% to 40% of the change in gross revenue (see Chapter A4 of the RBA). To calculate the total use value columns (low, mean, and high), the high end value for commercial fish ing benefits is added to thelow, mean, and high values for recreati onal fishing benefits, respectively.

cNo I&E reductions are expected in the South Atlantic region because all potentially regulated facilities in this region already meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h these options. dNo significant commercial fishing takes place in the Inland regi on, and thus this region is excluded from the commercial fishi ng benefits analysis. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-1 

## C HAPTER 

## C ONTENTS 

### E3-1 Comparison of Benefits and Social Costs by Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E3-2 E3-2 Incremental Analysis of Benefits and Social Costs E3-7 E3-3 Break-Even Analysis of Potential Non-Use Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E3-8 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E3-12 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E3-13 Appendix to Chapter E3 . . . . . . . . . . . . . . . . . . . . . . . E3A-1 

# Chapter E3: Comparison of Benefits and Social Costs

I NTRODUCTION 

### This chapter compares total monetized benefits to total social costs for the options analyzed for the Proposed Section 316(b) Rule for Phase III Facilities. Benefits and costs are compared on two bases: (1) for each of the options analyzed and (2) incrementally across options. For more information on the analysis of social costs and benefits, see Chapter E1: Summary of Social Costsand Chapter E2: Summary of Benefits

. EPA considered and analyzed three proposed options and five other options for Phase III existing facilities (Manufacturers and Generators) in developing the proposedrule. New offshore oil and gas extraction facilities were excluded from the comparison of benefits and cost s because EPA was unable to estimate benefits for this industry segment. This chapter presents results for the three proposed options for existing facilities: the “50 MGD for All Waterbodies” option (“50 MGD All”), the “200 MGD for All Waterbodies” option (“200 MGD All”), and the “100 MGD for Certain Waterbodies” option (“100 MGD CWB”). Summary results for five other options evaluated in regulation development are presented in the appendix to this chapter. Table E3-1 shows compliance action assumptions for the three proposed options based on the performance standard each facility would need to meet (depending on each facility’s waterbody type, design intake flow, capacity utilization, and annual intake flow as a percent of source waterbody mean annual flow) and its baseline technologies in-place.

Table E3-1: Number of Existing Pha se III Facilities by Compliance Action a Facility Compliance Action 50 MGD All 200 MGD All 100 MGD CWB Total Facilities Potentially Subject to Regulation (excluding baseline closures) 603 603 603 Facilities Subject to Best Professional Judgment 468 579 584 Facilities Subject to National Categorical Requirements 136 25 19 No compliance action b 32 2 1 Impingement controls only 37 3 0 Impingement and entrainment controls 66 19 18

aAlternative less stringent require ments based on site-specific assessments of costs, or costs and benefits are allowed. Esti mation of compliance responses is uncertain because the number of facilities requesting alternative less stringe nt requirements based on these site-specific assessments is unknown. bThese facilities meet compliance requirements in the baseline and thus would require no action to comply with the regulation. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-2 

## E3-1 C OMPARISON OF 

## B ENEFITS AND 

## S OCIAL 

## C OSTS BY 

## O PTION 

### The preceding chapters, Chapter E1: Summary of Social Costsand Chapter E2: Summary of Benefits , present estimates of total social cost and benefit for the three proposed and five other options evaluated in developing the 316(b) Phase III regulation. Based on these values of estimatedbenefits and social costs, EPA calculated the net monetized benefit to society of each option.
As documented in Chapter E2: Summary of Benefits , the monetized benefit values developed by EPA for the 316(b) Phase III regulation, and included in the net benef its calculation presented in this chapter, include only use benefit values for commercial and recreational fishing. EPAwas unable to estimate, at this time, a monetized value of non-use benefits from reduced impingement and en trainment (I&E). As a result, the monetized benefit value that is compared with the estimated value of total social cost in this benefit-cost comparison, is narrow in conceptual scope and omits a benefit category with potentially large monetary value. Specifically, the Agency was unable to monetize benefits for 96.7% of the age-oneequivalent losses of all commercial, recreational, and forage species considered for the opti ons for Phase III existing facilities. As a result, the benefits estimates used in this analysis represent the benefits associated withonly about 3.3% of the total avoided loss in age-one equivalents. Accordingly, the net benefit values presented in this chapter are based on comparison of a substantially complete estimate of costs to society w ith a substantially incomplete estimate of benefits. Table E3-2, below, presents EPA’s estimates of use benef its and social costs for the three proposed options for existing facilities, at 3% and 7% discount rates. At a 3% discount rate, EPA estimates that social costs exceed use benefits by $45.4 million under the 50 MGD All option, $21.5 million under the 200 MGD All option, and $16.2 million under the 100 MGD CWB option. At a 7% discount rate, social costs exceed use benefits by $48.6 million under the 50 MGD All option, $23.1 million under the 200 MGD All option, and $17.2 million under the 100 MGD CWB option. These values are all in dollars as of mid-year 2003 and are based on the discounting of costs and benefits to beginning of year 2007, the assume d date when the proposed rule would take effect.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-3 

### Table E3-2: Total Benefits, Social Costs, a nd Net Benefits for Existing Phase III Facilities by Option (millions; 2003$)

Option Total Monetized Use Benefits a Total Social Costs Net Benefits Based on Use Benefits Only b Low Mean High Low Mean High 3% discount rate 50 MGD All $1.0 $1.9 $3.8 $47.3 ($46.4) ($45.4) ($43.5) 200 MGD All $0.6 $1.3 $2.5 $22.8 ($22.1) ($21.5) ($20.2) 100 MGD CWB $0.7 $1.4 $2.9 $17.6 ($16.9) ($16.2) ($14.7) 7% discount rate 50 MGD All $0.8 $1.5 $3.0 $50.1 ($49.3) ($48.6) ($47.1) 200 MGD All $0.5 $1.0 $2.0 $24.1 ($23.6) ($23.1) ($22.1) 100 MGD CWB $0.6 $1.1 $2.3 $18.3 ($17.7) ($17.2) ($16.0)

aThe total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. The range (low, mean, and high) of annualized use values is computed by adding the hi gh end value for commercial fishing benefits (based on assumed producer surplus of 40% of gross revenue) to the low, mean, and high values from recreational fishing benefit s, respectively (see Chapter A4 of the RBA). b Net benefits are computed by subtracting total annualized costs from total annual use be nefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution. Source: U.S. EPA Analysis, 2004.



### This comparison of fairly complete costs and incomp lete benefits provides an incomplete assessment of net benefits to society. The proposed options are expected to provide benefits that were not accounted for in the benefits analysis. These benefits include reduced I&E losses of fish, shellfish, and other aquatic organisms, which, in turn, increase the numbers of individuals present, increase local and regional fishery populations (a subset of which was accounted for in the benefits analysis), and ultimately contribute to the enhanced environmental functioning of affected waterbodies (ri vers, lakes, estuaries, and oceans) and associated ecosystems. See Chapter A6 of the Regional Benefits Assessment for the Proposed Section 316(b) Rule for Phase III Facilities(RBA) for a detailed description of the ecologi cal benefits from reduced I&E (U.S. EPA, 2004). Taking into account these additional unquantified benef its of improved fisheries and aquatic ecosystem functioning, the Agency believes that the total benefits to society of the proposed rule for Phase III existing facilities could potentially exceed total social costs. Tables E3-3 and E3-4 present total net benefits for ex isting Phase III facilities by option and region, discounted at 3% and 7%, respectively. As reported in Tables E3-3 and E3-4, EPA estimates that costs are largest relative to benefits in the Inland region for the 50 MGD All and 200 M GD All options, and in the Gulf of Mexico region for the 100 MGD CWB option. Conversely, costs outweigh benefits by the least amount in the California region for the 50 MGD All option, in the North Atlantic region for the 200 MGD All option, and in the Mid-Atlantic region for the 100 MGD CWB option.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-4 

### Table E3-3: Total Net Benefits for Existing Phase III Facilities by Option and Region (millions; 2003$, discounted at 3%)

Option Net Benefits Based on Use Benefits Only a
California North Atlantic Mid-Atlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total Low 50 MGD All ($0.8) ($4.5) ($2.3) $0.0 ($8.7) ($9.9) ($19.5) ($46.4) 200 MGD All $0.0 ($0.5) ($1.7) $0. 0 ($3.6) ($3.9) ($12.2) ($22.1) 100 MGD CWB $0.0 ($2.0) ($1.7) $0.0 ($8.7) ($4.3) $0.0 ($16.9) Mean 50 MGD All ($0.8) ($4.5) ($2.0) $0.0 ($8.4) ($9.7) ($19.4) ($45.4) 200 MGD All $0.0 ($0.5) ($1.5) $0. 0 ($3.5) ($3.8) ($12.1) ($21.5) 100 MGD CWB $0.0 ($1.9) ($1.5) $0.0 ($8.4) ($4.2) $0.0 ($16.2) High 50 MGD All ($0.8) ($4.4) ($1.5) $0.0 ($7.7) ($9.4) ($19.1) ($43.5) 200 MGD All $0.0 ($0.5) ($1.0) $0. 0 ($3.1) ($3.6) ($11.9) ($20.2) 100 MGD CWB $0.0 ($1.9) ($1.0) $0.0 ($7.7) ($4.0) $0.0 ($14.7)

aNet benefits are computed by subtracti ng total annualized costs from total annual use benefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution. bNo benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region wit hdraw less than 50 MGD and therefore would not be required to inst all technologies to comply with the proposed options. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-5 

### Table E3-4: Total Net Benefits for Existing Phase III Facilities

by Option and Region (millions; 2003$, discounted at 7%)

Option Net Benefits Based on Use Benefits Only a
California North Atlantic Mid-Atlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total Low 50 MGD All ($1.0) ($5.0) ($2.2) $0.0 ($9.9) ($10.1) ($20.5) ($49.3) 200 MGD All $0.0 ($0.5) ($1.6) $0.0 ($4.2) ($3.6) ($13.6) ($23.6) 100 MGD CWB $0.0 ($2.0) ($1.6) $0.0 ($9.9) ($4.0) $0.0 ($17.7) Mean 50 MGD All ($0.9) ($5.0) ($2.0) $0.0 ($9.7) ($9.9) ($20.4) ($48.6) 200 MGD All $0.0 ($0.5) ($1.4) $0.0 ($4.1) ($3.5) ($13.5) ($23.1) 100 MGD CWB $0.0 ($2.0) ($1.4) $0.0 ($9.7) ($3.9) $0.0 ($17.2) High 50 MGD All ($0.9) ($4.9) ($1.6) $0.0 ($9.1) ($9.7) ($20.2) ($47.1) 200 MGD All $0.0 ($0.4) ($1.1) $0.0 ($3.8) ($3.3) ($13.4) ($22.1) 100 MGD CWB $0.0 ($1.9) ($1.1) $0.0 ($9.1) ($3.7) $0.0 ($16.0)

aNet benefits are computed by subtracti ng total annualized costs from total annual use benefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution. bNo benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region wit hdraw less than 50 MGD and therefore would not be required to inst all technologies to comply with the proposed options. Source: U.S. EPA Analysis, 2004.



### Table E3-5, on the following page, provides additional detail on the net benefits calculation. Table E3-5 compiles, for the three proposed options, the time profil es of benefits and costs as presented in the preceding chapters. The table also reports the calculated present and annualized values of benef its and costs at 3% and 7% discount rates.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-6 

### Table E3-5: Time Profile of Benefits and Social Costs for Existing Phase III Facilities (millions; 2003$)

Year 50 MGD All 200 MGD All 100 MGD CWB Monetized

Benefits Total Cost (excl. O&G) Monetized Benefits Total Cost (excl. O&G) Monetized Benefits Total Cost (excl. O&G) 2007 $0.00 $3.3 $0.00 $0.2 $0.00 $0.6 2008 $0.00 $10.2 $0.00 $1.4 $0.00 $3.8 2009 $0.00 $15.4 $0.00 $2.1 $0.00 $3.9 2010 $0.01 $172.6 $0.00 $129.1 $0.00 $9.0 2011 $0.05 $180.5 $0.03 $83.8 $0.01 $139.7 2012 $0.22 $74.4 $0.11 $12.3 $0.09 $11.5 2013 $0.63 $110.8 $0.34 $45.8 $0.27 $35.3 2014 $1.28 $22.2 $0.70 $7.5 $0.85 $5.4 2015 $1.83 $22.7 $1.16 $8.5 $1.32 $8.3 2016 $2.12 $18.6 $1.40 $7.5 $1.57 $5.4 2017 $2.22 $18.6 $1.47 $9.0 $1.66 $6.6 2018 $2.27 $15.3 $1.52 $7.5 $1.70 $5.3 2019 $2.29 $19.0 $1.53 $7.3 $1.72 $5.2 2020 $2.29 $44.5 $1.53 $12.7 $1.72 $8.3 2021 $2.29 $81.7 $1.53 $40.0 $1.72 $41.4 2022 $2.29 $29.2 $1.53 $14.6 $1.72 $12.2 2023 $2.29 $58.2 $1.53 $45.8 $1.72 $35.4 2024 $2.29 $22.1 $1.53 $7.4 $1.72 $5.4 2025 $2.29 $22.7 $1.53 $8.5 $1.72 $8.3 2026 $2.29 $18.6 $1.53 $7.5 $1.72 $5.4 2027 $2.29 $18.6 $1.53 $9.0 $1.72 $6.6 2028 $2.29 $15.3 $1.53 $7.5 $1.72 $5.3 2029 $2.29 $19.0 $1.53 $7.3 $1.72 $5.2 2030 $2.29 $44.5 $1.53 $12.7 $1.72 $8.3 2031 $2.29 $81.7 $1.53 $40.0 $1.72 $41.4 2032 $2.29 $29.2 $1.53 $14.6 $1.72 $12.2 2033 $2.29 $58.2 $1.53 $45.8 $1.72 $35.4 2034 $2.29 $22.1 $1.53 $7.4 $1.72 $5.4 2035 $2.29 $22.7 $1.53 $8.5 $1.72 $8.3 2036 $2.29 $18.6 $1.53 $7.5 $1.72 $5.4 2037 $2.29 $18.6 $1.53 $9.0 $1.72 $6.6 2038 $2.29 $15.3 $1.53 $7.5 $1.72 $5.3 2039 $2.29 $14.4 $1.53 $7.1 $1.72 $4.8 2040 $2.28 $12.1 $1.53 $6.8 $1.72 $4.7 2041 $2.23 $6.3 $1.50 $3.9 $1.71 $2.2 2042 $2.06 $4.1 $1.42 $3.1 $1.62 $1.3 2043 $1.66 $0.5 $1.19 $0.4 $1.45 $0.4 2044 $1.01 $0.0 $0.83 $0.0 $0.87 $0.0 2045 $0.46 $0.0 $0.37 $0.0 $0.40 $0.0 2046 $0.17 $0.0 $0.13 $0.0 $0.15 $0.0 2047 $0.06 $0.0 $0.06 $0.0 $0.05 $0.0 2048 $0.01 $0.0 $0.01 $0.0 $0.01 $0.0 PV 3% $37.18 $955.8 $24.70 $459.7 $27.65 $355.9 Annualized 3% $1.90 $47.3 $1.26 $22.8 $1.41 $17.6 PV 7% $18.56 $665.0 $12.21 $320.3 $13.63 $242.5 Annualized 7% $1.50 $50.1 $0.98 $24.1 $1.10 $18.3 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-7 

## E3-2 I NCREMENTAL 

## A NALYSIS OF 

## B ENEFITS AND 

## S OCIAL 

## C OSTS 

### In addition to comparing benefits and costs for each proposed option, as presented in the preceding section, EPA also analyzed the benefits and costs of the three op tions on an incremental basis. The comparison in the preceding section addresses the simple quantitative relations hip between estimated benefits and costs for each option by itself: for a given option, which is greater – bene fits or costs – and what is the amount of difference? In contrast, incremental analysis looks at the differential re lationship of benefits and costs across options and poses a different question: as increasingly more costly options are considered, by what amount do benefits, costs, and net benefits change from option to option? Incremental bene fit-cost analysis provides insight into the net gain to society from imposing increasingly more costly requirement s and may aid regulatory decision-makers in choosing among a set of regulatory proposals that otherwise have a similar quantitative relationship between benefits and costs based on a one-option-at-a-time comparison. The Agency conducted the incremental benefit-cost analys is by calculating, for each option, the change in net benefits, from option to option, in moving from the least costly option to successively more costly options. As described previously, the three proposed options – the 50 MGD All, 200 MGD All, and 100 MGD CWB options – differ in terms of design intake flow (DIF) applicability threshold and affected waterbodies. Thus the difference in benefits and costs across the options deri ves from the number of facilities each option is expected to cover and what types of waterbodies are affected. As reported in Table E3-6, at a 3% discount rate, the incremental change in net benefits in moving from th e 100 MGD CWB option to the 200 MGD All option is -$5.3 million, and from the 200 MGD All option to the 50 MGD All option, is -$23.9 million. Thus, for both incremental steps, calculated net benefits become in creasingly more negative but the step from the 200 MGD All option to the 50 MGD All option is more costly to society, on a net benefit basis, than the step from the 100 MGD CWB option to the 200 MGD All option. The same patternof change occurs for the calculations under a 7% discount rate: the incremental change in net benef its in moving from the 100 MGD CWB option to the 200 MGD All option is -$6.0 million, and from the 200 MGD All option to the 50 MGD All option, is -$25.4 million.

Table E3-6: Incremental Benefit-Cost Analysis for Existing Phase III Facilities (millions; 2003$)

Option a Net Benefits Based on Use Benefits Only b Incremental Net Benefits c Low Mean High Low Mean High 3% discount rate 100 MGD CWB ($16.9) ($16.2) ($14.7) n/a n/a n/a 200 MGD All ($22.1) ($21.5) ($20.2) ($5.2) ($5.3) ($5.5) 50 MGD All ($46.4) ($45.4) ( $43.5) ($24.2) ($23.9) ($23.3) 7% discount rate 100 MGD CWB ($17.7) ($17.2) ($16.0) n/a n/a n/a 200 MGD All ($23.6) ($23.1) ($22.1) ($5.9) ($6.0) ($6.1) 50 MGD All ($49.3) ($48.6) ( $47.1) ($25.7) ($25.4) ($24.9)

a Options are presented in order of increasing app licability, based on the number of facilities regulated. b Net benefits are computed by subtracting total annualized costs from total annual use be nefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution.

c Incremental net benefits are equal to the difference between net benefits of a given option and the net benefits of the previou s less stringent option. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

1 See chapter E2 for details on th e estimation of age-1 equivalents.

E3-8 

## E3-3 B REAK 

## -E VEN 

## A NALYSIS OF 

## P OTENTIAL 

## N ON 

## -U SE 

## B ENEFITS 

### As described in Section E3-1, above, EPA’s monetized estimates of benefits for the 316(b) Phase III regulation consider only the use benefit values for commercial and recreational fishing, and exclude non-use benefits

. Estimating non-use benefit values is a very challenging and uncertain exercise, particularly when primary research using stated preference methods is not a feasibl e option (as is the case for the proposed rulemaking). In Chapter A3 of the RBA, EPA described alternative approaches for developing non-use benefit estimates based on benefits transfer and associated methods. Because of th e uncertainty in estimating the non-use benefits of the options evaluated for the proposed rule, the Agency assessed non-use benefits only qualitatively (see Chapter A6 of RBA for a qualitative assessment of non-use benefits). As a result, the comparison of costs and benefits presented in Sections E3-1 and E3-2 involves a substantially more complete accounting of costs than of benefits. On the basis of this limited, incomplete accounting of be nefits and costs, EPA found that costs exceed use benefits for each of the three proposed options. Although EPA did not specifically estimate the non-use bene fits of the 316(b) Phase III regulation, it is possible to calculate the amount of non-use benefits that would be needed for the regulation’s benefits to equal the estimated total costs (the “break-even” non-use benefits value). Regulatory decision-makers may then judge the reasonableness of these required values in assessing whether th e regulation is likely, overall, to achieve total benefits to society that exceed costs. To perform this break-even analysis, EPA subtracted th e estimated commercial and recreational use benefits from the estimated annual costs. EPA then used this required residual to calculate the non-use benefit value, in terms of annual willingness-to-pay (WTP), needed for total benef its to equal total costs. This calculation was done in two different ways: (1) on a per household basis and (2) on a per age-1 equivalent basis. EPA performed this analysis using the regional studies framework as described in the RBA. This approach assumes that all of the facilities in the sample weight of a given sample facility are in the same benefits analysis region as the sample facility. For the WTP per household analysis, this approach also assumes that the size and other characteristics of potential use and non-use benefit populations, which are assessed for th e sample facility, may be extended to the weight of the sample facility. Although this assumption embeds consid erable uncertainty, it permits the estimation of a nonuse benefit population for each facility, which may then beused to calculate the WTP value by household that equates total benefits and total costs, on a sample-wei ghted basis, for each option. For this analysis, EPA assumed that only anglers fishing in the region and househol ds within a 25-mile radius of the facility hold non-use values for the affected resources (BLS, 2000). 1 

### At the national level, EPA estimated the following (see Table E3-7 below):

< 

### WTP per household. Under the 50 MGD All option, non-use benefit values per household would have to be $1.99 (3% discount rate) and $2.13 (7% discount rate) for total annual be nefits to equal total annualized costs. Under the 200 MGD All option, which applies to the next smaller set of facilities, these values decrease to $1.87 (3% discount rate) and $2. 01 (7% discount rate). Under the 100 MGD CWB option, which applies to the smallest set of fac ilities of the three proposed options, these values decrease, to $1.43 (3% discount rate) and $1.52 (7% discount rate).

< 

### WTP per age-1 equivalent. Under the 50 MGD All option, non-u se benefit values per age-1 equivalent would have to be $0.92 (3% discount rate) and $0.98 (7% discount rate) fo r total annual benefits to equal total annualized costs. Under the 200 MGD All option, which applies to the next smaller set of facilities, these values decrease to $0.63 (3% discount rate) and $0.68 (7% discount rate). Under the 100 MGD CWB option, which applies to the smallest set of facilities of the three proposed options, these values decrease, to $0.54 (3% discount rate) and $0.58 (7% discount rate).§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-9 

### Table E3-7: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social Costs for Existing Phase III Facilities - Break-Even Analysis (2003$)

Option Total Social Costs (millions) Mean Value of Use Benefits (millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction of I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($) 3% Discount Rate 50 MGD All $47.3 $1.9 $45.4 22,784,450 $1.99 49,493,000 $0.92 200 MGD All $22.8 $1.3 $21.5 11,524,368 $1.87 34,038,000 $0.63 100 MGD CWB $17.6 $1.4 $16.2 11,328,241 $1.43 29,774,000 $0.54 7% Discount Rate 50 MGD All $50.1 $1.5 $48.6 22,784,450 $2.13 49,493,000 $0.98 200 MGD All $24.1 $1.0 $23.1 11,524,368 $2.01 34,038,000 $0.68 100 MGD CWB $18.3 $1.1 $17.2 11,328,241 $1.52 29,774,000 $0.58

aThe non-use benefits category in this tabl e may include some categories of use values that were not taken into account by the recreation and commercial fishing analyses. bThe non-use value per age-1 equivalent reported in the table includes the value placed on the fish’s contribution to non-use ecological services (e.g., population, health, sustainability, and overall ecosystem health). Source: U.S. EPA Analysis, 2004.



### EPA also calculated the annual WTP needed on a per household basis and a per age-1 equivalent basis at the regional level (see Tables E3-8 and E3-9 below). EPA estimated the following:

< 

### WTP per household. The Gulf of Mexico region has the highest estimated annual break-even WTP values per household with $6.38, $13.83, and $6.38 (3 % discount rate) and $7.34, $16.31, and $7.34 (7% discount rate) under the 50 MGD All, the 200 MGD All, and the 100 MGD CWB options, respectively. The Mid-Atlantic region has the lowest estimated annual break-even WTP values per household with $0.35, $0.27, and $0.27 (3% discount rate) and $0.35, $0.25, and $0.25 (7% discount rate) under the 50 MGD All, the 200 MGD All, and the 100 MGD CWB options, respectively.

< 

### WTP per age-1 equivalent. The North Atlantic region has the highest estimated annual break-even WTP value per age-1 equivalent with $4.84, $2.51, and $2.56 (3% discount rate) and $5.37, $2.28, and $2.62 (7% discount rate) under the 50 MGD All, the 200 MGD All, and the 100 MGD CWB options, respectively. The Mid-Atlantic region has the low est estimated annual break-even WTP values per age-1 equivalent with $0.15, $0.13, and $0.13 (3% disc ount rate) and $0.15, $0.12, and $0.12 (7% discount rate) under the 50 MGD All, the 200 MGD All, and the 100 MGD CWB options, respectively.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-10 

### Table E3-8: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social Costs for Existing Phase III Facilities - Break-Even Analysis by Regions (2003$, discounted at 3%)

Option Total Social Costs (millions) Mean Value of Use Benefits (millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction of I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($) 50 MGD All California $0.8 $0.0 d $0.8 1,166,416 $0.70 383,000 $2.14 North Atlantic $4.6 $0.1 $4.5 2,129,180 $2.11 930,000 $4.84 Mid-Atlantic $2.6 $0.5 $2. 0 5,887,031 $0.35 13,400,000 $0.15 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $9.1 $0.6 $8.4 1,322, 480 $6.38 8,380,000 $1.01
Great Lakes $10.1 $0.3 $9. 7 4,064,660 $2.40 11,600,000 $0.84 Inland $19.7 $0.3 $19.4 8, 214,682 $2.36 14,800,000 $1.31 National Total $47.3 $1.9 $45.4 22,784,450 $1.99 49,493,000 $0.92 200 MGD All California $0.0 $0.0 $0.0 0 $0.00 0 $0.00 North Atlantic $0.5 $0.0 d $0.5 1,699,855 $0.29 198,000 $2.51 Mid-Atlantic $2.0 $0.5 $1. 5 5,603,551 $0.27 11,900,000 $0.13 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $3.8 $0.3 $3.5 251,666 $13.83 4,580,000 $0.76
Great Lakes $4.1 $0.2 $3. 8 2,388,297 $1.60 7,710,000 $0.50 Inland $12.3 $0.2 $12.1 1, 580,998 $7.65 9,650,000 $1.25 National Total $22.8 $1.3 $21.5 11,524,368 $1.87 34,038,000 $0.63 100 MGD CWB California $0.0 $0.0 $0.0 0 $0.00 0 $0.00 North Atlantic $2.0 $0.1 $1.9 1,989,096 $0.97 754,000 $2.56 Mid-Atlantic $2.0 $0.5 $1. 5 5,603,551 $0.27 11,900,000 $0.13 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $9.1 $0.6 $8.4 1,322, 480 $6.38 8,380,000 $1.01
Great Lakes $4.5 $0.3 $4. 2 2,413,114 $1.74 8,740,000 $0.48 Inland $0.0 $0.0 $0.0 0 $0.00 0 $0.00 National Total $17.6 $1.4 $16.2 11,328,241 $1.43 29,774,000 $0.54

aThe non-use benefits category in this tabl e may include some categories of use values that were not taken into account by the recreation and commercial fishing analyses. bThe non-use value per age-1 equivalent reported in the table includes the value placed on the fish’s contribution to non-use ecological services (e.g., population, health, sustainability, and overall ecosystem health).

cNo benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region wit hdraw less than 50 MGD and therefore would not be required to in stall technologies to comply with the proposed options. dPositive non-zero value less than $50,000. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-11 

### Table E3-9: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social Costs for Existing Phase III Facilities - Break-Even Analysis by Regions (2003$, discounted at 7%)

Option Total Social Costs (millions) Mean Value of Use Benefits (millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction of I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($) 50 MGD All California $1.0 $0.0 d $0.9 1,166,416 $0.81 383,000 $2.48 North Atlantic $5.0 $0.1 $5.0 2,129,180 $2.35 930,000 $5.37 Mid-Atlantic $2.4 $0.4 $2. 0 5,887,031 $0.35 13,400,000 $0.15 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $10.2 $0.5 $9.7 1,322,480 $7.34 8,380,000 $1.16 Great Lakes $10.2 $0.3 $9. 9 4,064,660 $2.45 11,600,000 $0.86 Inland $20.6 $0.3 $20.4 8, 214,682 $2.48 14,800,000 $1.38 National Total $50.1 $1.5 $48.6 22,784,450 $2.13 49,493,000 $0.98 200 MGD All California $0.0 $0.0 $0.0 0 $0.00 0 $0.00 North Atlantic $0.5 $0.0 d $0.5 1,699,855 $0.27 198,000 $2.28 Mid-Atlantic $1.8 $0.4 $1. 4 5,603,551 $0.25 11,900,000 $0.12 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $4.4 $0.3 $4.1 251,666 $16.31 4,580,000 $0.90 Great Lakes $3.7 $0.2 $3. 5 2,388,297 $1.47 7,710,000 $0.45 Inland $13.7 $0.2 $13.5 1, 580,998 $8.56 9,650,000 $1.40 National Total $24.1 $1.0 $23.1 11,524,368 $2.01 34,038,000 $0.68 100 MGD CWB California $0.0 $0.0 $0.0 0 $0.00 0 $0.00 North Atlantic $2.0 $0.0 d $2.0 1,989,096 $0.99 754,000 $2.62 Mid-Atlantic $1.8 $0.4 $1. 4 5,603,551 $0.25 11,900,000 $0.12 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $10.2 $0.5 $9.7 1,322,480 $7.34 8,380,000 $1.16 Great Lakes $4.1 $0.2 $3. 9 2,413,114 $1.62 8,740,000 $0.45 Inland $0.0 $0.0 $0.0 0 $0.00 0 $0.00 National Total $18.3 $1.1 $17.2 11,328,241 $1.52 29,774,000 $0.58

aThe non-use benefits category in this tabl e may include some categories of use values that were not taken into account by the recreation and commercial fishing analyses. bThe non-use value per age-1 equivalent reported in the table includes the value placed on the fish’s contribution to non-use ecological services (e.g., population, health, sustainability, and overall ecosystem health).

cNo benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region wit hdraw less than 50 MGD and therefore would not be required to in stall technologies to comply with the proposed options. dPositive non-zero value less than $50,000. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-12 

## G LOSSARY 

### opportunity cost: The lost value of alternative uses of resources (capital, labor, and raw materials) used in regulatory compliance. social cost: The costs incurred by society as a whole as a result of the proposed rule. Social costs do not include costs that are transfers among parties that do not represent a new cost overall.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-13 

## REFERENCES 

### U.S. Department of Commerce, Bureau of the Census, Bureau of Labor Statistics (BLS). 2000. “Summary File 1.” Available at: http://www.census.gov/Press-Release/www/2001/sumfile1.html. U.S. Environmental Protection Agency (U.S. EPA). 2004. The Regional Benefits Assessment for the Proposed Section 316(b) Rule for Phase III Facilities . EPA-821-R-04-017. November 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Costs, Benefits, and Benefit-Cost Analysis E3: Benefit-Cost Analysis

E3-14 

## T HIS 

## PAGE 

## I NTENTIONALLY 

## L EFT 

## B LANK§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-1 

# Appendix to Chapter E3

I NTRODUCTION 

### This appendix presents results from EPA’s analysis of the benefits and costs of the 316(b) Phase III regulation for five additional options evaluated for Phase III existing facilities. Results are presented for the comparison of benefits and costs and the breakeven assessment of non-use benefits. As discussed previously in Chapter E3, the benefit and cost values presented in this appendix pertain only to the Manufacturers and Electric Generators segments of the industries subject to Phase III regulation. EPA estimated the compliance response for each facility under each of the other options (see Table E3A-1, below). In this table and the following tables, the options are listed in order of increasing cost, which reflects the breadth of regulatory coverage based on design intakeflow applicability threshold and the stringency of compliance requirements. For a description of this analysis, see section E3-1 above.

Table E3A-1: Number of Existing Pha se III Facilities by Compliance Action a Facility Compliance Action Option 3 Option 4 Option 2 Option 1 Option 6 Total Facilities Potentially Subject to Regulation (excluding baseline closures) 603 603 603 603 603 Facilities Subject to Best Professional Judgment 235 415 235 251 0 Facilities Subject to National Categorical Requirements 368 189 368 353 603 No compliance action b 202 59 184 160 317 Impingement controls only 100 39 93 73 114 Impingement and entrainment controls 66 91 91 120 172

aAlternative less stringent require ments based on a site-specific assessment of cost s, or costs and benefits, are allowed. The estimate of number of facilities meeting specific requirements is uncertain because the number of facilities requesting alternative less stringent requirement s based on site-specific assessments is unknown. bThese facilities already meet compliance requirements. Source: U.S. EPA Analysis, 2004.



## E3A-1 C OMPARISON OF 

## B ENEFITS AND 

## S OCIAL 

## C OSTS BY 

## O PTION 

### Table E3A-2 on the following page reports benefits, costs, and net benefits for all five other options. For further information on this analysis, see section E3-1, above. 

## A PPENDIX 

## C ONTENTS 

### E3A-1 Comparison of Benefits and Social Costs by Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E3A-1 E3A-2 Incremental Analysis of Benefits and Social Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E3A-7 E3A-3 Break-Even Analysis of Potential Non-Use Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . E3A-7§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-2 

### Table E3A-2: Total Benefits, Social Costs, a nd Net Benefits for Existing Phase III Facilities by Option (millions; 2003$)

Option Total Monetized Use Benefits a Total Social Costs Net Benefits Based on Use Benefits Only b Low Mean High Low Mean High 3% Discount Rate Option 3 $1.0 $2.0 $4.0 $65.0 ($64.0) ($63.1) ($61.0) Option 4 $1.0 $2.0 $4.1 $67.9 ($66.9) ($65.9) ($63.8) Option 2 $1.0 $2.0 $4.1 $73.7 ($72.6) ($71.7) ($69.6) Option 1 $1.1 $2.1 $4.1 $76.1 ($75.0) ($74.0) ($71.9) Option 6 $1.1 $2.1 $4.2 $95.7 ($94.6) ($93.6) ($91.5) 7% Discount Rate Option 3 $0.8 $1.6 $3.2 $69.6 ($68.8) ($68.0) ($66.4) Option 4 $0.8 $1.6 $3.2 $73.9 ($73.1) ($72.3) ($70.7) Option 2 $0.8 $1.6 $3.2 $79.3 ($78.5) ($77.7) ($76.1) Option 1 $0.8 $1.6 $3.3 $81.8 ($80.9) ($80.1) ($78.5) Option 6 $0.9 $1.7 $3.3 $102.5 ($101.6) ($100.8) ($99.1)

aThe total monetizable value of I&E reductions includes use benefits only. EPA evaluated non-use benefits only qualitatively. The range (low, mean, and high) of annualized use values is computed by adding the hi gh end value for commercial fishing benefits (based on assumed producer surplus of 40% of gross revenue) to the low, mean, and high values from recreational fishing benefit s, respectively (see Chapter A4 of the RBA). b Net benefits are computed by subtracting total annualized costs from total annual use be nefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-3 

### Tables E3A-3 and E3A-4, below and following page, report net benefits, by option and benefit study region for, respectively, the 3% and 7% discount rate calculations. For further information on this analysis, see section E3-1, above.

Table E3A-3: Total Net Benefits for Existi ng Phase III Facilities by Option and Region (millions; 2003$, discounted at 3%)

Option Net Benefits Based on Use Benefits Only a
California North Atlantic Mid-Atlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total Low Option 3 ($1.1) ($4.5) ($2.5) $0. 0 ($9.2) ($20.4) ($25.0) ($64.0) Option 4 ($1.5) ($4.5) ($3.0) $0. 0 ($14.2) ($22.6) ($19.5) ($66.9) Option 2 ($1.5) ($4.5) ($3.0) $0. 0 ($14.2) ($22.6) ($25.0) ($72.6) Option 1 ($1.5) ($4.5) ($3.0) $0. 0 ($14.2) ($22.6) ($27.4) ($75.0) Option 6 ($2.2) ($4.5) ($3.2) $0. 0 ($14.2) ($28.4) ($39.8) ($94.6) Mean Option 3 ($1.1) ($4.5) ($2.2) $0. 0 ($8.9) ($20.2) ($24.8) ($63.1) Option 4 ($1.5) ($4.5) ($2.8) $0. 0 ($13.8) ($22.5) ($19.4) ($65.9) Option 2 ($1.5) ($4.5) ($2.8) $0. 0 ($13.8) ($22.5) ($24.9) ($71.7) Option 1 ($1.5) ($4.5) ($2.8) $0. 0 ($13.8) ($22.5) ($27.2) ($74.0) Option 6 ($2.2) ($4.5) ($3.0) $0. 0 ($13.8) ($28.2) ($39.6) ($93.6) High Option 3 ($1.1) ($4.4) ($1.6) $0. 0 ($8.1) ($19.9) ($24.5) ($61.0) Option 4 ($1.4) ($4.4) ($2.2) $0. 0 ($13.1) ($22.1) ($19.1) ($63.8) Option 2 ($1.4) ($4.4) ($2.2) $0. 0 ($13.1) ($22.1) ($24.6) ($69.6) Option 1 ($1.4) ($4.4) ($2.2) $0. 0 ($13.1) ($22.1) ($26.9) ($71.9) Option 6 ($2.1) ($4.4) ($2.4) $0. 0 ($13.1) ($27.8) ($39.3) ($91.5)

aNet benefits are computed by subtracti ng total annualized costs from total annual use benefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution. b No benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region alre ady meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-4 

### Table E3A-4: Total Net Benefits for Existi ng Phase III Facilities by Option and Region (millions; 2003$, discounted at 7%)

Option Net Benefits Based on Use Benefits Only a
California North Atlantic MidAtlantic South Atlantic b Gulf of Mexico Great Lakes Inland National Total Low Option 3 ($1.2) ($5.0) ($2.4) $0. 0 ($10.4) ($22.7) ($25.7) ($68.8) Option 4 ($1.6) ($5.0) ($2.9) $0. 0 ($16.7) ($24.8) ($20.5) ($73.1) Option 2 ($1.6) ($5.0) ($2.9) $0. 0 ($16.7) ($24.8) ($25.7) ($78.5) Option 1 ($1.6) ($5.0) ($2.9) $0. 0 ($16.7) ($24.8) ($28.1) ($80.9) Option 6 ($2.2) ($5.0) ($3.1) $0. 0 ($16.7) ($30.7) ($41.6) ($101.6) Mean Option 3 ($1.2) ($5.0) ($2.2) $0. 0 ($10.1) ($22.6) ($25.6) ($68.0) Option 4 ($1.6) ($5.0) ($2.7) $0. 0 ($16.5) ($24.7) ($20.4) ($72.3) Option 2 ($1.6) ($5.0) ($2.7) $0. 0 ($16.5) ($24.7) ($25.6) ($77.7) Option 1 ($1.6) ($5.0) ($2.7) $0. 0 ($16.5) ($24.7) ($28.0) ($80.1) Option 6 ($2.2) ($5.0) ($2.9) $0. 0 ($16.5) ($30.5) ($41.4) ($100.8) High Option 3 ($1.2) ($4.9) ($1.8) $0. 0 ($9.6) ($22.3) ($25.4) ($66.4) Option 4 ($1.5) ($4.9) ($2.3) $0. 0 ($15.9) ($24.4) ($20.2) ($70.7) Option 2 ($1.5) ($4.9) ($2.3) $0. 0 ($15.9) ($24.4) ($25.4) ($76.1) Option 1 ($1.5) ($4.9) ($2.3) $0. 0 ($15.9) ($24.4) ($27.7) ($78.5) Option 6 ($2.1) ($4.9) ($2.4) $0. 0 ($15.9) ($30.2) ($41.2) ($99.1)

aNet benefits are computed by subtracti ng total annualized costs from total annual use benefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution. b No benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region alre ady meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option. Source: U.S. EPA Analysis, 2004.



### Tables E3A-5 and E3A-6 compile the time profiles of benef its and costs for the five other options. The tables also report the calculated present and annualized values of benefits and costs at 3% and 7% discount rates.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-5 

### Table E3A-5: Time Profile of Benefits and Costs for Existing Phase III Facilities for Options 3, 4, and 2 (millions; 2003$)

Year Option 3 Option 4 Option 2 Monetized

Benefits Total Cost (excl. O&G) Monetized Benefits Total Cost (excl. O&G) Monetized Benefits Total Cost (excl. O&G) 2007 $0.00 $3.9 $0.00 $3.3 $0.00 $3.9 2008 $0.00 $14.9 $0.00 $13.9 $0.00 $16.0 2009 $0.00 $24.8 $0.00 $23.0 $0.00 $27.4 2010 $0.01 $188.0 $0.01 $182.6 $0.01 $191.4 2011 $0.05 $196.1 $0.06 $296.5 $0.06 $305.5 2012 $0.23 $281.5 $0.23 $284.6 $0.23 $291.2 2013 $0.64 $119.0 $0.65 $117.7 $0.65 $124.1 2014 $1.35 $31.0 $1.36 $27.0 $1.36 $34.4 2015 $1.91 $30.6 $1.92 $29.9 $1.92 $33.6 2016 $2.23 $29.1 $2.25 $26.8 $2.25 $32.7 2017 $2.34 $25.9 $2.36 $24.8 $2.36 $28.8 2018 $2.39 $20.4 $2.41 $20.7 $2.41 $24.2 2019 $2.40 $25.0 $2.43 $22.6 $2.43 $27.3 2020 $2.40 $55.1 $2.43 $51.8 $2.43 $58.2 2021 $2.40 $95.6 $2.43 $91.9 $2.43 $100.0 2022 $2.40 $39.4 $2.43 $40.8 $2.43 $46.6 2023 $2.40 $66.1 $2.43 $65.2 $2.43 $71.4 2024 $2.40 $30.6 $2.43 $26.6 $2.43 $33.9 2025 $2.40 $30.6 $2.43 $29.9 $2.43 $33.6 2026 $2.40 $29.1 $2.43 $26.8 $2.43 $32.7 2027 $2.40 $25.9 $2.43 $24.8 $2.43 $28.8 2028 $2.40 $20.4 $2.43 $20.7 $2.43 $24.2 2029 $2.40 $25.0 $2.43 $22.6 $2.43 $27.3 2030 $2.40 $55.1 $2.43 $51.8 $2.43 $58.2 2031 $2.40 $95.6 $2.43 $91.9 $2.43 $100.0 2032 $2.40 $39.4 $2.43 $40.8 $2.43 $46.6 2033 $2.40 $66.1 $2.43 $65.2 $2.43 $71.4 2034 $2.40 $30.6 $2.43 $26.6 $2.43 $33.9 2035 $2.40 $30.6 $2.43 $29.9 $2.43 $33.6 2036 $2.40 $29.1 $2.43 $26.8 $2.43 $32.7 2037 $2.40 $25.9 $2.43 $24.8 $2.43 $28.8 2038 $2.40 $20.4 $2.43 $20.7 $2.43 $24.2 2039 $2.40 $18.3 $2.43 $18.0 $2.43 $20.7 2040 $2.39 $15.3 $2.42 $15.7 $2.42 $17.6 2041 $2.35 $8.8 $2.37 $8.7 $2.37 $10.3 2042 $2.17 $5.3 $2.19 $5.2 $2.19 $6.2 2043 $1.76 $1.0 $1.78 $0.9 $1.78 $1.3 2044 $1.06 $0.0 $1.07 $0.0 $1.07 $0.0 2045 $0.49 $0.0 $0.50 $0.0 $0.50 $0.0 2046 $0.18 $0.0 $0.18 $0.0 $0.18 $0.0 2047 $0.06 $0.0 $0.07 $0.0 $0.07 $0.0 2048 $0.02 $0.0 $0.02 $0.0 $0.02 $0.0 PV 3% $39.06 $1,313.2 $39. 48 $1,371.2 $39.48 $1,487.3 Annualized 3% $1.99 $65.0 $2.01 $67.9 $2.01 $73.7 PV 7% $19.48 $923.8 $19.69 $980.8 $19.69 $1,053.3 Annualized 7% $1.57 $69.6 $1.59 $73.9 $1.59 $79.3 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-6 

### Table E3A-6: Time Profile of Benefits and Costs for Existing Phase III Facilities for Options 1 and 6 (millions; 2003$)

Year Option 1 Option 6 Monetized Benefits Total Cost (excl. O&G) Monetized Benefits Total Cost (excl. O&G) 2007 $0.00 $3.9 $0.00 $6.0 2008 $0.00 $16.1 $0.00 $23.8 2009 $0.00 $27.9 $0.00 $38.7 2010 $0.01 $206.0 $0.01 $266.2 2011 $0.06 $306.9 $0.06 $410.1 2012 $0.24 $295.9 $0.25 $316.7 2013 $0.67 $125.3 $0.69 $137.6 2014 $1.39 $36.1 $1.42 $49.6 2015 $1.96 $34.9 $2.00 $46.8 2016 $2.29 $34.5 $2.34 $44.5 2017 $2.41 $30.2 $2.46 $41.1 2018 $2.46 $25.4 $2.51 $35.5 2019 $2.47 $28.6 $2.53 $39.6 2020 $2.47 $61.7 $2.53 $76.5 2021 $2.47 $101.8 $2.53 $129.5 2022 $2.47 $51.2 $2.53 $69.7 2023 $2.47 $72.7 $2.53 $84.3 2024 $2.47 $35.0 $2.53 $47.7 2025 $2.47 $34.9 $2.53 $46.7 2026 $2.47 $34.5 $2.53 $44.5 2027 $2.47 $30.2 $2.53 $41.1 2028 $2.47 $25.4 $2.53 $35.5 2029 $2.47 $28.6 $2.53 $39.6 2030 $2.47 $61.7 $2.53 $76.5 2031 $2.47 $101.8 $2.53 $129.5 2032 $2.47 $51.2 $2.53 $69.7 2033 $2.47 $72.7 $2.53 $84.3 2034 $2.47 $35.0 $2.53 $47.7 2035 $2.47 $34.9 $2.53 $46.7 2036 $2.47 $34.5 $2.53 $44.5 2037 $2.47 $30.2 $2.53 $41.1 2038 $2.47 $25.4 $2.53 $35.5 2039 $2.47 $21.9 $2.53 $28.7 2040 $2.47 $18.6 $2.52 $23.6 2041 $2.42 $11.4 $2.47 $14.2 2042 $2.23 $6.2 $2.27 $8.1 2043 $1.81 $1.4 $1.84 $2.2 2044 $1.09 $0.0 $1.11 $0.0 2045 $0.51 $0.0 $0.53 $0.0 2046 $0.18 $0.0 $0.19 $0.0 2047 $0.07 $0.0 $0.07 $0.0 2048 $0.02 $0.0 $0.02 $0.0 PV 3% $40.23 $1,535.7 $41.12 $1,932.0 Annualized 3% $2.05 $76.1 $2.10 $95.7 PV 7% $20.07 $1,085.6 $20.52 $1,360.3 Annualized 7% $1.62 $81.8 $1.65 $102.5 Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-7 

## E3A-2 I NCREMENTAL 

## A NALYSIS OF 

## B ENEFITS AND 

## S OCIAL 

## C OSTS 

### EPA conducted an incremental analysis of benefits and social costs to determine as increasingly more costly options are considered, by what amount do benefits, costs, and net benefits change fro m option to option. Table E3A-7, below, reports this analysis for the five other options evaluated. For a description of this analysis, see section E3-2 above.

Table E3A-7: Incremental Benefit-Cost Analysis for Existing Phase III Facilities (millions; 2003$)

Option a Net Benefits Based on Use Benefits Only b Incremental Net Benefits c Low Mean High Low Mean High 3% discount rate Option 3 ($64.0) ($63.1) ($61.0) n/a n/a n/a Option 4 ($66.9) ($65.9) ($63.8) ($2.9) ($2.9) ($2.8) Option 2 ($72.6) ($71.7) ($69.6) ($5.8) ($5.8) ($5.8) Option 1 ($75.0) ($74.0) ($71.9) ($2.4) ($2.4) ($2.6) Option 6 ($94.6) ($93.6) ($91.5) ($19.6) ($19.6) ($19.5) 7% discount rate Option 3 ($68.8) ($68.0) ($66.4) n/a n/a n/a Option 4 ($73.1) ($72.3) ($70.7) ($4.3) ($4.3) ($4.3) Option 2 ($78.5) ($77.7) ($76.1) ($5.5) ($5.5) ($5.5) Option 1 ($80.9) ($80.1) ($78.5) ($2.4) ($2.4) ($2.4) Option 6 ($101.6) ($100.8) ($99.1) ($20.7) ($20.7) ($20.6)

a Options are presented in order of increasing app licability, based on the number of facilities regulated. b Net benefits are computed by subtracting total annualized costs from total annual use be nefits. The net benefits presented here are based on the comparison of a substantially comp lete measure of social costs with an in complete measure of benefits and should b e interpreted with caution.

c Incremental net benefits are equal to the difference between net benefits of a given option and the net benefits of the previou s less stringent option. Source: U.S. EPA Analysis, 2004.



## E3A-3 B REAK 

## -E VEN 

## A NALYSIS OF 

## P OTENTIAL 

## N ON 

## -U SE 

## B ENEFITS 

### EPA conducted a break-even analysis for each option todetermine the per household value and per age-1 equivalent value of non-use benefits needed for total annual benefits to equal total annual costs. Table E3A-8 presents the results at the national level; Tables E3A-9 and E3A-10 present results at the regional level. For a description of this analysis, see section E3-3 above.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-8 

### Table E3A-8: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social Cost for Existing Phase III Facilities - Break-Even Analysis (2003$)

Option Total Social Costs (millions) Mean Value of Use Benefits

(millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction in I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($) 3% Discount Rate Option 3 $65.0 $2.0 $63.1 31,890,286 $1.98 53,171,000 $1.19 Option 4 $67.9 $2.0 $65.9 26,772,975 $2.46 52,261,000 $1.26 Option 2 $73.7 $2.0 $71.7 26,772,975 $2.68 52,261,000 $1.37 Option 1 $76.1 $2.1 $74.0 32,298,995 $2.29 54,361,000 $1.36 Option 6 $95.7 $2.1 $93.6 38,143,532 $2.45 56,161,000 $1.67 7% Discount Rate Option 3 $69.6 $1.6 $68.0 31,890,286 $2.13 53,171,000 $1.28 Option 4 $73.9 $1.6 $72.3 26,772,975 $2.70 52,261,000 $1.38 Option 2 $79.3 $1.6 $77.7 26,772,975 $2.90 52,261,000 $1.49 Option 1 $81.8 $1.6 $80.1 32,298,995 $2.48 54,361,000 $1.47 Option 6 $102.5 $1.7 $100.8 38,143,532 $2.64 56,161,000 $1.79

aThe non-use benefits category in this tabl e may include some categories of use values that were not taken into account by the recreation and commercial fishing analyses. bThe non-use value per age-1 equivalent reported in the table includes the value placed on the fish’s contribution to non-use ecological services (e.g., population, health, sustainability, and overall ecosystem health). Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-9 

### Table E3A-9: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social

Costs for Existing Phase III Facilities - Break-Even Analysis by Regions (2003$, discounted at 3%)

Option Total Social Costs (millions) Mean Value of Use Benefits (millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction of I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($) Option 3 California $1.1 $0.0 d $1.1 1,518,773 $0.71 391,000 $2.76 North Atlantic $4.6 $0.1 $4.5 2,129,180 $2.11 930,000 $4.84 Mid-Atlantic $2.7 $0.5 $2. 2 6,491,544 $0.34 13,400,000 $0.16 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $9.5 $0.7 $8.9 1,344, 996 $6.59 8,650,000 $1.02

Great Lakes $20.6 $0.4 $20. 2 7,076,410 $2.86 13,200,000 $1.53 Inland $25.2 $0.3 $24.8 13, 329,383 $1.86 16,600,000 $1.50 National Total $65.0 $2.0 $63.1 31,890,286 $1.98 53,171,000 $1.19 Option 4 California $1.5 $0.1 $1. 5 1,518,773 $0.98 771,000 $1.93 North Atlantic $4.6 $0.1 $4.5 2,129,180 $2.11 930,000 $4.84 Mid-Atlantic $3.3 $0.5 $2. 8 6,491,544 $0.43 13,600,000 $0.20 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $14.5 $0.7 $13.8 1,344, 996 $10.28 8,860,000 $1.56

Great Lakes $22.8 $0.4 $22. 5 7,076,410 $3.17 13,300,000 $1.69 Inland $19.7 $0.3 $19.4 8, 212,072 $2.36 14,800,000 $1.31 National Total $67.9 $2.0 $65.9 26,772,975 $2.46 52,261,000 $1.26 Option 2 California $1.5 $0.1 $1. 5 1,518,773 $0.98 771,000 $1.93 North Atlantic $4.6 $0.1 $4.5 2,129,180 $2.11 930,000 $4.84 Mid-Atlantic $3.3 $0.5 $2. 8 6,491,544 $0.43 13,600,000 $0.20 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $14.5 $0.7 $13.8 1,344, 996 $10.28 8,860,000 $1.56

Great Lakes $22.8 $0.4 $22. 5 7,076,410 $3.17 13,300,000 $1.69 Inland $25.2 $0.3 $24.9 8, 212,072 $3.03 14,800,000 $1.68 National Total $73.7 $2.0 $71.7 26,772,975 $2.68 52,261,000 $1.37 Option 1 California $1.5 $0.1 $1. 5 1,518,773 $0.98 771,000 $1.93§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3



### Table E3A-9: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social

Costs for Existing Phase III Facilities - Break-Even Analysis by Regions (2003$, discounted at 3%)

Option Total Social Costs (millions) Mean Value of Use Benefits (millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction of I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($)

E3A-10

North Atlantic $4.6 $0.1 $4.5 2,129,180 $2.11 930,000 $4.84 Mid-Atlantic $3.3 $0.5 $2. 8 6,491,544 $0.43 13,600,000 $0.20 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $14.5 $0.7 $13.8 1,344, 996 $10.28 8,860,000 $1.56

Great Lakes $22.8 $0.4 $22. 5 7,076,410 $3.17 13,300,000 $1.69 Inland $27.5 $0.3 $27.2 13, 738,093 $1.98 16,900,000 $1.61 National Total $76.1 $2.1 $74.0 32,298,995 $2.29 54,361,000 $1.36 Option 6 California $2.2 $0.1 $2. 2 1,518,773 $1.43 771,000 $2.82 North Atlantic $4.6 $0.1 $4.5 2,129,180 $2.11 930,000 $4.84 Mid-Atlantic $3.5 $0.5 $3. 0 7,214,556 $0.41 13,700,000 $0.22 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $14.5 $0.7 $13.8 1,344, 996 $10.28 8,860,000 $1.56

Great Lakes $28.6 $0.4 $28. 2 9,055,971 $3.11 14,300,000 $1.97 Inland $40.0 $0.4 $39.6 16, 880,055 $2.35 17,600,000 $2.25 National Total $95.7 $2.1 $93.6 38,143,532 $2.45 56,161,000 $1.67

aThe non-use benefits category in this tabl e may include some categories of use values that were not taken into account by the recreation and commercial fishing analyses. bThe non-use value per age-1 equivalent reported in the table includes the value placed on the fish’s contribution to non-use ecological services (e.g., population, health, sustainability, and overall ecosystem health).

c No benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region alre ady meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option. dPositive non-zero value less than $50,000. Source: U.S. EPA Analysis, 2004.§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3

E3A-11 

### Table E3A-10: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social

Costs for Existing Phase III Facilities - Break-Even Analysis by Regions (2003$, discounted at 7%)

Option Total Social Costs (millions) Mean Value of Use Benefits (millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction of I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($) Option 3 California $1.2 $0.0 d $1.2 1,518,773 $0.79 391,000 $3.07 North Atlantic $5.0 $0.1 $5.0 2,129,180 $2.35 930,000 $5.37 Mid-Atlantic $2.6 $0.4 $2. 2 6,491,544 $0.34 13,400,000 $0.16 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $10.7 $0.5 $10.1 1,344, 996 $7.54 8,650,000 $1.17

Great Lakes $22.9 $0.3 $22. 6 7,076,410 $3.19 13,200,000 $1.71 Inland $25.9 $0.3 $25.6 13, 329,383 $1.92 16,600,000 $1.54 National Total $69.6 $1.6 $68.0 31,890,286 $2.13 53,171,000 $1.28 Option 4 California $1.6 $0.0 d $1.6 1,518,773 $1.03 771,000 $2.03 North Atlantic $5.0 $0.1 $5.0 2,129,180 $2.35 930,000 $5.37 Mid-Atlantic $3.1 $0.4 $2. 7 6,491,544 $0.42 13,600,000 $0.20 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $17.0 $0.5 $16.5 1,344, 996 $12.25 8,860,000 $1.86

Great Lakes $25.0 $0.3 $24. 7 7,076,410 $3.49 13,300,000 $1.86 Inland $20.6 $0.3 $20.4 8, 212,072 $2.48 14,800,000 $1.38 National Total $73.9 $1.6 $72.3 26,772,975 $2.70 52,261,000 $1.38 Option 2 California $1.6 $0.0 d $1.6 1,518,773 $1.03 771,000 $2.03 North Atlantic $5.0 $0.1 $5.0 2,129,180 $2.35 930,000 $5.37 Mid-Atlantic $3.1 $0.4 $2. 7 6,491,544 $0.42 13,600,000 $0.20 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $17.0 $0.5 $16.5 1,344, 996 $12.25 8,860,000 $1.86

Great Lakes $25.0 $0.3 $24. 7 7,076,410 $3.49 13,300,000 $1.86 Inland $25.9 $0.3 $25.6 8, 212,072 $3.12 14,800,000 $1.73 National Total $79.3 $1.6 $77.7 26,772,975 $2.90 52,261,000 $1.49 Option 1 California $1.6 $0.0 d $1.6 1,518,773 $1.03 771,000 $2.03§ 316(b) Proposed Rule: Phase III – EA, Part E: Social Cost s, Benefits, and Benefit-Cost Analysis Appendix to Chapter E3



### Table E3A-10: Estimated Value of Non-Use Benefits Required for Total Benefits to Equal Total Social

Costs for Existing Phase III Facilities - Break-Even Analysis by Regions (2003$, discounted at 7%)

Option Total Social Costs (millions) Mean Value of Use Benefits (millions) Non-Use Benefits Necessary to Break Even a

(millions) Number of Households Break-Even WTP per Household ($) Reduction of I&E Losses

(Age-1 Equivalents) Break-Even Value per

Age-1 Equivalentb ($)

E3A-12

North Atlantic $5.0 $0.1 $5.0 2,129,180 $2.35 930,000 $5.37 Mid-Atlantic $3.1 $0.4 $2. 7 6,491,544 $0.42 13,600,000 $0.20 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $17.0 $0.5 $16.5 1,344, 996 $12.25 8,860,000 $1.86

Great Lakes $25.0 $0.3 $24. 7 7,076,410 $3.49 13,300,000 $1.86 Inland $28.3 $0.3 $28.0 13, 738,093 $2.04 16,900,000 $1.66 National Total $81.8 $1.6 $80.1 32,298,995 $2.48 54,361,000 $1.47 Option 6 California $2.2 $0.0 d $2.2 1,518,773 $1.45 771,000 $2.85 North Atlantic $5.0 $0.1 $5.0 2,129,180 $2.35 930,000 $5.37 Mid-Atlantic $3.3 $0.4 $2. 9 7,214,556 $0.40 13,700,000 $0.21 South Atlantic c $0.0 $0.0 $0.0 0 $0.00 0 $0.00 Gulf of Mexico $17.0 $0.5 $16.5 1,344, 996 $12.25 8,860,000 $1.86

Great Lakes $30.8 $0.3 $30. 5 9,055,971 $3.37 14,300,000 $2.13 Inland $41.7 $0.3 $41.4 16, 880,055 $2.45 17,600,000 $2.35 National Total $102.5 $1.7 $100.8 38,143,532 $2.64 56,161,000 $1.79

aThe non-use benefits category in this tabl e may include some categories of use values that were not taken into account by the recreation and commercial fishing analyses. bThe non-use value per age-1 equivalent reported in the table includes the value placed on the fish’s contribution to non-use ecological services (e.g., population, health, sustainability, and overall ecosystem health).

c No benefits or costs are expected in the South Atlantic re gion because all potentially regulated facilities in this region alre ady meet the national categorical requirements in the baseline and therefore would not be required to install technologies to comply wit h this option. dPositive non-zero value less than $50,000. Source: U.S. EPA Analysis, 2004.