1

September 25, 2014

MEMORANDUM

SUBJECT: Economic Impact Analysis for Electronic Reporting and Recordkeeping 

Requirements for NSPS Rule

FROM: Robin Langdon 

Economist

AEG (C439-02)

TO: Colin Boswell

 Environmental Engineer

MPG (D243-05)

Introduction

This document addresses the economic impacts of the Electronic Reporting and 

Recordkeeping Requirements for NSPS (ERRR) Rule. Available in the docket is ERRR Rule EIA 

ICR Data Part 60.xls, which is a worksheet that includes information used in this analysis 

regarding the number of source performance tests required by Part 60 regulations and the 

number of summary and excess emissions reports.

1

 In addition, available in the docket is 

Electronic Reporting and Recordkeeping Requirements for NSPS Rule Estimate 09_17_2013

includes Part 60.xls, which includes additional assumptions and underlying calculations 

discussed in this memorandum.

Cost and Savings Estimation Approach

The Environmental Council of the States (ECOS) conducted a state survey through their 

Integrated Project Team; ECOS asked states if they intended on integrating EPA’s eReporting program through the Compliance and Emissions Data Reporting Interface (CEDRI) 

into state and local agency programs. Approximately 43 percent of states responded yes, 

they intended to use CEDRI as a means of fulfilling state reporting requirements; 43 percent 

of states responded they were not sure if they intended to use CEDRI; and 14 percent of 

states responded no, they did not intend to use CEDRI. To estimate total annualized costs, 

we assigned the not sure responses to the yes and no response categories in the same ratio 

as the yes to no responses. Also, we assumed the source performance tests and summary 

and excess emissions reports being submitted only through CEDRI (i.e., there would be no 

additional reporting to the states) were evenly distributed among responding states. 

 

1

For additional discussion on summary and excess emissions reports, see the section below entitled Data Used 

in Cost and Savings Estimation.
2

We estimate total annualized savings for the proposed requirements to be approximately 

$300,000 per year.2In addition to reflecting states’ intentions of allowing sources to submit 

reports through CEDRI to satisfy state reporting requirements, the total annualized savings

estimate reflects different assumptions for year one, year two, and years three through 

twenty. To allow time to transition from written reports to electronic reporting, we assume 

that (a) written reports will be submitted in years one and two, (b) for sources in states 

opting into EPA’s electronic reporting program, beginning in year three, written reports will 

no longer be submitted, and (c) for sources in states that are not opting into EPA’s electronic 

reporting program, electronic reports will be submitted to CEDRI, as well as printed out and

submitted to the state to meet the state’s requirement for a written report. For each of the 

three time periods (e.g., year one, year two, and years three through twenty), Table 1 below 

provides a summary of the number of each type of report submitted and the total labor time 

and costs or savings that would accrue. 

Table 1. By Report Type, the Number of Reports Submitted Each Year and Labor Hours per 

Submittal

Report

Number of

Submittals

Labor 

Rate

Hours/Test

Submittal –

Year 1

Total Labor Costs for 

Year 1

Source Performance 

Test 1,393 $85.22 6 $710,000

Periodic Reports 17,612 $85.22 3.5 $5,300,000

Report

Number of 

Submittals

Labor 

Rate

Hours/Test 

Submittal –

Year 2

Total Labor Costs for 

Year 2

Source Performance 

Test 1,393 $85.22 4 $480,000

Periodic Reports 17,612 $85.22 3 $4,500,000

Report

Number of 

Submittals3

Labor 

Rate

Hours/Test 

Submittal –

Years 3 

through 20

Total Labor Costs Each 

Year for Years 3 

through 20

Source Performance 

Test 1,051 $85.22 (4) ($360,000)

Periodic Reports 13,286 $85.22 (1) ($1,100,000)

 

2 The estimate reflects a 7 percent discount rate, a 7 percent cost of capital, and a 20-year annualization period.

3

For year three, the table reflects cost savings associated with those states opting into EPA’s electronic 

reporting program where written reports will no longer be submitted; we are not including any cost savings 

associated with those states that do not opt into EPA’s electronic reporting program.
3

Data Used in Cost and Savings Estimation

The following section briefly discusses the data used in calculating the cost and savings 

estimates. Because the ERRR Rule does not require testing, we do not include testing costs 

in the estimates. For additional details on the calculations, please refer to the Electronic 

Reporting and Recordkeeping Requirements for NSPS Rule Estimate 09_17_2013 includes

Part 60.xls worksheet located in the docket.

The periodic reports category includes reports required by 40 CFR Part 60 (Standards of 

Performance for New Stationary Sources). Currently, the General Provisions of Part 60 

include requirements for summary reports, excess emission reports, or a combination of the 

two. Generally, the reporting required by the General Provisions of the major air pollution 

regulation Parts applies to all of the related subparts (e.g., the General Provisions for Part 60

apply to all of Part 60’s corresponding subparts). However, in some cases, subparts override 

the General Provisions or otherwise indicate that the General Provisions do not apply to that

subpart. In other cases, the individual subparts create their own versions of these report

types. To simplify these differences for our analysis, we use the term periodic report to 

describe the various reports that are similar to the summary reports and excess emissions 

reports required in the General Provisions of Part 60.4

To estimate costs and savings associated with annual electronic submittal of source 

performance tests, the Agency compiled data on the total number of source performance 

tests required annually by 40 CFR Part 60 and its respective subparts. The total number of 

source performance tests submitted annually is 1,393.

5 Because not all states intend to 

integrate CEDRI into state and local agency programs, to calculate the savings beginning in 

year three, we estimate the number of source performance tests annually submitted only to 

CEDRI to be 1,051 (approximately 75 percent of the total number of tests).

6

 The remainder

of the source performance tests will be submitted both to CEDRI and to the state. EPA’s 

Electronic Reporting Tool (ERT) allows the source performance test report to be printed by 

the source once data is entered. The source can mail the printed report to the state or local 

air agency. While there is some additional burden associated with printing and mailing the 

report, we assume that the burden will be equal to or less than the savings associated with 

entering the data electronically. Because 40 CFR Part 60 does not require more than one 

source performance test per year, we conservatively assumed that the number of source 

performance test submittals is equal to the number of facilities. 

To estimate costs and savings associated with periodic reports, we compiled data on the 

total number of summary report and excess emissions report submittals through a review of 

 

4

In developing the electronic reporting data flow for these reports, the Agency determined that the majority of 

the reports will be subpart-specific forms on the CEDRI system and that the remaining minority will be sourcespecific reports converted and uploaded on to the CEDRI system.

5 The data is found in the following worksheet in the docket -- ERRR Rule EIA ICR Data Part 60.xls.

6 The 75 percent is calculated as follows: 43% of states that responded yes/(43 percent that responded yes + 

14 percent that responded no). 
4

40 CFR Part 60 and its corresponding ICR. The estimated number of periodic reports 

submitted each year is 17,612.

7

 Because not all states intend to integrate CEDRI into state 

and local agency programs, to calculate the savings beginning in year three, we estimate the 

number of periodic reports annually submitted only to CEDRI to be 13,286 (approximately 75 

percent of the total number of reports). The remainder of the periodic reports will be 

submitted both to CEDRI and to the state. EPA’s ERT allows the periodic report to be printed 

by the source once data is entered, and the source can mail the printed report to the state 

or local air agency. While there is some additional burden associated with printing and 

mailing the report, we assume that the burden will be equal to or less than the savings 

associated with entering the data electronically. 

Cost Calculations – Years 1 and 2

In year one, we assume that written reports will still be submitted. We calculate the labor 

costs associated with any additional time it may take to (a) become familiar with the 

electronic report templates and submittal process (i.e., the learning curve), and (b) submit 

the electronic reports. In year two, we also assume written reports will still be submitted, 

and we calculate the labor costs associated with any additional time it may take to submit 

the electronic reports.

Savings and Cost Calculations – Years 3 through 20

In years three through twenty, we assume that written reports are no longer submitted for 

sources in those states that opt into EPA’s electronic reporting program and that there is 

labor savings associated with only submitting electronic reports. We assume the labor 

savings are associated with report submittals from the sources in the portion of states that 

(a) intend to use CEDRI (43 percent) and (b) were not sure if they would use CEDRI but that 

we assigned to the yes response category (an additional 32 percent). We also assume that 

there is a 50 percent labor savings associated with electronically submitting source 

performance test reports, and we assume a 25 percent labor savings associated with 

electronically submitting periodic reports.8 For sources in states that are not opting into 

EPA’s electronic reporting program, we assume that these sources will have to submit an 

electronic report through CEDRI to meet federal reporting requirements and a written 

report to meet state reporting requirements. Because the electronic reports can be printed 

out and submitted to the state or local agency to meet that agency’s requirement for a 

written report, we assume that the burden will be equal to or less than the savings 

associated with entering the data electronically. We used labor rates from the Bureau of 

Labor Statistics and selected a rate for the Management, Professional, and Related 

 

7 The data is found in the following worksheet in the docket -- ERRR Rule EIA ICR Data Part 60.xls.

8 The 50 percent labor savings assumes an existing source performance test file can be reused and already 

contains about 50 percent of required data. The 25 percent labor savings assumes about 25 percent of the 

required data is in existing databases and will not need to be submitted a second time.
5

Occupations category; we adjusted the rate upward by 67 percent to reflect overhead.9 See 

Table 1 above for a summary, by report type, of the number of submittals and labor costs 

and savings. We aggregated the labor costs and savings and annualized the totals over a 20-

year period using a 7 percent discount rate; we estimated total annualized savings for the 

proposed requirements to be approximately $300,000 per year. 

To gauge the sensitivity of the assumption of assigning the not sure responses to the yes and 

no response categories, we assigned all of the not sure responses to the no response 

category. This resulted in a total annualized cost estimate for the proposed requirements of 

approximately $530,000. In this case, the total annualized cost estimate is higher because 

(a) years one and two reflect only costs for all facilities submitting both written and 

electronic reports, while years three through twenty reflect savings only for facilities in the 

states intending to use CEDRI, and (b) the costs in years one and two are not discounted as 

much as the costs and savings that accrue in years three through twenty. Approximately 

12,000 facilities are subject to Part 60 regulations, and some facilities submit one periodic 

report per year while others submit more than one. While it is difficult to calculate a 

potential precise per-facility cost, the cost is expected to be low.

Conclusions

Because we assume that beginning in year three written reports are no longer submitted for 

most states and for a portion of the states, there is labor savings associated with only 

submitting electronic reports, we conclude the ERRR Rule results in labor, or cost, savings. 

We conclude that the proposed ERRR Rule will not have a significant economic impact on 

small, or large, entities. 

 

9 The Labor Rates used in the analysis can be found at http://www.bls.gov/news.release/pdf/ecec.pdf, Table 9, 

Management, Professional, and Related Occupations.