## Screening Analysis to Examine the Economic Impact of Proposed Revisions to the Refrigerant Recycling and Emissions Rule
Draft Report

Prepared for:

Julius Banks U.S. EPA Headquarters Ariel Rios Building 1200 Pennsylvania Avenue, N.W. (6205J) Washington, DC 20460

### Prepared for:

Julius Banks U.S. EPA Headquarters Ariel Rios Building 1200 Pennsylvania Avenue, NW (6205J) Washington, DC 20460

Prepared by:

Stratus Consulting Inc. 1920 L St. NW, Ste. 420 Washington, DC 20036

202-466-3731

PO Box 4059 Boulder, CO 80306-4059

Contact:

Nimmi Damodaran

October 23, 2009
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SC11138 

# Screening Analysis to Examine the Economic Impact of Proposed Revisions to the Refrigerant Recycling and
Emissions Rule

Draft ReportDo Not Cite or Quote

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# Contents

List of Figures ..............................................................................................................................i x List of Tables

............................................................................................................................... xi

Executive Summary ................................................................................................................. S-1

Section 1 Introduction ..........................................................................................................1

1.1 Regulatory Baseline...............................................................................................4 1.1.1 Regulated community ................................................................................4 1.1.2 Current leak repair requirements ...............................................................4 1.1.3 Current recordkeeping and reporting requirements...................................5 1.2 Proposed Regulatory Revisions .............................................................................5 1.2.1 Proposed leak repair requirements.............................................................5 1.2.2 Proposed recordkeeping and reporting requirements ................................7 1.3 Analytical Requirements........................................................................................8

1.4 Contents .................................................................................................................8

Section 2 Approach ..............................................................................................................9

2.1 Repair and Retire/Retrofit Actions ........................................................................9 2.2 Evaluating the Aggregate Incremental Impact of Proposed Rule on the Economy ...................................................................................................11 2.2.1 Model equipment costs ............................................................................11 2.2.2 Model facility costs..................................................................................12 2.2.3 Model entity costs and incremental impacts of the rule ..........................13 2.3 Estimating the Impact of the Proposed Rule on Small Entities...........................13 2.4 Monte Carlo Analysis ..........................................................................................14

2.5 Benefits Estimation..............................................................................................15

2.5.1 Baseline benefits ......................................................................................16 2.5.2 Benefits of proposed changes ..................................................................16 2.5.3 Health benefits analysis ...........................................................................17 2.6 Synthesis of Benefits and Costs...........................................................................17

2.6.1 Cost-effectiveness estimation ..................................................................17

2.6.2 Net benefits estimation ............................................................................18Stratus Consulting Contents (Draft, 10/23/2009)

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### Section 3 Industry Characterization .................................................................................18

3.1 Comfort Cooling ..................................................................................................19 3.1.1 CC equipment characterization................................................................20 3.1.2 Affected business sectors in the CC category..........................................20 3.2 Commercial Refrigeration ...................................................................................23 3.2.1 CR equipment characterization................................................................24 3.2.2 Affected business sectors in the CR category..........................................25

3.3 Industrial Process Refrigeration...........................................................................26 3.3.1 IPR equipment characterization...............................................................26 3.3.2 Affected businesses in the IPR category..................................................26

Section 4 Economic Impacts Analysis ..............................................................................28

4.1 Characterization of All Affected Sectors.............................................................28 4.2 Cost Input Assumptions.......................................................................................35 4.3 Compliance Costs by Equipment Type Associated with Different

Levels of Action...................................................................................................38 4.4 Recordkeeping and Reporting Costs....................................................................38 4.5 Regulatory Impacts ..............................................................................................39 4.5.1 Aggregate incremental impact of proposed rule on the economy ...........39 4.5.2 Impact of proposed rule on small entities................................................42

Section 5 Benefits Estimation ............................................................................................49

5.1 Emissions Reduction Analysis.............................................................................66 5.2 Health Benefits Analysis .....................................................................................70 5.3 Health Benefits Economic Analysis ....................................................................78 5.3.1 Valuing fatal skin cancers........................................................................78 5.3.2 Valuing nonfatal cases of melanoma .......................................................78 5.3.3 Valuing nonfatal cases of carcinomas .....................................................79

5.3.4 Estimated value of reduced health effects ...............................................79

Section 6 Synthesis of Benefits and Costs .........................................................................81

6.1 Cost-Effectiveness Analysis ................................................................................81 6.2 Net Benefits Analysis ..........................................................................................84 6.3 Discussion of Uncertainties in Net Benefits Analysis.........................................85 6.3.1 Potentially overestimated costs................................................................86

6.3.2 Additional benefits...................................................................................87 6.3.3 Summary of discussion of uncertainty in costs and benefits analysis .....89Stratus Consulting Contents (Draft, 10/23/2009)

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### Section 7 Statutory and Executive Order Impact Analysis ............................................90

Section 8 Conclusions .........................................................................................................92

Bibliography

............................................................................................................................... 92

Attachment. Economic Analysis Detail TablesDo Not Cite or Quote

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# Figures

1 Example of lag in health effects from emissions reductions in 2010.................................76Do Not Cite or Quote

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# Tables

1 Business sectors and NAICS codes examined in this screening analysis............................ 3 2 Options for annual leak rates ............................................................................................... 5 3 Types of repairs ............................................................................................................. .... 10 4 Types and sequence of repairs assumed for each repair level in the different scenarios .. 11 5 Characterization of CC equipment .................................................................................... 21 6 CC equipment annual leak rate data .................................................................................. 21 7 Distribution of CC systems................................................................................................ 22 8 Sectors with CC equipment with a charge size greater than 50 pounds............................ 23 9 Characterization of CR equipment .................................................................................... 24 10 CR equipment annual leak rate data .................................................................................. 25 11 Sectors with CR equipment with a charge size greater than 50 pounds and units per facility ............................................................................................................. .... 25 12 Characterization of IPR equipment.................................................................................... 27 13 IPR equipment annual leak rate data ................................................................................. 27 14 Sectors with IPR equipment with a charge size greater than 50 pounds and units per facility ............................................................................................................. .... 28 15 Industries characterized by size categories, number of entities and facilities, facilities per entity, equipment us e, and average revenues................................................ 29 16 Compliance costs for applicable types of refrigeration and cooling equipment

under Scenario 1 ............................................................................................................... . 39 17 Compliance costs for applicable types of refrigeration and cooling equipment

under Scenario 2 ............................................................................................................... . 39 18 Incremental cost of the different options for the proposed rule under Scenario 1 per piece of equipment....................................................................................................... 40 19 Incremental cost of the different options for the proposed rule under Scenario 2 per piece of equipment....................................................................................................... 41 20 Incremental cost of the different options for the proposed rule under Scenario 1 per equipment category...................................................................................................... 43 21 Incremental cost of the different options for the proposed rule under Scenario 2 per equipment category...................................................................................................... 44 22 Percentage of regulatory impacts attributed to each equipment category

under Scenario 1 ............................................................................................................... . 45 23 Percentage of regulatory impacts attributed to each equipment category

under Scenario 2 ............................................................................................................... . 46 24 Total incremental cost of each regulatory option under Scenario 1 by sector................... 47 25 Total incremental cost of each regulatory option under Scenario 2 by sector................... 48Stratus Consulting Tables (Draft, 10/23/2009)

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### 26 Expected number of entities with compliance costs greater than 1% of average value of shipments under Scenario 1..................................................................................50 27 Expected number of entities with compliance costs greater than 1% of average value of shipments under Scenario 2..................................................................................54 28 Expected number of entities with compliance costs greater than 3% of average value of shipments under Scenario 1..................................................................................58 29 Expected number of entities with compliance costs greater than 3% of average value of shipments under Scenario 2..................................................................................62 30 Benefits assumptions of months avoided emissions if process stops at each regulatory stage specified below................................................................................67 31 Incremental benefits of the different options for the proposed rule under Scenario 1 per equipment category (ODP-weighted tonnes).............................................69 32 Incremental benefits of the different options for the proposed rule under Scenario 2 per equipment category (ODP-weighted tonnes).............................................69 33 Incremental benefits of the different options for the proposed rule under Scenario 1 per equipment category (MMTCE)..................................................................69 34 Incremental benefits of the different options for the proposed rule under Scenario 2 per equipment category (MMTCE)..................................................................70 35 Total incremental benefit of each regulatory option under Scenario 1 by sector (ODP-weighted tonnes)......................................................................................................71 36 Total incremental benefit of each regulatory option under Scenario 2 by sector (ODP-weighted tonnes)......................................................................................................72 37 Total incremental benefit of each regulatory option under Scenario 1 by sector (MMTCE)........................................................................................................................ ...73 38 Total incremental benefit of each regulatory option under Scenario 2 by sector (MMTCE)........................................................................................................................ ...74 39 Health benefits of the different options for the proposed rule under Scenario 1 ...............77 40 Health benefits of the different options for the proposed rule under Scenario 2 ...............77 41 Value of health benefits of the different options for the proposed rule under

Scenario 1..................................................................................................................... ......80 42 Value of health benefits of the different options for the proposed rule under

Scenario 2..................................................................................................................... ......80 43 Average cost-effectiveness of options for proposed regulation under Scenario 1.............81 44 Average cost-effectiveness of options for proposed regulation under Scenario 2.............82 45 Incremental cost-effectiveness of options for proposed regulation under Scenario 1 .......83 46 Incremental cost-effectiveness of options for proposed regulation under Scenario 2 .......83 47 Average cost-effectiveness of options for proposed regulation under Scenario 1.............84 48 Average cost-effectiveness of options for proposed regulation under Scenario 2.............84 49 Monetized net benefits of regulation under Scenario 1 .....................................................84 50 Monetized net benefits of regulation under Scenario 2 .....................................................85Do Not Cite or Quote

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# Executive Summary

The U.S. Environmental Protection Agency (EPA or the Agency) is proposing to change the leak rate repair requirements and associated pr actices for equipment used for commercial refrigeration (CR), industrial pr ocess refrigeration (IPR), and co mfort cooling (CC) containing more than 50 pounds of refrigerants that are oz one-depleting substances (ODS). The options for

revisions under consideration incl ude requiring owners or operators of this type of equipment to repair leaks at the annual leak rates presented in Table S.1, for CC and commercial and industrial process equipment, respectively.

The economic analysis examines a total of 12 regula tory options, with each of the six leak rate repair options (Table S.1) anal yzed under two scenarios. The scen arios represent different types of repairs. Under the first scenario, leaking components that fail verification tests must be replaced. Under the second scenar io, the owners and ope rators must repair leaking equipment, but whether or not repairs will include the repl acement of leaking components is at their discretion. For example, under the first scenario, upon th e failure of an initial attempt to repair an owner or operator would be required to replace a leaking compressor in its entirety, while in the second scenario the owner or operator would be allowed to replace a part of that compressor.

Table S.1. Options for annual leak rates

Leak rate since last verification

Option CC CR and IPR

1 (5% and 10%) 5% 10%

2 (5% and 20%) 5% 20%

3 (5% and 30%) 5% 30%

4 (10% and 10%) 10% 10%

5 (10% and 20%) 10% 20%

6 (10% and 30%) 10% 30%



### Under both scenarios, repairs must be comple ted within 30 days of leak detection, and verifications (immediate, and follow-up with in 30 days) must be conducted. Leaking components that fail verification tests must be repaired, and ow ners or operators that have repaired the leaking equipment three times w ithin a consecutive 12-month period due to the failure of an initial verification or follow-up veri fication test must retire the equipment or retrofit it to use non-ODS refrigerants.Stratus Consulting (Draft, 10/23/2009)

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### The regulatory alternative select ed for the proposed rule is Op tion 5 under Scenario 2. This option represents annual leak ra te thresholds of 10% for CC a nd 20% for CR and IPR, with no required component replacements and the type of repairs conducted left to the discretion of owners and operators.

Objectives of the economic analysis

This document presents an economic screening an alysis that examines the impacts of these potential revisions to the curre nt regulation. The purposes of the screening analysis are to determine (1) whether the revisi ons under consideration represen t a significant regulatory action resulting in a total annual impact on the economy greater than $100 million as per Executive Orders (EOs) 12866 and 13422, and (2) whether th e proposed revisions could result in a “significant economic impact on a substantial number of small entities” (SISNOSE) under the Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA).

This screening analysis satisfies the Agency’s obligations under EO 12866, which requires an assessment of costs, benefits, and of potentially effective and reasonably feasible alternatives to the planned regulatory action, and the Unfunded Mandates Reform Act, which requires a qualitative and quantitative assessment of the antic ipated costs and benefits of a Federal mandate resulting in annual expenditure s of $100 million or more, including the costs and benefits to State, local, and Tribal governme nts or the private sector. This analysis also complies with the RFA as amended by the SBREFA, which requires agencies to endeavor, consistent with the objectives of the rule and applicable statutes, to fit regulatory and information requirements to the scale of businesses, organiza tions, and governmental jurisdictions subject to their regulations. In addition, the document summarizes analyses of the proposed rule’s impacts that are needed to meet certain relevant regulatory development statues and EOs.

The business sectors examined in this analysis are shown in Table S.2.

Analytical methods: Costs and impacts

The economic analysis uses a “model entity” appr oach for size categories based on the number of employees within each affected sector. The model entity analysis uses a “model facility” analysis, which in turn relies on a “model equipm ent” analysis. The characteristics and costs of model piece of equipment are used to estimate th e costs of compliance for model facilities, and the model facility costs are then used to estimate the model entity level costs.Stratus Consulting (Draft, 10/23/2009)

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### Table S.2. Business sectors examined

Business sector NAICS code

Supermarkets and grocery stores 445110

Convenience stores 445120

Gas station convenience stores 447110

Warehouse and club supercenters 45291

Refrigerated warehouse and storage 49312

Refrigerated warehouse farm product storage 49313

Office building managers 531312

Lodging 72

Chemical manufacturing 325

Pharmaceutical manufacturing 3254

Petrochemical manufacturing 324110

Bakeries 3118

Food manufacturing other than bakeries 311

Breweries 31212

Soft drink manufacturing 312111

Bottled water manufacturing 312112

Ice manufacturing 312113

Ice rinks 713940

Elementary and secondary schools 6111

Junior colleges, colleges and universities 6112, 6113

Hospitals 622



### The model entity analysis is used to estimate the impact on the economy as a whole (i.e., aggregate cost of the proposed rule) a nd on small businesses individually (i.e., for a SISNOSE analysis). The specific Small Business Administration size cat egory definitions are only relevant to the small business impacts anal ysis, however, for consistency the same size category breakdowns are used in th e description of a model plant to assess the economic impact of the proposed rule on the economy as a whole.

The analysis assumes that owners and operators of refrigeration and cooling equipment with a charge size greater than 50 pounds of an ODS w ill make repairs only as mandated by regulation, which is likely to lead to an overestimate of the costs. In all likelihood, there would be a number of cases in which normal maintenance practices w ould include making the repairs to ensure that the refrigeration and cooling systems satisfact orily perform their f unctions regardless ofStratus Consulting (Draft, 10/23/2009)

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### proposed changes to the rule. In addition, in so me cases, owners and operators could choose to skip one of the regulatory steps (e.g., move from making minor repa irs to retrofitting the system without replacing a component), reducing the expected cost of the rule.

The analysis for estimating the impact of the pro posed rule uses a statistical modeling technique called Monte Carlo analysis to estimate the number of entities in each sector that are expected to experience costs exceeding 1% (and 3%) of the average annual value of shipments. This analysis

does not account for actions ma ndated by current regulations.

Results: Costs and impacts

Based on the analysis, the total e xpected annual incremental cost of the rule across all sectors is between $86.5 million and $135.6 million for the six op tions under the first scenario (requiring component replacement), and between $28.5 milli on and $53.2 million for the six options under

the second scenario. All but one of the regulatory options under th e first scenario are above the $100 million adverse impact threshold for the purposes of EO 12866 and 13422, while all the options under Scenario 2 are below that th reshold. The regulatory option (Option 5 under Scenario 2) selected for the ru le would result in a total expect ed annual incremental cost of $38.2 million and is therefore not an economical ly significant regulator y action based on the threshold of an annual effect on the economy of $100 million or more.

This screening analysis found that the revised rule will only significantly impact between 1,396 and 1,775 small businesses under Scenario 1 an d between 336 and 409 small businesses under the second scenario for the purposes of the RFA. With the preferred regu latory option, Option 5 under Scenario 2, a total of 353 small businesses will experience compliance costs greater than or equal to 1% of their average value of sh ipments. This represents 0.34% of the 104,068 total potentially affected small businesses examined acr oss all sectors. At the 1% level, the most heavily impacted sector, the ice rink sector, is pr edicted to have 36 impacted entities (out of 443 small businesses in the sector, or 8.1% of the sector). The sector w ith the most impacted small entities, bakeries, is predicted to have 114 affected small businesses (of the 9,598 potentially impacted small businesses in the sector, or 1.2% of the sector).

There are 74 small businesses with anticipated compliance costs grea ter than or equal to 3% of their average value of shipments, mainly in the ba kery and ice rink sectors. In the bakery sector, 24 companies are expected to have impacts betw een 3 and 4%, while 6 are expected to have impacts between 4 and 9.5%. In the ice rink sect or, 25 companies are exp ected to experience impacts between 3 and 4%, 4 companies will likely experience impacts between 4 and 10%, and there is a small chance that 1 of those 4 companies may experience impacts between 10 and

26%.Stratus Consulting (Draft, 10/23/2009)

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### Benefits assessment: Methods and results

The benefits analysis, like the cost analysis, is based on a “model entity” approach for size categories based on the number of employees wi thin each affected sector. Again, the “model entity” analysis is developed from a “model facility” analysis, which relies on a “model equipment” analysis. The characte ristics and benefits associated with model pieces of equipment are used to establish potential avoided emissions fo r model facilities, and th e benefits associated

with model facilities are used to establish bene fits for the model entities. This model entity analysis is used to estimate the impact on the eco nomy as a whole (i.e., ag gregate benefit of the proposed rule).

Using this approach, it is estimated that the total expected benefits – in terms of avoided refrigerant emissions

 are between 263 and 493 ozone-dep leting potential (ODP)-weighted

tonnes or between 1.5 and 2.5 million metric tonnes of carbon equivalent (MMTCE) of avoided refrigerant emissions under Scenario 1, and between 198 and 423 ODP-wei ghted tonnes or 1.2

and 2.3 MMTCE under Scenario 2.

The estimated total benefits for the preferred regulatory altern ative, Option 5 under Scenario 2, are 316 ODP-weighted tones or 1.8 MMTCE.

The sector generating the largest environmen tal benefit in terms of both ODP- and global warming potential-weighted emissions is the supermarket and grocery store sector, with estimated annual avoided refrigerant emissi ons between 110.5 and 178.7 ODP-weighted tones,

or between 0.89 and 1.49 MMTCE under Scenario 1, and between 100 and 166.8 ODP-weighted

tonnes or 0.80 and 1.40 MMTCE under Scenario 2.

ODS emissions deplete stratos pheric ozone, which protects th e biosphere from potentially damaging doses of ultraviolet (UV) radiation. Depletion of stratospheric ozone caused by the

release of man-made ODS can lead to increases in UV radiation reaching the Earth’s surface,

which could in turn lead to a dverse human and animal health effects, as well as ecosystem impacts. A health-based benefits analysis wa s conducted for the most important type of quantified health effect: skin cancers. Other health effects not included in the analysis, but which are known or suspected to be associated with dama ge to stratospheric ozon e, including premature aging, cataracts, and i mmune system suppression.

The health effects for each of the 12 regulatory options were estimated using EPA’s Atmospheric Health Effect Framework (AHEF) model to esti mate decreases in fata l and nonfatal cases of three types of skin cancer. The reduced skin cancers caused by reducing ODS emissions in a single year (2010) will occur over an extended pe riod of time. Additional skin cancers will be reduced by emissions reductions occurring in subs equent years. Using the estimated emissions reductions occurring in 2010, AHEF estimates the d ecreased incidence of new cases of each typeStratus Consulting (Draft, 10/23/2009)

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### of skin cancer and the number of skin cancer fatalities in each year through 2150. The AHEF estimates that a single year of emission reductions will reduce a cumulative total of between 85

and 228 cases of skin cancer in the United St ates between 2010 and 2150, with approximately

one avoided fatal case. Because the estimated av oided skin cancers occu r over a 140-year period,

the economic value of the reduced skin cancers is greatly effect ed by discounting to calculate a present value.

For Scenario 1, the skin-cancer-related benef its range between $1.3 million and $2.5 million with a 3% discount rate, and between $0.4 million and $0.8 million with a 7% discount rate. For
Scenario 2, the total benefits range between $1.0 million and $2.2 million with a 3% discount rate, and between $0.3 million and $0.7 million with a 7% discount rate. Option 5 under Scenario

2 has estimated avoided skin cancer benefits of $1.6 million with a 3% discount rate and $0.5

with a 7% discount rate.

The benefits analysis has some limitations. There is no analysis of benefits that may be obtained by preventing a chronically leaking system from continuing operation. There is also no analysis

of the benefits of an accelerate d transition to non-ODS alternative refrigerants. This means that the benefits estimates presented here are likely to underestimat e the total bene fits potentially realized through the proposed rule . The monetization of benefits is based solely on the avoidance

of incidences of skin cancer. Other health and environmental benefits are not examined in monetized fashion and, therefore, there is an underestimation of th e dollar value of total benefits.

Cost-effectiveness: Methods and results

Cost-effectiveness (C-E) analysis examines the cost per kilogram of avoided emissions for each option. C-E is calculated by divi ding the total cost of an option by the avoided emissions [in ODP-weighted kilograms (ODP-kilograms)] for that option. The C-E analysis of the leak rate regulatory options helps identify the equipment categories that are rela tively less expensive per pound of avoided emissions as well as the incremen tal costs of increasing the stringency of the regulation on each equipment type.

When the average C-E results of regulatory options for each equipment type are examined independently of one another (e.g., the costs and be nefits of a 20% leak rate for CR are examined independently of a 20% leak rate for IPR), th e most cost-effective option for CC is 10% under Scenarios 1 and 2 ($290 and $118/ODP-kilogram, re spectively), for CR is 20% under Scenario 1 and 30% under Scenario 2 ($350 and $169/ODP-kil ogram, respectively), and for IPR is 10%

under Scenario 1 and 20% under Scenario 2 ($161 and $45/ODP-kilogram, respectively).

The incremental C-E analysis of increasingly st ringent regulatory options reveals that the incremental emissions reductions attained by movi ng from a 10% to a 5% leak rate for CC are relatively more expensive than emissions reducti ons attained with the less stringent optionStratus Consulting (Draft, 10/23/2009)

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### (10%). The most cost-effective (i.e., lowest cost/ODP-kilogram) incremental emissions reductions for CR and IPR are attained by moving from a 30% annual leak rate to a 20% leak

rate.

When the average C-E is examined for option packages [e.g., Option 1 (5% and 10%)], then Option 4 (10% and 10%) appears to have the lowe st (i.e., most efficient) C-E result under Scenario 1, and Option 5 (10% a nd 20%) has the lowest C-E result under Scenario 2. This is driven largely by the average C-E of IPR equipment mentioned above.

Net benefits: Methods and results

The net benefits of each of the options represen ts the difference between the costs and benefits associated with that option. The costs outweigh the monetized portion of the benefits for each of the options, resulting in negative net monetized benefits with bot h a 3% and 7% discount rate. Under Scenario 1, the net monetized benefits range from $-85.2 million to $-133.1 million with a 3% discount rate, and from $- 86.1 million to $-134.9 million with a 7% discount rate. Under Scenario 2, the net monetized benefits range from $-27.4 million to $-51.1 million with a 3% discount rate, and from $-28.1 million to $-52.6 m illion with a 7% discount rate. Option 5 under Scenario 2 has a net monetized benefit of $-36.6 million with a 3% discount rate and $-37.7 with

a 7% discount rate. As indicated above in th e discussion of limitati ons of monetization of benefits, it should be noted that the net benefits are underestimated due to the omission of several types of nonmonetized benefits.

Conclusions

In summary, the total expected annual incrementa l cost of the rule across all sectors is between $86.5 million and $135.6 million under the first scenario, and between $28.5 million and $53.2 million under the second scenario. All but one of the regulatory options under Scenario 1 have a cost above the $100 million adverse im pact threshold for the purposes of EO 12866 and 13422, while all options under Scenario 2 are below this threshold.

The selected option, Option 5 under Scenario 2, has an expected incremental cost of $38.2 million with a total emissions reduction of 316 ODP-weighted tonnes or 1.8 MMTCE. The value of the monetized portion of the avoided health effects is less than the total incremental cost for all regulatory options, but there are nonmone tized benefits that are omitted from those

estimates.

The RFA screening analysis found that the revise d rule will only significantly impact between 1,396 and 1,775 small businesses under Scenario 1 and between 336 and 409 small businesses under the second scenario for the purposes of th e RFA. The regulatory option selected for the rule, described in Section 1.2, would result in a total expected annual incremental cost of $38.2 million and only significantly impact 353 small businesses.Do Not Cite or Quote

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# 1. Introduction

Section 608 of the Clean Air Act (CAA) Amen dments of 1990, the National Recycling and Emissions Reduction Program, required the U.S. Environmental Protection Agency (EPA or the Agency) to establish regulations to reduce em issions of ozone-depleting substances (ODS). These regulations were established to maximize the recyclin g of ODS, including chlorofluorocarbons (CFCs), hydrochlorofl uorocarbons (HCFCs), and their blends. CFR Title 40, Part 82, Subpart F (2003) details th e rules and regulations that prohibit knowingly venting ODS from refrigeration and air-conditio ning equipment during maintenance, service, repair, or disposal of the equipment and addresses several issues, including:

 Leak repair in refrigeration and air-conditioning equipment with a charge size greater than 50 pounds

 Service practices that maximize the recycli ng of ODS during the se rvicing and disposal of air-conditioning and re frigeration equipment

 Certification requirements for the equipment and technicians involved in the recycling, recovery, and reclamation of ODS

 Restrictions on the sale of refrigerants to certified technicians

 Certification of servicing equipment

 Safe disposal requirements for appliances that are disposed of with their charges intact

 Recordkeeping requirements

 Enforcement.

The EPA is considering revising the rules asso ciated with leak repair and recordkeeping requirements for equipment with a charge size greater than 50 pounds of an ODS refrigerant used in comfort cooling (CC), commercial refrig eration (CR), and industria l process refrigeration (IPR). This report documents an economic screen ing analysis conducted to evaluate the impact of the proposed revisions.

This document provides information to assist the Agency in satisfying its obligations under

relevant statutes and Executive Orders (EOs) such as EO 12866, 13132, 13045, and 12898; the Paperwork Reduction Act; the Regulatory Flexib ility Act (RFA); and the Unfunded Mandates Reform Act (UMRA) of 1995 (P.L. 104-4). EO 12866 directs agencies to prepare a RegulatoryStratus Consulting (Draft, 10/23/2009)

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### Impact Analysis (RIA) for any “significant re gulatory action.” The EO defines a “significant regulatory action” to be any regulation that may:

 Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of th e economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or

communities

 Create a serious inconsistency or otherwise in terfere with an action taken or planned by another agency

 Materially alter the budgetary im pact of entitlements, grants user fees, or loan programs or the rights and obligations of recipients thereof

 Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the EO.

Pursuant to the terms of the EO, the revision to th e rule has the potential to meet the criteria of the first condition above, depending on the regulatory option chosen.

Under section 202 of the UMRA, EPA generally mu st prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. In ac cordance with UMRA, the cost and benefit

calculations are include d in this document.

The RFA generally requires an agency to prepar e a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the ag ency certifies that the rule w ill not have a significant economic impact on a substantial number of small enti ties (SISNOSE). Small en tities include small businesses, small organizations, and small govern mental jurisdictions. This document presents an economic screening analysis that examines the impacts of these proposed revisions on small

entities.

Table 1 shows the business sectors potentially a ffected by the proposed revisions and therefore considered in this analysis, along with the North American Industry Classification System (NAICS) codes (U.S. Census Bureau, 2002a). The Small Business Administration’s (SBA’s) Table of Size Standards by NAICS code is used to determine what constitutes a small entity under the RFA. These size standards are expresse d in millions of dollars (annual receipts) or number of employees (U.S. SBA, 2007).Stratus Consulting (Draft, 10/23/2009)

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### Table 1. Business sectors and NAI CS codes examined in this screening analysis

Business sector NAICS code

Supermarkets and grocery stores 445110

Convenience stores 445120

Gas station convenience stores 447110

Warehouse and club supercenters 45291

Refrigerated warehouse and storage 49312

Refrigerated warehouse farm product storage 49313

Office building managers 531312

Lodging 72

Chemical manufacturing 325

Pharmaceutical manufacturing 3254

Petrochemical manufacturing 324110

Bakeries 3118

Food manufacturing other than bakeries 311

Breweries 31212

Soft drink manufacturing 312111

Bottled water manufacturing 312112

Ice manufacturing 312113

Ice rinks 713940

Elementary and secondary schools 6111

Junior colleges, colleges, and universities 6112, 6113

Hospitals 622



### The economic analysis examines 12 regulatory op tions, consisting of si x leak rate repair requirements, each applied for two scenarios, with the scenarios representing the type of repairs. Leaking components that fail veri fication tests must be replaced under the first scenario, while the owners and operators may replace leaking components at their discretion under the second

scenario.

Based on the screening analysis de scribed in this report, the to tal expected annual incremental

costs of the rule across a ll sectors range between $86.5 m illion and $135.6 million for the six options under the first scenario and $28.5 million and $53.2 million for the six options under

Scenario 2. Estimates for all but one of the options are above the $100 million per year costStratus Consulting (Draft, 10/23/2009)

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### threshold under the first scenario and under the $100 million cost threshold for all options under

the second scenario.

This screening analysis found that the revised rule will only significantly impact between 1,396 and 1,775 small businesses under Scenario 1 an d between 336 and 409 small businesses under the second scenario for the purposes of the RFA. The regulatory option selected for the rule, described in Section 1.2, would result in a to tal expected annual incremental cost of $38.2 million and only significantly impact 353 small businesses.



# 1.1 Regulatory Baseline

1.1.1 Regulated community

The rule examined here applies to a variety of business sectors. Most la rge buildings in all the

business sectors identified in Table 1 have la rge CC appliances. Requirements for CR equipment apply to supermarkets, warehouse clubs, and refrig erated warehouses. IPR re fers to appliances that are integral to the manufacturing process; these are used in food processing, pharmaceutical and chemical manufacturing, and petroleum refinement, among other applications.

1.1.2 Current leak repair requirements

Under the current leak repair re quirements, all equipment not clas sified as CR or IPR, including CC equipment, with a charge great er than 50 pounds of an ODS must be repaired within 30 days of discovery when the leak rate would result in a 15% or more loss of the charge over one year. Leaks in CR and IPR equipment with a charge greater than 50 pounds of an ODS must be repaired within 30 days of discovery if lack of repair would result in the release of 35% or more of the charge over one year. These requirements ma y be waived if the owners develop a one-year retrofit or retirement plan for the leaking equi pment within 30 days of leak discovery. The deadlines for repair and retrof it/retirement may be extended if the owner of the equipment qualifies for one of several exemp tions provided in these rules.

In the case of IPR, like CR, owners or operators are allowed 30 days to re pair the leak (however, they may be allowed up to 120 days for repair if an industrial process shutdown is required for repairs). Unlike CR, IPR equipment owners or op erators are also required to conduct an initial verification of a repair and a fo llow-up verification within 30 days . If the initial or follow-up

verification indicates that the re pair was unsuccessful, EPA must be informed within 30 days and the equipment must be retired or retrofitted. The requirement to retire or retrofit may be avoided if within 30 days of the firs t unsuccessful verification (120 da ys for an industrial process shutdown) the leak is successf ully repaired, as determined by an initial and follow-upStratus Consulting (Draft, 10/23/2009)

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### verification. A failed initial or follow-up verification following the second 30-day repair period requires retrofitting or retirement of the equipment.

1.1.3 Current recordkeeping and reporting requirements

Section 82.166 of CFR Title 40, Pa rt 82, Subpart B, details reco rdkeeping requirements. The current requirements potentially affected by this rule follow: (1) technicians servicing large appliances (those containing 50 pounds or more of refrigerant) must provide the owner or operator with an invoice that details the amount of refrigerant added to th e appliance, and must maintain a copy for their own records; and (2) owne rs or operators of large appliances must keep servicing records documenting the date and type of service and the amount of refrigerant added.



# 1.2 Proposed Regulatory Revisions

1.2.1 Proposed leak repair requirements

EPA is proposing to change the leak repair re quirements for equipment used for CC, CR, and IPR containing more than 50 pounds of ODS refriger ant, and associated practices by owners and operators of such equipment. The proposed rule would require owners a nd operators of leaking equipment to repair all leaks with in 30 days of discovery that th e leak rate exceeds the proposed regulatory threshold. This economic analysis ex amines the impact of the options, shown in Table 2, representing different annual leak rate thresholds for the proposed rule under two scenarios for required repairs resu lting in 12 regulatory options.

Table 2. Options for annual leak rates

Leak rate since last verification

Option CC CR and IPR

1 (5% and 10%) 5% 10%

2 (5% and 20%) 5% 20%

3 (5% and 30%) 5% 30%

4 (10% and 10%) 10% 10%

5 (10% and 20%) 10% 20%

6 (10% and 30%) 10% 30%Stratus Consulting (Draft, 10/23/2009)

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### Scenario 1

 Owners or operators of refrigeration and air-conditioning equipment must repair a leak

that exceeds the leak rate threshold within 30 days of discovery, and must conduct an

initial verification test immediately upon completion of repairs, and a follow-up verification test within 30 days of comple tion but no sooner than 24 hours after repair and recharge of the appliance

 If either the initial verification or the follow- up verification test indi cates that the repairs have not been successful, meaning that leak s are still apparent within the appliance component(s) requiring repair, the owne r or operator must replace the leaking component(s) in its/their entirety within 30 days of the failed verification. Owners or operators that have replaced any two components of the leaking equipment within a consecutive 12-month period due to the failure of an initial verification or follow-up verification test must replace the leaking com ponent, and retire the equipment or retrofit it to use non-ODS refrigerants (i.e., retrof it or retirement occurs after three failed verifications in a 12-month period).

 Owners and operators do not have to repair leaks within 30 days if they retire the equipment or retrofit it to use non-ODS refrigerants.

Scenario 2

 Scenario 2 is similar to Scenario 1, except that the type of repairs conducted are left to the discretion of owners and operators (i.e., th ere are no required component replacements).

Similar to the current rules, deadlines for repair and retrofit may be extend ed if the owner of the equipment qualifies for one of several exemptions provided in these rules. Because of a lack of data, this analysis does not addr ess differences in the methods fo r calculating the annual leak rate between the current and proposed rules.

The regulatory alternative select ed for the proposed rule is Op tion 5 under Scenario 2. This option represents annual leak ra te thresholds of 10% for CC a nd 20% for CR and IPR, with no required component replacements and the type of repairs conducted left to the discretion of owners and operators.Stratus Consulting (Draft, 10/23/2009)

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### 1.2.2 Proposed recordkeeping and reporting requirements

1. Technicians servicing large appliances (those containing 50 pounds or more of refrigerant) must:

a. Provide the owner or op erator with an invoice or other documentation which includes: the quantity and type of refriger ant added to the appliance; the identity and location of the appliance; the date a nd type of service performed; the physical location of any leaks; the amount and t ype of refrigerant recovered from the appliance; and the date, method, and result s of initial verifi cation and follow-up

verification tests

b. Maintain records for a minimum of thr ee years on refrigerant recovered but not returned to appliances.

2. Owners or operators of large appliances (those containing 50 pounds or more of refrigerant) must maintain on site for a minimum of three years:

a. Records documenting the quantity and type of refrigerant added to the appliance; the full charge of the appliance; the calcu lated leak rate of the appliance; the identity and location of the appliance; the date and type of service performed; the physical location of any leaks; the amount and type of refrigerant recovered from the appliance; and the date, method, and results of initial verification and followup verification tests

b. Records on refrigerants purchased

c. Records of the types and amounts of refr igerant recovered from their appliances

that are transferred to a different owner

d. A dated retrofit or re tirement plan that establishes a six-month schedule to retrofit or retire the leaking appliance

e. Information justifying any inability to co mplete repairs or retrofits/retirements on

schedule

f. Documents showing all appliance or appliance component data, measurements, calculations, and assumptions used to determine the full charge

g. Amount and type of refrigerant and the date that refrigerant was added to and removed from the appliance due to seasonal variance.Stratus Consulting (Draft, 10/23/2009)

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# 1.3 Analytical Requirements

EPA is required to evaluate the anticipated ec onomic impact of the proposed revisions. This involves performing a screening anal ysis to estimate the total impact of the rule on the economy and to determine whether a full RIA is necessary, and conducting a screening analysis to ensure agencies endeavor, consistent with the objectives of the rule and appli cable statutes, to fit regulatory and information requirements to th e scale of businesses, organizations, and governmental jurisdictions s ubject to their regulations.

As mentioned previously, an ec onomically significant regulatory action is an action that may have an annual effect on the economy of $100 m illion or more. A significant regulatory action requires a detailed RIA with an assessment of the costs and benefits of th e action and alternative regulatory options.

EPA guidance (U.S. EPA, 2006a) details specific requirements for the assessment of whether or

not a rule has a SISNOSE. Consis tent with the EPA guidance, th e analysis presented here was performed at multiple levels of aggregation. Re sults are summarized at the level of the overall rulemaking (i.e., encompassing all affected NAICS codes), at the level of individual NAICS codes, and at the level of company size cate gories (defined in term s of the number of employees). Small businesses are defined in th is analysis by annual receipts or number of employees, as appropriate.



# 1.4 Contents

The rest of this report is laid out as follows:

 Section 2, approach, describes the methods employed in this screening analysis

 Section 3, industry characteriza tion, describes the affected se ctors and states assumptions made about each industry category

 Section 4, economic impacts analysis, pres ents results of the cost analysis

 Section 5, benefits estimation, presents results of the benefits analys is (based on weighted avoided emissions)

 Section 6, synthesis of benefits and costs, indicates the efficiency of the potential regulatory changes in terms of cost per weighted pound of emissions reducedStratus Consulting (Draft, 10/23/2009)

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###  Section 7, statutory and EO impact analysis, summarizes analyses of the proposed rule’s impacts that are needed to m eet certain relevant regulatory development statutes and EOs

 Section 8, conclusions, summarizes the findings

 A bibliography follows

 The attachment presents detailed tables of results of the screening analysis.



# 2. Approach

The analyses of the impacts of different opti ons for the proposed rule were based on a model entity approach to estimate the impact on the eco nomy as a whole (i.e., aggregate cost of each option for the proposed rule) and on small busine sses individually (i.e., for a RFA screening analysis). The model entity analysis was develope d from a model facility analysis, which relied on a model equipment analysis. The steps follow.

1. The compliance cost associated with repair of the different kinds of equipment affected by the rule were calculated in the model equipm ent analysis based the type of equipment, the type of repair required, and re lated labor and materials costs.

2. The costs associated with the facilities were calculated in the model facility analysis based on the compliance costs for individual pieces of equipment developed in the previous step and the equipment typically used in a given type of facility. The model facilities varied by affected business sector and size (defined by number of employees) in terms of the types and number of pieces of equipment used.

3. The costs associated with entities were calcul ated in the model entity analysis based on the model facility costs developed in the previ ous step and the number of facilities in an entity. The number of facilities owned by an en tity varied by affected business sector and size. Therefore, each model entity reflecte d information about the typical number of facilities an entity has in a given sector and size, and the number of pieces of equipment in each equipment category that are likely to be owned and/or operated by each facility.



# 2.1 Repair and Reti re/Retrofit Actions

The proposed revisions result in compliance cost s for owners or operators when leaks are identified in CC, CR, and IPR equipment. Four repair levels (relying on different sequences of four different types of repair s) were assumed in this anal ysis, based on possible scenariosStratus Consulting (Draft, 10/23/2009)

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### resulting from compliance with the rule. Table 3 describes the possible type s of repairs and their rates of success, while Table 4 lists the sequence of repair types at the four repair levels for the

two scenarios under cons ideration (the first requiring com ponent replacements and the second leaving the type of repair to the discretion of th e owner or operator). This analysis assumes that under the second scenario, the owner or operator will attempt lower cost repairs rather than immediately resorting to component replacement, but that they will choose to attempt higher cost repairs with greater rates of success as they ge t closer to the retrofit/retirement requirement.

Detailed information on the actions and associated costs for each repair type are discussed in Section 4.2. The leakage assumptions indicate the amount of days the equipment leaks before a repair. For repair level 1, it is assumed that it takes 30 days for a leak in a piece of IPR or CR equipment to be discovered and 60 days for a le ak in a piece of CC equipment. In addition, owners or operators of equipment have 30 days from the date of discovery to repair a leak. Using a worst case scenario, it is assumed that owners or operators take the maximum time allowed to repair the leak, resulting in a total of 60 days of leakage fo r IPR and CR and 90 days for CC. Looking again at a worst case scenario for subseque nt repair levels (whe re repairs are conducted

as a result of a failed verification of a repair at a previous level) it is assumed that the prior repair fails a follow-up verification conducted 30 days after the repair (i.e., the prior repair was unsuccessful and equipment leaked for the 30 days before the verification was performed), and the subsequent repair is done 30 days after the faile d verification resulting in a total of 60 days of leakage. This information was used first in the model equipment analysis to develop the compliance costs associated with repairing or retrofitting a piece of equipment.

Table 3. Types of repairs

Repair type Actions taken Repair success rate (%)

Repair type A Perform leak te st, recover refrigerant, perform vacuum test, replace gaskets and seals, tighten joints, recharge system, and verify 80

Repair type B Perform leak te st, recover refrigerant, perform vacuum test, replace low-cost subcomponent component (e.g., coupling or valve), recharge system, and verify 90

Repair type C Perform leak test, recover refrigerant, pe rform vacuum test, replace component (e.g., compressor), recharge system, and verify 95

Repair type D Recover refrigerant, retrofit or retire equipment, recharge system, perform leak test, and report 100

Source: Expert judgment of SAIC, Inc.Stratus Consulting (Draft, 10/23/2009)

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### Table 4. Types and sequence of repairs assumed for each repair level in the

different scenarios

Scenario 1 Scenario 2

Repair level Type of repair Leakage assumptions Repair

success rate Type of repair Leakage assumptions Repair

success rate

Repair level 1 B 90 days of refrigerant leakage for CC equipment, and 60 days for CR and IPR equipment a 90 A 90 days of refrigerant leakage for CC equipment, and 60 days for CR and IPR equipment a 80

Repair level 2 C 60 days of refrigerant leakage b 95 B 60 days of refrigerant leakage b 90

Repair level 3 C 60 days of refrigerant leakage b 95 C 60 days of refrigerant leakage b 95

Repair level 4 C and D 60 days of refrigerant leakage b and system must be fully recharged 95 for repair type C

100 for repair type D A and D 60 days of refrigerant leakage b and system must be fully recharged 80 for repair type A

100 for repair type D

a. 30 days for leak discovery for IPR and CR and 60 days for CC, and 30 days to repair after leak detection. b. 30 days for follow-up verification fo r prior repair, and 30 days to repair after failed follow-up verification.

Source: Expert judgment of SAIC, Inc.



# 2.2 Evaluating the Aggregate In cremental Impact of Proposed Rule on the Economy

The aggregate incremental impact on the economy was based on model equipment, model facility, and model entity compliance costs.

2.2.1 Model equipment costs

An expected cost of compliance for an owner or operator of a piece of cooling or refrigeration equipment with a charge size greater than 50 po unds of an ODS refrigerant was calculated as follows, based on the costs associated with each piece of model equipment and the likelihood of each regulatory scenario. First, equipment was divided into two groups: group 1 consisted of equipment affected by the current rule, and group 2 consisted of newly affected equipment. Then, the probability that a pie ce of equipment would stop leaking above the rate in the proposed revisions was calculated at each of the four stag es (e.g., the percentage of equipment that would have no repair requirement versus the percentage of equipment that would go only through repairStratus Consulting (Draft, 10/23/2009)

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### level 1 versus the percentage of equipment that would go through repair levels 1, 2, and 3) such that the combined probabilities of ending at e ach of the stages for group 1 and group 2 sum to one (see the attachment to this report). Then, th e aggregate cost associated with reaching each level for each group was calculated. It was assumed that to reach the next level of repairs, an owner or operator of the equipment would go through all prior levels and incur all of the associated costs (e.g., to reach level 3, one w ould incur all costs from levels 1, 2, and 3).

We assumed that owners and opera tors of refrigeration and cooling equipment with a charge size greater than 50 pounds of an ODS would make re pairs only as mandated by regulation, which is likely to lead to an overestimate of the costs. In all likelihood, there would be some cases in which normal maintenance would involve making sim ilar repairs to ensure that the system in question was operating smoothly and performing its function regardless of proposed changes to the rule. In addition, in some cases, owners a nd operators could choose to skip one of the regulatory steps (e.g., move from making minor re pairs to replacing a major component without replacing a minor component ), thus reducing the exp ected cost of the rule.

The probability of equipment in each group ending at each regulatory level was then multiplied by the aggregate cost of reaching that level to fi nd the expected cost of each level for a given piece of equipment [e.g., the probability of a newl y affected direct expa nsion (DX) CR system completing its regulatory requirement with level 1 repairs was multiplied by the costs associated with those group 2 level 1 repairs for a DX system ]. The expected costs associated with both groups at each regulatory level were summed to find the total expected cost of the regulation for a given piece of equipment. Expected costs were calculated for both a baseline scenario (i.e., following current regulatory requirements) a nd different options for the proposed rule. The baseline assumed that for CC and CR equipment, owners and operators would be required to perform the actions associated with repair t ype A (with the excepti on of verification). For industrial process equipment, it was assumed that owners and operators would choose to conduct the a similar sequence of repairs to those outlined in Scenario 2. 1



### 2.2.2 Model facility costs

The percentage of facilities that use each t ype of equipment within the three equipment categories was then multiplied by the expected cost of each type of equipment, and these products were summed within each equipment cate gory to get the expected cost of a piece of

1. Although the current rule allows owners and operator s of IPR equipment the opportunity to attempt to repair equipment that is leaking greater than 35% of its full charge and which has failed an initial verification test as many times as they wish over a 30-day period, we assume d for this analysis that attempting to replace a part in the component subassembly at the beginning of the 30-day period, followed by a component in its entirety nearing the end of the 30-day period, was a logical course of action before committing to a retrofit or system

retirement.Stratus Consulting (Draft, 10/23/2009)

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### equipment in each of the three equipment categorie s. For instance, in the supermarket sector, the expected cost of a DX system was multiplied by the percentage of supermarkets likely to have a DX system, the expected cost of a distribute d system was multiplied by the percentage of supermarkets likely to have a distributed syst em, and these values were summed to get an expected cost of a piece of CR equipment in a facility within the supermarket sector.

For each size category within each sector, the expected cost of a piece of equipment in each equipment category was multiplied by the number of pieces of equipment in that category that a typical facility is likely to have, and the produc ts in each category were summed to find the total expected cost per facility. In the supermarket example, a supermarket with fewer than 20 employees is likely to have one piece of CC equipment, three pieces of CR equipment, and no IPR equipment. Thus, the expected cost of a piece of CC equipment was multiplied by one, the expected cost of a piece of CR equipment was mu ltiplied by three, and the expected cost of a piece of IPR equipment was multiplied by zero. Th ese products were then summed to find the total expected cost to a facility.

2.2.3 Model entity costs and increm ental impacts of the rule

The expected cost per facility was multiplied by the number of facilities that an entity in each size category of each sector is likely to have to ascertain the expected cost per entity. This was then multiplied by the number of entities in each size category to find the expected cost per size category in each sector. The expected costs in the size categories were summed to find the expected cost per sector. The totals from all affected sectors were summed to find the total impact of the baseline scenario and of each optio n for the proposed rule. The total expected cost

of the baseline scenario was then subtracted from the total expected cost of each option for the proposed rule to find the incremental expected cost of the options for the proposed rule.



# 2.3 Estimating the Impact of the Proposed Rule on Small Entities

The RFA generally requires an agency to prepar e a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a SISNOSE. Small entities include small businesses, small organizations, and sma ll governmental jurisdictions.

For purposes of assessing the economic impacts of th is rule on small entities, a small entity is defined as: (1) a small business as defined by the SBA’s regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a governme nt of a city, county, town, school district or special district with a population of less than 50, 000; and (3) a small organization that is any notfor-profit enterprise which is independently owne d and operated and is not dominant in its field.Stratus Consulting (Draft, 10/23/2009)

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### A statistical technique known as Monte Carlo analysis wa s used to estimate the number of entities, in each relevant size ca tegory, expected to experience costs exceeding 1% (and 3%) of revenues. The RFA requires the assessment of small government jurisdictions and small nonprofits; the analysis of these entities was based on operating expe nses rather than revenues as for for-profit entities. Because of the lack of information on small nonprofits and governments that might be affected by the rule, it was not possible to calculate th e typical cost per entity or the impact ratios for them. However, the cost for nonprofits and governments was expected to be similar to that incurred by busine sses. In particular, the educati on sector (largely nonprofit) was not evaluated in the RFA screening analysis because of a lack of information on operating expenses and revenues. The nature of educati onal buildings is such, however, that it was assumed they would be likely to have impacts that are similar to those experienced for small office buildings.



# 2.4 Monte Carlo Analysis

Individual analyses were performed for each of th e sectors. These analyses were based on typical

facilities in each of the size categories within a sector that use refrigeration and air-conditioning equipment with charge sizes greater than 50 pounds . The costs associated with these facilities were then aggregated to assess costs at the enti ty level. These entity level costs were then compared with average revenues per entity to estimate the number of entities significantly affected by different options for the proposed rule.

Estimating the number of entities in each size ca tegory requires careful consideration of a complex set of joint probabilities. For exam ple, the model warehouse and club supercenter facility contains six pieces of equipment (two CC systems and four CR units), and each piece of equipment has the potential to reac h four different repair levels (a s well as the “no leak” level), leading to many possible permutations of cost co mbinations for this sector. Although most of the permutations may result in a facility cost below 1% of revenues, it is im portant to estimate how many facilities are expected to experience cost s that exceed 1% (a nd 3%) of revenues.

This analysis used a Monte Carlo technique to simulate numerous model facilities (each analysis used 65,000 sample facilities). Each piece of aff ected equipment in each sample facility was randomly assigned a type of equipment and a re pair level. The probability of each piece of equipment requiring repair was assumed to be independent of the probability of repair for other pieces of equipment in the same sample facility. The analysis estimated the percentage of these sample facilities with a total cost exceeding 1% (and 3%) of revenues.

The cost of repair for each piece of equipm ent was calculated using the assigned equipment types and repair level. Again it was assumed that to reach each repair level all previous repair levels were reached (e.g., to reach repair level 3, one would incur costs associated with repairStratus Consulting (Draft, 10/23/2009)

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### levels 1, 2, and 3). The sample facility’s total cost of required repairs to all pieces of equipment is the sum of the cost for each piece of equipm ent. These facility-level costs were multiplied by the number of facilities per entity in each size category to estima te the entity-level cost of compliance. Multiplying by the number of facilities represents a slight overestimation of costs for facilities with multiple instan ces of high level repairs, because the probabilities of reaching those repair levels for all equipment in multiple facilities decrease as the aggregate number of pieces of equipment across both facilities increases.

This process was followed for each type of model entity 65,000 times to find 65,000 sample costs of compliance based on the joint probabilities of having specific types of equipment and reaching specific repair levels. The percentages of scenarios where entities had costs that were greater than 1% and 3% of av erage revenues in a given size ca tegory were calculated. These percentages were then multiplied by the potential number of affected entities in each size category to find an estimate of the number of affe cted entities and to asse ss whether or not the proposed rule should be presumed to have a SISNOSE. Fractional numbers of entities were rounded up to the nearest whole entity.

The economic analysis described in this sec tion was conducted to examine the impacts on the

affected business sectors that are described in Section 3.



# 2.5 Benefits Estimation

The environmental benefits of the options examin ed for revising the rule are the ODS emissions

that would be avoided as a result of rule modi fications. This screening analysis estimates the environmental benefits as pounds of avoided ODS emissions, measured in terms of both ozonedepleting potential (ODP) (i.e ., as ODP-weighted tonnes) and global warming potential (GWP) [million metric tonnes of carbon equivalent (MMTCE)].

The benefits analysis, like the cost analysis , uses the model plant method to estimate the expected benefits of the proposed rule. The be nefits analysis builds up benefits from the expected benefits of a model pie ce of equipment to the expected be nefits in a size category to the

total benefits of the rule.

The benefits analysis makes the following assumptions:

 As in the cost analysis, it is assumed that onc e a repair has been made , whether or not it is successful, there will be no subsequent repa irs unless mandated by regulation (i.e., unless a repair is verified and fails).

 The benefits of the rule ar e projected only over the one-yea r period in which costs are

assumed to be incurred.Stratus Consulting (Draft, 10/23/2009)

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###  As with the cost analysis, it is assumed in th e benefit analysis that owners or operators will wait the full 30 days before performing a follow-up verification and the full 30 days before fixing a leaking system or perfor ming a mandatory component replacement. In addition, owners and operators are expected to wait the full 180 days allowed to retrofit or retire a system from the time of the third failed verification.

2.5.1 Baseline benefits

The baseline benefits of the curren t rule are consistent with the ba seline costs of the current rule. For CC and CR equipment, it is assumed that unde r the current rule owne rs or operators will make a single repair to a system leaking over th e trigger rate of 15% and 35%, respectively. For IPR equipment, it is assumed that once a syst em reaches the trigger rate (35%), a certain percentage of owners/operators will conduct each of the four re pair levels. However, once an owner or operator has decided to retrofit or retire their system, it is un likely that under the current rule they will choose to replace a third component before retrofitting or retiring the equipment.

2.5.2 Benefits of proposed changes

The options under consideration for the proposed ru le would result in avoided emissions based on the repair level at which a successful repair is completed. The cumulative amount of assumed time that passes before each repair is completed follows:

 Repair level 1, 30 days
 Repair level 2, 90 days
 Repair level 3, 150 days
 Repair level 4, repair type A or C, 210 days
 Repair level 4, repair type D, 365 days.

For example, if the first repair was completed at the end of the 30-day period and was successful, the proposed rule avoided 11 months of emissions th at would have occurred if the repair had not been made. If the repair was unsuccessful (as determined by a follow-up verification at the end of the 30-day period) and a successful component replacement was performed (at the end of a 30-day period), 9 months of emi ssions would have been avoided.Stratus Consulting (Draft, 10/23/2009)

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### 2.5.3 Health benefits analysis

Reducing ODS emissions will reduce depletion of st ratospheric ozone concentrations, leading to reductions in ultraviolet (UV) radiation reachi ng the Earth’s surface. Reduced UV radiation at

the surface will lead to reductions in adverse UV-related human and animal health effects, as well as ecosystem impacts. In previous EPA anal yses, the quantified bene fits of stratospheric ozone protection programs were dominated by the re duced adverse health impacts expected from

reductions in UV radiation. Because health eff ects were found to be the dominant quantified benefit category for stratospheri c ozone protection, this economic screening analysis of the options for reducing ODS emissions is limited to an analysis of the mo st important type of quantified health effect: skin cancers.

The health analysis uses EPA’s Atmospheric He alth Effects Framework (AHEF) to estimate the

reductions in fatal and nonfatal cases of skin cancers. AHEF was originally developed for EPA to conduct the analysis of the Montreal Protocol on Substances that Deplete the Ozone Layer, and has been revised and updated numerous times to incorporate new scientific information and emissions data. The analysis in this screening analysis uses the version of AHEF, which is described in detail in a 2006 EPA peer review ed report (U.S. EPA, 2006b). AHEF is used to

estimate the reductions in future cases of fatal and nonfatal skin cancers that will result from emissions reductions in a singl e year (2010). The si ngle-year estimates of the rule’s ODS emissions reductions is consistent with the single -year cost estimates in this screening analysis. ODS emissions reductions in subsequent years will produce additional health benefits (and have additional costs). The economic value of the reducti ons in future cases of skin cancers is derived from methods used in previous EPA regulator y analyses. The economic values have been updated to reflect 2007 prices and 2010 income levels.



# 2.6 Synthesis of Benefits and Costs

2.6.1 Cost-effectiveness estimation

A cost-effectiveness (C-E) analysis explores a di fferent aspect of a set of proposed regulatory options. While a complete benefit-cost analysis compares all incremental benefits with the incremental costs for each option, C-E analysis examines the cost per kilogram of avoided emission for each option. C-E is calculated by dividing the total cost of an option by the avoided emissions for that option. The C-E analysis of th e leak rate regulatory options helps identify the equipment categories that are relatively less expe nsive per pound of avoided emissions as well as the incremental costs of increasing the stringenc y of the regulation on each equipment type. C-E analysis also helps compare the relative costs of this rule with ot her rules reducing ODS

emissions.Stratus Consulting (Draft, 10/23/2009)

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### 2.6.2 Net benefits estimation

A net benefits analysis compares the incrementa l benefits with the incremental costs for each option as compared to the baseline with the difference representing net benefits.



# 3. Industry Characterization

Section 608 leak repair regulations (40 CFR Part 82, subpart F) a ffects owners and operators of equipment with a charge size of 50 pounds or gr eater of an ODS refrigerant in the following categories:

 CC
 CR
 IPR.

This section characterizes each category by equipment types, charge sizes, and leak rates and

identifies the affected businesses within each se ctor. In the RFA screening analyses, the affected businesses are frequently analyzed based on NAICS codes. These codes are useful because the

U.S. Census Bureau collects information about the number of businesses, breaks them down by number of employees, and estimates the volume of sales (i.e., revenues) for each code.

This section provides information on the extent of use of different equipment types within each of the categories and typical charge sizes and type s of refrigerants used by each of the equipmenttypes. An A.D. Little (2002) report provides a more detailed description of different airconditioning and refrigeration equi pment, including types of refrig erants used and charge sizes. The only consistent source of information on equi pment leaks (affected by this rule) on an annual basis is California’s South Coast Air Qu ality Management District (SCAQMD) data. Similar to federal regulations , the purpose of SCAQMD Rule 1415 (SCAQMD, 1994) is to reduce emissions of Class I and Class II refriger ants from stationary refrigeration and airconditioning systems by requiring any person wi thin SCAQMD’s jurisdiction who owns or operates a refrigeration system to reclaim, r ecover, or recycle refr igerant and to minimize refrigerant leakage. A refrigeration system is defined for the purposes of the rule as any nonvehicular equipment used for cooling or fr eezing that holds more than 50 pounds of any combination of Class I and/or Class II refrigeran t, including but not lim ited to refrigerators, freezers, and air-conditioning equipment or systems.

Under Rule 1415, SCAQMD collects information ever y two years from owners and operators of stationary refrigeration system s holding more than 50 pounds of an ozone-depleting refrigerant using a standard registration form (AQMD, 2006 ). The information includes the number of refrigeration systems in operation, the type of refrigerant in each re frigeration system, theStratus Consulting (Draft, 10/23/2009)

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### amount of refrigerant in each refrigeration syst em, the date of the last annual audit or maintenance performed for each refrigeration sy stem, and the amount of additional refrigerant charged every year. The SCAQMD data do not diffe rentiate between small and large businesses.

For the purposes of the rule, additional refrigerant charge is defined as the quantity of refrigerant (in pounds) charged to a refrigeration system to bri ng the system to a full-ca pacity charge and to replace the refrigerant that ha s leaked. Information from 2004 and 2005 was used to develop the proportion of equipment expected to leak and the expected leak rates by equipment type for this analysis. It was assumed that equipment used in s outhern California is simila r to that used in the rest of the country and that the leak rates observed th ere are representative of the rest of the

country.

This section also characterizes the affected business sectors by size categories based on the number of employees, the number of entities in each size category, the number of facilities per entity, the number of entities using equipment with a charge size greater than 50 pounds of an ozone-depleting refrigerant, and the average revenues.



# 3.1 Comfort Cooling

Most businesses rely on air-conditioning units to provide CC fo r their employees and customers. The CC equipment with an ODS refrigerant char ge size of 50 pounds or greater, and therefore affected by this rule, includes:

1. DX equipment that cools building air dire cted via ductwork over evaporator cooling coils. This is in contrast to chiller systems (number 4 in this list) where chilled water is passed through an evaporator.

2. Unitary roof-top equipment that is mounted on the roof deck which can have an integrated or remote condenser. Each unit may house several smaller compressors staged and optimized to satisfy the cooling load.

3. Large split systems where the refrigerant is used as the main heat transfer fluid throughout the building and circulates betw een the condensing unit and evaporator through long refrigerant lines. Evaporators ar e typically located within the spaces that they condition and can be integrated with th e terminal room distribution systems. Some units come equipped with reversing valves, which enable them to act as a heat pump providing both heating and cooling. Compresso rs are typically located in attics or

mechanical rooms and condensers are outdoors. This system is marketed as ductless splits specifically targ eting buildings that do not have room to accommodate large ducts

for air distribution.Stratus Consulting (Draft, 10/23/2009)

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### 4. Chillers that do not directly condition buildi ng air but instead cool water as a secondary refrigerant circulated in a chil led water loop. Typically they ar e used in applications such as large office buildings where the cooling load is significantly higher than could be economically satisfied by a series of smaller uni tary systems, or where it is impractical to distribute smaller units throughout a buildi ng. Chillers typically use a reciprocating, screw, or centrifugal compressor.

a. Reciprocating chiller compressors use a reciprocating piston driven by a rotating crankshaft to compress the refrigerant. Multiple stages can be used to produce higher condensing pressures. b. Screw type chillers have a rotary compressor with helical screws. The interlocking grooves in the compressor scre ws compress the refrigerant as they

rotate. c. Centrifugal chiller compressors use a m echanical impellor rotating at high speeds to compress the refrigerant. The refrigerant is compressed in either a single- or a multistage compression process.

3.1.1 CC equipment characterization

Table 5 shows the estimated distribution of equi pment type (with an ODS charge size greater than 50 pounds) used for CC, typical equipment charge sizes, and types of refr igerants used. It is

estimated that chillers account for half the equipment, and DX, unitary roof top, and large split systems equally account for the remaining half. B ecause 5% and 10% are the different leak rate requirements being examined in this analysis fo r CC, the percentage of equipment affected under those rates and the average leak rates, based on 2,701 pieces of equipment represented in the SCAQMD data, are shown in Table 6.

3.1.2 Affected business sectors in the CC category

The affected businesses were id entified from an earlier RIA on this issue (ICF, 1997), the Commercial Buildings Energy Consumption Surv ey (CBECS; EIA, 2006), and an analysis of SCAQMD reports from 2004 and 2005. The CBECS data come from a national sample survey

that collects information on the st ock of U.S. commercial buildi ngs, their energy-related building characteristics, and their energy consumption an d expenditures. Commerci al buildings include all buildings in which at least half of the floor sp ace is used for a purpose th at is not residential, industrial, or agricultu ral, including building types that might not generally be considered “commercial,” such as schools, correctional institu tions, and buildings used for religious worship (EIA, 2006).The distribution of CC equipment was estimated based on the CBECS data for buildings with air-conditioning equipment. The to tal number of commercial buildings in theStratus Consulting (Draft, 10/23/2009)

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### Table 5. Characterization of CC equipment

Equipment type Percentage of systems in use Average charge size a (pounds) Refrigerants used

DX 16.7 650 HCFC-22: 77.2%

HCFC-123: 7 %

CFC-11: 10%

CFC-12: 1.5%

HFCs: 4.3%

Unitary roof top 16.7 160 HCFC-22: 95%

HFCs: 5%

Large split systems 16.7 160 HCFC-22: 95%

HFCs: 5%

Chiller (reciprocating) 42.0 338 HCFC-22: 90%

CFC-12: 5%

HFCs: 5%

Chiller (screw) 4.0 1,000 HCFC-22: 90%

CFC-12: 5%

HFCs: 5%

Chiller (centrifugal) 4.0 1,189 HCFC-22: 40.2%

CFC-11: 32%

CFC-12: 0.5%

HCFC-123: 23%

HFCs: 4.3%

HFCs: Hydrofluorocarbons.

a. While charge sizes vary by refrigerant type, the aver age charge sizes shown here are used in this analysis.

Sources: A.D. Little (2002) and expert opinion of SAIC, Inc., based on review of SCAQMD data.



### Table 6. CC equipment annual leak rate data

Leak rate range (%) Percent of equipment Average leak rate (%)

0-5 85.34% 0.03% a

5-15 3.11% 9.61%

> or = 15 11.55% 68.67%

0-10 87.02% 0.18% a

10-15 1.43% 11.90%

> or = 15 11.55% 68.67%

a. Since the equipment in this category does not meet the proposed regulatory threshold, and thus is not required to act under the proposed regulation, the average leak rate in this range is not relevant for subsequent analyses.

Sources: SCAQMD, 2004, 2005.Stratus Consulting (Draft, 10/23/2009)

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### United States is 4,645,000 and the number using one or more types of air-conditioning systems is3,997,000 (EIA, 2006). Of these, 144,000 use chillers and 3,853,000 use a roof-top, DX, or splittype system. 2 

### Based on an A.D. Little (2002) study, all CC systems identified in this analysis are expected to have a charge size on average of 2.6 pounds pe r ton of cooling cap acity with greater than 20-ton capacity, and therefore have a charge size greater than 50 pounds.

Shipment data from the Air-Conditioning and Refr igeration Institute (ARI, 2007) were used to

calculate the number of installed nonchille r units based on the CBECS data. Using the A.D. Little (2002) study and a basis of 12,000 Br itish thermal unit (Btu)-hour per ton of air conditioning, all pieces of equipment having a capacity of 231,000 Btu-hour or greater are

estimated to have at least a 50- pound refrigerant charge size. ARI shipment data indicate that approximately 3.8% of the unitary air-conditioni ng units shipped are more than 231,000 tons (ARI, 2007). Therefore, approximately 3.76% of the installed nonchiller air-conditioning units are estimated to be affected by this rule. Tabl e 7 shows the estimates of the number of these systems installed in U.S. buildings that are expected to have a charge size greater than 50 pounds.

Table 7. Distribution of CC systems

Equipment type Number of buildings with

equipment Percentage of equipment with charge size greater than 50 pounds ODS Estimated number of affected buildings

Chillers 144,000 100 144,000

DX, rooftop, split systems 3,853,000 3.76 145,000

Sources: A.D. Little, 2002; EIA, 2006; ARI, 2007.



### Based on this analysis, it is expected that 289,000 buildings out of 4,645,000 total buildings in the United States, or approximately 6%, will have a charge size of 50 pounds or greater. This percentage was used to calculate the actual numbers of businesses impacted.

Table 8 shows the businesses affected, by NAICS c ode, with the average nu mber of refrigeration systems per facility. Three types of buildings that use CC equipment and are not included in Table 8 were considered in this analysis: offi ce buildings, outpatient health care services buildings, and public assembly buildings. These buildings are owned by multiple owners and are not captured under any of the NAICS codes in Tabl e 8; they are considered to be similar to facilities owned by office building managers in this analysis.

2. Listed in the CBECS as residential-type central air conditioners, heat pumps, individual air conditioners, and packaged air conditioners.Stratus Consulting (Draft, 10/23/2009)

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### Table 8. Sectors with CC equipment with a charge size greater than 50 pounds

Sector NAICS code Average number of units of cooling equipment per facility

Supermarkets and grocery stores 445110 1

Convenience stores 445120 1

Gas station convenience stores 447110 1

Warehouse and club supercenters 45291 2

Refrigerated warehouse and storage 49312 2

Refrigerated warehouse farm products storage 49313 2

Office building managers 531312 1

Lodging 72 2

Chemical manufacturing 325 4

Pharmaceutical manufacturing 3254 4

Petrochemical manufacturing 324110 4

Bakeries 3118 2

Food manufacturing other than bakeries 311 2

Breweries 31212 4

Soft drink manufacturing 312111 4

Bottled water 312112

Ice manufacturing 312113 3

Ice rinks 713940 1

Elementary and secondary schools 6111 2

Junior colleges, colleges, and universities 6112, 6113 2

Hospitals 622 4

Source: Expert opinion of SAIC, Inc., based on review of SCAQMD data.



# 3.2 Commercial Refrigeration

Supermarkets, convenience stores, warehouses, and other businesses use CR equipment to preserve fresh and frozen food. The four major types of equi pment in the CR sector are DX systems (e.g., rack type systems), distributed systems, stand-alone cases, and secondary-loop systems. Equipment using non-ODS as refrigerants or with charge sizes of less than 50 pounds are not included in this analysis because they are not affected by the pr oposed rule (e.g., standalone cases with charge sizes of less than 50 pounds and seco ndary-loop systems primarily using non-ODS refrigerant, typically either ammonia or R-507).Stratus Consulting (Draft, 10/23/2009)

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### The types of equipment used in CR and potentia lly affected by the propo sed revisions include:

1. DX rack-type systems that are made up of multiple compressors on a single “rack” that circulate refrigerant throughout a store (e .g., to supply several low- or mediumtemperature display cases). Typically these syst ems use either reciprocating or scroll-type compressors with different capacities but m ounted together on a single rack. They can support either low or medium temperature refr igeration as required for refrigerating or freezing food products.

2. Distributed systems that typi cally have a single compresso r serving a dedicated display case or bank of cases. They may use scroll compressors to reduce noise of operation.

3.2.1 CR equipment characterization

Table 9 shows the estimated distribution of equi pment type (with an ODS charge size greater than 50 pounds) in CR, typical equipment charge sizes, and types of refrigerants used. DX systems charged with HCFC-22 dominate the type of refrigeration systems used across these businesses. Because 10%, 20%, and 30% are the di fferent leak rate requirements being examined in this analysis for CR, the percentages of e quipment affected under those rates and the average leak rates, based on 1,722 pieces of equipment represented in the SCAQMD data, are shown in

Table 10.

Table 9. Characterization of CR equipment

Equipment type Percentage of systems in use Average charge size (pound) a Refrigerants used

Rack type DX system 81 585 HCFC-22: > 87%

CFC-12: < 1%

HFCs: 12%

Distributed systems 19 146 HCFC-22: 94%

CFC-12: 2%

HFCs: 4%

a. While charge sizes vary by refrigerant type, the aver age charge sizes shown here are used in this analysis.

Sources: A.D. Little (2002) and expert opinion of SAIC, Inc., based on review of SCAQMD data.Stratus Consulting (Draft, 10/23/2009)

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### Table 10. CR equipment annual leak rate data

Leak rate range (%) Percent of equipment Average leak rate (%)

0-10 69.41% 0.28% a

10-35 15.14% 21.26%

> or = 35 15.46% 80.25%

0-20 76.55% 1.64% a

20-35 7.99% 27.00%

> or = 35 15.46% 80.25%

0-30 81.93% 3.15% a

30-35 2.61% 32.03%

> or = 35 15.46% 80.25%

a. Since the equipment in this categor y does not meet the proposed regulatory threshold, and thus is not required to act under the proposed regulation, the average leak rate in this range is not relevant for subsequent analyses.

Sources: SCAQMD, 2004, 2005.



### 3.2.2 Affected business sectors in the CR category

A review of the SCAQMD data indicated that bus inesses in the affected NAICS codes shown in Table 11 use CR equipment with a charge size of 50 pounds or greater. Table 11 shows the businesses affected, by NAICS code, with the average number of refrigeration systems per facility. The three types of busin esses affected by this rule are supermarkets and grocery stores, warehouse and club supercenters, and refrigerated warehouse and storage facilities. Convenience stores were originally include d, however, it was determined that typical convenience store refrigeration systems have a charge size of great er than 50 pounds of an ODS and thus they are not considered in subsequent analyses.

Table 11. Sectors with CR equipment with a ch arge size greater than 50 pounds and units per facility

Sector NAICS code Average number of units of refrigeration equipment per facility

Supermarkets and grocery stores 445110 4.2

Warehouse and club supercenters 45291 4

Refrigerated warehouse and storage 49312 4

Refrigerated warehouse farm product storage 49313 4

Source: Expert opinion of SAIC, Inc., based on review of SCAQMD data.Stratus Consulting (Draft, 10/23/2009)

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# 3.3 Industrial Process Refrigeration

Industrial process refrigeration is used to cool production processes and working fluids and has a wide range of applications, in cluding the manufacturing of many industrial commodities such as pharmaceuticals, chemicals, plastics, cosmetics, food, and other products.

Because the end uses for IPR are varied, IPR sy stems are often “built-up” systems that are specially designed for a particular application. They can, however, be characterized according to the compressor type, much like CC chillers. Th e significant difference between CC and process cooling is that the evaporating temperature can vary widely, depending on the process fluid being cooled, the production sp eed, and other variables. The types of equipment include:

1. Reciprocating compressors that compress re frigerant by means of a reciprocating piston driven by a rotating crankshaft. Multiple stag es can be used to produce higher condensing

pressures.

2. Screw type chillers that ha ve a rotary compressor with he lical screws. The interlocking grooves in the compressor screws compre ss the refrigerant as they rotate.

3. Centrifugal industrial proce ss cooling equipment that compresses refrigerant by means of a mechanical impellor rotating at high speed. The refrigerant is compressed in either a single- or a multistage compression pro cess, depending on the evaporating and condensing temperature desired, the refr igerant, and the fluid being cooled.

4. Scroll type chillers use a compressor with tw o interleaved spiral-like vanes to pump or compress fluids such as liquids and gases.

3.3.1 IPR equipment characterization

Table 12 shows the estimated distribution of equi pment type (with an ODS charge size greater than 50 pounds) used for IPR, average equipment ch arge sizes, and types of refrigerants used. Because 10%, 20%, and 30% are the different leak rate requirements being examined in this analysis for IPR, the percentage of equipment affected under those rates and the average leak rates, based on 349 pieces of equipment repr esented in the SCAQMD data, are shown in

Table 13.

3.3.2 Affected businesses in the IPR category

Table 14 shows the affected businesses that use IPR equipment iden tified using the SCAQMD data by NAICS code, with the average number of refrigeration systems per facility.Stratus Consulting (Draft, 10/23/2009)

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### Table 12. Characterization of IPR equipment

Equipment type Percentage of systems in use Charge size (pound) a Refrigerants used

Reciprocating 22 1,189 HCFC-22: 92.4%

CFC-12: 5%

HFCs: 2.6%

Screw 32 1,000 HCFC-22: 92.4%

CFC-12: 5%

HFCs: 2.6%

Centrifugal 41 338 HCFC-22: 41.2%

CFC-11: 32%

CFC-12: 0.5%

HCFC-123: 23%

CFC-113: 1%

CFC-114: 1%

HFCs: 1.3%

Scroll 5 160 HCFC-22: 95%

HFCs: 5%

a. While charge sizes vary by refrigera nt type, the average charge sizes shown here are used in this analysis.

Sources: A.D. Little (2002) and expert opinion of SAIC, Inc., based on review of SCAQMD data.



### Table 13. IPR equipment annual leak rate data

Leak rate range (%) Percent of equipment Average leak rate (%)

0-10 72.81% 0.24% a

10-35 9.69% 20.45%

> or = 35 17.50% 116.27%

0-20 77.66% 1.12% a

20-35 4.84% 26.59%

> or = 35 17.50% 116.27%

0-30 81.09% 2.10% a

30-35 1.41% 31.89%

> or = 35 17.50% 116.27%

a. Since the equipment in this categor y does not meet the proposed regulatory threshold, and thus is not required to act under the proposed regulation, the average leak rate in this range is not relevant for subsequent analyses.

Sources: SCAQMD, 2004, 2005.Stratus Consulting (Draft, 10/23/2009)

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### Table 14. Sectors with IPR equipment with a char g e size g reater than 50 pounds and units per facility

Sector NAICS code Average number of units of refrigeration equipment per facility

Chemical manufacturing 325 4

Pharmaceutical manufacturing 3254 4

Petrochemical manufacturing 324110 4

Bakeries 3118 2

Food manufacturing other than bakeries 311 2

Breweries 31212 4

Soft drink manufacturing 312111 4

Bottled water manufacturing 312112 4

Ice manufacturing 312113 3

Ice rinks 713940 2

Source: Expert opinion of SAIC, Inc., based on review of SCAQMD data.



# 4. Economic Impacts Analysis

4.1 Characterization of All Affected Sectors

Once the affected sectors in each of the categorie s were identified, the number of entities, the number of facilities, and average revenues pe r entity by size category were obtained from the U.S. Census Bureau (2002b). Table 15 shows this information along with the number of entities with equipment affected by the proposed revisi ons. The number of entities affected by the revisions (those with equipment greater th an 50 pounds of ODS refrigerant charge) was

estimated based on factors identifie d in equipment characterizations in Section 3 and the expert judgment of SAIC, Inc. staff.

The CBECS (EIA, 2006) reports 824,000 office buildings, 121,000 outpatient health care buildings, and 277,000 public assembly buildings th at use CC equipment affected by the rule (EIA, 2006); these are not included in Table 15. Th e number of office buildings reported in the CBECS (824,000) is clearly much larger than th ose managed by office building managers (about 12,000) shown in Table 15. The difference (812,000) was assumed to be managed by multiple owners not captured in a single NAICS code.Stratus Consulting (Draft, 10/23/2009)Page 29Do Not Cite or QuoteSC11138Table 15. Industries characterized bysize categories, number of entities and facilities, facilities per entity, equipment use, andaverage revenuesSectorNAICScode(s)Number ofemployeesNumber ofentitiesNumber offacilitiesNumber offacilitiesper entityNumber of firms usingequipment with> 50 lbs of an ozonedepleting refrigerantAverage valueof shipmentsper entity(2007$)Supermarkets and grocery storesa445110 < 20 32,246 32,374 1.00 32,246 $760,86720-99 6,438 7,212 1.12 6,438 $5,804,240100-499 1,157 3,171 2.74 1,157 $26,814,603500+ 335 20,177 60.23 335 $1,064,071,303Totals 40,176 62,934 N/A 40,176 N/A445120 < 20 28,464 28,657 1.01 1,708 $720,186Convenience stores20-99 923 1,264 1.37 55 $3,161,638100-499 141 741 5.26 8 $8,939,340500+ 88 3,570 40.57 5 $87,857,296Totals 29,616 34,232 N/A 1,777 N/A447110 < 20 34,962 35,998 1.03 2,098 $1,576,988Gas station convenience stores20-99 3,665 9,043 2.47 220 $6,855,701100-499 764 10,843 14.19 46 $34,020,000500+ 207 28,817 139.21 12 $431,894,817Totals 39,598 84,701 N/A 2,376 N/AWarehouse and club supercenters 45291 < 20 179 179 1.00 179 $689,00020-99 10 11 1.10 10 $8,085,762100-499 4 28 7.00 4 $30,629,911500+ 11 2,023 183.91 11 $13,566,306,382Totals 204 2,241 N/A 204 N/AStratus Consulting (Draft, 10/23/2009)Page 30Do Not Cite or QuoteSC11138Table 15. Industries characterized bysize categories, number of entities and facilities, facilities per entity, equipment use, andaverage revenues (cont.)SectorNAICScode(s)Number ofemployeesNumber ofentitiesNumber offacilitiesNumber offacilitiesper entityNumber of firms usingequipment with> 50 lbs of an ozonedepleting refrigerantAverage valueof shipmentsper entity(2007$)Refrigerated warehouse and storage 49312 < 20 411 420 1.02 411 $844,17520-99 138 204 1.48 138 $5,540,779100-499 34 96 2.82 34 $17,230,410500+ 25 250 10.00 25 $127,657,208Totals 608 970 N/A 812 N/A49313 < 20 276 289 1.05 276 $1,474,575Refrigerated warehouse farm productstorage20-99 48 78 1.63 48 $4,696,650100-499 18 73 4.06 18 $17,545,505500+ 21 99 4.71 21 $48,989,768Totals 363 539 N/A 1,175 N/AOffice building managers 531312 < 20 8,568 8,630 1.01 514 $528,31020-99 880 1,172 1.33 53 $4,531,681100-499 239 569 2.38 14 $12,856,712500+ 146 1,529 10.47 9 $59,821,191Totals 9,833 11,900 N/A 76 N/ALodging 72 < 20 342,431 344,341 1.01 20,546 $312,01320-99 75,392 88,963 1.18 4,524 $1,556,255100-499 7,954 34,731 4.37 477 $8,115,097500+ 1,688 97,114 57.53 101 $133,968,426Totals 427,465 565,149 N/A 5,102 N/AStratus Consulting (Draft, 10/23/2009)Page 31Do Not Cite or QuoteSC11138Table 15. Industries characterized bysize categories, number of entities and facilities, facilities per entity, equipment use, andaverage revenues (cont.)SectorNAICScode(s)Number ofemployeesNumber ofentitiesNumber offacilitiesNumber offacilitiesper entityNumber of firms usingequipment with> 50 lbs of an ozonedepleting refrigerantAverage valueof shipmentsper entity(2007$)Chemical manufacturing 325 < 20 5,192 5,219 1.01 5,192 $2,185,66420-99 1,679 1,899 1.13 1,679 $12,609,842100-499 622 1,144 1.84 622 $55,672,937500+ 437 3,055 6.99 437 $703,197,343Totals 7,930 11,317 N/A 7,930 N/APharmaceutical manufacturing 3254 <20 812 815 1.00812 $2,243,96820-99 295 309 1.05 295 $11,816,746100-499 168 208 1.24 168 $62,191,006500+ 136 447 3.29 136 $1,098,753,829Totals 1,411 1,779 N/A 1,411 N/APetrochemical manufacturing 324110 < 20 106 107 1.01 106 $5,667,56320-99 24 29 1.21 24 $133,600,118100-499 23 28 1.22 23 $225,487,294500+ 49 185 3.78 49 $4,420,789,703Totals 202 349 N/A 202 N/ABakeries 3118 < 20 7,948 7,981 1.00 7,948 $429,17220-99 1,375 1,490 1.08 1,375 $3,604,377100-499 275 445 1.62 275 $23,168,700500+ 131 618 4.72 131 $326,837,633Totals 9,729 10,534 N/A 11,549 N/AStratus Consulting (Draft, 10/23/2009)Page 32Do Not Cite or QuoteSC11138Table 15. Industries characterized bysize categories, number of entities and facilities, facilities per entity, equipment use, andaverage revenues (cont.)SectorNAICScode(s)Number ofemployeesNumber ofentitiesNumber offacilitiesNumber offacilitiesper entityNumber of firms usingequipment with> 50 lbs of an ozonedepleting refrigerantAverage valueof shipmentsper entity(2007$)Food manufacturing other than bakeries 311 < 20 7,703 7,745 1.01 7,703 $1,751,16420-99 2,560 2,764 1.08 2,560 $12,594,370100-499 972 1,506 1.55 972 $60,629,867500+ 420 3,149 7.50 420 $869,272,625Totals 11,655 15,164 N/A 33,135 N/ABreweries 31212 < 20 292 292 1.00 292 $1,144,50020-99 95 98 1.03 95 $7,009,507100-499 18 24 1.33 18 $44,900,857500+ 10 32 3.20 10 $1,969,754,071Totals 415 446 N/A 66,685 N/ASoft drink manufacturing 312111 < 20 132 132 1.00 132 $2,261,38920-99 73 74 1.01 73 $16,166,651100-499 62 73 1.18 62 $51,883,126500+ 50 272 5.44 50 $669,460,778Totals 317 551 N/A 317 N/ABottled water 312112 < 20 181 181 1.00 181 $796,66020-99 33 38 1.15 33 $9,680,535100-499 8 11 1.38 8 $34,142,134500+ 7 55 7.86 7 $195,098,070Totals 229 285 N/A 229 N/AStratus Consulting (Draft, 10/23/2009)Page 33Do Not Cite or QuoteSC11138Table 15. Industries characterized bysize categories, number of entities and facilities, facilities per entity, equipment use, andaverage revenues (cont.)SectorNAICScode(s)Number ofemployeesNumber ofentitiesNumber offacilitiesNumber offacilitiesper entityNumber of firms usingequipment with> 50 lbs of an ozonedepleting refrigerantAverage valueof shipmentsper entity(2007$)Ice manufacturing 312113 < 20 369 370 1.00 369 $592,02520-99 44 55 1.25 44 $4,426,462100-499 6 11 1.83 6 $9,901,666500+ 3 52 17.33 3 $93,617,007Totals 422 488 N/A 422 N/AIce rinks 713940 < 20 18,568 18,612 1.00 381 $241,98120-99 3,534 3,853 1.09 62 $1,294,443100-499 596 1,103 1.85 0 $5,211,097500+ 159 1,909 12.01 0 $32,434,709Totals 22,857 25,477 N/A 443 N/AElementary and secondary schools 6111 < 20 8,205 8,219 1.00 492 N/A20-99 8,298 8,637 1.04 498 N/A100-499 1,883 3,205 1.70 113 N/A500+ 161 833 5.17 10 N/ATotals 18,547 20,894 N/A 1,113 N/A< 20 1,237 1,239 1.00 74 N/A6112,611320-99 551 585 1.06 33 N/AJunior colleges, colleges anduniversities100-499 709 830 1.17 43 N/A500+ 720 1,654 2.30 43 N/ATotals 3,217 4,308 N/A 193 N/AStratus Consulting (Draft, 10/23/2009)Page 34Do Not Cite or QuoteSC11138Table 15. Industries characterized bysize categories, number of entities and facilities, facilities per entity, equipment use, andaverage revenues (cont.)SectorNAICScode(s)Number ofemployeesNumber ofentitiesNumber offacilitiesNumber offacilitiesper entityNumber of firms usingequipment with> 50 lbs of an ozonedepleting refrigerantAverage valueof shipmentsper entity(2007$)Hospitals 622 < 20 637 651 1.02 38 $2,405,49520-99 487 513 1.05 29 $5,938,879100-499 1,590 1,725 1.08 95 $21,103,169500+ 1,834 4,680 2.55 110 $292,970,113Totals 4,548 7,569 N/A 273 N/AOther not included above N/A N/A 72,600 72,600 1.00 72,600 N/Aa. The 2007 Directory of Supermarket, Grocery and Convenience Store Chains estimatesthat there are 31,036 supermarket and grocery store facilities,and 77,148 convenience store facilities inthe United States. While these numbers differ from the ones obtained through the Census Bureau, we chose touse Census Bureau numbers because they are broken downin a way that allows for a small business analysis.Sources: U.S. Census Bureau, 2002b; number of entities with equipment charged with more than 50 pounds of ODS estimated based on expert opinionof SAIC, Inc.; Chain Store Guide, 2007.Stratus Consulting (Draft, 10/23/2009)

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# 4.2 Cost Input Assumptions

Labor rates used in this analysis were assumed to be equal to the U.S. mean wage for a heating, air conditioning, and refrigeration mechanic, plus an allowance for wage taxes, fringe benefits, overhead, and profit. The estimated cost per hour of labor for repairs (including replacement of equipment if necessary) used in this analysis was $39.28/hour. This cost per hour reflects the price charged by the service company in the ai r-conditioning and refrigeration service industry. The $39.28/hour cost estimate was derived from in formation obtained from the Bureau of Labor Statistics, the Census Bureau, and the EPA. The total labor cost per hour was calculated as:

Labor Cost per Hour = wage ra te*(1 + fringe rate)*(1 + overh ead rate)*(1 + profit rate).

The following information was used to derive the $39.28/hour estimate:

 The national mean hourly wage for heating, air conditioning and refrigeration mechanics (Labor Category 49-021) in 2006 was $19.09/hour, an average of four quarters in 2006 (U.S. BLS, 2007).

 The total employer cost of fringe benef its (including voluntary and legally required expenditures, including vacation and sick l eave, health and group insurance, Social Security, Medicare, and unemployment and wo rkers compensation) for the Installation, Maintenance and Repair Occupations categor y was 46.6% of the hourly wage (U.S. BLS, 2007).

 A labor overhead rate of 17% was used. This labor overhead rate is used in many EPA Information Collection Request analyses and re gulatory impact analyses for all private sector employment, and was de rived from a survey of the chemical industry and trade associations (U.S. EPA, 2005a).

The gross profit rate for the Plumbing, Heating and Air Conditioning Contr actor industry used in the analysis was 19.9%. This was derived from 2 002 gross sales in the in dustry ($118.7 billion) and total expenditures in the industry ($95.0 billion), including to tal payroll (with fringe), materials, subcontracting costs, property and equipment rent, purchased services (e.g., phone, legal), and depreciation of assets (1 – $95.0/$118.7 = 19.9%) (U.S. Census Bureau, 2004).

SAIC, Inc. staff estimated, for each type of equi pment and repair, the level of effort in labor hours, costs associated with a repa ir, and the percentage of time that the repair was successful. A core set of activities happen at each visit by a service technician, with additional activities occurring for all repair types. The core activities and the la bor time taken were assumed as

follows:Stratus Consulting (Draft, 10/23/2009)

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###  Perform leak test: 0.5 hour

 Recover refrigerant: 1 hour

 Conduct vacuum test: 0.5 hour

 Recharge system: 1 hour

 Verify repair: 1 hour

 Develop report: 0.25 hour

 Total for core activities: 4.25 hours.

Repair type A assumptions

 A leak test is performed, the refrigerant is completely recove red before repair begins, and a vacuum test is performed before equipment is recharged.

 Minor parts such as gaskets and seal s are replaced at a cost of $20.

 The labor required is 5.75 hour s and includes the following:

 Core activities: 4.25 hours

 Replace gaskets and seals, tighten joints: 1 hour

 Conduct leak test: 0.5 hour.

 A cost is incurred to replace the refrigerant that leaked from the equipment and caused the need for repair. The cost of refrigeran t replaced is equal to the cost per pound of refrigerant typically found in each type of equipment times the respective length of time leakage occurs before detection in fractions of a year times the average annual leak rate for each type of equipment.

 Both initial and follow-up ve rifications are conducted.

Repair type B assumptions

 A leak test is performed, the refrigerant is completely recove red before repair begins, and a vacuum test is performed before equipment is recharged.

 A type B repair includes the replacement of a low-cost sub-component (e.g., coupling or valve), and involves the actions described in Table 3. To estimate the cost of a part replacement, several typical components for each of the equipment types were identified,Stratus Consulting (Draft, 10/23/2009)

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### and estimates of the costs for replacement parts were obtained from manufacturer and parts catalogues (Parker Hannifin, Ther maCom Ltd.). The average retail costs 3 

### for typical low-cost replacement parts were assumed to be $179 for commercial refrigeration, and $105 for process refrigeration and comfort coolin g. The average cost of a small part was assumed to be higher for commercial refriger ation equipment based on the higher cost of components such as hot gas bypass valves no t assumed to be typically encountered on process refrigeration or comfort cooling.

 The labor required is 5.92 hour s and includes the following:

 Core activities: 4.25 hours

 Replace inexpensive fitting or valve: 0.67 hour

 Install/replace drier: 1 hour.

 A cost is incurred to replace the refrigerant that leaked from the equipment and caused the need for repair. The cost of refrigeran t replaced is equal to the cost per pound of refrigerant typically found in each type of equipment times the respective length of time leakage occurs before detection in fractions of a year times the average annual leak rate for each type of equipment.

 Both initial and follow-up ve rifications are conducted.

Repair type C assumptions

 A leak test is performed, the refrigerant is completely recove red before repair begins, and a vacuum test is performed before equipment is recharged.

 A type C repair includes the replacement of a component, and involves the actions

described in Table 3. To estimate the cost of a part replacement, prices for typical compressors used were identified on each of th e equipment types and estimates of prices were obtained from a compressor supplier (T hermaCom Ltd.). The average retail costs 4


### for typical replacement compressors range from $2,550 (CR) to $9,300 (IPR, centrifugal type compressor).

 The labor required is 20.25 hour s and includes the following:

 Core activities: 4.25 hours

 Replace component: 16 hours.

3. Retail price was assumed to be 200% of catalogue (trade) price.

4. Retail prices for major components were assumed as given in the ThermaCom catalogue.Stratus Consulting (Draft, 10/23/2009)

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###  A cost is incurred to replace the refriger ant that leaked from the equipment and perpetrated the need for repair. The cost of re frigerant replaced is equal to the cost per pound of refrigerant typically found in each type of equipment times the respective length of time leakage occurs before detection in fr actions of a year times the average annual leak rate for each type of equipment.

 Both initial and follow-up ve rifications are conducted.

Repair type D assumptions

 A leak test is performed, the refrigerant is completely recove red before repair begins, and a vacuum test is performed before equipment is recharged.

 Repair type D is the retirement or retrofit of an entire piece of equipment, and involves

the actions described in Table 3. The cost of an entire piece of retrofit equipment is

between two and three times the cost of the compressor, ranging from $7,500 (CR) to $20,000 (IPR, centrifugal type compressor).

 The labor required to retrofit/ retire equipment is 20.25 hours and includes the following:

 Core activities: 4.25 hours

 Retrofit/retire equipment: 16 hours

 A cost is incurred to replace the entire refr igerant charge with virgin refrigerant.



# 4.3 Compliance Costs by Equipm ent Type Associated with

Different Levels of Action

Tables 16 and 17 show the compliance costs associat ed with the different levels of repair and retire/retrofit option based on the labor costs a nd equipment costs discussed in Section 4.2 for each of the two scenarios. These costs were used in conducting the screening analysis.



# 4.4 Recordkeeping and Reporting Costs

As described in Section 1.2.2, the proposed action requires technician s servicing large appliances (those containing 50 pounds or more of refriger ant) to provide the owner or operator with detailed invoice or other documentation when repa iring the appliances, and to maintain records for a minimum of three years on refrigerant recove red but not returned to appliances. Owners or operators of large appliances (t hose containing 50 pounds or more of refrigerant) must maintain records on repairs and verifica tions, refrigerants purchased, refrigerants recovered and transferred to a different owner, retrofit or retirement plans, justifications for any inability toStratus Consulting (Draft, 10/23/2009)

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### Table 16. Compliance costs for applicable type s of refrigeration and cooling equipment

under Scenario 1 a

Equipment category Repair level 1 Repair level 2 Repair level 3 Repair level 4

CR: DX and distributed $450 $3,345 $3,345 $8,295
IPR: Reciprocating and scroll $395 $6,629 $6,629 $8,295
IPR: Screw and centrifugal $395 $10,095 $10,095 $20795
CC: Rooftop, split, and reciprocating $395 $5,505 $5,505 $8,295 CC: DX, screw, and centrifugal $395 $5,917 $5,917 $20,795

a. These costs are composed of parts and labor and do not include the costs associated with recharging equipment, which will vary slightly based on diffe rences in the leak rate modeled for each option.



### Table 17. Compliance costs for applicable type s of refrigeration and cooling equipment

under Scenario 2 a

Equipment category Repair level 1 Repair level 2 Repair level 3 Repair level 4

CR: DX and distributed $246 $450 $3,345 $8,295
IPR: Reciprocating and scroll $226 $395 $6,629 $8,295
IPR: Screw and centrifugal $226 $395 $10,095 $20,795
CC: Rooftop, split, and reciprocating $246 $395 $5,505 $8,295
CC: DX, screw, and centrifugal $246 $395 $5,917 $20,795

a. These costs are composed of parts and labor and do not include the costs associated with recharging equipment, which will vary slightly based on diffe rences in the leak rate modeled for each option.



### complete repairs or retrofits/retirements on sc hedule, determination of the full charge, and addition and removal of refrigerants due to seasonal variance. There is no reporting cost associated with the proposed action. According to the anal ysis of burden conducted in accordance with the Paperwork Reduction Act of 1995, the regulatory alternative selected for the proposed rule (Option 5 under Scenario 2) ha s an annual recordkeep ing cost of $148,365 (cite ICR supporting document once published in the docket).



# 4.5 Regulatory Impacts

4.5.1 Aggregate incremental impact of proposed rule on the economy

The total expected economic impact on the eco nomy was estimated at between $86.5 million and $135.6 million under Scenario 1 and between $2 8.5 million and $53.2 milli on under Scenario 2. The total expected economic impact for Option 5 under Scenario 2 (the option selected for the rule) was estimated at $38.2 million. As discussed in Section 2, the regulatory impacts were based on a model entity analysis as follows:Stratus Consulting (Draft, 10/23/2009)

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### 1. An expected cost of compliance for an ow ner or operator of a piece of cooling or refrigeration equipment with a charge size gr eater than 50 pounds of an ODS refrigerant

was calculated based on the costs associated with each piece of model equipment and the likelihood of each regulatory scenario. The mo del equipment costs were derived through the combination of costs incurred by two groups. Group 1 includes those pieces affected by current regulation (i.e., those pieces of e quipment past the trigger leak rate), and group 2 includes those pieces that are not a ffected by current regulation but would be affected by the given option for the proposed ru le. These costs differ slightly because of

differences in leak rates and therefore differe nces in the amount of refrigerant required for recharging once a repair is completed. Ta bles 18 and 19 give the expected average costs of compliance by equipment for differe nt options for the proposed rule and the

baseline and the incremental cost.

Table 18. Incremental cost of th e different options for the proposed rule under Scenario 1 per piece of equipment

Equipment type Proposed Baseline Incremental
Option 1 (5% and 10%)
CC $174 $50 $124
CR $284 $59 $225
IPR $508 $228 $280
Option 2 (5% and 20%)
CC $174 $50 $124
CR $224 $59 $165
IPR $438 $228 $210
Option 3 (5% and 30%)
CC $174 $50 $124
CR $178 $59 $118
IPR $386 $228 $158
Option 4 (10% and 10%)
CC $157 $50 $107
CR $284 $59 $225
IPR $508 $228 $280
Option 5 (10% and 20%)
CC $157 $50 $107
CR $224 $59 $165
IPR $438 $228 $210
Option 6 (10% and 30%)
CC $157 $50 $107
CR $178 $59 $118
IPR $386 $228 $158
Note: Values may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)

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### Table 19. Incremental cost of th e different options for the proposed rule under Scenario 2 per piece of equipment

Equipment type Proposed Baseline Incremental

Option 1 (5% and 10%)

CC $97 $50 $47

CR $169 $59 $109

IPR $291 $228 $63
Option 2 (5% and 20%)

CC $97 $50 $47

CR $136 $59 $77

IPR $261 $228 $34

Option 3 (5% and 30%)

CC $97 $50 $47

CR $110 $59 $51

IPR $238 $228 $10

Option 4 (10% and 10%)

CC $89 $50 $39

CR $169 $59 $109

IPR $291 $228 $63
Option 5 (10% and 20%)

CC $89 $50 $39

CR $136 $59 $77

IPR $261 $228 $34

Option 6 (10% and 30%)

CC $89 $50 $39

CR $110 $59 $51

IPR $238 $228 $10

Note: Values may vary slightly due to rounding.



### 2. For each size category within each sector, the expected cost of a piece of equipment in each equipment category was multiplied by the number of pieces of equipment in that category that a typical facility is likely to have, and the products in each category were summed to find the total exp ected cost per facility.

3. The expected cost per facility was multiplied by the average number of facilities per entity in each size category of each sector to ascertain the expected cost per entity.

4. This was then multiplied by the number of entities in each size category to find the expected cost per size ca tegory in each sector.Stratus Consulting (Draft, 10/23/2009)

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### 5. The expected costs in the size categories we re summed to find the expected cost per

sector.

6. The totals from all affected sectors were su mmed to find the total impact of the baseline scenario and proposed rule.

7. The total expected cost of the baseline s cenario was then subtracted from the total expected cost of different options for the pr oposed rule to find the incremental expected cost of different options for the proposed rule.

8. As mentioned in Section 4.1, there are 824,000 office buildings, 121,000 outpatient health care buildings, and 277,000 public asse mbly buildings reported in the CBECS (EIA, 2006) that use CC equipment affected by the rule (EIA, 2006) and are not included in the analysis by NAICS code and size cate gories. Six percent of these buildings, or 72,600 buildings, are affected by the rule (Section 3.1.2). These buildings were considered similar to those in the office building managers sector where the average number of CC equipment is one. The impact of different options for the proposed rule on these buildings is therefore 72,600 times the expected regulatory impact on a piece of CC equipment at each of the options for proposed regulation. These costs were then added to the total incremental expected costs described previously.

The incremental impacts on the economy from eac h of the options for proposed regulation are presented in Tables 20 and 21.

Tables 22 and 23 present the percentage of cost s that can be attributed to each equipment category under each scenario. Because baseline requirements are currently higher in IPR equipment, and CC equipment has leak rates th at are generally low, expected incremental impacts will generally be highest in the CR equipment sector.

Tables 24 and 25 present the aggregated incrementa l impacts of the options for the proposed rule by sector. The most heavily impacted sector is the supermarket and grocery store sector, with between $37.8 million and $66.9 million in expect ed costs under Scenario 1 and between $15.9 million and $31.7 million under Scenario 2.

4.5.2 Impact of proposed rule on small entities

The Monte Carlo analysis described in Section 2.4 estimated the number of entities in each relevant size category expected to experien ce costs exceeding 1% (and 3%) of the average annual value of shipments. This analysis di d not account for actions mandated by current regulations.Stratus Consulting (Draft, 10/23/2009)

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### Table 20. Incremental cost of th e different options for the proposed rule under Scenario 1 per equipment category (million dollars)

Equipment type Proposed Baseline Incremental

Option 1 (5% and 10%)

CC $58.4 $16.8 $41.5

CR $79.0 $16.5 $62.5

IPR $57.3 $25.7 $31.6
Total $194.6 $59.0 $135.6

Option 2 (5% and 20%)

CC $58.4 $16.8 $41.5

CR $62.3 $16.5 $45.8

IPR $49.3 $25.7 $23.7
Total $170.0 $59.0 $111.0

Option 3 (5% and 30%)

CC $58.4 $16.8 $41.5

CR $49.4 $16.5 $32.9

IPR $43.5 $25.7 $17.8
Total $151.3 $59.0 $92.2

Option 4 (10% and 10%)

CC $52.7 $16.8 $35.8

CR $79.0 $16.5 $62.5

IPR $57.3 $25.7 $31.6
Total $188.9 $59.0 $129.9

Option 5 (10% and 20%)

CC $52.7 $16.8 $35.8

CR $62.3 $16.5 $45.8

IPR $49.3 $25.7 $23.7
Total $164.3 $59.0 $105.3

Option 6 (10% and 30%)

CC $52.7 $16.8 $35.8

CR $49.4 $16.5 $32.9

IPR $43.5 $25.7 $17.8
Total $145.6 $59.0 $86.5

Note: Values may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)

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### Table 21. Incremental cost of th e different options for the proposed rule under Scenario 2 per equipment category (million dollars)

Equipment type Proposed Baseline Incremental

Option 1 (5% and 10%)

CC $32.6 $16.8 $15.8

CR $46.8 $16.5 $30.3

IPR $32.8 $25.7 $7.1
Total $112.2 $59.0 $53.2

Option 2 (5% and 20%)

CC $32.6 $16.8 $15.8

CR $37.9 $16.5 $21.3

IPR $29.4 $25.7 $3.8
Total $99.9 $59.0 $40.9

Option 3 (5% and 30%)

CC $32.6 $16.8 $15.8

CR $30.7 $16.5 $14.2

IPR $26.8 $25.7 $1.2
Total $90.2 $59.0 $31.1

Option 4 (10% and 10%)

CC $30.0 $16.8 $13.1

CR $46.8 $16.5 $30.3

IPR $32.8 $25.7 $7.1
Total $109.6 $59.0 $50.5

Option 5 (10% and 20%)

CC $30.0 $16.8 $13.1

CR $37.9 $16.5 $21.3

IPR $29.4 $25.7 $3.8
Total $97.3 $59.0 $38.2

Option 6 (10% and 30%)

CC $30.0 $16.8 $13.1

CR $30.7 $16.5 $14.2

IPR $26.8 $25.7 $1.2
Total $87.5 $59.0 $28.5

Note: Values may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)

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### Table 22. Percentage of regulatory impacts attributed to each equipment category under Scenario 1

Equipment type Proposed Baseline Incremental

Option 1 (5% and 10%)

CC 30% 29% 31%

CR 41% 28% 46%

IPR 29% 43% 23%
Option 2 (5% and 20%)

CC 34% 29% 37%

CR 37% 28% 41%

IPR 29% 43% 21%
Option 3 (5% and 30%)

CC 39% 29% 45%

CR 33% 28% 36%

IPR 29% 43% 19%
Option 4 (10% and 10%)

CC 28% 29% 28%

CR 42% 28% 48%

IPR 30% 43% 24%
Option 5 (10% and 20%)

CC 32% 29% 34%

CR 38% 28% 43%

IPR 30% 43% 22%
Option 6 (10% and 30%)

CC 36% 29% 41%

CR 34% 28% 38%

IPR 30% 43% 21%
Note: Values may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)

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### Table 23. Percentage of regulatory impacts attributed to each equipment category under Scenario 2

Equipment type Proposed Baseline Incremental

Option 1 (5% and 10%)

CC 29% 29% 30%

CR 42% 28% 57%

IPR 29% 43% 13%
Option 2 (5% and 20%)

CC 33% 29% 39%

CR 38% 28% 52%

IPR 29% 43% 9%
Option 3 (5% and 30%)

CC 36% 29% 51%

CR 34% 28% 46%

IPR 30% 43% 4%
Option 4 (10% and 10%)

CC 27% 29% 26%

CR 43% 28% 60%

IPR 30% 43% 14%
Option 5 (10% and 20%)

CC 31% 29% 34%

CR 39% 28% 56%

IPR 30% 43% 10%
Option 6 (10% and 30%)

CC 34% 29% 46%

CR 35% 28% 50%

IPR 31% 43% 4%
Note: Values may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)Page 47Do Not Cite or QuoteSC11138Table 24. Total incremental cost of each regulatoryoption under Scenario 1 by sector (million dollars)OptionSector1(5% and 10%)2(5% and 20%)3(5% and 30%)4(10% and 10%)5(10% and 20%)6(10% and 30%)Supermarkets and grocery stores $66.9 $51.1 $38.9 $65.8 $50.0 $37.8Convenience stores $0.3 $0.3 $0.3 $0.2 $0.2 $0.2Gas station convenience stores $0.6 $0.6 $0.6 $0.5 $0.5 $0.5Warehouse and club supercenters $2.6 $2.0 $1.6 $2.5 $2.0 $1.5Refrigerated warehouse and storage $1.1 $0.9 $0.7 $1.1 $0.8 $0.7Refrigerated warehouse farm products $0.6 $0.5 $0.4 $0.6 $0.5 $0.4Office building managers $0.1 $0.1 $0.1 $0.1 $0.1 $0.1Lodging $8.4 $8.4 $8.4 $7.2 $7.2 $7.2Chemical manufacturing $18.3 $15.1 $12.8 $17.5 $14.3 $12.0Pharmaceutical manufacturing $2.9 $2.4 $2.0 $2.8 $2.3 $1.9Petrochemical manufacturing $0.6 $0.5 $0.4 $0.5 $0.4 $0.4Bakeries $8.5 $7.0 $5.9 $8.2 $6.7 $5.6Food manufacturing other than bakeries $12.3 $10.1 $8.5 $11.7 $9.6 $8.0Breweries $0.7 $0.6 $0.5 $0.7 $0.6 $0.5Soft drink manufacturing $0.9 $0.7 $0.6 $0.9 $0.7 $0.6Bottled water manufacturing $0.5 $0.4 $0.3 $0.4 $0.4 $0.3Ice manufacturing $0.6 $0.5 $0.4 $0.6 $0.5 $0.4Ice rinks $0.3 $0.2 $0.2 $0.3 $0.2 $0.2Elementary and secondary schools $0.3 $0.3 $0.3 $0.3 $0.3 $0.3Junior colleges, colleges, and universities $0.1 $0.1 $0.1 $0.1 $0.1 $0.1Hospitals $0.2 $0.2 $0.2 $0.2 $0.2 $0.2Other, buildings not included above $9.0 $9.0 $9.0 $7.7 $7.7 $7.7Total $135.6 $111.0 $92.2 $129.9 $105.3 $86.5Stratus Consulting (Draft, 10/23/2009)Page 48Do Not Cite or QuoteSC11138Table 25. Total incremental cost of each regulatoryoption under Scenario 2 by sector (million dollars)OptionSector1(5% and 10%)2(5% and 20%)3(5% and 30%)4(10% and 10%)5(10% and 20%)6(10% and 30%)Supermarkets and grocery stores $31.7 $23.1 $16.4 $31.1 $22.6 $15.9Convenience stores $0.1 $0.1 $0.1 $0.1 $0.1 $0.1Gas station convenience stores $0.2 $0.2 $0.2 $0.2 $0.2 $0.2Warehouse and club supercenters $1.2 $0.9 $0.7 $1.2 $0.9 $0.6Refrigerated warehouse and storage $0.5 $0.4 $0.3 $0.5 $0.4 $0.3Refrigerated warehouse farm products $0.3 $0.2 $0.2 $0.3 $0.2 $0.2Office building managers < $0.1 < $0.1 < $0.1 < $0.1 < $0.1 < $0.1Lodging $3.2 $3.2 $3.2 $2.6 $2.6 $2.6Chemical manufacturing $5.0 $3.7 $2.6 $4.6 $3.3 $2.2Pharmaceutical manufacturing $0.8 $0.6 $0.4 $0.7 $0.5 $0.4Petrochemical manufacturing $0.2 $0.1 $0.1 $0.1 $0.1 $0.1Bakeries $2.3 $1.7 $1.2 $2.1 $1.5 $1.0Food manufacturing other than bakeries $3.3 $2.4 $1.7 $3.1 $2.2 $1.5Breweries $0.2 $0.1 $0.1 $0.2 $0.1 $0.1Soft drink manufacturing $0.2 $0.2 $0.1 $0.2 $0.2 $0.1Bottled water manufacturing $0.1 $0.1 $0.1 $0.1 $0.1 $0.1Ice manufacturing $0.2 $0.1 $0.1 $0.1 $0.1 $0.1Ice rinks $0.1 $0.1 < $0.1 $0.1 < $0.1 < $0.1Elementary and secondary schools $0.1 $0.1 $0.1 $0.1 $0.1 $0.1Junior colleges, colleges, and universities <$0.1 < $0.1 < $0.1 < $0.1 < $0.1 < $0.1Hospitals $0.1 $0.1 $0.1 $0.1 $0.1 $0.1Other, buildings not included above $3.4 $3.4 $3.4 $2.8 $2.8 $2.8Total $53.2 $40.9 $31.1 $50.5 $38.2 $28.5Stratus Consulting (Draft, 10/23/2009)

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SC11138 

### Results of this analysis are presented in Tables 26 through 29. Under Scenario 1, between 1,396 and 1,775 small entities are likely to experience compliance costs great er than or equal to 1% of their average value of shipme nts. Under Scenario 2, between 336 and 409 small entities are likely to experience costs at this level. With th e selected alternative, Option 5 under Scenario 2, a

total of 353 small businesses are likely to experience compliance costs greater than or equal to 1% of their average value of shipments. This represents 0.34% of the 104,068 total potentially

affected small businesses examined across all se ctors. At the 1% level, the most heavily impacted sector, the ice rink sect or, is predicted to have 36 impact ed entities (out of 443 small businesses in the sector, or 8.1% of the sector). Th e sector with the most impacted small entities, bakeries, is predicted to have 114 affected small businesses (of the 9,598 potentially impacted

small businesses in the sector , or 1.2% of the sector).

Under Scenario 1, between 140 a nd 172 small entities are likely to experience compliance costs greater than or equal to 3% of their average value of shipment s. Under Scenario 2, between 74 and 88 small entities are likely to experience costs at this level. With the selected alternative, Option 5 under Scenario 2, there are 74 small bus inesses with anticipated compliance costs greater than or equal to 3% of their average value of shipments, mainly in the bakery and ice rink sectors. In the bakery sector, 24 companies ar e expected to have impacts between 3 and 4%, while 6 are expected to have impacts between 4 and 9.5%. In the ice ri nk sector, 25 companies are expected to experience impacts between 3 and 4%, 4 companies will likely experience impacts between 4 and 10%, and there is a sm all chance that 1 of those 4 companies may experience impacts between 10 and 26%.



# 5. Benefits Estimation

The benefits analysis of the ODS emissions reduc tions for each of the options for revising the rule consists of three separate , but sequential, analyses. Each of the three components of the benefits analysis presents a different measure of the benefits of revisi ng the rule. The benefits analysis uses the results of the economy-wide impacts analyses desc ribed in previous sections of this report, resulting in the following set of thre e different types of benefits measures that are consistent with the cost and economic impact analyses.

1. Environmental benefits, which are presen ted in terms of the amount of emissions reductions that would result from adop ting each of the regulatory options.

2. Health benefits, which are pr esented in terms of the reductions in future cases of both

fatal and nonfatal skin cancer s that would result from the emissions reductions for each regulatory option.

3. Economic benefits, which are presented in terms of the economic value of the avoided

cancers.Stratus Consulting (Draft, 10/23/2009)Page 50Do Not Cite or QuoteSC11138Table 26. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $760,867 32,246 305 232 182 287 216 178Supermarkets and grocerystores20-99 $5,804,240 6,438 0 0 0 0 0 0100-499 $26,814,603 1,157 0 0 0 0 0 0Total 39,841 305 232 182 287 216 178Convenience stores < 20 $720,186 1,708 3 3 3 3 3 320-99 $3,161,638 55 1 1 1 0 0 0100-499 $8,939,340 8 1 1 1 1 1 1> 500 $87,857,296 5 0 0 0 0 0 0Total 1,777 5 5 5 4 4 4< 20 $1,576,988 2,098 1 1 1 1 1 1Gas station conveniencestores20-99 $6,855,701 220 1 1 1 0 0 0100-499 $34,020,000 46 1 1 1 0 0 0Total 2,363 3 3 3 1 1 1< 20 $689,000 179 5 4 4 5 4 4Warehouse and clubsupercenters20-99 $8,085,762 10 0 0 0 0 0 0100-499 $30,629,911 4 0 0 0 0 0 0Total 193 5 4 4 5 4 4< 20 $844,175 411 4 4 3 4 4 3Refrigerated warehouse andstorage20-99 $5,540,779 138 0 0 0 1 1 1100-499 $17,230,410 34 0 0 0 0 0 0> 500 $127,657,208 25 0 0 0 0 0 0Total 608 4 4 3 5 5 4Stratus Consulting (Draft, 10/23/2009)Page 51Do Not Cite or QuoteSC11138Table 26. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $1,474,575 276 1 1 1 1 1 1Refrigerated warehouse andstorage farm products20-99 $4,696,650 48 0 1 0 1 1 1100-499 $17,545,505 18 0 0 0 0 0 0> 500 $48,989,768 21 0 0 0 0 0 0Total 363 1 2 1 2 2 2Office building managers < 20 $528,310 514 8 8 8 7 7 720-99 $4,531,681 53 1 1 1 1 1 1100-499 $12,856,712 14 0 0 0 0 0 0Total 581 9 9 9 8 8 8Lodging < 20 $312,013 20,546 592 592 592 534 534 53420-99 $1,556,255 4,524 2 2 2 2 2 2100-499 $8,115,097 477 1 1 1 1 1 1Total 25,547 595 595 595 537 537 537Chemical manufacturing < 20 $2,185,664 5,192 34 26 23 33 26 2420-99 $12,609,842 1,679 0 0 0 0 0 0100-499 $55,672,937 622 0 0 0 0 0 0> 500 $703,197,343 437 0 0 0 0 0 0Total 7,493 34 26 23 33 26 24< 20 $2,243,968 812 5 4 4 5 4 4Pharmaceuticalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1,275 5 4 4 5 4 4Stratus Consulting (Draft, 10/23/2009)Page 52Do Not Cite or QuoteSC11138Table 26. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Bakeries < 20 $429,172 7,948 650 561 518 624 539 49720-99 $3,604,377 1,375 1 1 1 1 1 1100-499 $23,168,700 275 0 0 0 0 0 0> 500 $326,837,633 131 0 0 0 0 0 0Total 9,598 651 562 519 625 540 498< 20 $1,751,164 7,703 25 22 22 26 22 21Food manufacturing otherthan bakeries20-99 $12,594,370 2,560 0 0 0 0 0 0100-499 $60,629,867 972 0 0 0 0 0 0> 500 $869,272,625 420 0 0 0 0 0 0Total 11,235 25 22 22 26 22 21Breweries < 20 $1,144,500 292 22 20 18 22 20 1720-99 $7,009,507 95 0 0 0 0 0 0100-499 $44,900,857 18 0 0 0 0 0 0Total 405 22 20 18 22 20 17Soft drink manufacturing < 20 $2,261,389 132 1 1 1 1 1 120-99 $16,166,651 73 0 0 0 0 0 0100-499 $51,883,126 62 0 0 0 0 0 0Total 267 1 1 1 1 1 1Bottled water < 20 $691,221 181 26 22 20 25 22 1920-99 $8,399,303 33 0 0 0 0 0 0100-499 $29,623,375 8 0 0 0 0 0 0Total 222 26 22 20 25 22 19Stratus Consulting (Draft, 10/23/2009)Page 53Do Not Cite or QuoteSC11138Table 26. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Ice rinks < 20 $241,981 381 35 35 35 35 35 3520-99 $1,294,443 62 1 1 1 1 1 1100-499 $5,211,097 – 0 0 0 0 0 0Total 443 36 36 36 36 36 36< 20 $2,243,968 812 0 0 1 0 0 1Petrochemicalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1275 0 0 1 0 0 1Ice manufacturing < 20 $592,025 369 45 40 36 44 39 3520-99 $4,426,462 44 1 1 1 1 1 1100-499 $9,901,666 6 1 1 0 1 1 0Total 419 47 42 37 46 41 36Hospitals < 20 $2,405,495 38 1 1 1 1 1 120-99 $5,938,879 29 0 0 0 0 0 0100-499 $21,103,169 95 0 0 0 0 0 0Total 163 1 1 1 1 1 1Total 104,068 1,775 1,590 1,484 1,669 1,490 1,396Note: The expected number of entities are estimates from a probabilistic analysis of the potential impacts on small entities. Small differences in estimatednumbers of entities (e.g., 178 vs. 182) are not statistically significant. Totals may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)Page 54Do Not Cite or QuoteSC11138Table 27. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $760,867 32,246 56 42 37 58 46 37Supermarkets and grocerystores20-99 $5,804,240 6,438 0 0 0 0 0 0100-499 $26,814,603 1,157 0 0 0 0 0 0Total 39,841 56 42 37 58 46 37Convenience stores < 20 $720,186 1,708 2 2 2 2 2 220-99 $3,161,638 55 1 1 1 1 1 1100-499 $8,939,340 8 1 1 1 1 1 1> 500 $87,857,296 5 0 0 0 0 0 0Total 1,777 4 4 4 4 4 4< 20 $1,576,988 2,098 1 1 1 1 1 1Gas station conveniencestores20-99 $6,855,701 220 1 1 1 1 1 1100-499 $34,020,000 46 1 1 1 1 1 1Total 2,363 3 3 3 3 3 3< 20 $689,000 179 1 1 1 1 1 1Warehouse and clubsupercenters20-99 $8,085,762 10 0 0 0 0 0 0100-499 $30,629,911 4 0 0 0 0 0 0Total 193 1 1 1 1 1 1< 20 $844,175 411 1 1 1 1 1 1Refrigerated warehouse andstorage20-99 $5,540,779 138 0 0 0 0 0 0100-499 $17,230,410 34 0 0 0 0 0 0> 500 $127,657,208 25 0 0 0 0 0 0Total 608 1 1 1 1 1 1Stratus Consulting (Draft, 10/23/2009)Page 55Do Not Cite or QuoteSC11138Table 27. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $1,474,575 276 1 1 1 1 1 1Refrigerated warehouse andstorage farm products20-99 $4,696,650 48 1 1 1 1 1 1100-499 $17,545,505 18 0 0 0 0 0 0> 500 $48,989,768 21 0 0 0 0 0 0Total 363 2 2 2 2 2 2Office building managers < 20 $528,310 514 2 2 2 2 2 220-99 $4,531,681 53 1 1 1 0 0 0100-499 $12,856,712 14 0 0 0 0 0 0Total 581 3 3 3 2 2 2Lodging < 20 $312,013 20,546 118 118 118 109 109 10920-99 $1,556,255 4,524 2 2 2 2 2 2100-499 $8,115,097 477 1 1 1 1 1 1Total 25,547 121 121 121 112 112 112Chemical manufacturing < 20 $2,185,664 5,192 6 4 4 7 5 520-99 $12,609,842 1,679 0 0 0 0 0 0100-499 $55,672,937 622 0 0 0 0 0 0> 500 $703,197,343 437 0 0 0 0 0 0Total 7,493 6 4 4 7 5 5< 20 $2,243,968 812 1 1 1 1 1 1Pharmaceuticalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1,275 1 1 1 1 1 1Stratus Consulting (Draft, 10/23/2009)Page 56Do Not Cite or QuoteSC11138Table 27. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Bakeries < 20 $429,172 7,948 145 124 118 135 113 10820-99 $3,604,377 1,375 1 1 1 1 1 1100-499 $23,168,700 275 0 0 0 0 0 0> 500 $326,837,633 131 0 0 0 0 0 0Total 9,598 146 125 119 136 114 109< 20 $1,751,164 7,703 5 6 4 5 5 4Food manufacturing otherthan bakeries20-99 $12,594,370 2,560 0 0 0 0 0 0100-499 $60,629,867 972 0 0 0 0 0 0> 500 $869,272,625 420 0 0 0 0 0 0Total 11,235 5 6 4 5 5 4Breweries < 20 $1,144,500 292 5 5 4 5 5 420-99 $7,009,507 95 0 0 0 0 0 0100-499 $44,900,857 18 0 0 0 0 0 0Total 405 5 5 4 5 5 4Soft drink manufacturing < 20 $2,261,389 132 1 1 1 1 1 120-99 $16,166,651 73 0 0 0 0 0 0100-499 $51,883,126 62 0 0 0 0 0 0Total 267 1 1 1 1 1 1Bottled water < 20 $691,221 181 6 5 5 6 5 420-99 $8,399,303 33 0 0 0 0 0 0100-499 $29,623,375 8 0 0 0 0 0 0Total 222 6 5 5 6 5 4Stratus Consulting (Draft, 10/23/2009)Page 57Do Not Cite or QuoteSC11138Table 27. Expected number of entities with compliance costsgreater than 1% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Ice rinks < 20 $241,981 381 35 35 35 35 35 3520-99 $1,294,443 62 1 1 1 1 1 1100-499 $5,211,097 – 0 0 0 0 0 0Total 443 36 36 36 36 36 36< 20 $2,243,968 812 0 0 0 0 0 0Petrochemicalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1275 0 0 0 0 0 0Ice manufacturing < 20 $592,025 369 10 9 8 10 8 820-99 $4,426,462 44 1 1 1 1 1 1100-499 $9,901,666 6 0 0 0 0 0 0Total 419 11 10 9 11 9 9Hospitals < 20 $2,405,495 38 1 1 1 1 1 120-99 $5,938,879 29 0 0 0 0 0 0100-499 $21,103,169 95 0 0 0 0 0 0Total 163 1 1 1 1 1 1Total 104,068 409 371 356 392 353 336Note: The expected number of entities are estimates from a probabilistic analysis of the potential impacts on small entities. Small differences in estimatednumbers of entities (e.g., 56 vs. 58) are not statistically significant. Totals may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)Page 58Do Not Cite or QuoteSC11138Table 28. Expected number of entities with compliance costsgreater than 3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $760,867 32,246 2 0 0 1 1 0Supermarkets and grocerystores20-99 $5,804,240 6,438 0 0 0 0 0 0100-499 $26,814,603 1,157 0 0 0 0 0 0Total 39,841 2 0 0 1 1 0Convenience stores < 20 $720,186 1,708 1 1 1 0 0 020-99 $3,161,638 55 0 0 0 0 0 0100-499 $8,939,340 8 0 0 0 0 0 0> 500 $87,857,296 5 0 0 0 0 0 0Total 1,777 1 1 1 0 0 0< 20 $1,576,988 2,098 0 0 0 0 0 0Gas station conveniencestores20-99 $6,855,701 220 0 0 0 0 0 0100-499 $34,020,000 46 0 0 0 0 0 0Total 2,363 0 0 0 0 0 0< 20 $689,000 179 1 1 1 1 1 1Warehouse and clubsupercenters20-99 $8,085,762 10 0 0 0 0 0 0100-499 $30,629,911 4 0 0 0 0 0 0Total 193 1 1 1 1 1 1< 20 $844,175 411 1 1 1 1 1 1Refrigerated warehouse andstorage20-99 $5,540,779 138 0 0 0 0 0 0100-499 $17,230,410 34 0 0 0 0 0 0> 500 $127,657,208 25 0 0 0 0 0 0Total 608 1 1 1 1 1 1Stratus Consulting (Draft, 10/23/2009)Page 59Do Not Cite or QuoteSC11138Table 28. Expected number of entities with compliance costsgreater than 3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $1,474,575 276 0 0 0 0 0 0Refrigerated warehouse andstorage farm products20-99 $4,696,650 48 0 0 0 0 0 0100-499 $17,545,505 18 0 0 0 0 0 0> 500 $48,989,768 21 0 0 0 0 0 0Total 363 0 0 0 0 0 0Office building managers < 20 $528,310 514 1 1 1 1 1 120-99 $4,531,681 53 0 0 0 0 0 0100-499 $12,856,712 14 0 0 0 0 0 0Total 581 1 1 1 1 1 1Lodging < 20 $312,013 20,546 37 37 37 31 31 3120-99 $1,556,255 4,524 0 0 0 0 0 0100-499 $8,115,097 477 0 0 0 0 0 0Total 25,547 37 37 37 31 31 31Chemical manufacturing < 20 $2,185,664 5,192 0 0 0 0 0 020-99 $12,609,842 1,679 0 0 0 0 0 0100-499 $55,672,937 622 0 0 0 0 0 0> 500 $703,197,343 437 0 0 0 0 0 0Total 7,493 0 0 0 0 0 0< 20 $2,243,968 812 0 0 0 0 0 0Pharmaceuticalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1,275 0 0 0 0 0 0Stratus Consulting (Draft, 10/23/2009)Page 60Do Not Cite or QuoteSC11138Table 28. Expected number of entities withcompliance costs greater than3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Bakeries < 20 $429,172 7,948 94 85 73 95 84 7220-99 $3,604,377 1,375 0 0 0 0 0 0100-499 $23,168,700 275 0 0 0 0 0 0> 500 $326,837,633 131 0 0 0 0 0 0Total 9,598 94 85 73 95 84 72< 20 $1,751,164 7,703 0 1 1 0 1 1Food manufacturing otherthan bakeries20-99 $12,594,370 2,560 0 0 0 0 0 0100-499 $60,629,867 972 0 0 0 0 0 0> 500 $869,272,625 420 0 0 0 0 0 0Total 11,235 0 1 1 0 1 1Breweries < 20 $1,144,500 292 1 1 1 1 1 120-99 $7,009,507 95 0 0 0 0 0 0100-499 $44,900,857 18 0 0 0 0 0 0Total 405 1 1 1 1 1 1Soft drink manufacturing < 20 $2,261,389 132 0 0 0 0 0 020-99 $16,166,651 73 0 0 0 0 0 0100-499 $51,883,126 62 0 0 0 0 0 0Total 267 0 0 0 0 0 0Bottled water < 20 $691,221 181 2 2 1 2 2 120-99 $8,399,303 33 0 0 0 0 0 0100-499 $29,623,375 8 0 0 0 0 0 0Total 222 2 2 1 2 2 1Stratus Consulting (Draft, 10/23/2009)Page 61Do Not Cite or QuoteSC11138Table 28. Expected number of entities with compliance costsgreater than 3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 1 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Ice rinks < 20 $241,981 381 28 28 28 28 28 2820-99 $1,294,443 62 1 1 1 1 1 1100-499 $5,211,097 – 0 0 0 0 0 0Total 443 29 29 29 29 29 29< 20 $2,243,968 812 0 0 0 0 0 0Petrochemicalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1275 0 0 0 0 0 0Ice manufacturing < 20 $592,025 369 3 3 2 3 2 220-99 $4,426,462 44 0 0 0 0 0 0100-499 $9,901,666 6 0 0 0 0 0 0Total 419 3 3 2 3 2 2Hospitals < 20 $2,405,495 38 0 0 0 0 0 020-99 $5,938,879 29 0 0 0 0 0 0100-499 $21,103,169 95 0 0 0 0 0 0Total 163 0 0 0 0 0 0Total 104,068 172 162 148 165 154 140Note: The expected number of entities are estimates from a probabilistic analysis of the potential impacts on small entities. Small differences in estimatednumbers of entities (e.g., 93 vs. 94) are not statistically significant. Totals may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)Page 62Do Not Cite or QuoteSC11138Table 29. Expected number of entities with compliance costsgreater than 3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $760,867 32,246 3 2 2 2 1 1Supermarkets and grocerystores20-99 $5,804,240 6,438 0 0 0 0 0 0100-499 $26,814,603 1,157 0 0 0 0 0 0Total 39,841 3 2 2 2 1 1Convenience stores < 20 $720,186 1,708 1 1 1 1 1 120-99 $3,161,638 55 0 0 0 0 0 0100-499 $8,939,340 8 0 0 0 0 0 0> 500 $87,857,296 5 0 0 0 0 0 0Total 1,777 1 1 1 1 1 1< 20 $1,576,988 2,098 0 0 0 0 0 0Gas station conveniencestores20-99 $6,855,701 220 0 0 0 0 0 0100-499 $34,020,000 46 0 0 0 0 0 0Total 2,363 0 0 0 0 0 0< 20 $689,000 179 1 1 1 1 1 1Warehouse and clubsupercenters20-99 $8,085,762 10 0 0 0 0 0 0100-499 $30,629,911 4 0 0 0 0 0 0Total 193 1 1 1 1 1 1< 20 $844,175 411 1 1 1 1 1 1Refrigerated warehouse andstorage20-99 $5,540,779 138 0 0 0 0 0 0100-499 $17,230,410 34 0 0 0 0 0 0> 500 $127,657,208 25 0 0 0 0 0 0Total 608 1 1 1 1 1 1Stratus Consulting (Draft, 10/23/2009)Page 63Do Not Cite or QuoteSC11138Table 29. Expected number of entities with compliance costsgreater than 3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)< 20 $1,474,575 276 0 0 0 0 0 0Refrigerated warehouse andstorage farm products20-99 $4,696,650 48 0 0 0 0 0 0100-499 $17,545,505 18 0 0 0 0 0 0> 500 $48,989,768 21 0 0 0 0 0 0Total 363 0 0 0 0 0 0Office building managers < 20 $528,310 514 1 1 1 1 1 120-99 $4,531,681 53 0 0 0 0 0 0100-499 $12,856,712 14 0 0 0 0 0 0Total 581 1 1 1 1 1 1Lodging < 20 $312,013 20,546 8 8 8 7 7 720-99 $1,556,255 4,524 0 0 0 0 0 0100-499 $8,115,097 477 0 0 0 0 0 0Total 25,547 8 8 8 7 7 7Chemical manufacturing < 20 $2,185,664 5,192 0 0 0 0 0 020-99 $12,609,842 1,679 0 0 0 0 0 0100-499 $55,672,937 622 0 0 0 0 0 0> 500 $703,197,343 437 0 0 0 0 0 0Total 7,493 0 0 0 0 0 0< 20 $2,243,968 812 0 0 0 0 0 0Pharmaceuticalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1,275 0 0 0 0 0 0Stratus Consulting (Draft, 10/23/2009)Page 64Do Not Cite or QuoteSC11138Table 29. Expected number of entities with compliance costsgreater than 3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Bakeries < 20 $429,172 7,948 41 30 35 40 30 3420-99 $3,604,377 1,375 0 0 0 0 0 0100-499 $23,168,700 275 0 0 0 0 0 0> 500 $326,837,633 131 0 0 0 0 0 0Total 9,598 41 30 35 40 30 34< 20 $1,751,164 7,703 0 0 0 0 0 0Food manufacturing otherthan bakeries20-99 $12,594,370 2,560 0 0 0 0 0 0100-499 $60,629,867 972 0 0 0 0 0 0> 500 $869,272,625 420 0 0 0 0 0 0Total 11,235 0 0 0 0 0 0Breweries < 20 $1,144,500 292 1 1 1 1 1 120-99 $7,009,507 95 0 0 0 0 0 0100-499 $44,900,857 18 0 0 0 0 0 0Total 405 1 1 1 1 1 1Soft drink manufacturing < 20 $2,261,389 132 0 0 0 0 0 020-99 $16,166,651 73 0 0 0 0 0 0100-499 $51,883,126 62 0 0 0 0 0 0Total 267 0 0 0 0 0 0Bottled water < 20 $691,221 181 1 1 1 1 1 120-99 $8,399,303 33 0 0 0 0 0 0100-499 $29,623,375 8 0 0 0 0 0 0Total 222 1 1 1 1 1 1Stratus Consulting (Draft, 10/23/2009)Page 65Do Not Cite or QuoteSC11138Table 29. Expected number of entities withcompliance costs greater than3% of average value of shipments (rounded up to thenearest whole entity) under Scenario 2 (cont.)OptionSectorNumber ofemployeesAverage valueof shipmentsper entityEntities withequipment containing> 50 lbs of an ozonedepleting refrigerant1(5% and10%)2(5% and20%)3(5% and30%)4(10% and10%)5(10% and20%)6(10% and30%)Ice rinks < 20 $241,981 381 28 28 28 28 28 2820-99 $1,294,443 62 1 1 1 1 1 1100-499 $5,211,097 – 0 0 0 0 0 0Total 443 29 29 29 29 29 29< 20 $2,243,968 812 0 0 0 0 0 0Petrochemicalmanufacturing20-99 $11,816,746 295 0 0 0 0 0 0100-499 $62,191,006 168 0 0 0 0 0 0> 500 $1,098,753,829 136 0 0 0 0 0 0Total 1275 0 0 0 0 0 0Ice manufacturing < 20 $592,025 369 1 1 1 1 1 120-99 $4,426,462 44 0 0 0 0 0 0100-499 $9,901,666 6 0 0 0 0 0 0Total 419 1 1 1 1 1 1Hospitals < 20 $2,405,495 38 0 0 0 0 0 020-99 $5,938,879 29 0 0 0 0 0 0100-499 $21,103,169 95 0 0 0 0 0 0Total 163 0 0 0 0 0 0Total 104,068 88 76 81 85 74 78Note: The expected number of entities are estimates from a probabilistic analysis of the potential impacts on small entities. Small differences in estimatednumbers of entities (e.g., 30 vs. 35) are not statistically significant. Totals may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)

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# 5.1 Emissions Reduction Analysis

The environmental benefits of the options examin ed for revising the rule are portrayed in this analysis in terms of the ODS emissions that woul d be avoided as a result of rule modifications. In the model plant analysis for the benefits estimation, each equipment type was divided into two groups to estimate the expected avoided emissions from a model piece of equipment. The first group consisted of those pieces of equipment above the current trigger leak rate (i.e., 15% for CC, and 35% for CR and IPR applications). Th e baseline avoided emissions from current requirements were subtracted from the potential avoided emissions from the proposed regulation for this group to find the incremental potential benefits of the rule. The second group consisted of equipment that would be required to be fi xed under the proposed regulation, but currently requires no action (i.e., the baseli ne for group 2 is zero). The combined benefits from these two groups capture all potential avoided emissi ons as a result of proposed regulation.

For example, in the case of CC and CR equipm ent, group 1 generates the benefits mentioned above, minus the baseline. Therefore there are mi nor incremental benefits associated with a successful level 1 repair in Scenario 1, due to th e slightly higher success ra te of repairs type B, and no incremental benefits in Scenario 2, where the same type of repair is performed in the baseline and proposed rule. The majority of the benefits of the proposed regulation begin with a successful level 2 repair and captu re all subsequent benefits. In the case of IPR equipment, the only majority of benefits of the proposed regulat ion for group 1 come from emissions avoided as a result of a third component replacement before a system is retrofitted or retired. Group 2 captures the benefits possible as a result of each repair level, because the baseline for these pieces of equipment is no action and thus no avoide d emissions. Table 30 presents the number of months of potential avoided emissions as a resu lt of the proposed re gulation. Note that the retrofit/retirement of a system shows no months of avoided emissions, because these potential benefits must occur in subsequent years a nd are thus beyond the scope of this analysis.

The following equation was used to calcu late the volume of avoided emissions:

Avoided emissions = (leak rate ) × (charge size) × (months avoided emissions/12 months)

The procedure used to calculate the expected avoided emissions of each type of equipment

follows:

1. The potential avoided emissions at each repa ir level were multiplied by the probability of ending at that level to get the total expected avoided emissions at that level.

2. The expected avoided emissions at each repair level were divided into emissions of each common refrigerants used in that type of equipment. This was accomplished by multiplying total expected avoided emissions at each repair level by the percentage of equipment that uses each common type of refrig erant. As noted in the cost analysis, theStratus Consulting (Draft, 10/23/2009)Page 67Do Not Cite or QuoteSC11138Table 30. Benefits assumptions of monthsavoided emissions if process stops at each regulatory stage specified belowRepair level 1 Repair level 2 Repair level 3Repair level 4(repair type A or Csuccessful)Repair level 4(repair type A or Cunsuccessful)EquipmentcategoryGroupBaseline Proposed Baseline Proposed Baseline Proposed Baseline Proposed Baseline ProposedCR 2 0 11 0 9 0 7 0 5 0 01 11 11 0 9 0 7 0 5 0 0IPR 2 0 11 0 9 0 7 0 5 0 01 11 11 9 9 9 7 0 5 0 0CC 2 0 11 0 9 0 7 0 5 0 01 11 11 0 9 0 7 0 5 0 0Stratus Consulting (Draft, 10/23/2009)

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### refrigerants considered are the most commonly used refrigerants for each of the types of equipment. Although there may be other refr igerants used in the equipment, the SCAQMD data indicate that these other refrige rants are a negligible percentage of all refrigerant usage.

3. The emissions of each type of refrigerant were weighted using the ODP and GWP of each chemical to get the ODP- and GWP- weighted pounds of expected avoided refrigerant emissions.

Once this procedure was completed for each type of equipment at each repair level, the group 1 and group 2 expected avoided emissions in ODP-weighted pounds were summed across each equipment type to find the total expected avoided ODP-weighted emissions per piece of equipment. A similar calculation was used to es timate the avoided GWP-weighted emissions per piece of equipment.

The benefits analysis has the following limitations:

 There is no analysis of benef its that may be obtained by pr eventing a chronically leaking system from continuing operation. There is al so no analysis of th e benefits of an

accelerated transition to non-ODS alternative re frigerants. This means that the benefits estimations presented here ar e likely to underestimate bene fits potentially realized through the proposed rule.

 This analysis does not address any differences in the timing of leak discovery and repair as a result of changes in the methods used to calculate annual leak rates mandated by the current and proposed rules. The data do not exis t to assess if and how the timing of leak discovery and repair would change with the proposed rule changes.

 The benefits are estimated in terms of th e projected emissions reductions (i.e., ODPweighted tonnes and MMTCE of avoided emi ssions). This screeni ng analysis does not estimate the economic value of the emissions reductions. A more comprehensive economic benefit-cost analysis using conven tional economic theory requires estimating the total societal willingness to pay to avoid the ODS emissions.

The benefits analysis estima tes the total expected benefits are between 263 and 493 ODPweighted tonnes or between 1.5 and 2.5 MMTCE of avoided refrigerant emissions under Scenario 1, and between 198 and 423 ODP-wei ghted tonnes or 1.2 and 2.3 MMTCE under

Scenario 2. The estimated tota l benefits for Option 5 under S cenario 2 are 316 ODP-weighted tones or 1.8 MMTCE. Tables 31 through 34 present th e benefits in terms of avoided emissions for all options.Stratus Consulting (Draft, 10/23/2009)

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### Table 31. Incremental benefits of the different options for the proposed rule under Scenario 1 per equipmen t category (ODP-weighted tonnes)

Expected incremental benefit
Option CC CR IPR Total

1 (5% and 10%) 134 162 197 493
2 (5% and 20%) 134 131 129 394

3 (5% and 30%) 134 92 47 273

4 (10% and 10%) 124 162 197 483
5 (10% and 20%) 124 131 129 384

6 (10% and 30%) 124 92 47 263
Note: Values may vary slightly due to rounding.



### Table 32. Incremental benefits of the different options for the proposed rule under Scenario 2 per equipmen t category (ODP-weighted tonnes)

Expected incremental benefit
Option CC CR IPR Total

1 (5% and 10%) 120 153 150 423
2 (5% and 20%) 120 122 84 326

3 (5% and 30%) 120 84 4 208
4 (10% and 10%) 111 153 150 413

5 (10% and 20%) 111 122 84 316
6 (10% and 30%) 111 84 4 198
Note: Values may vary slightly due to rounding.



### Table 33. Incremental benefits of the different options for the proposed rule under Scenario 1 per e quipment category (MMTCE)

Expected incremental benefit
Option CC CR IPR Total

1 (5% and 10%) 0.6 1.5 0.5 2.5
2 (5% and 20%) 0.6 1.2 0.3 2.1
3 (5% and 30%) 0.6 0.8 0.1 1.5

4 (10% and 10%) 0.5 1.5 0.5 2.5
5 (10% and 20%) 0.5 1.2 0.3 2.0

6 (10% and 30%) 0.5 0.8 0.1 1.5
Note: Values may vary slightly due to rounding.Stratus Consulting (Draft, 10/23/2009)

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### Table 34. Incremental benefits of the different options for the proposed rule under Scenario 2 per e quipment category (MMTCE)

Expected incremental benefit
Option CC CR IPR Total

1 (5% and 10%) 0.5 1.4 0.4 2.3
2 (5% and 20%) 0.5 1.1 0.2 1.8

3 (5% and 30%) 0.5 0.8 0.0 1.3

4 (10% and 10%) 0.5 1.4 0.4 2.2
5 (10% and 20%) 0.5 1.1 0.2 1.8

6 (10% and 30%) 0.5 0.8 0.0 1.2
Note: Values may vary slightly due to rounding.



### Tables 35 through 38 list the benefits results by s ector. Note that the sector with the largest

environmental benefit in terms of both ODP- a nd GWP-weighted emissions is the supermarket and grocery store sector, with estimated annual avoided refrige rant emissions between 110.5 and 178.7 ODP-weighted tonnes or between 0.89 and 1.49 MMTCE under Scenario 1, and between 100 and 166.8 ODP weighted tonnes or 0.80 and 1.40 MMTCE under Scenario 2.



# 5.2 Health Benefits Analysis

ODS emissions deplete stratos pheric ozone, which protects th e biosphere from potentially damaging doses of UV radiation. Depletion of st ratospheric ozone caused by the release of manmade ODS can lead to increases in UV radiat ion reaching the Earth’s surface, which could in

turn lead to adverse human and animal health effects, as well as ecosystem impacts. The ODS emissions reductions for the different options for revising the rule will reduce the depletion of stratospheric ozone, and hence reduce the adverse health effects of UV radiation.

In previous EPA analyses, the quantified benefi ts of stratospheric oz one protection programs were dominated by the reduced adverse hea lth impacts expected fr om reductions in UV

radiation. Because health effects were found to be the dominant quantified benefit category for stratospheric ozone protection, th is economic screening analysis of the options for reducing ODS emissions is limited to an analysis of the most important type of quantified health effect: skin

cancers. Other health effects are known or su spected to be associated with damage to stratospheric ozone, including premature aging, cataracts, and immune system suppression.Stratus Consulting(Draft, 10/23/2009)Page 71Do Not Cite or QuoteSC11138Table 35. Total incremental benefit of each regulatory option under Scenario 1 by sector (ODP-weighted tonnes)OptionSector1(5% and 10%)2(5% and 20%)3(5% and 30%)4(10% and 10%)5(10% and 20%)6(10% and 30%)Supermarkets and grocery stores 178.7 149.1 112.3 176.9 147.3 110.5Convenience stores 0.8 0.8 0.8 0.8 0.8 0.8Gas station convenience stores 2.0 2.0 2.0 1.9 1.9 1.9Warehouse and club supercenters 7.0 6.0 4.8 6.9 5.9 4.6Refrigerated warehouse and storage 3.0 2.6 2.1 3.0 2.5 2.0Refrigerated warehouse farm products 1.7 1.4 1.1 1.7 1.4 1.1Office building managers 0.3 0.3 0.3 0.3 0.3 0.3Lodging 27.0 27.0 27.0 25.0 25.0 25.0Chemical manufacturing 97.1 69.9 37.0 95.7 68.6 35.7Pharmaceutical manufacturing 15.3 11.0 5.8 15.1 10.8 5.6Petrochemical manufacturing 3.0 2.2 1.1 3.0 2.1 1.1Bakeries 45.2 32.5 17.2 44.6 31.9 16.6Food manufacturing other than bakeries 65.0 46.8 24.8 64.1 45.9 23.9Breweries 3.8 2.8 1.5 3.8 2.7 1.4Soft drink manufacturing 4.7 3.4 1.8 4.7 3.3 1.7Bottled water manufacturing 2.4 1.8 0.9 2.4 1.7 0.9Ice manufacturing 3.1 2.3 1.2 3.1 2.2 1.2Ice rinks 1.7 1.2 0.6 1.7 1.2 0.5Elementary and secondary schools 1.0 1.0 1.0 0.9 0.9 0.9Junior colleges, colleges, and universities 0.2 0.2 0.2 0.2 0.2 0.2Hospitals 0.7 0.7 0.7 0.7 0.7 0.7Other, buildings not included above 28.9 28.9 28.9 26.8 26.8 26.8Total 492.8 393.9 273.0 483.0 384.1 263.3Stratus Consulting(Draft, 10/23/2009)Page 72Do Not Cite or QuoteSC11138Table 36. Total incremental benefit of each regulatory option under Scenario 2 by sector (ODP-weighted tonnes)OptionSector1(5% and 10%)2(5% and 20%)3(5% and 30%)4(10% and 10%)5(10% and 20%)6(10% and 30%)Supermarkets and grocery stores 166.8 137.8 101.8 165.0 136.1 100.0Convenience stores 0.7 0.7 0.7 0.7 0.7 0.7Gas station convenience stores 1.8 1.8 1.8 1.7 1.7 1.7Warehouse and club supercenters 6.5 5.5 4.3 6.4 5.4 4.2Refrigerated warehouse and storage 2.8 2.4 1.9 2.8 2.3 1.8Refrigerated warehouse farm products 1.6 1.3 1.0 1.5 1.3 1.0Office building managers 0.3 0.3 0.3 0.2 0.2 0.2Lodging 24.3 24.3 24.3 22.3 22.3 22.3Chemical manufacturing 76.4 49.9 17.6 75.2 48.6 16.4Pharmaceutical manufacturing 12.0 7.8 2.8 11.8 7.6 2.6Petrochemical manufacturing 2.4 1.5 0.5 2.3 1.5 0.5Bakeries 35.6 23.2 8.2 35.0 22.6 7.6Food manufacturing other than bakeries 51.2 33.4 11.8 50.4 32.5 11.0Breweries 3.0 2.0 0.7 3.0 1.9 0.6Soft drink manufacturing 3.7 2.4 0.9 3.7 2.4 0.8Bottled water manufacturing 1.9 1.3 0.4 1.9 1.2 0.4Ice manufacturing 2.5 1.6 0.6 2.4 1.6 0.5Ice rinks 1.4 0.8 0.2 1.3 0.8 0.2Elementary and secondary schools 0.9 0.9 0.9 0.8 0.8 0.8Junior colleges, colleges, and universities 0.2 0.2 0.2 0.2 0.2 0.2Hospitals 0.6 0.6 0.6 0.6 0.6 0.6Other, buildings not included above 26.0 26.0 26.0 23.9 23.9 23.9Total 422.6 325.8 207.5 413.1 316.3 198.0Stratus Consulting(Draft, 10/23/2009)Page 73Do Not Cite or QuoteSC11138Table 37. Total incremental benefit of each regulatory option under Scenario 1 by sector (MMTCE)OptionSector1(5% and 10%)2(5% and 20%)3(5% and 30%)4(10% and 10%)5(10% and 20%)6(10% and 30%)Supermarkets and grocery stores 1.49 1.23 0.89 1.49 1.22 0.89Convenience stores < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Gas station convenience stores 0.01 0.01 0.01 0.01 0.01 0.01Warehouse and club supercenters 0.05 0.05 0.03 0.05 0.05 0.03Refrigerated warehouse and storage 0.02 0.02 0.01 0.02 0.02 0.01Refrigerated warehouse farm products 0.01 0.01 0.01 0.01 0.01 0.01Office building managers < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Lodging 0.12 0.12 0.12 0.11 0.11 0.11Chemical manufacturing 0.26 0.20 0.12 0.26 0.19 0.12Pharmaceutical manufacturing 0.04 0.03 0.02 0.04 0.03 0.02Petrochemical manufacturing 0.01 0.01 < 0.01 0.01 0.01 < 0.01Bakeries 0.12 0.09 0.06 0.12 0.09 0.05Food manufacturing other than bakeries 0.18 0.13 0.08 0.17 0.13 0.08Breweries 0.01 0.01 < 0.01 0.01 0.01 < 0.01Soft drink manufacturing 0.01 0.01 0.01 0.01 0.01 0.01Bottled water manufacturing 0.01 0.01 < 0.01 0.01 < 0.01 < 0.01Ice manufacturing 0.01 0.01 < 0.01 0.01 0.01 < 0.01Ice rinks < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Elementary and secondary schools < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Junior colleges, colleges, and universities < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Hospitals < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Other, buildings not included above 0.12 0.12 0.12 0.11 0.11 0.11Total 2.50 2.06 1.51 2.46 2.02 1.47Stratus Consulting(Draft, 10/23/2009)Page 74Do Not Cite or QuoteSC11138Table 38. Total incremental benefit of each regulatory option under Scenario 2 by sector (MMTCE)OptionSector1(5% and 10%)2(5% and 20%)3(5% and 30%)4(10% and 10%)5(10% and 20%)6(10% and 30%)Supermarkets and grocery stores 1.40 1.14 0.81 1.39 1.13 0.80Convenience stores < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Gas station convenience stores 0.01 0.01 0.01 0.01 0.01 0.01Warehouse and club supercenters 0.05 0.04 0.03 0.05 0.04 0.03Refrigerated warehouse and storage 0.02 0.02 0.01 0.02 0.02 0.01Refrigerated warehouse farm products 0.01 0.01 0.01 0.01 0.01 0.01Office building managers < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Lodging 0.10 0.10 0.10 0.10 0.10 0.10Chemical manufacturing 0.21 0.15 0.08 0.21 0.15 0.07Pharmaceutical manufacturing 0.03 0.02 0.01 0.03 0.02 0.01Petrochemical manufacturing 0.01 < 0.01 < 0.01 0.01 < 0.01 < 0.01Bakeries 0.10 0.07 0.04 0.10 0.07 0.03Food manufacturing other than bakeries 0.14 0.10 0.05 0.14 0.10 0.05Breweries 0.01 0.01 < 0.01 0.01 0.01 < 0.01Soft drink manufacturing 0.01 0.01 < 0.01 0.01 0.01 < 0.01Bottled water manufacturing 0.01 < 0.01 < 0.01 0.01 < 0.01 < 0.01Ice manufacturing 0.01 < 0.01 < 0.01 0.01 < 0.01 < 0.01Ice rinks < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Elementary and secondary schools < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Junior colleges, colleges, and universities < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Hospitals < 0.01 < 0.01 < 0.01 < 0.01 < 0.01 < 0.01Other, buildings not included above 0.11 0.11 0.11 0.10 0.10 0.10Total 2.25 1.82 1.28 2.21 1.78 1.24Stratus Consulting (Draft, 10/23/2009)

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### The health analysis used the AHEF to estimate the reductions in fatal and nonfatal cases of skin cancers. AHEF was originally developed for EPA to conduct analysis of stratospheric ozone depletion, and EPA has relied on AHEF analysis since prior to the 1987 signing of the Montreal

Protocol on Substances That Deplete the Ozone Layer.

AHEF has been revised and updated numerous times, incorporating new scientific information on the complex relationships between ODS emissi ons, stratospheric ozon e depletion, and human health. The analysis is this screening analysis uses the version of AHEF , which is described in detail in a 2006 EPA peer revi ewed report (U.S. EPA, 2006c).

AHEF is an integrated model of stratosphe ric ozone levels, ODS emissions, UV exposure, population, and health effects. The analyt ical structure of AHEF is as follows.

1. Compute projections of baseline inciden ce and mortality based on historical rates assuming stratospheric ozone concentrations remain constant. Baseline incidence and morality projections vary by latitude to reflect differing UV radiation levels.

2. Model the impacts of future emissions of ODS on stratospheric ozone concentrations.

3. Estimate changes in ground-level UV ra diation. UV changes vary by latitude.

4. Select dose-response relationships fo r skin cancer incidence and mortality.

5. Combine all the inputs to project futu re skin cancer incidence and mortality.

ODS emissions reductions result in health benef its that occur over an ex tended period of time. The extended lag time is the result of two sepa rate issues. First, ODS emissions can deplete stratospheric ozone for an extended period tim e, with some ODS chemicals reducing ozone concentrations for decades. Second, cumulativ e UV exposure over a lifetime is the most important risk factor for skin cancer. As discussed in the AHEF documentation, early life exposure has been identified as a potentially important risk factor, people receive 50% of their cumulative lifetime UV exposure before the age of 18. Some skin cancers that result from childhood UV exposure, however, will not o ccur until an individual is elderly.

The combination of the two lag effect issues m eans that ODS emissions reductions occurring in a single year (modeled as 2010) will result in new fatal and nonfatal skin cancer cases occurring through the year 2140. AHEF estimates that the maxi mum reduction in new cases of skin cancers associated with a single year’s ODS emissions reductions will occur between 25 and 60 years

after the emissions are reduced. The AHEF estima tes of the impact of the lagged impacts for emissions reductions occurring in 2010 from a single ODS option (Scenario 1, Option 1) are shown in Figure 1. All the rule revision options in this analysis have a similar pattern of the timing of health effects resulting from emissions reductions occurring in 2010.Stratus Consulting (Draft, 10/23/2009)

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SC11138 0 0.01 0.02 0.03 0.0420102030205020702090211021302150

YearReduced mortality

0.0 1.0 2.0 3.0 4.0Reduced cases of non-fatalcancers

Mortality Non-Fatal Cancers



### Fi g ure 1. Example of la g in health effects from emissi ons reductions in 2010 (results for Scenario 1, Option 1).

AHEF estimates the reduction in cases in the Un ited States for three types of skin cancer:

 Cutaneous malignant melanoma
 Basal cell carcinoma
 Squamous cell carcinoma.

AHEF estimates the decreased incidence of new cases of each type of skin cancer and the

number of these new cancer cases that will re sult in a fatality in each year through 2150.

The dose-response functions selected for use in AHEF are only applied to lighter-skinned racial populations in the United States. While higher UV levels are a known risk fa ctor for skin cancers in people with darker skin, the dose-response func tions appropriate for in dividuals with darker skin are likely to be different than the functi ons currently selected in AHEF. Modeling only the lighter-skinned U.S. population leads to an underes timate of the total health effects of reducing

ODS emissions.

Tables 39 and 40 present the AHEF estimates of th e cumulative reductions in each type of skin cancer for each of the 12 regulatory options. The avoided cases of skin cancers in Tables 39 and

40 are the total number of cases that occur over a 120-year period. The final incidence reductions

associated with emissions reducti ons occurring in 2010 occur in 2131.Stratus Consulting(Draft, 10/23/2009)Page 77Do Not Cite or QuoteSC11138Table 39. Health benefits of the different options for the proposed rule under Scenario 1Cumulative reductions in incidenceof skin cancers (2010 through 2131)Cumulative cases (fatal or non-fatal)Cumulative mortalityOptionCutaneousmalignantmelanomaBasal cellcarcinoma(BCC)Squamous cellcarcinoma(SCC)Totalcases, allcancersMelanomamortalityAll carcinomamortality(BCC + SCC)Totalmortality,all cancers1 (5% and 10%) 5.0 121.2 62.2 188.4 0.6 0.3 1.02 (5% and 20%) 4.0 96.9 49.7 150.5 0.5 0.3 0.83 (5% and 30%) 2.8 67.1 34.4 104.3 0.3 0.2 0.54 (10% and 10%) 4.9 118.8 60.9 184.6 0.6 0.3 0.95 (10% and 20%) 3.9 94.5 48.4 146.8 0.5 0.3 0.76 (10% and 30%) 2.7 64.7 33.2 100.6 0.3 0.2 0.5Table 40. Health benefits of the different options for the proposed rule under Scenario 2Cumulative reductions in incidenceof skin cancers (2010 through 2131)Cumulative cases (fatal or non-fatal)Cumulative mortalityOptionCutaneousmalignantmelanomaBasal cellcarcinoma(BCC)Squamous cellcarcinoma(SCC)Total cases,all cancersMelanomamortalityCarcinomamortality(BCC + SCC)Totalmortality, allcancers1 (5% and 10%) 4.3 103.9 53.3 161.5 0.5 0.3 0.82 (5% and 20%) 3.3 80.1 41.1 124.5 0.4 0.2 0.63 (5% and 30%) 2.1 51.0 26.2 79.3 0.3 0.1 0.44 (10% and 10%) 4.2 101.6 52.1 157.9 0.5 0.3 0.85 (10% and 20%) 3.2 77.8 39.9 120.9 0.4 0.2 0.66 (10% and 30%) 2.0 48.7 25.0 75.7 0.3 0.1 0.4Stratus Consulting (Draft, 10/23/2009)

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# 5.3 Health Benefits Economic Analysis

The valuation approach used to estimate the economic value of the avoided skin cancers is derived from the approach used in previous EP A regulatory analyses. As described below, the specific value functions (i.e., “unit values”) used in this analysis have be en adjusted to reflect 2007 price levels, and expected U.S. income levels in 2010.

5.3.1 Valuing fatal skin cancers

There is extensive literature about the appropriate value of a change in the risk of premature morality to use in EPA regulatory analyses. The value of a fatal risk is referred to as the value of a statistical life (VSL). The value selected for us e in this analysis is derived from the specific

VSL methods EPA used in RIAs for the Clean Air Interstate Rule (U.S. EPA, 2005b), the Regulatory Impact Analysis for Particulate Matter (U.S. EPA, 2006d), and the RIA for the Proposed Revisions to the National Ambient Air Quality Standards for Ground-Level Ozone (U.S. EPA, 2007).

In terms of 1999 prices and 2010 income, the VSL used in the previous EPA RIAs is $6.05 million. Adjusting from 1999 prices to Novemb er 2007 prices using the Consumer Price

Index-Urban increases the VSL by a factor of 1.26. The result ing VSL in 2007 prices and 2010 income is $7.63 million.

The ODS emissions reductions in 2010 will result in the estimated reduced future fatalities presented in Tables 39 and 40. Consistent with th e methods used in previous EPA RIAs to value the lagging mortality associated with particulate matter (which occurs over a 20-year period following the change in emissions), the presen t value of the ODS-related avoided fatalities occurring in the future must be discounted. Because of the extended lag involved with skin

cancer fatalities associated with ODS emissions reductions, discounting substantially reduces the VSL. This analysis presents the results using both a 3% and a 7% discount rate. With a 3% discount rate, the average present value of VS L for the ODS-related fa talities is $2.0 million. A

7% discount rate results in a present value of VSL of $602,000.

5.3.2 Valuing nonfatal cases of melanoma

The values used for reduced cases of nonfatal cu taneous malignant melanoma used in previous EPA regulatory impact and policy analyses are derived from the estimated medical cost of treating nonfatal melanoma presented in the EPA Report to Congress on the Benefits and Costs of the CAA (U.S. EPA, 1999), wh ich is known as the Section 812 First Prospective Report. Valuation approaches based on medical costs are refe rred to as cost of illness measures, rather than a willingness-to -pay based values.Stratus Consulting (Draft, 10/23/2009)

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### The medical cost of treating a nonfatal case of melanoma used in the Section 812 First Prospective Report is $15,000, measured in 1990 pr ices. Adjusting the 1990 prices to November 2007 prices using the Consumer Pr ice Index for Medical Care Serv ices increases the estimated cost by a factor of 2.31. This results in an es timated cost of $34,700 (in 2007 prices) to treat a

case of nonfatal melanoma.

Because the cases of nonfatal cases of melanoma occur in the fu ture, and the future costs of treating the melanoma cases are incurred in the fu ture, the future costs must be discounted. The average present values of the avoided cases of nonfatal melanoma are $10,300 using a 3% discount rate, and $3,400 usi ng a 7% discount rate.

5.3.3 Valuing nonfatal cases of carcinomas

The Section 812 First Prospectiv e Report reports that the medi cal cost of treating nonfatal carcinomas (including both ba sal cell carcinoma and squamous cell carcinoma) is $5,000 (in 1990 prices). Following the same procedures us ed for valuing nonfatal melanomas (including using the same 2.31 factor to adjust to November 2007 prices), the averag e present value of the cost of treating a nonfatal case of basal cell carcinoma is $3,100 using a 3% discount rate, and $1,000 using a 7% discount rate. The average present value of the cost of treating squamous cell carcinoma is $3,000 (with 3% discounting) and $900 (with 7% discounting). The costs differ because the lag structure is somewhat different for the two types of carcinoma. The lag time to the onset of squamous cell carcinomas somewhat longer than the lag to onset of basal cell carcinomas, which results in the somewhat lower present value of the average cost for squamous

cell carcinomas.

5.3.4 Estimated value of reduced health effects

The present value of the monetizab le benefits of avoided health effects for the Scenario 1 and Scenario 2 options, using both a 3% and a 7% di scount rate, are presented in Tables 41 and 42, respectively. For Scenario 1, the total monetized health benefits range between $1.3 million and $2.5 million with a 3% discount rate and be tween $0.4 million and $0.8 million with a 7%
discount rate. For Scenario 2, the total monetized health benefits range between $1.0 million and $2.2 million with a 3% discount rate and be tween $0.3 million and $0.7 million with a 7% discount rate. Option 5 under Scen ario 2 has total benefits of $1.6 million with a 3% discount rate and $0.5 with a 7% discount rate.Stratus Consulting (Draft, 10/23/2009)

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### Table 41. Value of health benefits of the di fferent options for th e proposed rule under

Scenario 1

Present value of reductions in incidenc e of skin cancers (2010 through 2131)

Option Value of

avoided mortality Value of

non-fatal

melanoma Value of

non-fatal basal

cell carcinoma Value of non-fatal squamish

cell carcinoma Total

benefits

3% discount rate 1 (5% and 10%) $1,916,000 $45,000 $378,000 $182,000 $2,521,000 2 (5% and 20%) $1,531,000 $36,000 $302,000 $146,000 $2,015,000 3 (5% and 30%) $1,061,000 $25,000 $209,000 $101,000 $1,396,000 4 (10% and 10%) $1,878,000 $44,000 $370,000 $179,000 $2,471,000 5 (10% and 20%) $1,493,000 $35,000 $294,000 $142,000 $1,965,000 6 (10% and 30%) $1,023,000 $24,000 $202,000 $97,000 $1,347,000

7% discount rate 1 (5% and 10%) $577,000 $15,000 $116,000 $46,000 $754,000 2 (5% and 20%) $461,000 $12,000 $93,000 $35,000 $601,000 3 (5% and 30%) $320,000 $8,000 $64,000 $23,000 $415,000 4 (10% and 10%) $565,000 $14,000 $114,000 $45,000 $739,000 5 (10% and 20%) $450,000 $12,000 $90,000 $34,000 $586,000 6 (10% and 30%) $308,000 $8,000 $62,000 $22,000 $400,000



### Table 42. Value of health benefits of the di fferent options for th e proposed rule under

Scenario 2

Present value of reductions in incidenc e of skin cancers (2010 through 2131)

Option Value of

avoided mortality Value of nonfatal

melanoma Value of nonfatal basal cell

carcinoma Value of non-fatal squamish cell

carcinoma Total

benefits

3% discount rate 1 (5% and 10%) $1,643,000 $41,000 $324,000 $156,000 $2,164,000 2 (5% and 20%) $1,267,000 $32,000 $250,000 $120,000 $1,669,000 3 (5% and 30%) $807,000 $20,000 $159,000 $77,000 $1,063,000 4 (10% and 10%) $1,606,000 $40,000 $317,000 $153,000 $2,116,000 5 (10% and 20%) $1,230,000 $31,000 $242,000 $117,000 $1,620,000 6 (10% and 30%) $770,000 $19,000 $152,000 $73,000 $1,014,000

7% discount rate 1 (5% and 10%) $495,000 $13,000 $100,000 $46,000 $653,000 2 (5% and 20%) $381,000 $10,000 $77,000 $35,000 $503,000 3 (5% and 30%) $243,000 $6,000 $49,000 $23,000 $321,000 4 (10% and 10%) $484,000 $12,000 $97,000 $45,000 $638,000 5 (10% and 20%) $370,000 $9,000 $74,000 $34,000 $489,000 6 (10% and 30%) $232,000 $6,000 $47,000 $22,000 $306,000Stratus Consulting (Draft, 10/23/2009)

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# 6. Synthesis of Benefits and Costs

The final step was to compare the benefits a nd costs of the different options. Both costeffectiveness analysis and net benefits analys is were conducted for each of the options and

described below.



# 6.1 Cost-Effectiveness Analysis

The avoided ODS emissions can be measured in terms of both ODP-weighted kilograms (ODPkilograms) and metric tonnes of carbon equivalent (MTCE). Ther e is, therefore, a separate C-E estimate for ODP-kilograms and MTCE for each option. Because the primary purpose of the regulatory options is to reduce ODS emissions , the ODP-kilogram C-E measure is the most

relevant. The MTCE measure is included in th e analysis for completeness (see Tables A.13 through A.18 in the attachment). The two C-E meas ures cannot be consider ed as additive. For each regulatory option the numerator (total co st) in both measures is the same. Only the denominator in the C-E calculation (emissions m easured in terms of ODP-kilograms or MTCE)

differs.

C-E analysis calculates the cost of emissions re ductions in terms of cost per ODP-kilogram. An option with a lower C-E value is thus less expens ive (per kilogram) than an option with a higher C-E value, and is considered more cost-effective.

Tables 43 and 44 present the average C-E in terms of ODP-weighted kilograms of each equipment category for each of the regulatory opt ions. As an average C-E analysis, each option is compared to the baseline.

Table 43. Average cost-effectiveness of option s for proposed regulation under Scenario 1

Equipment Allowable annual

leak rate Cost (million dollars) Benefit (ODP-weighted tonnes) Cost-effectiveness ($/ODP-weighted kg)

CC 10% $35.8 124 $289

5% $41.5 134 $311

CR 30% $32.9 92 $357

20% $45.8 131 $349

10% $62.5 162 $385

IPR 30% $17.8 47 $378

20% $23.7 129 $183

10% $31.6 197 $161Stratus Consulting (Draft, 10/23/2009)

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### Table 44. Average cost-effectiveness of option s for proposed regulation under Scenario 2

Equipment Allowable annual

leak rate Cost (million dollars) Benefit (ODP-weighted tonnes) Cost-effectiveness ($/ODP-weighted kg)

CC 10% $13.1 111 $118

5% $15.8 120 $132

CR 30% $14.2 84 $169

20% $21.3 122 $175

10% $30.3 153 $199

IPR 30% $1.2 4 $325

20% $3.8 84 $45

10% $7.1 150 $47



### Tightening the CC annual leak rate option from 10% to 5% increases the average cost per kilogram, raising the average C-E per ODP-wei ghted kilogram from $290 under Scenario 1 and $118 under Scenario 2 per ODP-kilogram to $311 and $132 per ODP-kilogram, respectively. The average C-E of CR equipment decreases (b ecoming less expensive per kilogram) between the 30% and 20% option in Scenario 1. Furthe r tightening the stringency to 10%, however, increases the average co st to $385 per ODP-kilogram. Under S cenario 2, however, costs steadily increase with stringency. The average C-E for IP R equipment decreases c ontinually as the leak rate options becomes more stringe nt (i.e., from 30% to 10%) in Scenario 1. In Scenario 2, C-E for IPR equipment is the lowest at 20%.

Tables 45 and 46 present the incremental C-E of increasing levels of stringency for the annual leak rate options. For CC equipment, it costs $336 per ODP-kilogram under Scenario 1 and $143 under Scenario 2 to implement the least stringent requirement (10 %). The cost pe r kilogram of

the additional emissions reductions as a result of tightening the allowable em ission rate to 5% is higher, $587 per ODP-kilogram under S cenario 1 and $283 under Scenario 2.

For CR equipment, the C-E of the least stri ngent (30%) option is $357 per ODP-kilogram under Scenario 1 and $169 under Scenario 2. The cost per kilogram of the additional emissions reduced by increasing the stringency to 20% declines to $332 in Scenario 1 a nd increases to $188 per ODP-kilogram in Scenario 2. Increasing the stri ngency further to a 10% leak rate is more expensive per additional kilogram reduced, with the incremental C-E of $534 and $294 per ODP-kilogram, respectively. The CR stringency op tions under Scenario 1 have a classic “U-shaped” marginal cost curve, with the cost per emissions reduction initially decreasing, and then increasing.Stratus Consulting (Draft, 10/23/2009)

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### Table 45. Incremental cost-effe ctiveness of options for proposed regulation under

Scenario 1

Equipment Allowable

annual

leak rate Incremental

cost (million dollars) Incremental

benefit (ODP-weighted tonnes) Incremental

cost-effectiveness ($/ODP-weighted kg)

CC 10% $41.5 124 $335

5% $5.7 10 $587

CR 30% $32.9 92 $357

20% $12.9 39 $332

10% $16.7 31 $533

IPR 30% $17.8 47 $378

20% $5.9 82 $72

10% $7.9 68 $117



### Table 46. Incremental cost-effe ctiveness of options for proposed regulation under

Scenario 2

Equipment Allowable

annual

leak rate Incremental

cost (million dollars) Incremental

benefit (ODP-weighted tonnes) Incremental

cost-effectiveness ($/ODP-weighted kg)

CC 10% $15.8 111 $143

5% $2.7 10 $283

CR 30% $14.2 84 $169

20% $7.2 38 $188

10% $9.0 31 $294

IPR 30% $1.2 4 $325

20% $2.6 80 $33

10% $3.3 66 $50



### IPR equipment also has a “U-shaped” marginal co st curve. The C-E of the least stringent (30%) option is $379 under Scenario 1 and $325 under S cenario 2 per ODP-kilogram. The marginal cost per kilogram of increasi ng the stringency to the 20% opti on is less expensive, $72 and $33 per ODP-kilogram, respectively. The addition al emissions reductions from the 10% option become more expensive, at $117 and $50 per ODP- kilogram, respectively.

Tables 47 and 48 present the average C-E of the combined options for the proposed regulation. It appears that under Scenario 1, Option 4 (10% an d 10%) is the most cost-effective at $269 per ODP-kilogram. Under Scenario 2, Option 5 (10% and 20%) is most cost effective at $121 per ODP-kilogram. The least cost-effective option unde r both scenarios appears to be Option 3 (5% and 30%) at $338 and $150 per ODP-kilogram, respectiv ely. The average C-E of these options is driven in large part by the average C-E of IPR.

The C-E in terms of MTCE follows similar patterns.Stratus Consulting (Draft, 10/23/2009)

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### Table 47. Average cost-effectiveness of options for proposed regulation

under Scenario 1

Option Cost (million dollars) Benefit (ODP-weighted tonnes) Cost-effectiveness ($/ODP-weighted kg)

1 (5% and 10%) $135.6 493 $275
2 (5% and 20%) $111.0 394 $282
3 (5% and 30%) $92.2 273 $338
4 (10% and 10%) $129.9 483 $269
5 (10% and 20%) $105.3 384 $274
6 (10% and 30%) $86.5 263 $329



### Table 48. Average cost-effectiveness of options for proposed regulation

under Scenario 2

Option Cost (million dollars) Benefit (ODP-weighted tonnes) Cost-effectiveness ($/ODP-weighted kg)

1 (5% and 10%) $53.2 423 $126
2 (5% and 20%) $40.9 326 $126
3 (5% and 30%) $31.1 208 $150
4 (10% and 10%) $50.5 413 $122
5 (10% and 20%) $38.2 316 $121
6 (10% and 30%) $28.5 198 $144



# 6.2 Net Benefits Analysis

The net benefits of each of the options represen ts the difference between the costs and monetized portion of the benefits associated with that op tion. The costs outweigh the monetizable benefits for each of the options resulting in negative net monetized benefits, as shown in Tables 49 and

50 for Scenarios 1 and 2 with bot h a 3% and 7% discount rate.

Table 49. Monetized net benefits of reg ulation under Scenario 1 (million $)

3% discount rate 7% discount rate

Leak rate Costs Total benefits Net Benefits Total bene fits Net Benefits

1 (5% and 10%) 135.6 2.5 -133.1 0.8 -134.9

2 (5% and 20%) 111.0 2.0 -109.0 0.6 -110.4

3 (5% and 30%) 92.2 1.4 -90.8 0.4 -91.8

4 (10% and 10%) 129.9 2.5 -127.4 0.7 -129.2

5 (10% and 20%) 105.3 2.0 -103.3 0.6 -104.7

6 (10% and 30%) 86.5 1.3 -85.2 0.4 -86.1Stratus Consulting (Draft, 10/23/2009)

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### Table 50. Monetized net benefits of reg ulation under Scenario 2 (million $)

3% discount rate 7% discount rate

Leak rate Costs Total benefits Net Benefits Total bene fits Net Benefits

1 (5% and 10%) 53.2 2.2 -51.1 0.7 -52.6

2 (5% and 20%) 40.9 1.7 -39.2 0.5 -40.4

3 (5% and 30%) 31.1 1.1 -30.1 0.3 -30.8

4 (10% and 10%) 50.5 2.1 -48.4 0.6 -49.9

5 (10% and 20%) 38.2 1.6 -36.6 0.5 -37.7

6 (10% and 30%) 28.5 1.0 -27.4 0.3 -28.1



### Under Scenario 1, the net benefits range from $-85.2 million to $-133.1 million with a 3% discount rate, and from $-86.1 million to $-134. 9 million with a 7% discount rate. Under Scenario 2, the monetized net benefits range from $-27.4 million to $-51.1 million with a 3% discount rate, and from $-28.1 million to $-52.6 m illion with a 7% discount rate. Option 5 under Scenario 2 has a monetized net benefit of $-36.6 million with a 3% discount rate and $-37.7 with

a 7% discount rate.

It should be noted that these estimates of net bene fits are understated, because the benefits reflect only the portion of health risk reductions that were readily monetize d. Other potential human health risk reductions, and other types of bene fits, are not reflected in these net benefit

calculations.



# 6.3 Discussion of Uncertainties in Net Benefits Analysis

The fundamental design of this analysis was to co nduct a worst case scenario regulatory analysis. The analytical design included features likely lead ing to an overestimation of the actual costs, and an underestimation of the likely benefits.

Specifically, the analysis selected methods by wh ich the costs were intentionally measured and analyzed to provide a ceiling (i.e ., worst case) analysis of the potential ec onomic impact of the proposed regulation. However, the actual costs may be lower in practice. A comprehensive analysis using complete information (much of wh ich is not available) would result in a lower estimated cost for each of the regulatory options.

Similarly, due to a lack of complete informati on, the benefits analysis omitted categories of benefits that would likely increase the estimated benefits. These omitted benefit categories include both non-monetized benefits from the long- term health benefits from additional years ofStratus Consulting (Draft, 10/23/2009)

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### the rule, as well as benefit categories from ot her mechanisms, such as health and ecological

benefits from reductions in the GWP of the ODS emissions.

This section discusses several of the important issues involve d with the cost and benefit

uncertainties.

6.3.1 Potentially overestimated costs

A comprehensive analysis using complete inform ation (much of which is not available) would likely estimate a lower cost of each of the regulat ory options than is presented in this screening analysis. Ways in which the actual costs will li kely be lower than the worst case cost analysis estimates include the following examples.

 The existing analysis assumes that owne rs and operators will sequentially go through each level of repairs until the leaks are succe ssfully repaired. In practice, owners and operators may skip intermediate steps, and th eir accompanying costs, in order to ensure leaks are properly repaired. After an initial Level 1 repair is unsuccessfully completed, good business practices will l ead some equipment owners to voluntarily choose to accelerate a planned equipment replacement cycl e, rather than following the step-by-step procedure required by the proposed rule. Such actions are a business-based decision, not a response to a regulatory mandate. Business-ba sed decisions should not be considered a cost of the rule (although an earlier investment in replacem ent equipment would increase the present value of the investment cost). In this situation only the costs of the Level 1 repair would appropriately be included as a co st of the rule (along with any increase in the present value of the investment cost), wh ich would substantially lower the cost of the rule. For example, for the Commercial Refrig erant, Distributed System (the equipment category contributing the largest portion of the total costs of the rule as reported in the Draft Report), this good business practice assump tion would lower the co st of the rule for this equipment category by 48% (the current por tion of the cost from Levels 2 through 4 repairs). Because adequate data are not available on the probab ility that such good business practice based activity will occur, the Draft Report assumes that this type of good business practice response will not occur; the companies are modeled as fully implementing each level repair as necessary.

 The analysis assumes that owners and operators will only make repairs when mandated by regulation, thus overstating th e costs of the regulation’s implementation. In practice, owners and operators may choose to repair leaks entirely indepe ndent of regulatory requirements. For businesses that follow such good business practice, there is no cost

attributable to rule.Stratus Consulting (Draft, 10/23/2009)

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###  Most likely, owners and operators, through routine maintenance, will make similar repairs to the prescribed regul ation procedures in order to ensure functionality regardless of the implementation of the regulatory action. Rou tine maintenance following good business practices will lower the probability a leak will occur in th e first place, lowering the number of pieces of equipment that ever ex ceed the leak threshol d level in the first place. An additional compelling reason for business owners to properly maintain their equipment, and repair leaking equipment as quickly as possible, is energy efficiency. Clark (2008), an energy consultant to the f ood service industry, repo rts that refrigeration equipment operating with a 15% refrigerant loss consumes twice the electricity to achieve the same cooling results as properly maintain ed equipment. The substantial energy costs of operating cooling equipment with even a modest loss of refrigerant provides a powerful economic incentive to a void leaks as much as possible, and repair them as soon as they are detected.

 As regulations under EPA’s CAA continues to reduce the commercial supply of ODS, the cost of replacement refrigeran t will continue to rise, providi ng greater financial incentive to owners to reduce leaks as quick ly and effectively as possible.

 The analysis assumes that owners and operators will wait the full length of time allowed under regulatory action before fixing leaks. In practice, a portion of owners and operators will likely choose not to wait this long to c onduct repairs. Faster repairs will reduce both the costs of refilling the leak ed refrigerant and the environm ental impact of the leak.

6.3.2 Additional benefits

In order to create a worst case scenario RIA, this analysis did not monetize several benefit categories that have the potential for substant ial economic and environmental benefits. These benefits include the following quali tative and non-monetized examples:

Non-monetized benefits

 The ODS benefits of regulation are only proj ected over the first year of implementation. The analysis does not monetiz e the potential long-term be nefits of a reduction in refrigerant leaks and the accompanying d ecrease in ODS in the atmosphere.

 As mentioned above in Section 6.3.1, highe r energy costs provid e an incentive to equipment owners to avoid leaks in their co oling and refrigeration equipment. Not only do energy savings provide an incentive to a void leaks, but the energy savings from repairing a leak through rule compliance also avoids unnecessary energy use from using inefficient equipment. The potentially subs tantial energy savings generated by the rule are thus another non-quantified benefit cate gory not reflected in the Draft Report.Stratus Consulting (Draft, 10/23/2009)

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### Omitted greenhouse gas benefits

Carbon-equivalent emission bene fits were estimated only in terms of projected emissions

reductions and not the economic value of emissions reductions. The amount of carbon-equivalent emission reductions from the proposed rules are substantial: between 1.5 and 2.5 MMTCE under the Scenario 1 options, and between 1.2 and 2.3 MMT CE under Scenario 2. The benefits of these avoided carbon emissions are not assigned an economic value in the Draft Report.

There is, however, a burgeoning body of scientific and economic research on the “social cost of

carbon.” The social cost of carbon is the moneti zed value of reducing carbon emissions. In a comprehensive review of the l iterature on estimates of the so cial cost of carbon, Tol (2005) identified 103 estimates in 28 published papers . The Fourth Assessment Report of the United Nation’s Intergovernmental Panel on Climate Change (IPCC, 2007) drew heavily on the Tol (2005) review, and developed a mean estimate of $43 (in 2006 dollars) for the value of a marginal reduction in a metric ton of carbon em issions in the year 2050. The IPCC estimated the social cost of carbon is growing at approximately 2.4% per year, hence the value in earlier years is lower. Expressed in 2011 terms (adjusting for growth from 2011 to 2050), the IPCC estimate is $14/ton.

A quantified sensitivity analysis in a recent (June 2008) Preliminar y Regulatory Impact Analysis June by the National Highway Traffic Safety Administration (NHTSA) used the $14/ton value derived from the IPCC as an upper bound estimate of the social cost of carbon. The NHTSA used $0/ton as a lower bound estimate, and the NHTSA’s central estimate was the midpoint of the range: $7/ton. The NHTSA Preliminary RIA noted that while this range of values for the

social cost of carbon reflects was derived from an estimate of worldwid e benefits, the NHTSA

decided to use the same estimate for a benefit/ton value in the United States.

In August 2008, EPA submitted a comment to the NHTSA rulemaking docket (Docket Number NHTSA 2008-0060). Among other comments, EPA recommended that NHTSA calculate and present worldwide benefits of th e reductions in U.S. emissions (along the domestic-only benefits estimates). EPA comments noted th at the estimates of the social cost of carbon that NHTSA used are only a partial accounting of benefits of reducing greenh ouse gases. EPA quoted the IPCC report that was the source of the social cost of car bon estimates as stating that these social cost of carbon values are “very likely” underestimates of the true so cial cost of carbon. The IPCC defines “very likely” as a gr eater than 90% probability.

Applying the NHTSA estimate of $7/ton as the social cost ofcarbon of reducing the carbonequivalent emissions of the leak rule (1.2 to 2.5 million ton) result s in omitted first year benefits of $8.4 million to $15.5 million, which are not reflected in the monetized benefits analysis in the Draft Report. Using the NHTSA’s range of $0/ton to $14/ton produces a range of $0 to $31 million in the first year of the rule. Addition al ODS reductions attributable to the rule in subsequent years will pr oduce additional benefits.Stratus Consulting (Draft, 10/23/2009)

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### Qualitative benefits

In addition to the omitted quantified benefits esti mates, there are also other qualitative benefits that were not included in the assessment. These benefit categories are qualitative because there are not methods currently available to quantify or monetize the benefits. The omitted qualitative benefits include the following.

 The analysis does not monetiz e any of the environmental benefits of preventing a chronically leaking refrigerant system from continual operation. Additionally, the analysis does not quantify the ecological bene fits of an accelerated transition to non-ODS alternative refrigerants.

 Destruction of the ozone layer by ODS can re sult in increases in UV radiation, thus having potential impacts on animal and ecologi cal well-being, in addition to the human health effects that are included in the analysis.

 This analysis only quantifies the human health benefits of reducing th e incidence of skin cancer infection, while omitting the additional benefits of limiting other health effects

known to be associated with the accumulation of ODS. Elevated levels of ODS have been linked to premature aging, cataracts, and immune system suppression.

Many of these benefits were excluded from the analysis because of the overwhelming challenge of placing clear economic benefits on non-market goods and services. However, their presence as non-quantified benefits adds substantial pot ential value associated with the proposed regulations. These omitted benefit categories lead to further underestimation of the total benefits of the proposed regulation.

6.3.3 Summary of discussion of uncertaint y in costs and benefits analysis

Overall, there are a variety of factors that have been intentionally omitted from this analysis in order to generate a worst case scenario RIA. Con ducting the analysis in th is manner ensures that the policy is carefully co nstructed with the most pessimistic of benefit-cost possibilities in mind, thus allowing for regulation to potentially exceed expectations and generate greater net benefits upon implementation than presented in the draft screening analysis re port. The greater net

benefits could be better consider ed if some of the worst case s cenario cost assumptions, and/or the limited scope of the benefits assessment, we re revised using more complete information.Stratus Consulting (Draft, 10/23/2009)

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# 7. Statutory and Executive Order Impact Analysis

This section summarizes the Stat utory and EO impact analyses relevant for the regulation associated with leak repair requirements. The requirements and the way in which the analysis addresses these requirements are described below.

 EO 12866 (Regulatory Planning an d Review): Six of the 12 re gulatory options examined in this analysis represent “economically sign ificant regulatory actio n” because they are likely to have an annual effect on the economy of $100 million or more. The annual effect is over $100 million for all six of th e Scenario 1 options, and for none of the Scenario 2 options. Accordingly, this screening analysis evaluates the costs and benefits of all of the regulatory options.

 Paperwork Reduction Act, Unfunded Mandates Reform Act, EO 13132 (Federalism), and EO 13175 (“Consultation and Coordination wi th Indian Tribal Governments”): As discussed in Section 4.4, this action does im pose recordkeeping but no reporting burden. Furthermore, this action is not anticipated to have substantial direct effects on the States, on the relationship between the national governme nt and the States, or on the distribution of power and responsibilities among the vari ous levels of government (per EO 13132), nor have any Tribal implications (per EO 13175). EPA will solicit comments during the public comment process.

 RFA: The RFA generally requires EPA to prepar e a regulatory flexibility analysis of any rule subject to notice and comment rulemaki ng requirements unless EPA certifies that the

rule will not have a SISNOSE. Small en tities include small businesses, small organizations, and small governmental jurisd ictions. Sections 2.3, 2.4, and 2.5 present an economic screening analysis that examines the impacts of the proposed revisions on small entities. This screening analysis will assist EPA in determining whether any of the 12 regulatory options will have a significant economic impact on a substantial number of

small entities.

 EO 13045 (Protection of Children from Envi ronmental Health & Safety Risks): EO 13045 applies to any rule that (1) is determ ined to be “economically significant” as defined under EO 12866, and (2) concerns an envi ronmental health or safety risk that EPA has reason to believe may have a disp roportionate effect on children. If the regulatory action meets both crite ria, EPA must evaluate th e environmental health or safety effects of the rule on children, and explain why the regu lation is preferable to other potentially effective and reasonably feasib le alternatives considered by EPA.Stratus Consulting (Draft, 10/23/2009)

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### The Scenario 1 regulatory options meet the first requirement for being subject to EO 13045, because the economic screen ing analysis determines that six Scenario 1 regulatory options may be economically si gnificant as defined by EO 12866.

While the quantified skin cancer health effect s of reducing stratospheric ozone primarily occur in adults, exposure to UV radiation dur ing childhood is directly linked to increased

incidence of skin cancer later in life. A ccording to EPA’s “Guide to Considering Children’s Health When Developing EPA Actions” (U.S. EPA, 2006b), a disproportionate risk to childre n occurs either when (1) child ren are more sensitive to a particular pollutant or agent being considered in the rulema king, or (2) children are more likely to be exposed or are like ly to be exposed to higher leve ls of the pollutant or agent than adults are. Direct exposure to ODS is not a risk to children, but the environmental effects of ODS emissions (i.e., UV radiation) are a health risk for children. Therefore, EPA may conclude that this proposed rulemaking is covered by EO 13045.

If the EPA concludes that this proposed ru lemaking is covered by EO 13045, the health risk analysis discussed in Section 5.2 (which was conduc ted using the peer-reviewed AHEF model), will meet the “Guide to Cons idering Children’s Health” objectives for both a preliminary children’s health risk analys is and a more detailed risk analysis of each proposed regulatory option.

 EO 13211 (Actions that Signifi cantly Affect Energy Supply, Di stribution or Use): This rule is not expected to have adverse impact s on energy supply, distribution, or use. On the contrary, the regulatory options under considera tion are expected to improve the efficient operation of refrigeration systems, and result in energy savings. Refrigeration and cooling equipment are less energy-efficient when operating with a diminished charge of refrigerant. By requiring timely and successful repair of ODS leaks in large refrigeration and cooling systems, the regulatory options will decrease the time the affected refrigeration and cooling equipment operates inefficiently.

 EO 12898 (Federal Actions to Address Enviro nmental Justice in Minority Populations and Low-Income Populations): EO 12898 re quires EPA to consider the impact on minority populations and low-income populations . According to EPA guidance, agencies are to assess whether minority or low-income populations face a risk or a rate of exposure to hazards that are significant and that appreciably exceed the risk or rate to the general population or to the appropriate comparis on group. Protecting stratospheric ozone by reducing emissions of ODS reduces risks of UV radiation for all sectors of the U.S. population, with the amount of protection increasing for resident s in more northern latitudes. As described in Section 6.2, the darker-skinned U.S. population is believed to be less at risk from developing cancer fr om UV radiation than the lighter-skinned population, but are still at ris k. Income level is not known to affect the risks of UV radiation. Because the risk of developing UV-re lated skin cancer will be reduced by theStratus Consulting (Draft, 10/23/2009)

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### same proportion of all individua ls in any particular locati on, the regulatory options will not disproportionately affect the mi nority or low-income populations.



# 8. Conclusions

Based on this screening analysis, the total expected incremental cost of the rule across all sectors is between $86.5 million and $135.6 million under Scenario 1 and $28.5 million and $53.2 million under Scenario 2. Scenario 1 costs are greater than the $100 million adverse impact threshold for the purposes of EOs 12866 and 13422, while Scenario 2 costs all fall below this threshold. Option 5 under Scenario 2 has an expected incremental cost of $38.2 million with a total emissions reduction of 316 ODP-weight ed tonnes or 1.8 MMTCE. The value of the

avoided health effects is less than the total incremental cost for all regulatory options.

The RFA screening analysis found that the revise d rule will only significantly impact between 1,396 and 1,775 small businesses under Scenario 1 and between 336 and 409 small businesses under the second scenario for the purposes of th e RFA. The regulatory option selected for the rule, described in Section 1.2, would result in a total expected annual incremental cost of $38.2 million and only significantly impact 353 small businesses.

Although there are uncertainties asso ciated with several components of this analysis, we believe that the assumptions and methodol ogy applied are logical, and that the results derived and presented here are reasonably robust.



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Available: http://www.arap.org/ adlittle/toc.html . Accessed October 1, 2006.

AQMD. 2006. Rule 1415 Regist ration Form. Available: http://www.aqmd.gov/prdas/forms/1415form2.doc . Accessed May 15, 2007.

ARI. 2007. Air Conditioning and Refrigeration Institu te (ARI), Statistical Release, February 5,

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SCAQMD. 1994. Rule 1415 – Reduction of Refrigeran t Emissions from Stationary Refrigerant Emissions from Stationary Refrigeration and Ai r Conditioning Systems. October. Available: http://www.arb.ca.gov/DRDB/SC/CURHTML/R1415.HTM . Accessed May 15, 2007.

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uncertainties. Energy Policy 33(16):2064-2074.Stratus Consulting (Draft, 10/23/2009)

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### U.S. BLS. 2007. Occupational Employment Statistics. Employer Costs for Employee Compensation. U.S. Bureau of Labor Statisti cs, US Department of Labor. Available: www.bls.gov/ncs/ect/home . Accessed May 23, 2007.

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2002. Available: http://www.census .gov/epcd/naics02/ . Accessed May 15, 2007.

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001. Available: http://www.epa.gov/airprogm/oar /sect812/prospective1.html . Accessed December 1, 2007.

U.S. EPA. 2005a. Regulatory Analysis for the Proposed Revisions to the Oil Pollution Prevention Regulation (40 CF R PART 112). Available: http://yosemite.epa.gov/ee/epa/riafile.nsf/vwAN/ Regulatory%20Analysis%20SPCC.pdf/$File/Re gulatory%20Analysis%20SPCC.pdf . Accessed May 15, 2007.

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U.S. EPA. 2006a. Final Guidance for EPA Rulewr iters: Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcem ent Fairness Act. November 2006. U.S. Environmental Protection Agency. Available: http://www.epa.gov/sbrefa/documents/rfafinalguidance06.pdf . Accessed May 15, 2007.

U.S. EPA. 2006b. Guide to Considering Children’s Health When Developing EPA Actions: Implementing Executive Order 13045 and EPA’s Po licy on Evaluating Health Risks to Children.

Available: http://yosemite.epa.gov/ochp/ochpweb.nsf/c ontent/ADPguide.htm/$File/EPA_ADP_Guide_508. pdf . Accessed 12/1/2007.

U.S. EPA. 2006c. Human Health Benefits of St ratospheric Ozone Protec tion; Peer Reviewed Report. Prepared for EPA by ICF C onsulting. April 24, 2006. Available: http://www.epa.gov/Ozone/sc ience/effects/AHEFDEC2003D3.pdf . Accessed 12/1/2007.

U.S. EPA. 2006d. Regulatory Impact Analysis for the 2006 Revisions to the National Ambient Air Quality Standards for Part iculate Matter. Available: http://www.epa.gov/ttn/ecas/ria.html

. Accessed 12/1/2007.Stratus Consulting (Draft, 10/23/2009)

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### U.S. EPA. 2007. Regulatory Impact Analysis of the Proposed Revisions to the National Ambient Air Quality Standards for Ground-Leve l Ozone. EPA-452/R-07-008. Available: http://www.epa.gov/ttn/ecas/ria.html . Accessed 12/1/2007.

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# Attachment. Economic Analysis Detail Tables 1

1. Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-1Do Not Cite or QuoteSC11138Table A.1. Regulatory impact by sector and size category for Option 1 (5% and 10%) under Scenario 1Sector NAICS code Number of employeesProposed expectedcost of compliance persize categoryBaseline expected costof complianceper size categoryIncremental cost ofthe proposed rule445110 < 20 $33,200,000 $7,400,000 $25,800,000Supermarkets and grocerystores20-99 $9,460,000 $2,080,000 $7,380,000100-499 $5,060,000 $1,100,000 $3,960,000500+ $37,900,000 $8,210,000 $29,700,000Totals All entities $85,700,000 $18,800,000 $66,900,000Convenience stores 445120 < 20 $299,000 $86,000 $213,00020-99 $13,000 $4,000 $9,000100-499 $8,000 $2,000 $5,000500+ $37,000 $11,000 $26,000Totals All entities $357,000 $103,000 $254,000447110 < 20 $376,000 $108,000 $267,000Gas station conveniencestores20-99 $94,000 $27,000 $67,000100-499 $113,000 $33,000 $80,000500+ $301,000 $87,000 $214,000Totals All entities $884,000 $255,000 $629,00045291 < 20 $266,000 $61,000 $205,000Warehouse and clubsupercenters20-99 $16,000 $4,000 $13,000100-499 $42,000 $9,000 $32,000500+ $3,000,000 $684,000 $2,320,000Totals All entities $3,330,000 $758,000 $2,570,00049312 < 20 $624,000 $142,000 $482,000Refrigerated warehouse andstorage20-99 $303,000 $69,000 $234,000100-499 $143,000 $32,000 $110,000500+ $371,000 $85,000 $287,000Totals All entities $1,440,000 $328,000 $1,110,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-2Do Not Cite or QuoteSC11138Table A.1. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of compliance persize categoryBaseline expected costof complianceper size categoryIncremental cost ofthe proposed rule49313 < 20 $429,000 $98,000 $331,000Refrigerated warehouse farmproducts20-99 $116,000 $26,000 $89,000100-499 $108,000 $25,000 $84,000500+ $147,000 $33,000 $114,000Totals All entities $800,000 $182,000 $618,000Office building managers 531312 < 20 $90,000 $26,000 $64,00020-99 $12,000 $4,000 $9,000100-499 $6,000 $2,000 $4,000500+ $16,000 $5,000 $11,000Totals All entities $124,000 $36,000 $88,000Lodging 72 < 20 $7,180,000 $2,070,000 $5,110,00020-99 $1,860,000 $536,000 $1,320,000100-499 $725,000 $209,000 $515,000500+ $2,030,000 $585,000 $1,440,000Totals All entities $11,800,000 $3,400,000 $8,390,000Chemical manufacturing 325 < 20 $14,200,000 $5,800,000 $8,440,00020-99 $5,180,000 $2,110,000 $3,070,000100-499 $3,120,000 $1,270,000 $1,850,000500+ $8,330,000 $3,400,000 $4,940,000Totals All entities $30,900,000 $12,600,000 $18,300,0003254 < 20 $2,220,000 $906,000 $1,320,000Pharmaceuticalmanufacturing20-99 $843,000 $343,000 $499,000100-499 $567,000 $231,000 $336,000500+ $1,220,000 $497,000 $723,000Totals All entities $4,850,000 $1,980,000 $2,880,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-3Do Not Cite or QuoteSC11138Table A.1. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of compliance persize categoryBaseline expected costof complianceper size categoryIncremental cost ofthe proposed rule324110 < 20 $292,000 $119,000 $173,000Petrochemicalmanufacturing20-99 $79,000 $32,000 $47,000100-499 $76,000 $31,000 $45,000500+ $505,000 $206,000 $299,000Totals All entities $952,000 $388,000 $564,000Bakeries 3118 < 20 $10,900,000 $4,440,000 $6,450,00020-99 $2,030,000 $828,000 $1,200,000100-499 $607,000 $247,000 $360,000500+ $843,000 $343,000 $499,000Totals All entities $14,400,000 $5,850,000 $8,510,000311 < 20 $10,600,000 $4,300,000 $6,260,000Food manufacturing otherthan bakeries20-99 $3,770,000 $1,540,000 $2,230,000100-499 $2,050,000 $837,000 $1,220,000500+ $4,300,000 $1,750,000 $2,550,000Totals All entities $20,700,000 $8,430,000 $12,300,000Breweries 31212 < 20 $797,000 $325,000 $472,00020-99 $267,000 $109,000 $158,000100-499 $65,000 $27,000 $39,000500+ $87,000 $36,000 $52,000Totals All entities $1,220,000 $496,000 $721,000Soft drink manufacturing 312111 < 20 $360,000 $147,000 $213,00020-99 $202,000 $82,000 $120,000100-499 $199,000 $81,000 $118,000500+ $742,000 $302,000 $440,000Totals All entities $1,500,000 $613,000 $891,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-4Do Not Cite or QuoteSC11138Table A.1. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of compliance persize categoryBaseline expected costof complianceper size categoryIncremental cost ofthe proposed ruleBottled water manufacturing 312112 < 20 $494,000 $201,000 $293,00020-99 $104,000 $42,000 $61,000100-499 $30,000 $12,000 $18,000500+ $150,000 $61,000 $89,000Totals All entities $777,000 $317,000 $461,000Ice manufacturing 312113 < 20 $757,000 $308,000 $449,00020-99 $113,000 $46,000 $67,000100-499 $23,000 $9,000 $13,000500+ $106,000 $43,000 $63,000Totals All entities $998,000 $407,000 $592,000Ice rinks 713940 < 20 $455,000 $193,000 $261,00020-99 $80,000 $34,000 $46,000100-499 None None None500+ None None NoneTotals All entities $535,000 $227,000 $308,0006111 < 20 $171,000 $49,000 $122,000Elementary and secondaryschools20-99 $180,000 $52,000 $128,000100-499 $67,000 $19,000 $48,000500+ $17,000 $5,000 $12,000Totals All entities $436,000 $126,000 $310,0006112, 6113 < 20 $26,000 $7,000 $18,000Junior colleges, colleges anduniversities20-99 $12,000 $4,000 $9,000100-499 $17,000 $5,000 $12,000500+ $35,000 $10,000 $25,000Totals All entities $90,000 $26,000 $64,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-5Do Not Cite or QuoteSC11138Table A.1. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of compliance persize categoryBaseline expected costof complianceper size categoryIncremental cost ofthe proposed ruleHospitals 611 < 20 $27,000 $8,000 $19,00020-99 $21,000 $6,000 $15,000100-499 $72,000 $21,000 $51,000500+ $195,000 $56,000 $139,000Totals All entities $316,000 $91,000 $225,000Other, not included above All entities $12,600,000 $3,640,000 $8,980,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-6Do Not Cite or QuoteSC11138Table A.2. Regulatory impact by sector and size category for Option 2 (5% and 20%) under Scenario 1Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expected costof complianceper size categoryIncremental cost of theproposed rule< 20 $27,400,000 $7,400,000 $20,000,00020-99 $7,720,000 $2,080,000 $5,650,000100-499 $4,110,000 $1,100,000 $3,010,000Supermarkets and grocerystores445110500+ $30,700,000 $8,210,000 $22,400,000Totals All entities $69,900,000 $18,800,000 $51,100,000< 20 $299,000 $86,000 $213,00020-99 $13,000 $4,000 $9,000100-499 $8,000 $2,000 $5,000Convenience stores 445120500+ $37,000 $11,000 $26,000Totals All entities $357,000 $103,000 $254,000< 20 $376,000 $108,000 $267,00020-99 $94,000 $27,000 $67,000100-499 $113,000 $33,000 $80,000Gas station conveniencestores447110500+ $301,000 $87,000 $214,000Totals All entities $884,000 $255,000 $629,000< 20 $223,000 $61,000 $162,00020-99 $14,000 $4,000 $10,000100-499 $35,000 $9,000 $25,000Warehouse and clubsupercenters45291500+ $2,520,000 $684,000 $1,830,000Totals All entities $2,790,000 $758,000 $2,030,000< 20 $523,000 $142,000 $381,00020-99 $254,000 $69,000 $185,000100-499 $120,000 $32,000 $87,000Refrigerated warehouse andstorage49312500+ $311,000 $85,000 $227,000Totals All entities $1,210,000 $328,000 $879,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-7Do Not Cite or QuoteSC11138Table A.2. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expected costof complianceper size categoryIncremental cost of theproposed rule< 20 $360,000 $98,000 $262,00020-99 $97,000 $26,000 $71,000100-499 $91,000 $25,000 $66,000Refrigerated warehouse farmproducts49313500+ $123,000 $33,000 $90,000Totals All entities $671,000 $182,000 $489,000< 20 $90,000 $26,000 $64,00020-99 $12,000 $4,000 $9,000100-499 $6,000 $2,000 $4,000Office building managers 531312500+ $16,000 $5,000 $11,000Totals All entities $124,000 $36,000 $88,000< 20 $7,180,000 $2,070,000 $5,110,00020-99 $1,860,000 $536,000 $1,320,000100-499 $725,000 $209,000 $515,000Lodging 72500+ $2,030,000 $585,000 $1,440,000Totals All entities $11,800,000 $3,400,000 $8,390,000< 20 $12,800,000 $5,800,000 $6,970,00020-99 $4,650,000 $2,110,000 $2,540,000100-499 $2,800,000 $1,270,000 $1,530,000Chemical manufacturing 325500+ $7,480,000 $3,400,000 $4,080,000Totals All entities $27,700,000 $12,600,000 $15,100,000< 20 $1,990,000 $906,000 $1,090,00020-99 $756,000 $343,000 $413,000100-499 $509,000 $231,000 $278,000Pharmaceuticalmanufacturing3254500+ $1,090,000 $497,000 $597,000Totals All entities $4,350,000 $1,980,000 $2,380,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-8Do Not Cite or QuoteSC11138Table A.2. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expected costof complianceper size categoryIncremental cost of theproposed rule< 20 $262,000 $119,000 $143,00020-99 $71,000 $32,000 $39,000100-499 $69,000 $31,000 $37,000Petrochemical manufacturing 324110500+ $453,000 $206,000 $247,000Totals All entities $854,000 $388,000 $466,000< 20 $9,760,000 $4,440,000 $5,330,00020-99 $1,820,000 $828,000 $995,000100-499 $544,000 $247,000 $297,000Bakeries 3118500+ $756,000 $343,000 $413,000Totals All entities $12,900,000 $5,850,000 $7,030,000< 20 $9,480,000 $4,300,000 $5,170,00020-99 $3,380,000 $1,540,000 $1,850,000100-499 $1,840,000 $837,000 $1,010,000Food manufacturing otherthan bakeries311500+ $3,850,000 $1,750,000 $2,100,000Totals All entities $18,600,000 $8,430,000 $10,100,000< 20 $715,000 $325,000 $390,00020-99 $240,000 $109,000 $131,000100-499 $59,000 $27,000 $32,000Breweries 31212500+ $78,000 $36,000 $43,000Totals All entities $1,090,000 $496,000 $596,000< 20 $323,000 $147,000 $176,00020-99 $181,000 $82,000 $99,000100-499 $179,000 $81,000 $97,000Soft drink manufacturing 312111500+ $666,000 $302,000 $363,000Totals All entities $1,350,000 $613,000 $736,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-9Do Not Cite or QuoteSC11138Table A.2. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expected costof complianceper size categoryIncremental cost of theproposed rule< 20 $443,000 $201,000 $242,00020-99 $93,000 $42,000 $51,000100-499 $27,000 $12,000 $15,000Bottled water manufacturing 312112500+ $135,000 $61,000 $73,000Totals All entities $697,000 $317,000 $381,000< 20 $679,000 $308,000 $371,00020-99 $101,000 $46,000 $55,000100-499 $20,000 $9,000 $11,000Ice manufacturing 312113500+ $95,000 $43,000 $52,000Totals All entities $896,000 $407,000 $489,000< 20 $401,000 $193,000 $208,00020-99 $71,000 $34,000 $37,000100-499 None None NoneIce rinks 713940500+ None None NoneTotals All entities $472,000 $227,000 $245,000< 20 $171,000 $49,000 $122,00020-99 $180,000 $52,000 $128,000100-499 $67,000 $19,000 $48,000Elementary and secondaryschools6111500+ $17,000 $5,000 $12,000Totals All entities $436,000 $126,000 $310,000< 20 $26,000 $7,000 $18,00020-99 $12,000 $4,000 $9,000100-499 $17,000 $5,000 $12,000Junior colleges, colleges anduniversities6112, 6113500+ $35,000 $10,000 $25,000Totals All entities $90,000 $26,000 $64,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-10Do Not Cite or QuoteSC11138Table A.2. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expected costof complianceper size categoryIncremental cost of theproposed rule< 20 $27,000 $8,000 $19,00020-99 $21,000 $6,000 $15,000100-499 $72,000 $21,000 $51,000Hospitals 611500+ $195,000 $56,000 $139,000Totals All entities $316,000 $91,000 $225,000Other, not included above All entities $12,600,000 $3,640,000 $8,980,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-11Do Not Cite or QuoteSC11138Table A.3. Regulatory impact by sector and size category for Option 3 (5% and 30%) under Scenario 1Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $22,900,000 $7,400,000 $15,500,000Supermarkets and grocerystores20-99 $6,380,000 $2,080,000 $4,310,000100-499 $3,370,000 $1,100,000 $2,270,000500+ $25,000,000 $8,210,000 $16,800,000Totals All entities $57,700,000 $18,800,000 $38,900,000Convenience stores 445120 < 20 $299,000 $86,000 $213,00020-99 $13,000 $4,000 $9,000100-499 $8,000 $2,000 $5,000500+ $37,000 $11,000 $26,000Totals All entities $357,000 $103,000 $254,000447110 < 20 $376,000 $108,000 $267,000Gas station conveniencestores20-99 $94,000 $27,000 $67,000100-499 $113,000 $33,000 $80,000500+ $301,000 $87,000 $214,000Totals All entities $884,000 $255,000 $629,00045291 < 20 $190,000 $61,000 $129,000Warehouse and clubsupercenters20-99 $12,000 $4,000 $8,000100-499 $30,000 $9,000 $20,000500+ $2,140,000 $684,000 $1,460,000Totals All entities $2,370,000 $758,000 $1,620,00049312 < 20 $445,000 $142,000 $303,000Refrigerated warehouse andstorage20-99 $216,000 $69,000 $147,000100-499 $102,000 $32,000 $69,000500+ $265,000 $85,000 $180,000Totals All entities $1,030,000 $328,000 $699,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-12Do Not Cite or QuoteSC11138Table A.3. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $306,000 $98,000 $208,000Refrigerated warehouse farmproducts20-99 $83,000 $26,000 $56,000100-499 $77,000 $25,000 $53,000500+ $105,000 $33,000 $71,000Totals All entities $571,000 $182,000 $389,000Office building managers 531312 < 20 $90,000 $26,000 $64,00020-99 $12,000 $4,000 $9,000100-499 $6,000 $2,000 $4,000500+ $16,000 $5,000 $11,000Totals All entities $124,000 $36,000 $88,000Lodging 72 < 20 $7,180,000 $2,070,000 $5,110,00020-99 $1,860,000 $536,000 $1,320,000100-499 $725,000 $209,000 $515,000500+ $2,030,000 $585,000 $1,440,000Totals All entities $11,800,000 $3,400,000 $8,390,000Chemical manufacturing 325 < 20 $11,700,000 $5,800,000 $5,880,00020-99 $4,250,000 $2,110,000 $2,140,000100-499 $2,560,000 $1,270,000 $1,290,000500+ $6,840,000 $3,400,000 $3,440,000Totals All entities $25,300,000 $12,600,000 $12,800,0003254 < 20 $1,820,000 $906,000 $919,000Pharmaceuticalmanufacturing20-99 $692,000 $343,000 $348,000100-499 $466,000 $231,000 $234,000500+ $1,000,000 $497,000 $504,000Totals All entities $3,980,000 $1,980,000 $2,010,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-13Do Not Cite or QuoteSC11138Table A.3. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $240,000 $119,000 $121,000Petrochemical manufacturing20-99 $65,000 $32,000 $33,000100-499 $63,000 $31,000 $32,000500+ $414,000 $206,000 $209,000Totals All entities $781,000 $388,000 $393,000Bakeries 3118 < 20 $8,930,000 $4,440,000 $4,500,00020-99 $1,670,000 $828,000 $840,000100-499 $498,000 $247,000 $251,000500+ $692,000 $343,000 $348,000Totals All entities $11,800,000 $5,850,000 $5,940,000311 < 20 $8,670,000 $4,300,000 $4,370,000Food manufacturing otherthan bakeries20-99 $3,090,000 $1,540,000 $1,560,000100-499 $1,690,000 $837,000 $849,000500+ $3,530,000 $1,750,000 $1,780,000Totals All entities $17,000,000 $8,430,000 $8,550,000Breweries 31212 < 20 $654,000 $325,000 $329,00020-99 $219,000 $109,000 $110,000100-499 $54,000 $27,000 $27,000500+ $72,000 $36,000 $36,000Totals All entities $999,000 $496,000 $503,000Soft drink manufacturing 312111 < 20 $296,000 $147,000 $149,00020-99 $166,000 $82,000 $83,000100-499 $163,000 $81,000 $82,000500+ $609,000 $302,000 $307,000Totals All entities $1,230,000 $613,000 $621,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-14Do Not Cite or QuoteSC11138Table A.3. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $405,000 $201,000 $204,00020-99 $85,000 $42,000 $43,000100-499 $25,000 $12,000 $12,000500+ $123,000 $61,000 $62,000Totals All entities $638,000 $317,000 $321,000Ice manufacturing 312113 < 20 $621,000 $308,000 $313,00020-99 $92,000 $46,000 $47,000100-499 $18,000 $9,000 $9,000500+ $87,000 $43,000 $44,000Totals All entities $819,000 $407,000 $413,000Ice rinks 713940 < 20 $361,000 $193,000 $168,00020-99 $64,000 $34,000 $30,000100-499 None None None500+ None None NoneTotals All entities $425,000 $227,000 $198,0006111 < 20 $171,000 $49,000 $122,000Elementary and secondaryschools20-99 $180,000 $52,000 $128,000100-499 $67,000 $19,000 $48,000500+ $17,000 $5,000 $12,000Totals All entities $436,000 $126,000 $310,0006112, 6113 < 20 $26,000 $7,000 $18,000Junior colleges, colleges anduniversities20-99 $12,000 $4,000 $9,000100-499 $17,000 $5,000 $12,000500+ $35,000 $10,000 $25,000Totals All entities $90,000 $26,000 $64,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-15Do Not Cite or QuoteSC11138Table A.3. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $27,000 $8,000 $19,00020-99 $21,000 $6,000 $15,000100-499 $72,000 $21,000 $51,000500+ $195,000 $56,000 $139,000Totals All entities $316,000 $91,000 $225,000Other, not included above All entities $12,600,000 $3,640,000 $8,980,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-16Do Not Cite or QuoteSC11138Table A.4. Regulatory impact by sector and size category for Option 4 (10% and 10%) under Scenario 1Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $32,700,000 $7,400,000 $25,300,000Supermarkets and grocerystores20-99 $9,330,000 $2,080,000 $7,260,000100-499 $5,010,000 $1,100,000 $3,900,000500+ $37,600,000 $8,210,000 $29,400,000Totals All entities $84,600,000 $18,800,000 $65,800,000Convenience stores 445120 < 20 $270,000 $86,000 $183,00020-99 $12,000 $4,000 $8,000100-499 $7,000 $2,000 $5,000500+ $34,000 $11,000 $23,000Totals All entities $322,000 $103,000 $219,000447110 < 20 $339,000 $108,000 $230,000Gas station conveniencestores20-99 $85,000 $27,000 $58,000100-499 $102,000 $33,000 $69,000500+ $271,000 $87,000 $185,000Totals All entities $797,000 $255,000 $542,00045291 < 20 $260,000 $61,000 $199,000Warehouse and clubsupercenters20-99 $16,000 $4,000 $12,000100-499 $41,000 $9,000 $31,000500+ $2,940,000 $684,000 $2,250,000Totals All entities $3,250,000 $758,000 $2,490,00049312 < 20 $609,000 $142,000 $467,000Refrigerated warehouse andstorage20-99 $296,000 $69,000 $227,000100-499 $139,000 $32,000 $107,000500+ $363,000 $85,000 $278,000Totals All entities $1,410,000 $328,000 $1,080,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-17Do Not Cite or QuoteSC11138Table A.4. Regulatory impact by sector and size category for Option 4 (10% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $419,000 $98,000 $322,000Refrigerated warehouse farmproducts20-99 $113,000 $26,000 $87,000100-499 $106,000 $25,000 $81,000500+ $144,000 $33,000 $110,000Totals All entities $782,000 $182,000 $600,000Office building managers 531312 < 20 $81,000 $26,000 $55,00020-99 $11,000 $4,000 $8,000100-499 $5,000 $2,000 $4,000500+ $14,000 $5,000 $10,000Totals All entities $112,000 $36,000 $76,000Lodging 72 < 20 $6,480,000 $2,070,000 $4,410,00020-99 $1,670,000 $536,000 $1,140,000100-499 $654,000 $209,000 $445,000500+ $1,830,000 $585,000 $1,240,000Totals All entities $10,600,000 $3,400,000 $7,240,000Chemical manufacturing 325 < 20 $13,900,000 $5,800,000 $8,080,00020-99 $5,050,000 $2,110,000 $2,940,000100-499 $3,040,000 $1,270,000 $1,770,000500+ $8,130,000 $3,400,000 $4,730,000Totals All entities $30,100,000 $12,600,000 $17,500,0003254 < 20 $2,170,000 $906,000 $1,260,000Pharmaceuticalmanufacturing20-99 $822,000 $343,000 $478,000100-499 $553,000 $231,000 $322,000500+ $1,190,000 $497,000 $692,000Totals All entities $4,730,000 $1,980,000 $2,750,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-18Do Not Cite or QuoteSC11138Table A.4. Regulatory impact by sector and size category for Option 4 (10% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $285,000 $119,000 $166,000Petrochemical manufacturing20-99 $77,000 $32,000 $45,000100-499 $74,000 $31,000 $43,000500+ $492,000 $206,000 $286,000Totals All entities $928,000 $388,000 $540,000Bakeries 3118 < 20 $10,600,000 $4,440,000 $6,180,00020-99 $1,980,000 $828,000 $1,150,000100-499 $592,000 $247,000 $345,000500+ $822,000 $343,000 $478,000Totals All entities $14,000,000 $5,850,000 $8,160,000311 < 20 $10,300,000 $4,300,000 $6,000,000Food manufacturing otherthan bakeries20-99 $3,680,000 $1,540,000 $2,140,000100-499 $2,000,000 $837,000 $1,170,000500+ $4,190,000 $1,750,000 $2,440,000Totals All entities $20,200,000 $8,430,000 $11,700,000Breweries 31212 < 20 $777,000 $325,000 $452,00020-99 $261,000 $109,000 $152,000100-499 $64,000 $27,000 $37,000500+ $85,000 $36,000 $50,000Totals All entities $1,190,000 $496,000 $691,000Soft drink manufacturing 312111 < 20 $351,000 $147,000 $204,00020-99 $197,000 $82,000 $115,000100-499 $194,000 $81,000 $113,000500+ $724,000 $302,000 $421,000Totals All entities $1,470,000 $613,000 $853,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-19Do Not Cite or QuoteSC11138Table A.4. Regulatory impact by sector and size category for Option 4 (10% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $481,000 $201,000 $280,00020-99 $101,000 $42,000 $59,000100-499 $29,000 $12,000 $17,000500+ $146,000 $61,000 $85,000Totals All entities $758,000 $317,000 $441,000Ice manufacturing 312113 < 20 $738,000 $308,000 $430,00020-99 $110,000 $46,000 $64,000100-499 $22,000 $9,000 $13,000500+ $104,000 $43,000 $60,000Totals All entities $974,000 $407,000 $567,000Ice rinks 713940 < 20 $448,000 $193,000 $255,00020-99 $79,000 $34,000 $45,000100-499 None None None500+ None None NoneTotals All entities $527,000 $227,000 $300,0006111 < 20 $155,000 $49,000 $105,000Elementary and secondaryschools20-99 $163,000 $52,000 $111,000100-499 $60,000 $19,000 $41,000500+ $16,000 $5,000 $11,000Totals All entities $393,000 $126,000 $268,0006112, 6113 < 20 $23,000 $7,000 $16,000Junior colleges, colleges anduniversities20-99 $11,000 $4,000 $7,000100-499 $16,000 $5,000 $11,000500+ $31,000 $10,000 $21,000Totals All entities $81,000 $26,000 $55,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-20Do Not Cite or QuoteSC11138Table A.4. Regulatory impact by sector and size category for Option 4 (10% and 10%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $25,000 $8,000 $17,00020-99 $19,000 $6,000 $13,000100-499 $65,000 $21,000 $44,000500+ $176,000 $56,000 $120,000Totals All entities $285,000 $91,000 $194,000Other, not included above All entities $11,400,000 $3,640,000 $7,750,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-21Do Not Cite or QuoteSC11138Table A.5. Regulatory impact by sector and size category for Option 5 (10% and 20%) under Scenario 1Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $26,900,000 $7,400,000 $19,500,000Supermarkets and grocerystores20-99 $7,600,000 $2,080,000 $5,520,000100-499 $4,050,000 $1,100,000 $2,950,000500+ $30,300,000 $8,210,000 $22,100,000Totals All entities $68,800,000 $18,800,000 $50,000,000Convenience stores 445120 < 20 $270,000 $86,000 $183,00020-99 $12,000 $4,000 $8,000100-499 $7,000 $2,000 $5,000500+ $34,000 $11,000 $23,000Totals All entities $322,000 $103,000 $219,000447110 < 20 $339,000 $108,000 $230,000Gas station conveniencestores20-99 $85,000 $27,000 $58,000100-499 $102,000 $33,000 $69,000500+ $271,000 $87,000 $185,000Totals All entities $797,000 $255,000 $542,00045291 < 20 $217,000 $61,000 $156,000Warehouse and clubsupercenters20-99 $13,000 $4,000 $10,000100-499 $34,000 $9,000 $24,000500+ $2,450,000 $684,000 $1,770,000Totals All entities $2,710,000 $758,000 $1,960,00049312 < 20 $509,000 $142,000 $367,000Refrigerated warehouse andstorage20-99 $247,000 $69,000 $178,000100-499 $116,000 $32,000 $84,000500+ $303,000 $85,000 $218,000Totals All entities $1,170,000 $328,000 $847,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-22Do Not Cite or QuoteSC11138Table A.5. Regulatory impact by sector and size category for Option 5 (10% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $350,000 $98,000 $252,000Refrigerated warehouse farmproducts20-99 $94,000 $26,000 $68,000100-499 $88,000 $25,000 $64,000500+ $120,000 $33,000 $86,000Totals All entities $653,000 $182,000 $470,000Office building managers 531312 < 20 $81,000 $26,000 $55,00020-99 $11,000 $4,000 $8,000100-499 $5,000 $2,000 $4,000500+ $14,000 $5,000 $10,000Totals All entities $112,000 $36,000 $76,000Lodging 72 < 20 $6,480,000 $2,070,000 $4,410,00020-99 $1,670,000 $536,000 $1,140,000100-499 $654,000 $209,000 $445,000500+ $1,830,000 $585,000 $1,240,000Totals All entities $10,600,000 $3,400,000 $7,240,000Chemical manufacturing 325 < 20 $12,400,000 $5,800,000 $6,620,00020-99 $4,520,000 $2,110,000 $2,410,000100-499 $2,720,000 $1,270,000 $1,450,000500+ $7,270,000 $3,400,000 $3,870,000Totals All entities $26,900,000 $12,600,000 $14,300,0003254 < 20 $1,940,000 $906,000 $1,030,000Pharmaceuticalmanufacturing20-99 $735,000 $343,000 $392,000100-499 $495,000 $231,000 $264,000500+ $1,060,000 $497,000 $567,000Totals All entities $4,230,000 $1,980,000 $2,250,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-23Do Not Cite or QuoteSC11138Table A.5. Regulatory impact by sector and size category for Option 5 (10% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $255,000 $119,000 $136,000Petrochemical manufacturing20-99 $69,000 $32,000 $37,000100-499 $67,000 $31,000 $35,000500+ $440,000 $206,000 $234,000Totals All entities $830,000 $388,000 $442,000Bakeries 3118 < 20 $9,490,000 $4,440,000 $5,060,00020-99 $1,770,000 $828,000 $944,000100-499 $529,000 $247,000 $282,000500+ $735,000 $343,000 $392,000Totals All entities $12,500,000 $5,850,000 $6,680,000311 < 20 $9,210,000 $4,300,000 $4,910,000Food manufacturing otherthan bakeries20-99 $3,290,000 $1,540,000 $1,750,000100-499 $1,790,000 $837,000 $954,000500+ $3,750,000 $1,750,000 $2,000,000Totals All entities $18,000,000 $8,430,000 $9,610,000Breweries 31212 < 20 $695,000 $325,000 $370,00020-99 $233,000 $109,000 $124,000100-499 $57,000 $27,000 $30,000500+ $76,000 $36,000 $41,000Totals All entities $1,060,000 $496,000 $565,000Soft drink manufacturing 312111 < 20 $314,000 $147,000 $167,00020-99 $176,000 $82,000 $94,000100-499 $174,000 $81,000 $93,000500+ $647,000 $302,000 $345,000Totals All entities $1,310,000 $613,000 $698,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-24Do Not Cite or QuoteSC11138Table A.5. Regulatory impact by sector and size category for Option 5 (10% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $431,000 $201,000 $229,00020-99 $90,000 $42,000 $48,000100-499 $26,000 $12,000 $14,000500+ $131,000 $61,000 $70,000Totals All entities $678,000 $317,000 $361,000Ice manufacturing 312113 < 20 $660,000 $308,000 $352,00020-99 $98,000 $46,000 $52,000100-499 $20,000 $9,000 $10,000500+ $93,000 $43,000 $49,000Totals All entities $871,000 $407,000 $464,000Ice rinks 713940 < 20 $394,000 $193,000 $201,00020-99 $70,000 $34,000 $36,000100-499 None None None500+ None None NoneTotals All entities $464,000 $227,000 $237,0006111 < 20 $155,000 $49,000 $105,000Elementary and secondaryschools20-99 $163,000 $52,000 $111,000100-499 $60,000 $19,000 $41,000500+ $16,000 $5,000 $11,000Totals All entities $393,000 $126,000 $268,0006112, 6113 < 20 $23,000 $7,000 $16,000Junior colleges, colleges anduniversities20-99 $11,000 $4,000 $7,000100-499 $16,000 $5,000 $11,000500+ $31,000 $10,000 $21,000Totals All entities $81,000 $26,000 $55,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-25Do Not Cite or QuoteSC11138Table A.5. Regulatory impact by sector and size category for Option 5 (10% and 20%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $25,000 $8,000 $17,00020-99 $19,000 $6,000 $13,000100-499 $65,000 $21,000 $44,000500+ $176,000 $56,000 $120,000Totals All entities $285,000 $91,000 $194,000Other, not included above All entities $11,400,000 $3,640,000 $7,750,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-26Do Not Cite or QuoteSC11138Table A.6. Regulatory impact by sector and size category for Option 6 (10% and 30%) under Scenario 1Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $22,300,000 $7,400,000 $14,900,000Supermarkets and grocerystores20-99 $6,260,000 $2,080,000 $4,180,000100-499 $3,320,000 $1,100,000 $2,210,000500+ $24,700,000 $8,210,000 $16,500,000Totals All entities $56,600,000 $18,800,000 $37,800,000Convenience stores 445120 < 20 $270,000 $86,000 $183,00020-99 $12,000 $4,000 $8,000100-499 $7,000 $2,000 $5,000500+ $34,000 $11,000 $23,000Totals All entities $322,000 $103,000 $219,000447110 < 20 $339,000 $108,000 $230,000Gas station conveniencestores20-99 $85,000 $27,000 $58,000100-499 $102,000 $33,000 $69,000500+ $271,000 $87,000 $185,000Totals All entities $797,000 $255,000 $542,00045291 < 20 $183,000 $61,000 $123,000Warehouse and clubsupercenters20-99 $11,000 $4,000 $8,000100-499 $29,000 $9,000 $19,000500+ $2,070,000 $684,000 $1,390,000Totals All entities $2,300,000 $758,000 $1,540,00049312 < 20 $431,000 $142,000 $288,000Refrigerated warehouse andstorage20-99 $209,000 $69,000 $140,000100-499 $98,000 $32,000 $66,000500+ $256,000 $85,000 $172,000Totals All entities $994,000 $328,000 $666,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-27Do Not Cite or QuoteSC11138Table A.6. Regulatory impact by sector and size category for Option 6 (10% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $296,000 $98,000 $198,000Refrigerated warehouse farmproducts20-99 $80,000 $26,000 $54,000100-499 $75,000 $25,000 $50,000500+ $101,000 $33,000 $68,000Totals All entities $552,000 $182,000 $370,000Office building managers 531312 < 20 $81,000 $26,000 $55,00020-99 $11,000 $4,000 $8,000100-499 $5,000 $2,000 $4,000500+ $14,000 $5,000 $10,000Totals All entities $112,000 $36,000 $76,000Lodging 72 < 20 $6,480,000 $2,070,000 $4,410,00020-99 $1,670,000 $536,000 $1,140,000100-499 $654,000 $209,000 $445,000500+ $1,830,000 $585,000 $1,240,000Totals All entities $10,600,000 $3,400,000 $7,240,000Chemical manufacturing 325 < 20 $11,300,000 $5,800,000 $5,530,00020-99 $4,120,000 $2,110,000 $2,010,000100-499 $2,480,000 $1,270,000 $1,210,000500+ $6,630,000 $3,400,000 $3,240,000Totals All entities $24,600,000 $12,600,000 $12,000,0003254 < 20 $1,770,000 $906,000 $864,000Pharmaceuticalmanufacturing20-99 $671,000 $343,000 $327,000100-499 $452,000 $231,000 $220,000500+ $971,000 $497,000 $474,000Totals All entities $3,860,000 $1,980,000 $1,880,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-28Do Not Cite or QuoteSC11138Table A.6. Regulatory impact by sector and size category for Option 6 (10% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $232,000 $119,000 $113,000Petrochemical manufacturing20-99 $63,000 $32,000 $31,000100-499 $61,000 $31,000 $30,000500+ $402,000 $206,000 $196,000Totals All entities $758,000 $388,000 $370,000Bakeries 3118 < 20 $8,660,000 $4,440,000 $4,230,00020-99 $1,620,000 $828,000 $789,000100-499 $483,000 $247,000 $236,000500+ $671,000 $343,000 $327,000Totals All entities $11,400,000 $5,850,000 $5,580,000311 < 20 $8,410,000 $4,300,000 $4,100,000Food manufacturing otherthan bakeries20-99 $3,000,000 $1,540,000 $1,460,000100-499 $1,630,000 $837,000 $798,000500+ $3,420,000 $1,750,000 $1,670,000Totals All entities $16,500,000 $8,430,000 $8,030,000Breweries 31212 < 20 $634,000 $325,000 $309,00020-99 $213,000 $109,000 $104,000100-499 $52,000 $27,000 $25,000500+ $69,000 $36,000 $34,000Totals All entities $968,000 $496,000 $473,000Soft drink manufacturing 312111 < 20 $287,000 $147,000 $140,00020-99 $161,000 $82,000 $78,000100-499 $158,000 $81,000 $77,000500+ $591,000 $302,000 $288,000Totals All entities $1,200,000 $613,000 $584,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-29Do Not Cite or QuoteSC11138Table A.6. Regulatory impact by sector and size category for Option 6 (10% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $393,000 $201,000 $192,00020-99 $83,000 $42,000 $40,000100-499 $24,000 $12,000 $12,000500+ $119,000 $61,000 $58,000Totals All entities $619,000 $317,000 $302,000Ice manufacturing 312113 < 20 $602,000 $308,000 $294,00020-99 $90,000 $46,000 $44,000100-499 $18,000 $9,000 $9,000500+ $85,000 $43,000 $41,000Totals All entities $795,000 $407,000 $388,000Ice rinks 713940 < 20 $355,000 $193,000 $162,00020-99 $63,000 $34,000 $29,000100-499 None None None500+ None None NoneTotals All entities $417,000 $227,000 $190,0006111 < 20 $155,000 $49,000 $105,000Elementary and secondaryschools20-99 $163,000 $52,000 $111,000100-499 $60,000 $19,000 $41,000500+ $16,000 $5,000 $11,000Totals All entities $393,000 $126,000 $268,0006112, 6113 < 20 $23,000 $7,000 $16,00020-99 $11,000 $4,000 $7,000Junior colleges, colleges anduniversities100-499 $16,000 $5,000 $11,000500+ $31,000 $10,000 $21,000Totals All entities $81,000 $26,000 $55,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-30Do Not Cite or QuoteSC11138Table A.6. Regulatory impact by sector and size category for Option 6 (10% and 30%)under Scenario 1 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $25,000 $8,000 $17,00020-99 $19,000 $6,000 $13,000100-499 $65,000 $21,000 $44,000500+ $176,000 $56,000 $120,000Totals All entities $285,000 $91,000 $194,000Other, not included above All entities $11,400,000 $3,640,000 $7,750,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-31Do Not Cite or QuoteSC11138Table A.7. Regulatory impact by sector and size category for Option 1 (5% and 10%) under Scenario 2Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $19,500,000 $7,400,000 $12,100,000Supermarkets and grocerystores20-99 $5,560,000 $2,080,000 $3,490,000100-499 $2,980,000 $1,100,000 $1,880,000500+ $22,400,000 $8,210,000 $14,200,000Totals All entities $50,400,000 $18,800,000 $31,700,000Convenience stores 445120 < 20 $167,000 $86,000 $81,00020-99 $7,000 $4,000 $4,000100-499 $4,000 $2,000 $2,000500+ $21,000 $11,000 $10,000Totals All entities $200,000 $103,000 $97,000447110 < 20 $210,000 $108,000 $102,000Gas station conveniencestores20-99 $53,000 $27,000 $26,000100-499 $63,000 $33,000 $31,000500+ $168,000 $87,000 $81,000Totals All entities $494,000 $255,000 $239,00045291 < 20 $156,000 $61,000 $95,000Warehouse and clubsupercenters20-99 $10,000 $4,000 $6,000100-499 $24,000 $9,000 $15,000500+ $1,760,000 $684,000 $1,070,000Totals All entities $1,950,000 $758,000 $1,190,00049312 < 20 $365,000 $142,000 $223,000Refrigerated warehouse andstorage20-99 $177,000 $69,000 $108,000100-499 $83,000 $32,000 $51,000500+ $217,000 $85,000 $133,000Totals All entities $843,000 $328,000 $515,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-32Do Not Cite or QuoteSC11138Table A.7. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $251,000 $98,000 $153,000Refrigerated warehouse farmproducts20-99 $68,000 $26,000 $41,000100-499 $63,000 $25,000 $39,000500+ $86,000 $33,000 $53,000Totals All entities $468,000 $182,000 $286,000Office building managers 531312 < 20 $50,000 $26,000 $24,00020-99 $7,000 $4,000 $3,000100-499 $3,000 $2,000 $2,000500+ $9,000 $5,000 $4,000Totals All entities $69,000 $36,000 $34,000Lodging 72 < 20 $4,020,000 $2,070,000 $1,940,00020-99 $1,040,000 $536,000 $502,000100-499 $405,000 $209,000 $196,000500+ $1,130,000 $585,000 $548,000Totals All entities $6,590,000 $3,400,000 $3,190,000Chemical manufacturing 325 < 20 $8,100,000 $5,800,000 $2,300,00020-99 $2,950,000 $2,110,000 $836,000100-499 $1,780,000 $1,270,000 $504,000500+ $4,740,000 $3,400,000 $1,340,000Totals All entities $17,600,000 $12,600,000 $4,980,0003254 < 20 $1,260,000 $906,000 $359,000Pharmaceuticalmanufacturing20-99 $479,000 $343,000 $136,000100-499 $323,000 $231,000 $92,000500+ $694,000 $497,000 $197,000Totals All entities $2,760,000 $1,980,000 $783,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-33Do Not Cite or QuoteSC11138Table A.7. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $166,000 $119,000 $47,000Petrochemical manufacturing20-99 $45,000 $32,000 $13,000100-499 $43,000 $31,000 $12,000500+ $287,000 $206,000 $81,000Totals All entities $542,000 $388,000 $154,000Bakeries 3118 < 20 $6,190,000 $4,440,000 $1,760,00020-99 $1,160,000 $828,000 $328,000100-499 $345,000 $247,000 $98,000500+ $479,000 $343,000 $136,000Totals All entities $8,170,000 $5,850,000 $2,320,000311 < 20 $6,010,000 $4,300,000 $1,700,00020-99 $2,140,000 $1,540,000 $608,000Food manufacturing otherthan bakeries100-499 $1,170,000 $837,000 $331,000500+ $2,440,000 $1,750,000 $693,000Totals All entities $11,800,000 $8,430,000 $3,340,000Breweries 31212 < 20 $453,000 $325,000 $129,00020-99 $152,000 $109,000 $43,000100-499 $37,000 $27,000 $11,000500+ $50,000 $36,000 $14,000Totals All entities $692,000 $496,000 $196,000Soft drink manufacturing 312111 < 20 $205,000 $147,000 $58,00020-99 $115,000 $82,000 $33,000100-499 $113,000 $81,000 $32,000500+ $422,000 $302,000 $120,000Totals All entities $855,000 $613,000 $243,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-34Do Not Cite or QuoteSC11138Table A.7. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $281,000 $201,000 $80,00020-99 $59,000 $42,000 $17,000100-499 $17,000 $12,000 $5,000500+ $85,000 $61,000 $24,000Totals All entities $442,000 $317,000 $125,000Ice manufacturing 312113 < 20 $431,000 $308,000 $122,00020-99 $64,000 $46,000 $18,000100-499 $13,000 $9,000 $4,000500+ $61,000 $43,000 $17,000Totals All entities $568,000 $407,000 $161,000Ice rinks 713940 < 20 $259,000 $193,000 $66,00020-99 $46,000 $34,000 $12,000100-499 None None None500+ None None NoneTotals All entities $305,000 $227,000 $78,0006111 < 20 $96,000 $49,000 $46,000Elementary and secondaryschools20-99 $101,000 $52,000 $49,000100-499 $37,000 $19,000 $18,000500+ $10,000 $5,000 $5,000Totals All entities $244,000 $126,000 $118,0006112, 6113 < 20 $14,000 $7,000 $7,00020-99 $7,000 $4,000 $3,000Junior colleges, colleges anduniversities100-499 $10,000 $5,000 $5,000500+ $19,000 $10,000 $9,000Totals All entities $50,000 $26,000 $24,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-35Do Not Cite or QuoteSC11138Table A.7. Regulatory impact by sector and size category for Option 1 (5% and 10%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $15,000 $8,000 $7,00020-99 $12,000 $6,000 $6,000100-499 $40,000 $21,000 $19,000500+ $109,000 $56,000 $53,000Totals All entities $177,000 $91,000 $85,000Other, not included above All entities $7,060,000 $3,640,000 $3,420,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-36Do Not Cite or QuoteSC11138Table A.8. Regulatory impact by sector and size category for Option 2 (5% and 20%) under Scenario 2Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $16,400,000 $7,400,000 $8,980,000Supermarkets and grocerystores20-99 $4,630,000 $2,080,000 $2,550,000100-499 $2,470,000 $1,100,000 $1,370,000500+ $18,500,000 $8,210,000 $10,200,000Totals All entities $41,900,000 $18,800,000 $23,100,000Convenience stores 445120 < 20 $167,000 $86,000 $81,00020-99 $7,000 $4,000 $4,000100-499 $4,000 $2,000 $2,000500+ $21,000 $11,000 $10,000Totals All entities $200,000 $103,000 $97,000447110 < 20 $210,000 $108,000 $102,000Gas station conveniencestores20-99 $53,000 $27,000 $26,000100-499 $63,000 $33,000 $31,000500+ $168,000 $87,000 $81,000Totals All entities $494,000 $255,000 $239,00045291 < 20 $132,000 $61,000 $72,000Warehouse and clubsupercenters20-99 $8,000 $4,000 $4,000100-499 $21,000 $9,000 $11,000500+ $1,500,000 $684,000 $812,000Totals All entities $1,660,000 $758,000 $899,00049312 < 20 $311,000 $142,000 $168,000Refrigerated warehouse andstorage20-99 $151,000 $69,000 $82,000100-499 $71,000 $32,000 $39,000500+ $185,000 $85,000 $100,000Totals All entities $717,000 $328,000 $389,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-37Do Not Cite or QuoteSC11138Table A.8. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $214,000 $98,000 $116,000Refrigerated warehouse farmproducts20-99 $58,000 $26,000 $31,000100-499 $54,000 $25,000 $29,000500+ $73,000 $33,000 $40,000Totals All entities $398,000 $182,000 $216,000Office building managers 531312 < 20 $50,000 $26,000 $24,00020-99 $7,000 $4,000 $3,000100-499 $3,000 $2,000 $2,000500+ $9,000 $5,000 $4,000Totals All entities $69,000 $36,000 $34,000Lodging 72 < 20 $4,020,000 $2,070,000 $1,940,00020-99 $1,040,000 $536,000 $502,000100-499 $405,000 $209,000 $196,000500+ $1,130,000 $585,000 $548,000Totals All entities $6,590,000 $3,400,000 $3,190,000Chemical manufacturing 325 < 20 $7,490,000 $5,800,000 $1,680,00020-99 $2,720,000 $2,110,000 $613,000100-499 $1,640,000 $1,270,000 $369,000500+ $4,380,000 $3,400,000 $986,000Totals All entities $16,200,000 $12,600,000 $3,650,0003254 < 20 $1,170,000 $906,000 $263,000Pharmaceuticalmanufacturing20-99 $443,000 $343,000 $100,000100-499 $298,000 $231,000 $67,000500+ $641,000 $497,000 $144,000Totals All entities $2,550,000 $1,980,000 $574,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-38Do Not Cite or QuoteSC11138Table A.8. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $153,000 $119,000 $35,000Petrochemical manufacturing20-99 $42,000 $32,000 $9,000100-499 $40,000 $31,000 $9,000500+ $265,000 $206,000 $60,000Totals All entities $501,000 $388,000 $113,000Bakeries 3118 < 20 $5,720,000 $4,440,000 $1,290,00020-99 $1,070,000 $828,000 $240,000100-499 $319,000 $247,000 $72,000500+ $443,000 $343,000 $100,000Totals All entities $7,550,000 $5,850,000 $1,700,000311 < 20 $5,550,000 $4,300,000 $1,250,00020-99 $1,980,000 $1,540,000 $446,000Food manufacturing otherthan bakeries100-499 $1,080,000 $837,000 $243,000500+ $2,260,000 $1,750,000 $508,000Totals All entities $10,900,000 $8,430,000 $2,450,000Breweries 31212 < 20 $419,000 $325,000 $94,00020-99 $141,000 $109,000 $32,000100-499 $34,000 $27,000 $8,000500+ $46,000 $36,000 $10,000Totals All entities $640,000 $496,000 $144,000Soft drink manufacturing 312111 < 20 $189,000 $147,000 $43,00020-99 $106,000 $82,000 $24,000100-499 $105,000 $81,000 $24,000500+ $390,000 $302,000 $88,000Totals All entities $790,000 $613,000 $178,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-39Do Not Cite or QuoteSC11138Table A.8. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $260,000 $201,000 $58,00020-99 $55,000 $42,000 $12,000100-499 $16,000 $12,000 $4,000500+ $79,000 $61,000 $18,000Totals All entities $409,000 $317,000 $92,000Ice manufacturing 312113 < 20 $398,000 $308,000 $90,00020-99 $59,000 $46,000 $13,000100-499 $12,000 $9,000 $3,000500+ $56,000 $43,000 $13,000Totals All entities $525,000 $407,000 $118,000Ice rinks 713940 < 20 $237,000 $193,000 $44,00020-99 $42,000 $34,000 $8,000100-499 None None None500+ None None NoneTotals All entities $279,000 $227,000 $51,0006111 < 20 $96,000 $49,000 $46,000Elementary and secondaryschools20-99 $101,000 $52,000 $49,000100-499 $37,000 $19,000 $18,000500+ $10,000 $5,000 $5,000Totals All entities $244,000 $126,000 $118,0006112, 6113 < 20 $14,000 $7,000 $7,00020-99 $7,000 $4,000 $3,000Junior colleges, colleges anduniversities100-499 $10,000 $5,000 $5,000500+ $19,000 $10,000 $9,000Totals All entities $50,000 $26,000 $24,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-40Do Not Cite or QuoteSC11138Table A.8. Regulatory impact by sector and size category for Option 2 (5% and 20%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $15,000 $8,000 $7,00020-99 $12,000 $6,000 $6,000100-499 $40,000 $21,000 $19,000500+ $109,000 $56,000 $53,000Totals All entities $177,000 $91,000 $85,000Other, not included above All entities $7,060,000 $3,640,000 $3,420,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-41Do Not Cite or QuoteSC11138Table A.9. Regulatory impact by sector and size category for Option 3 (5% and 30%) under Scenario 2Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $13,900,000 $7,400,000 $6,480,000Supermarkets and grocerystores20-99 $3,890,000 $2,080,000 $1,810,000100-499 $2,060,000 $1,100,000 $958,000500+ $15,300,000 $8,210,000 $7,120,000Totals All entities $35,200,000 $18,800,000 $16,400,000Convenience stores 445120 < 20 $167,000 $86,000 $81,00020-99 $7,000 $4,000 $4,000100-499 $4,000 $2,000 $2,000500+ $21,000 $11,000 $10,000Totals All entities $200,000 $103,000 $97,000447110 < 20 $210,000 $108,000 $102,000Gas station conveniencestores20-99 $53,000 $27,000 $26,000100-499 $63,000 $33,000 $31,000500+ $168,000 $87,000 $81,000Totals All entities $494,000 $255,000 $239,00045291 < 20 $114,000 $61,000 $53,000Warehouse and clubsupercenters20-99 $7,000 $4,000 $3,000100-499 $18,000 $9,000 $8,000500+ $1,290,000 $684,000 $603,000Totals All entities $1,430,000 $758,000 $668,00049312 < 20 $267,000 $142,000 $125,000Refrigerated warehouse andstorage20-99 $130,000 $69,000 $61,000100-499 $61,000 $32,000 $29,000500+ $159,000 $85,000 $75,000Totals All entities $617,000 $328,000 $289,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-42Do Not Cite or QuoteSC11138Table A.9. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $184,000 $98,000 $86,000Refrigerated warehouse farmproducts20-99 $50,000 $26,000 $23,000100-499 $46,000 $25,000 $22,000500+ $63,000 $33,000 $30,000Totals All entities $343,000 $182,000 $161,000Office building managers 531312 < 20 $50,000 $26,000 $24,00020-99 $7,000 $4,000 $3,000100-499 $3,000 $2,000 $2,000500+ $9,000 $5,000 $4,000Totals All entities $69,000 $36,000 $34,000Lodging 72 < 20 $4,020,000 $2,070,000 $1,940,00020-99 $1,040,000 $536,000 $502,000100-499 $405,000 $209,000 $196,000500+ $1,130,000 $585,000 $548,000Totals All entities $6,590,000 $3,400,000 $3,190,000Chemical manufacturing 325 < 20 $7,000,000 $5,800,000 $1,200,00020-99 $2,550,000 $2,110,000 $436,000100-499 $1,530,000 $1,270,000 $263,000500+ $4,100,000 $3,400,000 $702,000Totals All entities $15,200,000 $12,600,000 $2,600,0003254 < 20 $1,090,000 $906,000 $187,000Pharmaceuticalmanufacturing20-99 $414,000 $343,000 $71,000100-499 $279,000 $231,000 $48,000500+ $600,000 $497,000 $103,000Totals All entities $2,390,000 $1,980,000 $409,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-43Do Not Cite or QuoteSC11138Table A.9. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $144,000 $119,000 $25,000Petrochemical manufacturing20-99 $39,000 $32,000 $7,000100-499 $38,000 $31,000 $6,000500+ $248,000 $206,000 $42,000Totals All entities $468,000 $388,000 $80,000Bakeries 3118 < 20 $5,350,000 $4,440,000 $917,00020-99 $999,000 $828,000 $171,000100-499 $298,000 $247,000 $51,000500+ $414,000 $343,000 $71,000Totals All entities $7,060,000 $5,850,000 $1,210,000311 < 20 $5,190,000 $4,300,000 $889,00020-99 $1,850,000 $1,540,000 $317,000Food manufacturing otherthan bakeries100-499 $1,010,000 $837,000 $173,000500+ $2,110,000 $1,750,000 $362,000Totals All entities $10,200,000 $8,430,000 $1,740,000Breweries 31212 < 20 $392,000 $325,000 $67,00020-99 $131,000 $109,000 $23,000100-499 $32,000 $27,000 $6,000500+ $43,000 $36,000 $7,000Totals All entities $598,000 $496,000 $102,000Soft drink manufacturing 312111 < 20 $177,000 $147,000 $30,00020-99 $99,000 $82,000 $17,000100-499 $98,000 $81,000 $17,000500+ $365,000 $302,000 $62,000Totals All entities $739,000 $613,000 $127,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-44Do Not Cite or QuoteSC11138Table A.9. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $243,000 $201,000 $42,00020-99 $51,000 $42,000 $9,000100-499 $15,000 $12,000 $3,000500+ $74,000 $61,000 $13,000Totals All entities $382,000 $317,000 $65,000Ice manufacturing 312113 < 20 $372,000 $308,000 $64,00020-99 $55,000 $46,000 $9,000100-499 $11,000 $9,000 $2,000500+ $52,000 $43,000 $9,000Totals All entities $491,000 $407,000 $84,000Ice rinks 713940 < 20 $219,000 $193,000 $26,00020-99 $39,000 $34,000 $5,000100-499 None None None500+ None None NoneTotals All entities $258,000 $227,000 $30,0006111 < 20 $96,000 $49,000 $46,000Elementary and secondaryschools20-99 $101,000 $52,000 $49,000100-499 $37,000 $19,000 $18,000500+ $10,000 $5,000 $5,000Totals All entities $244,000 $126,000 $118,0006112, 6113 < 20 $14,000 $7,000 $7,00020-99 $7,000 $4,000 $3,000Junior colleges, colleges anduniversities100-499 $10,000 $5,000 $5,000500+ $19,000 $10,000 $9,000Totals All entities $50,000 $26,000 $24,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-45Do Not Cite or QuoteSC11138Table A.9. Regulatory impact by sector and size category for Option 3 (5% and 30%)under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $15,000 $8,000 $7,00020-99 $12,000 $6,000 $6,000100-499 $40,000 $21,000 $19,000500+ $109,000 $56,000 $53,000Totals All entities $177,000 $91,000 $85,000Other, not included above All entities $7,060,000 $3,640,000 $3,420,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-46Do Not Cite or QuoteSC11138Table A.10. Regulatory impact by sector and size category for Option 4 (10% and 10%) under Scenario 2Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $32,700,000 $7,400,000 $25,300,000Supermarkets and grocerystores20-99 $9,330,000 $2,080,000 $7,260,000100-499 $5,010,000 $1,100,000 $3,900,000500+ $37,600,000 $8,210,000 $29,400,000Totals All entities $84,600,000 $18,800,000 $65,800,000Convenience stores 445120 < 20 $270,000 $86,000 $183,00020-99 $12,000 $4,000 $8,000100-499 $7,000 $2,000 $5,000500+ $34,000 $11,000 $23,000Totals All entities $322,000 $103,000 $219,000447110 < 20 $339,000 $108,000 $230,000Gas station conveniencestores20-99 $85,000 $27,000 $58,000100-499 $102,000 $33,000 $69,000500+ $271,000 $87,000 $185,000Totals All entities $797,000 $255,000 $542,00045291 < 20 $260,000 $61,000 $199,00020-99 $16,000 $4,000 $12,000Warehouse and clubsupercenters100-499 $41,000 $9,000 $31,000500+ $2,940,000 $684,000 $2,250,000Totals All entities $3,250,000 $758,000 $2,490,00049312 < 20 $609,000 $142,000 $467,00020-99 $296,000 $69,000 $227,000Refrigerated warehouse andstorage100-499 $139,000 $32,000 $107,000500+ $363,000 $85,000 $278,000Totals All entities $1,410,000 $328,000 $1,080,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-47Do Not Cite or QuoteSC11138Table A.10. Regulatory impact by sector and size category for Option 4 (10% and 10%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $419,000 $98,000 $322,000Refrigerated warehouse farmproducts20-99 $113,000 $26,000 $87,000100-499 $106,000 $25,000 $81,000500+ $144,000 $33,000 $110,000Totals All entities $782,000 $182,000 $600,000Office building managers 531312 < 20 $81,000 $26,000 $55,00020-99 $11,000 $4,000 $8,000100-499 $5,000 $2,000 $4,000500+ $14,000 $5,000 $10,000Totals All entities $112,000 $36,000 $76,000Lodging 72 < 20 $6,480,000 $2,070,000 $4,410,00020-99 $1,670,000 $536,000 $1,140,000100-499 $654,000 $209,000 $445,000500+ $1,830,000 $585,000 $1,240,000Totals All entities $10,600,000 $3,400,000 $7,240,000Chemical manufacturing 325 < 20 $13,900,000 $5,800,000 $8,080,00020-99 $5,050,000 $2,110,000 $2,940,000100-499 $3,040,000 $1,270,000 $1,770,000500+ $8,130,000 $3,400,000 $4,730,000Totals All entities $30,100,000 $12,600,000 $17,500,0003254 < 20 $2,170,000 $906,000 $1,260,00020-99 $822,000 $343,000 $478,000Pharmaceuticalmanufacturing100-499 $553,000 $231,000 $322,000500+ $1,190,000 $497,000 $692,000Totals All entities $4,730,000 $1,980,000 $2,750,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-48Do Not Cite or QuoteSC11138Table A.10. Regulatory impact by sector and size category for Option 4 (10% and 10%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $285,000 $119,000 $166,000Petrochemical manufacturing20-99 $77,000 $32,000 $45,000100-499 $74,000 $31,000 $43,000500+ $492,000 $206,000 $286,000Totals All entities $928,000 $388,000 $540,000Bakeries 3118 < 20 $10,600,000 $4,440,000 $6,180,00020-99 $1,980,000 $828,000 $1,150,000100-499 $592,000 $247,000 $345,000500+ $822,000 $343,000 $478,000Totals All entities $14,000,000 $5,850,000 $8,160,000311 < 20 $10,300,000 $4,300,000 $6,000,00020-99 $3,680,000 $1,540,000 $2,140,000Food manufacturing otherthan bakeries100-499 $2,000,000 $837,000 $1,170,000500+ $4,190,000 $1,750,000 $2,440,000Totals All entities $20,200,000 $8,430,000 $11,700,000Breweries 31212 < 20 $777,000 $325,000 $452,00020-99 $261,000 $109,000 $152,000100-499 $64,000 $27,000 $37,000500+ $85,000 $36,000 $50,000Totals All entities $1,190,000 $496,000 $691,000Soft drink manufacturing 312111 < 20 $351,000 $147,000 $204,00020-99 $197,000 $82,000 $115,000100-499 $194,000 $81,000 $113,000500+ $724,000 $302,000 $421,000Totals All entities $1,470,000 $613,000 $853,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-49Do Not Cite or QuoteSC11138Table A.10. Regulatory impact by sector and size category for Option 4 (10% and 10%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $481,000 $201,000 $280,00020-99 $101,000 $42,000 $59,000100-499 $29,000 $12,000 $17,000500+ $146,000 $61,000 $85,000Totals All entities $758,000 $317,000 $441,000Ice manufacturing 312113 < 20 $738,000 $308,000 $430,00020-99 $110,000 $46,000 $64,000100-499 $22,000 $9,000 $13,000500+ $104,000 $43,000 $60,000Totals All entities $974,000 $407,000 $567,000Ice rinks 713940 < 20 $448,000 $193,000 $255,00020-99 $79,000 $34,000 $45,000100-499 None None None500+ None None NoneTotals All entities $527,000 $227,000 $300,0006111 < 20 $155,000 $49,000 $105,000Elementary and secondaryschools20-99 $163,000 $52,000 $111,000100-499 $60,000 $19,000 $41,000500+ $16,000 $5,000 $11,000Totals All entities $393,000 $126,000 $268,0006112, 6113 < 20 $23,000 $7,000 $16,00020-99 $11,000 $4,000 $7,000Junior colleges, colleges anduniversities100-499 $16,000 $5,000 $11,000500+ $31,000 $10,000 $21,000Totals All entities $81,000 $26,000 $55,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-50Do Not Cite or QuoteSC11138Table A.10. Regulatory impact by sector and size category for Option 4 (10% and 10%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $25,000 $8,000 $17,00020-99 $19,000 $6,000 $13,000100-499 $65,000 $21,000 $44,000500+ $176,000 $56,000 $120,000Totals All entities $285,000 $91,000 $194,000Other, not included above All entities $11,400,000 $3,640,000 $7,750,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-51Do Not Cite or QuoteSC11138Table A.11. Regulatory impact by sector and size category for Option 5 (10% and 20%) under Scenario 2Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $16,100,000 $7,400,000 $8,720,000Supermarkets and grocerystores20-99 $4,570,000 $2,080,000 $2,500,000100-499 $2,440,000 $1,100,000 $1,340,000500+ $18,300,000 $8,210,000 $10,100,000Totals All entities $41,400,000 $18,800,000 $22,600,000Convenience stores 445120 < 20 $153,000 $86,000 $67,00020-99 $7,000 $4,000 $3,000100-499 $4,000 $2,000 $2,000500+ $19,000 $11,000 $8,000Totals All entities $183,000 $103,000 $80,000447110 < 20 $193,000 $108,000 $84,000Gas station conveniencestores20-99 $48,000 $27,000 $21,000100-499 $58,000 $33,000 $25,000500+ $154,000 $87,000 $68,000Totals All entities $453,000 $255,000 $198,00045291 < 20 $129,000 $61,000 $69,000Warehouse and clubsupercenters20-99 $8,000 $4,000 $4,000100-499 $20,000 $9,000 $11,000500+ $1,460,000 $684,000 $779,000Totals All entities $1,620,000 $758,000 $863,00049312 < 20 $304,000 $142,000 $162,000Refrigerated warehouse andstorage20-99 $148,000 $69,000 $79,000100-499 $69,000 $32,000 $37,000500+ $181,000 $85,000 $96,000Totals All entities $702,000 $328,000 $374,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-52Do Not Cite or QuoteSC11138Table A.11. Regulatory impact by sector and size category for Option 5 (10% and 20%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $209,000 $98,000 $111,000Refrigerated warehouse farmproducts20-99 $56,000 $26,000 $30,000100-499 $53,000 $25,000 $28,000500+ $72,000 $33,000 $38,000Totals All entities $390,000 $182,000 $208,000Office building managers 531312 < 20 $46,000 $26,000 $20,00020-99 $6,000 $4,000 $3,000100-499 $3,000 $2,000 $1,000500+ $8,000 $5,000 $4,000Totals All entities $64,000 $36,000 $28,000Lodging 72 < 20 $3,690,000 $2,070,000 $1,610,00020-99 $952,000 $536,000 $417,000100-499 $372,000 $209,000 $163,000500+ $1,040,000 $585,000 $455,000Totals All entities $6,050,000 $3,400,000 $2,650,000Chemical manufacturing 325 < 20 $7,320,000 $5,800,000 $1,520,00020-99 $2,660,000 $2,110,000 $552,000100-499 $1,600,000 $1,270,000 $332,000500+ $4,280,000 $3,400,000 $888,000Totals All entities $15,900,000 $12,600,000 $3,290,0003254 < 20 $1,140,000 $906,000 $237,000Pharmaceuticalmanufacturing20-99 $433,000 $343,000 $90,000100-499 $292,000 $231,000 $60,000500+ $627,000 $497,000 $130,000Totals All entities $2,490,000 $1,980,000 $517,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-53Do Not Cite or QuoteSC11138Table A.11. Regulatory impact by sector and size category for Option 5 (10% and 20%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $150,000 $119,000 $31,000Petrochemical manufacturing20-99 $41,000 $32,000 $8,000100-499 $39,000 $31,000 $8,000500+ $259,000 $206,000 $54,000Totals All entities $489,000 $388,000 $101,000Bakeries 3118 < 20 $5,600,000 $4,440,000 $1,160,00020-99 $1,040,000 $828,000 $216,000100-499 $312,000 $247,000 $65,000500+ $433,000 $343,000 $90,000Totals All entities $7,390,000 $5,850,000 $1,530,000311 < 20 $5,430,000 $4,300,000 $1,130,000Food manufacturing otherthan bakeries20-99 $1,940,000 $1,540,000 $402,000100-499 $1,060,000 $837,000 $219,000500+ $2,210,000 $1,750,000 $457,000Totals All entities $10,600,000 $8,430,000 $2,200,000Breweries 31212 < 20 $409,000 $325,000 $85,00020-99 $137,000 $109,000 $28,000100-499 $34,000 $27,000 $7,000500+ $45,000 $36,000 $9,000Totals All entities $625,000 $496,000 $130,000Soft drink manufacturing 312111 < 20 $185,000 $147,000 $38,00020-99 $104,000 $82,000 $21,000100-499 $102,000 $81,000 $21,000500+ $381,000 $302,000 $79,000Totals All entities $773,000 $613,000 $160,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-54Do Not Cite or QuoteSC11138Table A.11. Regulatory impact by sector and size category for Option 5 (10% and 20%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $254,000 $201,000 $53,00020-99 $53,000 $42,000 $11,000100-499 $15,000 $12,000 $3,000500+ $77,000 $61,000 $16,000Totals All entities $400,000 $317,000 $83,000Ice manufacturing 312113 < 20 $389,000 $308,000 $81,00020-99 $58,000 $46,000 $12,000100-499 $12,000 $9,000 $2,000500+ $55,000 $43,000 $11,000Totals All entities $513,000 $407,000 $106,000Ice rinks 713940 < 20 $234,000 $193,000 $41,00020-99 $41,000 $34,000 $7,000100-499 None None None500+ None None NoneTotals All entities $275,000 $227,000 $48,0006111 < 20 $88,000 $49,000 $39,000Elementary and secondaryschools20-99 $92,000 $52,000 $40,000100-499 $34,000 $19,000 $15,000500+ $9,000 $5,000 $4,000Totals All entities $224,000 $126,000 $98,0006112, 6113 < 20 $13,000 $7,000 $6,00020-99 $6,000 $4,000 $3,000Junior colleges, colleges anduniversities100-499 $9,000 $5,000 $4,000500+ $18,000 $10,000 $8,000Totals All entities $46,000 $26,000 $20,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-55Do Not Cite or QuoteSC11138Table A.11. Regulatory impact by sector and size category for Option 5 (10% and 20%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $14,000 $8,000 $6,00020-99 $11,000 $6,000 $5,000100-499 $37,000 $21,000 $16,000500+ $100,000 $56,000 $44,000Totals All entities $162,000 $91,000 $71,000Other, not included above All entities $6,480,000 $3,640,000 $2,830,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attachment (Draft, 10/23/2009)Page A-56Do Not Cite or QuoteSC11138Table A.12. Regulatory impact by sector and size category for Option 6 (10% and 30%) under Scenario 2Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule445110 < 20 $13,600,000 $7,400,000 $6,220,000Supermarkets and grocerystores20-99 $3,830,000 $2,080,000 $1,750,000100-499 $2,030,000 $1,100,000 $932,000500+ $15,200,000 $8,210,000 $6,960,000Totals All entities $34,700,000 $18,800,000 $15,900,000Convenience stores 445120 < 20 $153,000 $86,000 $67,00020-99 $7,000 $4,000 $3,000100-499 $4,000 $2,000 $2,000500+ $19,000 $11,000 $8,000Totals All entities $183,000 $103,000 $80,000447110 < 20 $193,000 $108,000 $84,000Gas station conveniencestores20-99 $48,000 $27,000 $21,000100-499 $58,000 $33,000 $25,000500+ $154,000 $87,000 $68,000Totals All entities $453,000 $255,000 $198,00045291 < 20 $111,000 $61,000 $50,000Warehouse and clubsupercenters20-99 $7,000 $4,000 $3,000100-499 $17,000 $9,000 $8,000500+ $1,250,000 $684,000 $571,000Totals All entities $1,390,000 $758,000 $632,00049312 < 20 $261,000 $142,000 $118,000Refrigerated warehouse andstorage20-99 $127,000 $69,000 $58,000100-499 $60,000 $32,000 $27,000500+ $155,000 $85,000 $71,000Totals All entities $602,000 $328,000 $274,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-57Do Not Cite or QuoteSC11138Table A.12. Regulatory impact by sector and size category for Option 6 (10% and 30%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule49313 < 20 $179,000 $98,000 $82,000Refrigerated warehouse farmproducts20-99 $48,000 $26,000 $22,000100-499 $45,000 $25,000 $21,000500+ $61,000 $33,000 $28,000Totals All entities $334,000 $182,000 $152,000Office building managers 531312 < 20 $46,000 $26,000 $20,00020-99 $6,000 $4,000 $3,000100-499 $3,000 $2,000 $1,000500+ $8,000 $5,000 $4,000Totals All entities $64,000 $36,000 $28,000Lodging 72 < 20 $3,690,000 $2,070,000 $1,610,00020-99 $952,000 $536,000 $417,000100-499 $372,000 $209,000 $163,000500+ $1,040,000 $585,000 $455,000Totals All entities $6,050,000 $3,400,000 $2,650,000Chemical manufacturing 325 < 20 $6,830,000 $5,800,000 $1,030,00020-99 $2,490,000 $2,110,000 $375,000100-499 $1,500,000 $1,270,000 $226,000500+ $4,000,000 $3,400,000 $604,000Totals All entities $14,800,000 $12,600,000 $2,240,0003254 < 20 $1,070,000 $906,000 $161,000Pharmaceuticalmanufacturing20-99 $405,000 $343,000 $61,000100-499 $272,000 $231,000 $41,000500+ $585,000 $497,000 $88,000Totals All entities $2,330,000 $1,980,000 $352,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-58Do Not Cite or QuoteSC11138Table A.12. Regulatory impact by sector and size category for Option 6 (10% and 30%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed rule324110 < 20 $140,000 $119,000 $21,000Petrochemical manufacturing20-99 $38,000 $32,000 $6,000100-499 $37,000 $31,000 $6,000500+ $242,000 $206,000 $37,000Totals All entities $457,000 $388,000 $69,000Bakeries 3118 < 20 $5,220,000 $4,440,000 $789,00020-99 $975,000 $828,000 $147,000100-499 $291,000 $247,000 $44,000500+ $405,000 $343,000 $61,000Totals All entities $6,900,000 $5,850,000 $1,040,000311 < 20 $5,070,000 $4,300,000 $765,00020-99 $1,810,000 $1,540,000 $273,000Food manufacturing otherthan bakeries100-499 $986,000 $837,000 $149,000500+ $2,060,000 $1,750,000 $311,000Totals All entities $9,930,000 $8,430,000 $1,500,000Breweries 31212 < 20 $382,000 $325,000 $58,00020-99 $128,000 $109,000 $19,000100-499 $31,000 $27,000 $5,000500+ $42,000 $36,000 $6,000Totals All entities $584,000 $496,000 $88,000Soft drink manufacturing 312111 < 20 $173,000 $147,000 $26,00020-99 $97,000 $82,000 $15,000100-499 $96,000 $81,000 $14,000500+ $356,000 $302,000 $54,000Totals All entities $721,000 $613,000 $109,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-59Do Not Cite or QuoteSC11138Table A.12. Regulatory impact by sector and size category for Option 6 (10% and 30%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleBottled water manufacturing 312112 < 20 $237,000 $201,000 $36,00020-99 $50,000 $42,000 $8,000100-499 $14,000 $12,000 $2,000500+ $72,000 $61,000 $11,000Totals All entities $373,000 $317,000 $56,000Ice manufacturing 312113 < 20 $363,000 $308,000 $55,00020-99 $54,000 $46,000 $8,000100-499 $11,000 $9,000 $2,000500+ $51,000 $43,000 $8,000Totals All entities $479,000 $407,000 $72,000Ice rinks 713940 < 20 $216,000 $193,000 $23,00020-99 $38,000 $34,000 $4,000100-499 None None None500+ None None NoneTotals All entities $254,000 $227,000 $27,0006111 < 20 $88,000 $49,000 $39,000Elementary and secondaryschools20-99 $92,000 $52,000 $40,000100-499 $34,000 $19,000 $15,000500+ $9,000 $5,000 $4,000Totals All entities $224,000 $126,000 $98,0006112, 6113 < 20 $13,000 $7,000 $6,00020-99 $6,000 $4,000 $3,000Junior colleges, colleges anduniversities100-499 $9,000 $5,000 $4,000500+ $18,000 $10,000 $8,000Totals All entities $46,000 $26,000 $20,000Stratus Consulting Attachment (Draft, 10/23/2009)Page A-60Do Not Cite or QuoteSC11138Table A.12. Regulatory impact by sector and size category for Option 6 (10% and 30%) under Scenario 2 (cont.)Sector NAICS code Number of employeesProposed expectedcost of complianceper size categoryBaseline expectedcost of complianceper size categoryIncremental cost of theproposed ruleHospitals 611 < 20 $14,000 $8,000 $6,00020-99 $11,000 $6,000 $5,000100-499 $37,000 $21,000 $16,000500+ $100,000 $56,000 $44,000Totals All entities $162,000 $91,000 $71,000Other, not included above All entities $6,480,000 $3,640,000 $2,830,000Note: Totals may vary slightly due to rounding.Stratus Consulting Attach ment (Draft, 10/23/2009)

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### Table A.13. Cost effectiveness of options for proposed regulation under Scenario 1 ($/GWP-weighted tonne)

Equipment Allowable

annual

leak rate Cost (million dollars) Benefit (MMTCE) Cost

effectiveness

($/MTCE)

CC 10% $35.8 0.5 $68

5% $41.5 0.6 $73

CR 30% $32.9 0.8 $40

20% $45.8 1.2 $39

10% $62.5 1.5 $43

IPR 30% $17.8 0.1 $161

20% $23.7 0.3 $78

10% $31.6 0.5 $68



### Table A.14. Cost effectiveness of options for proposed regulation under Scenario 2 ($/GWP-weighted tonne)

Equipment Allowable

annual

leak rate Cost (million dollars) Benefit (MMTCE) Cost

effectiveness

($/MTCE)

CC 10% $13.1 0.5 $28

5% $15.8 0.5 $31

CR 30% $14.2 0.8 $19

20% $21.3 1.1 $19

10% $30.3 1.4 $22

IPR 30% $1.2 0.0 $73

20% $3.8 0.2 $18

10% $7.1 0.4 $20Stratus Consulting Attach ment (Draft, 10/23/2009)

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### Table A.15. Incremental cost effectiv eness of options for proposed regulation under Scenario 1

Equipment Allowable

annual leak

rate Incremental cost (million dollars) Benefit (MMTCE) Incremental cost

effectiveness

($/MTCE)

CC 10% $41.5 0.5 $79

5% $5.7 0.0 $138

CR 30% $32.9 0.8 $40

20% $12.9 0.4 $37

10% $16.7 0.3 $59

IPR 30% $17.8 0.1 $161

20% $5.9 0.2 $30

10% $7.9 0.2 $49



### Table A.16. Incremental cost effectiv eness of options for proposed regulation under Scenario 2

Equipment Allowable

annual leak

rate Incremental cost (million dollars) Benefit (MMTCE) Incremental cost

effectiveness

($/MTCE)

CC 10% $15.8 0.5 $33

5% $2.7 0.0 $66

CR 30% $14.2 0.8 $19

20% $7.2 0.3 $21

10% $9.0 0.3 $33

IPR 30% $1.2 0.0 $73

20% $2.6 0.2 $14

10% $3.3 0.2 $21Stratus Consulting Attach ment (Draft, 10/23/2009)

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### Table A.17. Cost effectiveness of options for proposed regulation under Scenario 1

Option Cost (million dollars) Benefit (MMTCE) Cost

effectiveness

($/MTCE)

1 (5% and 10%) $135.6 2.5 $54

2 (5% and 20%) $111.0 2.1 $54

3 (5% and 30%) $92.2 1.5 $61

4 (10% and 10%) $129.9 2.5 $53

5 (10% and 20%) $105.3 2.0 $52

6 (10% and 30%) $86.5 1.5 $59



### Table A.18. Cost effectiveness of options for proposed regulation under Scenario 2

Option Cost (million dollars) Benefit (MMTCE) Cost

effectiveness

($/MTCE)

1 (5% and 10%) $53.2 2.3 $24

2 (5% and 20%) $40.9 1.8 $22

3 (5% and 30%) $31.1 1.3 $24

4 (10% and 10%) $50.5 2.2 $23

5 (10% and 20%) $38.2 1.8 $21

6 (10% and 30%) $28.5 1.2 $23

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