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United States Environmental ProtectionAgencyOffice of Water (4503F)Washington, DC 20460http://www.epa.gov/water/EPA 841-F-01-004August 1, 2001
Fact Sheet on "The National Costs of the Total Maximum Daily Load Program (Draft Report)"
**Background**

"The National Costs of the Total Maximum Daily Load Program (Draft Report)" responds to Congress' request, in connection with EPA's 2001 appropriation, for information on the costs of developing and implementing Total Maximum Daily Loads (TMDLs).  TMDLs are calculations of how much pollutant load reduction is needed to restore polluted waters to standards adopted for those waters and allocations of those reductions to sources of the pollutant.  In July 2000, EPA estimated costs of changes to the TMDL program that were included in a rule issued by the Agency.  Those changes, which affected only the costs to states and territories (herein after referred to as "states") to develop TMDLs, were estimated to cost approximately $23 million annually.  The Draft Report being issued for comment looks at all costs to develop TMDLs, including the additional provisions of the July 2000 rule, and the costs to sources of pollutants to implement the TMDLs.

**Key Findings**

*1)  The costs to pollutant sources for implementing the TMDL program are expected to be between approximately $1 billion and $3.4 billion per year.  The costs may be higher or lower depending on the extent to which States choose to allocate more of the reductions to sources with lower control costs versus allocating an equal percentage reductions to sources regardless of costs.*
The costs to implement ~36,000 TMDLs for ~20,000 impaired waters identified by states in 1998 are estimated to be between $900 million and $3.2 billion per year, assuming the implementation of TMDLs using cost-effective reductions among all sources of the impairments, including trading between point and nonpoint sources.
In the event that the impaired waters were addressed by requiring all sources to adopt additional pollution controls, costs might rise to as high as $1.9 billion to $4.3 billion per year.  While unlikely, this  scenario could occur if states simply tighten discharge permits and other requirements through a uniform and inflexible approach regardless of the individual contributions of different sources or the relative costs of control among sources.  This scenario could also result in pollution reductions greater than those needed to bring the waterbody into attainment with standards.
*2) The total average annual costs to states and EPA of developing TMDLs, over the next 15 years, are estimated to be between $63-69 million per year, nationwide.*

It will cost a total of approximately $1 billion over 10 to 15 years to develop the 36,000 TMDLs in the over 20,000 waterbodies known to be impaired.
The average cost of developing the TMDLs for each of the roughly 20,000 impaired waterbodies is estimated to be about $52,000, with a range of costs between $26,000 and over $500,000.
EPA expects that states will increase the number of TMDLs developed each year, spending about $30 million in the year 2000, $43-48 million in 2002, and about $68-75 million starting in 2005 and each year thereafter until 2015.
The costs of TMDL development cited in the Draft Report are based on requirements of the existing TMDL program as well as new provisions added in July 2000, but not yet implemented.   The costs of the additional requirements associated with the July 2000 regulations represent less than 10% of the total cost estimated in this Report.  Congress precluded EPA from implementing the July 2000 rule before October, 2001.  EPA has announced it intends to further delay implementation by 18 months to consider changes to the July 2000 rule.
*3) The cost of water quality monitoring to support the development of TMDLs is expected to be approximately $17 million per year.*

EPA made a preliminary estimate of additional monitoring needed for detailed TMDL assessments from a limited survey of state experiences to date.  This estimate needs to be revised as states gain more experience with TMDL development.
*4)  Clustering TMDLs through a watershed approach can significantly reduce the costs of developing TMDLs.*

Eighty percent of TMDLs occur within a watershed containing other TMDLs for the same pollutant and could be developed jointly. Several states are currently clustering or bundling TMDLs on a watershed basis, realizing efficiencies.
*5)  EPA provides substantial funding to the states for management of the full range of Clean Water Act programs.*

Using the high end of the range of costs for core TMDL development, for TMDL- related monitoring, and accepting the potential for high cost TMDLs of 10-20%,  the total TMDL development costs are expected to be as much as  $65-74 million in 2002, rising to about  $92-107 million in 2005 and on out to 2015, with some variation in costs from state-to-state.
In FY 2001, the resources available to states to develop TMDLs include:

Funding Under Section 106 Water Program Grants B  This core water program implementation grant funding increased from $115 million in FY 2000 to $170 million in FY 2001, with an indication from Congress that the $55 million increase was associated with the TMDL program.
Funding Under Section 319 Nonpoint Pollution Control Grants B This funding for implementation of state nonpoint pollution control programs increased from $200 million in FY 2000 to $237 million in FY 2001.  EPA has provided that states may use up to 20% of this funding (i.e. about $47 million) to develop TMDLs.
Water Quality Planning Grants B  Under section 604(b)(3) of the Clean Water Act, states may use up to one percent (or $100,000, whichever is greater) of grant funds for planning and related purposes, including development of TMDLs.  In FY 2001, the total funding available under this authority was $14 million.
In FY 2001, EPA expects to invest about $21.7 million in management of the current TMDL program.  About $10 million of this funding is available to EPA Regions as contract funds to support development of TMDLs at the request of a state or where EPA is required to develop a TMDL to "backstop" a state. 
The President's budget provided for these funding levels to be maintained in FY 2002.
For a copy of the Draft Cost Study and other information related to TMDLs see EPA's TMDL homepage http://www.epa.gov/owow/tmdl/.
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