0223-00-008\Auto Refinishing Capital & Annual Cost 1

MEMORANDUM

TO: Warren Johnson, U.S. EPA, Sectors Policies and P rograms Division/Natural Resources and Commerce Group

FROM: Brandin McDonough and Brian Palmer, Eastern Resea rch Group, Inc. (ERG)

DATE: May 18, 2007

SUBJECT: Estimate of Capital and Annual Costs For Autom otive Refinishing Operations and Miscellaneous Surface Coating Operations Subject to the Pr oposed National Emission Standards for Hazardous Air Pollutants for Pai nt Stripping and Miscellaneous Surface Coating Operations at Area Sources

This memo documents the procedures we used to estimate co sts for all surface coating area sources that would be regulated under the Miscellaneous Surface Coating Area Source

National Emission Standards for Hazardous Air Pollutants (NESHAP). We estimate that the controls required to comply with the proposed standards f or surface coating operations at about 36,000 automotive refinishing shops and 800 miscellaneous plastic and metal part surface coating operations would have no net annual costs to thos e surface coating operations. The initial cost of complying with the proposed standards would be off-set and recovered over time by cost savings as a result of more efficient use of la bor and materials by surface coating operations.

Initial and annualized costs were estimated for the foll owing proposed rule requirements:

• Completing painter training to properly set up and use high-volu me low-pressure (HVLP) spray guns to increase transfer efficiency at all by an estimated 94,533 painters.

• Upgrading to HVLP spray guns at 208 sources with the purchase of an average of 3 guns per source (624 spray guns, total).

• Installing enclosed and automated gun washers at 5,214 sources.

• Complying with equipment specifications or minimum effic iency standards for paint spray booth exhaust filters.0223-00-008\Auto Refinishing Capital & Annual Cost 2

Table 1 summarizes the initial cost and annualized cost i mpacts of the miscellaneous surface coating standards. As explained in the following sections, we estimate that the proposed standards for surface coating operations will have no net annual cost after cost savings are taken

into account.

Table 1. National Initial and Annualized Costs of Miscellaneous Surface Coating Area

Source Requirements. All costs are in millions (MM) of dollars.

Cost Item Number required Capital Cost ($MM) Annualized Cost ($MM)

Painter Training 94,533 $94.5 $18.9

HVLP guns 624 $0.44 $0.06 Gun washers 5,214 $9.4 $1.33

Total $104.3 $20.29

The cost of installing and operating spray booths are not in cluded in the estimated total costs impacts for this rule because spray booths are previ ously required for compliance with existing OSHA standards (29 CFR 1910.94(c) and 1910.107(b)). Some surfa ce coating sources may need to replace their current filters for ones with higher paint overspray capture efficiency, but the higher efficiency filters are readily availabl e and will not result in an additional cost.

Assumptions and Procedure for Estimating Painter Training Costs To estimate painter training costs, we developed four categori es of model shops. Three model shops represented automotive refinish shops and one mo del shop represented a miscellaneous surface coating operation. The three model automotive refinish shops were based on information obtained in the 2003 U.S. Census County Business Patterns and through EPA site visits, and are summarized in

Table 2. 1 These models included the total number of employees and n umber of painters.

1 Memorandum. To: Kim Teal, U.S. EPA, Sector Policies and Programs Division/Natural Resources and Commerce Group (E143-03). From: Brian Palmer, Eastern Research Gro up, Inc. July 17, 2006. Development of Model Shops for Sources Subject to the National Emission Standards f or Hazardous Air Pollutants (NESHAP) for Motor Vehicles and Mobile Equipment Refinishing Operations for Area Sour ces.0223-00-008\Auto Refinishing Capital & Annual Cost 3 Table 2. Summary of Automotive Refinishing Model Shop Paramete rs

Shop Size Small Medium Large Number of Vehicles Refinished Per Month 40 100 200 Number of employees 1

- 9 10

- 19 20 or more Estimated Number of Shops (from County Business Patterns) 28,351 5,490 1, 9 14

Total Number of Employees (estimated from County Business Patterns) 107,674 79,605 74,349

Average number of employees per shop 3.8 14.5 39.4 Number of Painters Per Shop 2 4 7 Total Number of Painters Needing Training 56,702 21,960 13,398

We estimated the number of painters for the three size s of auto shops based on observations made during EPA site visits. Table 3 presents the number of vehicles per month and the number of painters at each of the sites visited by EPA. The sites with very low numbers of vehicles (5 or fewer per month) were either custom re storation shops or mobile equipment repair shops.

Table 3. Vehicle and Painter Information Collected During E PA Site Visits

Name and Location Vehicles per Month No. of

Painters Advanced Restoration and Autobody, Sacramento, CA 1 1 The Finish Line Restoration Services, Inc., Monrovia, CA 1 1 Durham School District Transportation Department Garage, Durham, NC 3 2 NC DOT Maintenance Garage, Raleigh, NC 5 1 Gemini Autobody, Cedar Falls, IA 8 1 Fulton Autobody, Sacramento, CA 15 1 McJack’s Corvette

, Santa Ana, CA 20 1 Dale Bright Auto Service

, Chino, CA 30 1 Walt Stickel Body and Frame Shop, Inc., Sacramento, CA 45 2 Cherry Auto Body, Chino, CA 60 2 Coffman's Body Shop, Cedar Falls, IA 72 4 Niello Collision Service

, Sacramento, CA 90 3 California Auto Body

, Sacramento, CA 100 4 Maaco Sacramento, CA 120 2 Zimmerman Ford , Cedar Rapids, IA 150 4 Bertolucci’s Body and Fender Shop, Inc., Sacramento, CA 200 5 Falconi's Collision Center, Las Vegas, NV 280 5 Deery Brothers Collision Center, Cedar Falls, IA 300 4 Seidner’s Collision Center

, Duarte, CA 310 9

Based on the site visit information and contacts with i ndustry, we estimated that a small shop (40 cars per month), would have two painters. For a m edium shop (100 cars per month),0223-00-008\Auto Refinishing Capital & Annual Cost 4

we estimated four painters, and for a large shop (200 cars per month) we estimated seven painters. ERG contacted a coating vendor, Robert Blair of Finishm aster Automotive and Industrial Paint, who is a former auto refinisher and he concurred w ith our model shop estimates and observations for the number of painters at small and med ium shops. 2 He suggested that the number of painters for most of the large shops that we visited was probably too low because it only included the journeyman (finish) painters and did not i nclude the painters that performed the priming and jamming, also known as prep painters. He conf irmed that a shop servicing 300 cars per month would have about nine painters, total. The refore, for the large model shop, we estimated seven painters because it is the midpoint betw een the number of painters for a medium shop (100 cars per month) and the confirmed number of painte rs for a shop painting 300 cars visited during site visits. Since the proposed rule would requ ire both prep and journeyman painters to receive training, we included both in the total number of painters. The model miscellaneous surface coating shop was developed from survey data collected from miscellaneous metal parts and miscellaneous plasti c parts surface coating operations. The area source surface coating facilities reported an avera ge of three coating scenarios. We assumed that the miscellaneous surface coating model sho p would have three painters that would need training and three spray guns, one painter and spray gun pe r scenario. We estimated that 831 facilities were represented by the miscellaneous surfac e coating model shop, for a total of 2,463 painters who would need training. We estimated a training cost of $1,000 per painter for both au tomotive refinish painters and miscellaneous surface coating painters. This includes $360 tuition cost and $640 labor cost for 16 hours of training time at $40 per hour. These are ba sed on the I-CAR 16-hour refinishing course sequence that included “Refinishing Equipment and VOC R egulations,” “Surface Preparation and Masking,” and “Color Theory, Application, Tinting, and Blending.” 3 Since the training would be valid for a period of 5 years, t he annualized cost was assumed to be one-fifth of the initial training cost, to account for worker turnover and the need to

2 Telephone Call Record: Robert Blair, Field Sales Manage r, Finishmaster Automotive and Industrial Paints. March 2, 2007. 3 http://www.i-car.com/html_pages/training_programs/pricing .shtml . A the time these costs were first estimated by ERG in July 2006, costs were $90 per unit and each unit was e qual to 4 hours of instruction; 16 hours of instruction would cost $360 for 4 units.0223-00-008\Auto Refinishing Capital & Annual Cost 5

train new painters. The initial national cost to trai n 94,553 painters would be $94.5 million and the annual cost would be $18.9 million. However, we believe that the actual annual cost of tra ining to improve painter efficiency could be offset through reduced coating consumption and associ ated cost. Although the actual volume of coating use that can be reduced at each shop th rough training is difficult to estimate, it can be reduced substantially. Painter training programs t hat address increasing transfer efficiency, such as the Iowa Waste Reduction Center (IW RC) Spray Technique Analysis and Research (STAR®) program, have shown that the amount of coating sprayed per job can be reduced by 13 to 18 percent. 4 This increase in efficiency is expected to translate i nto reduced coating costs, but a one-to-one savings is not expected s ince, in some cases, a minimum amount of coating may still need to be mixed to achieve the corre ct color match and the excess coating will result in some coating becoming waste. It is important to note that these “untrained” operator s are not inexperienced painters. They often have many years of experience before they e nter these training programs. However, they have not been specifically trained in how to best set up and operate high efficiency spray equipment and to optimize their technique to maximize tran sfer efficiency and minimize coating consumption. Annual coating costs were estimated for each model shop b ased on information provided by Robert Blair of Finishmaster Automotive and Industria l Paint. 5 Mr. Blair provided the estimated coating costs for the following customer shops, which he felt are typical of many automotive refinish shops: Shop 1: 2 painters, 40 to 50 cars per month, $5,000 per month for coatings. Shop 2: 9 painters, 300 cars per month, $35,000 per month for coatings.

Mr. Blair felt that these two shops were indicative of the average coating cost for all likesized shops. Based on the information provided, we estima ted the average coating cost per car is about $110: $35,000/month ÷ 300 cars/month = $116/car $5,000/month ÷ 45 cars/month = $111/car.

4 www.iwrc.org/staruserqueries/avg_of_all_trainees.cfm (accessed on March 31, 2006) and http://www.star4d.org/database.cfm (accessed on July 17, 2006). 5 Telephone Call Record: Robert Blair, Field Sales Manage r, Finishmaster Automotive and Industrial Paints. March 2, 2007.0223-00-008\Auto Refinishing Capital & Annual Cost 6

The annual coating cost for the small (40 cars/month), m edium (100 cars/month), and large (200 cars/month) model shops was calculated using the relative number of cars per month

as follows: Small shops: ($110/car)(40 cars/month)(12 months) = $58,200/yr Medium shops: ($110/car)(100 cars/month)(12 months) = $132,000/yr Large shops: ($110/car)(200 cars/month)(12 months) = $264,000/yr

We estimated the annual coating savings that would be requi red to offset the training cost of $1,000 per painter in a single year. Since the proposed rule would allow a painter to use training completed in the last 5 years to satisfy the tra ining requirements and the training certification is valid for 5 years, we also estimated the annual coating savings that would be required to offset the training costs over a 5 year period. Table 4 shows the percent reductions of coating use and cost required to offset the training costs for both 1 year and 5 year payback periods for each of the three model shop types. If a shop were able to reduce annual coating use and costs by 5 percent, then the model shops would see a net cost savings in the first year, even afte r including the cost of training. These savings based on a 5 percent coating reduction are also presen ted in Table 4.

Table 4. Estimated Cost Savings Needed to Offset Training C osts in 1- and 5-Year Periods, and Estimated Net Cost Savings in 1 Year if Shops Reduce Coat ing Costs by 5 Percent

Shop Size Small Mediu m Large Number of Vehicles Refinished Per Month 40 100 200 Estimated Number of Painters 2 4 7 Estimated Training Cost per Shop $2,000 $4,000 $7,000 Annual Coating Cost $58,200 $132,000 $264,000 Reduction in coating use and cost required to recoup the training costs in 1 year. 3.4% 3.0% 2.7%

Reduction in coating use and cost required to recoup the training costs in 5 years. 0.7% 0.6% 0.5%

Coating cost savings at 5 percent reduction in annual coating cost $2,910 $6,600 $13,200

Net cost savings in 1 year after training cost at 5 percent reduction in annual coating cost $910 $2,600 $6,200

The coating reduction required to offset the cost of pain ter training in a single year, included in Table 4, was calculated by dividing the estimated cost of painter training by the estimated annual coating cost, for each model shop.0223-00-008\Auto Refinishing Capital & Annual Cost 7

Small shops: (2 painters * $1,000) ÷ $58,200 = 3.4 percent Medium shops: (4 painters * $1,000) ÷ $132,000 = 3.0 percent Large shops: (7 painters * $1,000) ÷ $81,000 = 2.7 percent

The coating reduction required to offset the cost of pai nter training over 5 years was calculated by simply dividing the reduction needed in a si ngle year by 5. All size model shops could recover their training costs in 1 year if the coati ng costs were reduced by at least 3.5 percent. We expect that most shops could reduce their cos ts by at least this amount, and could begin to see cost savings that exceed the cost of initial training in the first year after training is completed.

These estimates are consistent with estimates from the Iowa Waste Reduction Centers STAR® program, as reported by the EPA’s Design for the Envi ronment (DfE) program. 6 The STAR® program, in year 2000, estimated that a shop refinishi ng 15 cars per week (60 cars per month) that switched from conventional to HVLP spray guns could save $6,900 per year in coating costs. The same shops switching to HVLP and recei ving training to use more efficient spray techniques were estimated to save $13,000 per year. We co uld assume that the difference, $6,100/year, would be the savings from training alone at shops th at already use HVLP spray guns. This value ($6,100/year) is between the estimated cos t savings for the small and medium model shops, when we assume that coating costs were re duced by 5 percent. Although cost savings were not specifically estimated for miscellaneous surface coating shops, we expect that reduced coating consumption at these facilities would also be sufficient to offset the additional cost of painter training.

Assumptions and Procedure for Estimating HVLP Spray Gun C osts We have assumed that HVLP spray guns are the industry sta ndard for auto refinishing area sources and that only a substantial number of misc ellaneous surface coating facilities would need to purchase HVLP spray guns. We estimated that 25 perc ent of miscellaneous surface

6 http://www.epa.gov/dfe/pubs/auto/spraygun/spraygun.pdf United States Environmental Protection Agency. Design for the Environment, Auto Refinishing Shop Project. June 2000. “HVLP SPRAY GUNS: Cost-effective, environment-friendly technology.” EPA 744-F-00-004.0223-00-008\Auto Refinishing Capital & Annual Cost 8

coating area sources do not use HVLP spray guns, based on th e percentage of sources that did not report using these types of spray guns or an equivalen t, such as electrostatic spray guns. We

estimated that there are a total 831 miscellaneous surface coating area sources and an average of three coating scenarios per area source. The number o f area sources and the estimated percent needing to purchase HVLP spray guns is based on survey data co llected from area sources in response to the EPA surveys used to develop 40 CFR part 63, sub parts MMMM and PPPP. 7,8 We assumed that area sources would probably need to purchase multiple spray guns and assumed that one new spray gun would be purchased for each coating scenario reported by a source. We estimated that the total number of spray guns required is:

831 sources * 25% needing spray guns* 3 guns/source = 624 guns

The estimated cost for an industrial quality HVLP spray gu n and accessories (e.g., larger diameter hose, gauges, extra air caps) is $700, based on ven dor information. 9 The total capital cost to purchase 624 guns would be $0.44 million We estimated annualized costs using the standard method and factors presented in the EPA Air Pollution Control Cost Manual (EPA/452/B-02-001). T able 5 shows the cost elements used to estimate annualized capitol costs. Capital rec overy factors for all equipment were based on a 10-year economic life and 7 percent interest.

7 Memorandum. To: Kim Teal, U.S. EPA, Sectors Policies and Programs Division/Natural Resources and Commerce Group. From: Brian Palmer, Eastern Research Gr oup, Inc. July 19, 2006. Estimating the Number of Miscellaneous Surface Coating Area Sources for Which EPA Has Data. 8 Memorandum to: Kim Teal, U.S. EPA, Sectors Policies and Programs Division/Natural Resources and Commerce Group (E143-03). From: Brian Palmer, Eastern Research Group, Inc. July 19, 2006. Analysis of Generally Available Control Technology (GACT) Options for the Na tional Emission Standards for Hazardous Air Pollutants (NESHAP) for Miscellaneous Surface Coating Operations at Area Sources. 9 HVLP Spray Gun Costs – Model 248 Astro http://www.airmaxproducts.com/finishing_supplies.htm Low End HVLP Spray Gun: High Point http://www.spraygunworld.com/products/HP/Highpoint2.html Sata Jet 2000 HVLP Spray Gun: Model # SAT61168 http://search.cartserver.com/search/search.cgi?cartid=a6834&category=datapaint&maxhits=20&keywords=SAT61168 Compressed Air Hoses for HVLP – Costs http://www.1st-in-hvlp.com/compressed_air_hose.htm Sata Satajet 3000 HVLP Spray Gun: Model SAT133025 http://www.spraygunworld.com/products/SATA/SATA%20HVLP%20133025.htm DeVilbiss HVLP Spray Gun: Model DEVGTI620S - GTI2000 HVLP http://www.spraygunworld.com/products/DeVilbiss/DeVilbiss% 20DEVGTI620S.htm0223-00-008\Auto Refinishing Capital & Annual Cost 9 Table 5. Derivation of Net Annualized Cost

Capital Cost Elements Installed Cost A Annualized Capitol Cost Elements Equipment Economic Life n = 10 years Interest Rate i = 7 percent (0.07) Capital Recovery Factor B = i*(1 + i) n = 0.142 (1 + i) n -1 Annualized Capital Recovery Cost C = A*B

Using the capital recovery factor as derived above (10 ye ar life, 7 percent interest), the annualized capital cost for an HVLP gun is $700 × 0.142 = $100 per gun . We assumed that sources would have no additional insurance, tax, or other adm inistrative overhead costs for the spray guns since these were replacements for existing spr ay guns. Cost savings from improved transfer efficiency and reduced co ating usage were not estimated for the miscellaneous surface coating sources since we do not have coating cost data specific to these sources. However, based on the inform ation collected by the IWRC and summarized above with respect to painter training, we expec t that the cost savings compared to conventional spray guns would be sufficient to at least o ffset the annualized capital costs of purchasing HVLP or equivalent spray guns.

Assumptions and Procedure for Estimating Gun Washer Costs We estimated that about 5,214 sources would not have automa ted enclosed spray gun washers. While sources often use multiple spray guns, a single gun washer is typically adequate to service all spray guns at a facility, particularly fo r area sources. The EPA visited over 20 automotive refinishing facilities and all but the smalles t shop used an automatic, enclosed spray gun washer. The one shop that did not have a gun washer c leaned guns by hand in a small covered parts cleaning tray that held solvent. This latte r shop would be able to comply with the proposed standards as long as no cleaning solvent was atomiz ed through the spray gun. For automotive refinishing shops, we assumed that 14 percen t of shops, or about 5,006 shops, that did not report having a spray booth would also not have a gun washer. For miscellaneous surface coating shops, we assumed that the same 25 percent of shops that did not have HVLP spray guns, or about 208 shops, would also not h ave a gun washer.0223-00-008\Auto Refinishing Capital & Annual Cost 10

The estimated capital cost for a spray gun washer was $1, 800, based on calls with gun

washer vendors and information available from internet- based searches. 10 We assumed that shops without a spray gun washer would install a durable, low- cost spray gun washer instead of a more expensive model. However, less expensive gun washers are available, including a frequently observed model that is available for less th an $1,000. The total capital cost to purchase 5,213 gun washers would be $9.4 million. Using the same capital recovery factor as derived above, the annualized capital cost for a gun washer is $1,800 × 0.142 = $256. The total annualized cost for all 5,214 sources estimated to n eed an enclosed spray gun washer was $1.33 million per year. However, we estimate that the initial cost of a gun washer could be offset within 1 year at nearly all shops through reduced labor to wash spray guns and through more efficient use of cleaning solvent, compared to manual spray gun washing. The

more efficient use of solvent would reduce solvent costs and the costs to properly dispose of spent solvent. Although spray gun washers can potentially reduce solvent an d labor costs, and reduce emissions, the actual volume of solvent that can be reduced is difficult to estimate due to variances in enclosed gun cleaner makes, models, and sol vent recovery efficiency. The Department of Defense’s Joint Services Pollution Preve ntion Handbook states that “automatic paint gun washers can reduce the amount of solvent used and pa int solvent waste generated by 70 to 80 percent when compared to manual paint gun cleaning.” 11 As a conservative estimate, we used a 70 percent reduction of solvents to calculate ass ociated cost savings. Even greater reductions in solvent use and waste generation are possible with systems that also use a still to recover clean solvent from waste paint and spent solve nt, but these are more expensive than just an automated gun washer. To estimate potential cost savings for automated gun wash ers compared to manual gun washing we used the following assumptions: Labor Rate ($/hour): $40.00 Solvent cost: $6.75/gallon

10 Paint Gun Equipment Washer from SAFETY-KLEEN: Model 1111 http://www.safety-kleen.com/SKInternet/SKShoppingDetailP arts.aspx?ItemCode=6512 Manual Paint Gun Washer from SAFETY-KLEEN: Model 1077 http://www.safety-kleen.com/SKInternet/SKShoppingDetailP arts.aspx?ItemCode=6630 11 http://p2library.nfesc.navy.mil/P2_Opportunity_Handbook/4_9.html0223-00-008\Auto Refinishing Capital & Annual Cost 11

Paint sludge waste disposal cost: $5.10/gallon Monthly equipment service fee: $17.00 The labor rate is based on an industry survey by Body Sh op Business magazine. 12 The costs for solvent, paint sludge waste disposal, and the m onthly service fee are based on information from a site visited by EPA. We assumed each vehicle would require at least 3 gun washings for a primer, color coat, and clear coat. We also assumed that manual gun washing w ould require 10 minutes and automatic gun washing would require 1 minute of labor to load t he gun in the washer, based on the assumptions in the Joint Services Pollution Preven tion Handbook. 13 We assumed that manual gun cleaning would require the use of 10 ounces of solv ent per gun and automated gun washing 3 ounces per gun (a 70-percent reduction). We assumed no costs for paint sludge waste or solvent disposal for manual gun cleaning, even though it w ould be difficult to avoid these costs and remain in full environmental compliance for wa ste disposal. For waste paint sludge disposal costs with a gun washer, we assumed that the v olume of waste sludge was equal to solvent purchases to maintain a constant solvent level in the machine. The results of the gun washer cost analysis are presen ted in Table 6. Since we observed enclosed gun washers at all but one automotive refinishing s hop visited by EPA, only results estimated for shops refinishing only 10, 20, and 40 cars per mon th are presented here since these are the shops most likely to have to purchase a gun washer. Even a shop refinishing 10 cars per month could see a net an nual cost savings that would offset the initial cost of an enclosed spray gun washer . A major component of these cost savings is the cost of labor saved. However, even if the as sumptions are changed to reduce the difference in labor required to clean guns manually and with a gun washer (e.g., 5 minutes and 2 minutes, respectively), the cost savings could still offse t the initial cost of a gun washer in 5 years or less.

12 http://www.babcox.com/editorial/bb/704OperationsProf.pdf 13 http://p2library.nfesc.navy.mil/P2_Opportunity_Handbook/4_9.html0223-00-008\Auto Refinishing Capital & Annual Cost 12 Table 6. Gun Washer Cost Savings Analysis

Model Shop Parameters Cars per month per model shop 10 20 40 Gun washings per month 30 60 120 Manual Gun Washing Calculated values Calculated manual solvent use per month (gallons) 2.3 4.7 9.4 Manual solvent cost per month $ 15.82 $ 31.64 $ 63.28 Manual gun washing labor per month (hours) 5.00 10.00 20.00 Manual gun washing labor cost per month $ 200.00 $ 400.00 $ 800.00 Total Monthly Cost $ 215.82 $ 431.64 $ 863.28 Total Annual Cost for Manual Gun Washing $2,589.84 $5,179.69 $10,359. 38 Automated Gun Washing Calculated values Gun washer virgin solvent use per month (gallons) 0.7 1.4 2.8 Gun washer solvent cost per month $ 4.75 $ 9. 49 $ 18.98 Gun washer waste sludge disposal cost per month $ 3.59 $ 7.17 $ 14.34 Gun washer labor per month (hours) 0.50 1.00 2.00 Gun washer labor cost per month $ 20.00 $ 40.00 $ 80.00 Service fee per month $ 17.00 $ 17.00 $ 17.00 Monthly cost for solvent, waste, labor and fee $ 45.33 $ 73.66 $ 130.33 Annual cost for solvent, waste, labor, and fee $ 543.98 $ 883.97 $ 1,563.94 Annualized capital cost of gun washer $ 256.28 $ 256.28 $ 256.28 Total Annual Cost for Gun Washer $ 800.26 $1,140.25 $ 1,820.22 Estimated Annual Cost Savings for Automated Gun Washer Compared to Manual Gun Washing $1,789 $4,039 $ 8,539

Assumptions and Procedure for Estimating Spray Booth Costs The proposed rule would require all spray applied surface coa ting to be done in a ventilated enclosure, such as a spray booth, with fiberg lass or polyester fiber filters on the exhaust, or filters that are demonstrated to achieve at l east 98-percent overspray capture efficiency. The capital cost of installing a spray booth a nd annual operating costs were not included in the capital and annualized cost estimates becaus e spray booths or similar enclosures are already required by existing OSHA standards such as 29 CF R 1910.94(c) or 1910.107(b). The proposed rule would only specify exhaust filter requireme nts, which are not addressed by the existing OSHA standards. We do not expect that the pro posed standards would have any0223-00-008\Auto Refinishing Capital & Annual Cost 13

cost impacts since compliant exhaust filters are readil y available and the cost difference among exhaust filters is negligible. We have included a discussion of spray booth capital and annu alized costs for informational purposes for those affected sources that may need to install a spray booth to comply with this proposed rule as well as other existing r ules. Based on this information we have gathered, we estimate t hat about 5214 area sources affected by this rule may not have a spray booth. This e stimate includes 5005 automotive refinishing shops and 208 miscellaneous surface coating area sources. A 2003 reader survey reported that 51 percent of automotive refinishing shops had a do wndraft spray booth and 35 percent had a cross draft spray booth. 14 We assumed this meant that 14 percent of shops had no spray booth. Based on a population of 35,755 automotive refini shing shops, according to the 2003 County Business Patterns from the U.S. Census, we esti mated that 5,006 shops may not have spray booths. For miscellaneous surface coating shops, we used data colle cted in support of 40 CFR 63 subparts PPPP and MMMM that showed that 25 percent of m iscellaneous surface coating area sources did not report having spray booths with dry filters. Based on this information, we estimated that 208 miscellaneous surface coating area sourc es affected by this rule may not have spray booths. The estimated capital cost for a spray booth was $10,000, including installation. This approximate cost was based on the cost of an inexpensive cro ss draft automotive refinishing

booth. 15 We assumed that sources without a booth would purchase th e lowest cost booth needed to comply, rather than more expensive booths, such as do wndraft booths or booths with separate heating systems. We also assumed that this cost would be a reasonable surrogate for the cost of a booth used in miscellaneous surface coating operations. Using the capital recovery factor derived above (0.142), the annualized capital recovery cost for the booth is $1,420. The total annualized costs are equal to the annualized cap ital costs, plus the annual operating costs for the spray booth. The estimated annual operating costs for a spray booth are

listed Table 7:

14 http://www.bodyshopbusiness.com/bb/Purchases.pdf 15 See, for example, http://www.sprayshield.com/cgi-bin/hazel-cgi/hazel.cgi?act ion=serve&item=ECF-1000.html

. Web page for an economy cross flow spray booth ($4899), plus cos t for exhaust package ($700) and fire suppression system ($2,999).0223-00-008\Auto Refinishing Capital & Annual Cost 14 Table 7. Estimated Spray Booth Annual Operating Costs. Annual Operating Cost Item Cost per year Air Intake Filters (Cross Flow Booth) $ 152 Exhaust Filters (paint extractors) (Cross Flow Booth) $ 58 Exhaust Filters disposal $ 440 Taxes, insurance, admin. costs (4% of installed capital cost): $ 400 Natural gas to heat make -up air $ 2,011 Electricity for fan in booth $ 171

The costs for intake and exhaust filters and used filter disposal are based on the estimated costs provided by an automotive collision repair facility visited by EPA. These costs have been estimated for a small automotive refinishing facility tha t refinishes 40 cars per month, since these small facilities are most likely to not already have a booth. Taxes, insurance, and administrative costs were assumed to be 4 percent of the installed cap ital cost. This is a standard assumption

for EPA cost estimates. Natural gas is needed to heat the air that is used by the bo oth during cold weather months to maintain a constant shop and booth temperature. We est imated the annual cost of natural gas using the following assumptions:

• The booth would operate 1,000 hours per year at a flow rate of 10,000 cubic feet per minute.

• For 500 hours per year of operation, the air would need to be heated from 50 degrees F (a national average wintertime temperature) to 70 degrees F.

• The heater would be 80 percent efficient.

• The price of natural gas would be $13.50 per thousand cubic feet (mcf), based on the average cost for natural gas from the Energy Informati on Administration for the Winter of 2005 to 2006 (October to March, inclusive).

• The heating value of natural gas would be 950 Btu per cubic foot

.

The estimated annual cost of natural gas would be $2011:

2011 $ cf/mcf) 000 Btu/cf)(1, )(950 efficiency heater 0 lb/cf)(0.8 13.1 air of (density hrs) 0 min/hr)(50 /mcf)(60 oF)($13.50 50 - oF)(70 Btu/lb 0.24 air of capacity cfm)(heat (10,000

=

Electricity would be needed to operate the fans of a spray booth to move the air in and out of the spray booth. Electricity costs were estim ated using an algorithm adapted from the OAQPS Control Cost Manual procedure to estimate operatin g costs for ventilation ductwork.0223-00-008\Auto Refinishing Capital & Annual Cost 15

The algorithm estimated annual electricity cost based o n flow rate, pressure drop, and electricity cost per kilowatt-hour (kwh). We estimated the annual co st of electricity using the following equation and assumptions: Annual electricity cost ($/yr) = 0.0001175*Hours*Flow* ∆ P*Price/Efficiency

Where: 0.0001175 = an empirical computational constant with units of

(hrs

· acf

· in. water/min

· kwh) Hours = annual hours of operation, assumed to be 1,000 hours per year. Flow = booth air flow rate, assumed to be 10,000 cubic fee t per minute, based on

vendor information. ∆ P = The total pressure drop across the spray booth system (inlet filters, outlet filters, and ductwork) would be 1.0 inches of water. This is over twice the maximum pressure drop for a loaded spray booth filter to als o account for the pressure drop of the inlet filters. Price = The price for electricity, $0.0872 per kwh, based on the national average

for 2005 from the U.S. Energy Information Service. Efficiency = The fan and motor combined efficiency, using the standard assumption

from the OAQPS Control Cost Manual of 60 percent.

The annual operating cost for a spray booth is estimated to be $3,231. After adding the annualized capital cost of $1,424, the total annualized cost f or a spray booth would be $4,655 per

year.