### MEMORANDUM

**TO:** Steam Electric Rulemaking Record **FROM:** Elizabeth Sabol, E RG

TJ Finseth, ERG **DATE:** January 2 9 , 201 3 **SUBJECT: Steam Electric Effluent Guidelines** 
**– Methodology for**  **Identifying Surface**  **Impoundment Closure**  **s Based on Regulatory Options** As part of the compliance cost and pollutant removal estimates, ERG identified combustion residual surface impoundments at steam electric plants that will likely remain open, partiall y c los e , or completel y clos e based on the regulatory options considered as part of the proposed rule . For additional details regarding the regulatory options considered as part of the rulemaking, see Section 8 of the Technical Development Document for the Pro posed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category . EPA used the results of the pond closure analy sis to estimate costs for best management practices (BMP) for surface impoundments as part of the proposed rulemaking. For more information on the BMP costs see Section 5.6 of EPA’s Incremental Costs and Pollutant Removals for Proposed Effluent Limitation Guidelines and Standards for the Steam Electric Generating Point Source Category [ DCN SE01957 ]. Additionally, ERG estimated percent closures for surface impoundments determined to partially close based on combustion residual wastewater flow rates (in gallons per day

(gpd)), capacity

(ft 3 ), and impoundment age . EPA used the results of the pond closure analy sis, flow rate, capacity, and impoundment age to estimate benefits associated with avoided impoundment failures. See ERG’s “ Methodology for Estimating Impoundment Age, Capacity , and Reductions in Capacity Used to Estimate Benefits Associated with Av oided Impoundment Failures ” memorandum [DCN SE02121 ] for more information on the percent closures methodology

for combustion residual impoundments. **1. O**  **VERVIEW** Implementation of the regulatory options evaluated as part of this rulemaking will reduce, and in some cases eliminate, FGD wastewater, fl y ash transport water , bottom ash transport water , and combustion residuals managed in on - site surface impoundments. ERG used data from the Questionnaire for the Steam Electric Power Generating E ffluent Guidelines (Steam Electric Survey) to develop a complete listing of combustion residual impoundments at steam electric power plants in the scope of this rule. ERG’s complete listing of combustion residual surface impoundments contains 1, 0 97 surface impoundments containing FGD and/or ash combustion residual waste water, solids, or both . 1 The listing also includes a flag for each ty pe of combustion 1 Twenty - seven of these surface impoundments are located at non - coal plants; therefore, there are 1,070 surface im poundments located at coal - fired plants that contain FGD and/or ash combustion residual wastewater, solids, or both. Additionally, there is one surface impoundment containing FGD and/or ash combustion residual wastewater, solids, or both at a petroleum coke - fired plant.Memorandum

January 29, 2013 Page 2 residual contained within the impoundment (i.e., FGD, fl y ash, bottom ash) . ERG flagged the waste as bein g contained in the pond if it was identified as a solid waste, process wastewater, or both. The Steam Electric Survey did not require plants to differentiate between CCR leachate from impoundments versus CCR leachate from landfills. For this reason, ERG wa s unable to evaluate which impoundment s contained combustion residual landfill leachate and therefore, leachate was not included in the anal ys is . ERG used the complete listing of surface impoundments in combination with the regulatory options considered as part of this rulemaking and those plants incurring costs to comply with the proposed rulemaking to determine the effect revisions to the EL G s would have on the population of surface impoundments. Table 1 - 1 presents the five regulatory options evaluated as part of this rulemaking and the types of combustion residual surface impoundment s each option will affect. **Table 1**  **- 1**  **. Regulatory Options and**  **Effects on Surface Impoundment Types** 
**Regulatory Option**  **Combustion Residual**

**Waste Stream (**  **s )**  **Affected by the Regulatory Option**  **a Treatm**  **ent Affects**  **Surface Impoundment**  **s Containing the**  **Combustion Residual Waste(s)**  **:** 1 FGD Wastewater Chemical Precipitation FGD 2 FGD Wastewater Chemical Precipitation + Biological Treatment FGD 3 FGD Wastewater Chemical Precipitation + Biological Treatment FGD, Fly Ash Fly Ash Transport Water Dry Handling 4 FGD Wastewater Chemical Precipitation + Biological Treatment FGD, Fly Ash, Bottom Ash Fly Ash Transport Water Dry Handling Bottom Ash Transport Water Dry Handling 5 FGD Wastewater Chemical Precipitation + Biological Treatment FGD, Fly Ash, Bottom Ash Fly Ash Transport Water Dry Handling Bottom Ash Transport Water Dry Handling
a O ther c om

bustion residual wastestreams ( i.e., com bustion residual leachate, gasification wastewater , and flue gas mercury control wastewater) are also affected by the proposed effluent guidelines but either the associated surface im poundment(s) would be unaffected or those effects are not included in this analysis. Based on the combustion residual ty pes flagged during the development of the surface impoundment listing, ERG flagged surface impoundments as the following:
 FGD Onl y;  Fly

Ash Onl y ;  Both FGD and Fly Ash ;  Bottom Ash Only ;  Both FGD and Bottom Ash;  Both Fl y Ash and Bottom Ash; and  All Wastes (FGD, Fly Ash, and Bottom Ash).Memorandum

January 29, 2013 Page 3 ERG identified the following outcomes for surface impoundments for this anal ys is :
 No t Affect ed

– The implementation of the r egulatory option being evaluated will not affect the operation of the impoundments .  Closure

– The implementation of the regulatory option being evaluated will eliminate all the combustion residual w astes (e.g., FGD wastewater, fl y ash, and/or bottom ash) currently stored in the surface impoundment; therefore, ERG assumes the plant will close the surface impoundment.  Partial Closure

– The implementation of the regulatory option being evaluated will el iminate at least one , but not all, of the combustion residual wastes currentl y stored in the surface impoundment ; therefore, ERG assumes the plant wi ll stop sending the affected combustion residual waste (s) to the surface impoundment , but the impoundment w ill continue receiving the other wastes (i.e., a “partial closure”). ERG also used information from the Steam Electric Survey to identify

surface impoundments that will not be affected as part of the regulatory options because of assumptions ERG made in the compliance cost estimates. The impoundments determined unaffected, regardless of combustion residual ty

pe and regulatory

option, are those impoundments identified as remaining functional as part of a complete recycle sy stem, remaining functional as part of the FGD wastewater treatment sy stem, or remaining functional for bottom ash complete recycle s ys tems at plants incurring bottom ash management costs. ERG anal yz ed the impoundment ty pe (e.g., FGD only , All Wastes) to determine the ty pe of outcome for each impoundment associated with a regulatory option. Table 1 - 2 presents the likel y outcomes associated with each regulatory option, excluding the surface impoundments determined to be unaffected regardless of combustion residual ty pe and regulatory

option , described above. **Table 1**  **- 2**  **. Outcomes for Types of Surface Impoundments Associated with Each**  **Regulatory Option**  **Type of Impoundment**  **Regulatory Option 1**  **2 3**  **4 5**  FGD Only Closure Closure Closure Closure Closure Fly Ash Only Not Affected Not Affected Closure Closure Closure Both FGD and Fly Ash Partial Closure Partial Closure Closure Closure Closure Bottom Ash Only Not Affected Not Affected Not Affected Closure Closure Both FGD and Bottom Ash Partial Closure Partial Closure Partial Closure Closure Closure Both Fly Ash and Bottom Ash Not Affected Not Affected Partial Closure Closure Closure All Wastes Partial Closure Partial Closure Partial Closure Closure Closure Note: This table does not reflect the outcomes for those surface impoundments determined to be unaffected because they remain functional as part of a com plete recycle system , remain functional as part of the FGD wastewater treatment sy s tem , or remain functional for bottom ash com plete recycle systems at plants incurring bottom ash management costs .Memorandum

January 29, 2013 Page 4 **2. I**  **DENTIFICATION OF I**  **MPOUNDMENT C**  **LOSURES AND**  **P ARTIAL**  **C LOSURES**  To identify

impoundments that will be affected by the proposed rulemaking, ERG used the complete listing of combustion residual surface impoundments, complete with impoundment ty pe flags, and the listing of plants incurring compliance costs for FGD wastewater , fly ash, and /or bottom ash. ERG used the following process for identifying surface impoundments as closures and partial closures. First, ERG flagged impoundments for FGD costs, fly ash costs, and/or bottom ash costs based on the lists of plant s incurring costs for FGD wastewater, fl y ash, and/or bottom ash. For each plant incurring a cost, a corresponding cost flag was marked for all impoundments at the plant . Additionally , ERG also flagged impoundment s marked as complete recycle, part of the FGD wastewat er treatment, or bottom ash management. ERG marked th ose impoundments flagged as complete recycle and part of the FGD wastewater treatment s ys tem for all regulatory options as “Not Affected” because ERG assumes these impoundments will remain open. ERG assumes that complete recycle impoundments will remain open so that the plant can continue operating a complete recycle sy stem, which is in compliance with the proposed rulemaking for FGD wastewater, fly ash transport water, and bottom ash transport wastewater. Additionally, ERG determined that seven plants would continue to operate FGD impoundments as part of their FGD wastewater treatment because it would be more cost effective than installing equalization tanks to accommodate the large FGD wastewater flow. ERG marked th ose impoundments flagged as incurring bottom ash management costs and having bottom ash combustion residual wastes as “Not Affected” because ERG assumes that these plants will continue to operate their bottom as h impoundments to achieve complete recycle. ERG identified those plants receiving bottom ash management costs as those plants that recycle a majority (more than 90 percent) of their bottom ash transport water for reuse as bottom ash transport water or other plant operations that do not lead to discharges . Therefore, ERG expects these plants to adjust their recycle operations to achieve complete recycle, rather than install dry bottom ash handling. For the remaining impoundments, ERG identified complete closures . Complete closures are impoundments that will likely close because all of the combustion residual waste currentl y transferred to the impoundment will likely no longer be transferred to the impoundment . ERG identified complete closures for each regulat ory o ption using the following assumptions:
 Regulatory Options 1 and 2:

— The ty

pe of impoundment is “FGD Onl y ; ” **and**

— The FGD cost flag for the impoundment is marked “Yes . ”

 Regulatory

Option 3 :

— The ty

pe of impoundment is “FGD Onl y” or “Fly Ash Only” or “ Both FGD and Fl y Ash ; ” **and**

— The FGD and/or fl y ash cost flag for the impoundment is marked “Yes . ”Memorandum

January 29, 2013 Page 5
 Regulatory Options 4 and 5:

— Any

Cost Flag ( FGD, fl y ash, and/or bottom ash) is marked “Yes . ” 2 Additionally , ERG identified partial closures for each regulatory option . These closures represent ponds that will remain open because at least one type of combustion residual waste will continue to be transferred to the impoundment, but additionally , at least one type of combustion residual waste will likely

no longer be transferred to the impoundment . ERG identified partial closures for each regulatory option using the following assumptions:
 Regulatory

Options 1 and 2 :

— The ty

pe of impoundment is “Both FGD and Fl y Ash” or “Both FGD and Bottom Ash” or “All Wastes ; ” **and**

— The FGD cost flag for the impoundment is marked “Yes . ”

 Regulatory

Option 3:

— The ty

pe of impoundment is “Both Fl y Ash and Bottom Ash ” or “Both FGD and Bottom Ash” or “All Wastes ; ” **and**

— The FGD and/or fl y ash cost flag for the impoundment are marked “Yes . ” **OR**

— The impoundment is flagged as part of FGD wastewater treatment; **and**

— The ty

pe of impoundment is “Both FGD and Fl y Ash ; ” **and**

— The fl y ash cost flag for the impoundment is marked “Yes . ” **OR**

— The impoundment is flagged for complete recycle; **and**

— The ty

pe of impoun dment is “Both FGD and Fl y Ash ; ” **and**

— The FGD cost flag for the impoundment is marked “Yes . ”

 Regulatory Options 4 and 5:

— The impoundment is flagged as bottom ash management ; **and**

— The ty

pe of impoundment is “Both Fl y Ash and Bottom Ash” or “Both FGD and Bottom Ash” or “All Wastes ; ” **and**

— The FGD and/or fl y ash cost flag for the impoundment are marked “Yes . ” **OR**

— The impoundment is flagged as part of FGD wastewater treatment; **and**

— The ty

pe of impoundment is “Bo th FGD and Fl y Ash” or “Both FGD and Bottom Ash” or “All W astes;” **and**

— The fl y ash and/or bottom ash cost flag for the impoundment are marked “Yes . ” The remaining impoundments not flagged as closures or partial closures were considered to be unaffected b y the ELG. The results of the impoundment closure analy sis associated with the proposed ELG are presented in the file titled “Revised Pond Closure Analy sis Including Partial Benefits ( DCN SE01772 ) .
2 For Regulatory Options 4 and 5 , ERG assumes that all combustion residual surface impoundments (except those determined to be unaffected regardless of combustion residual type and regulatory option) located at plants that incur compliance costs will close .