### MEMORANDUM

TO: Steam Electric Rulemaking Record

FROM: E lizabeth Gentile , E RG

DATE: September 30, 2015

SUBJECT: Methodology for Estimating Impoundment Age, Capacity, and Reductions in Capacity Used to Estimate Benefits Associated with Avoided Impoundment

Failures

Steam electric power plants manage combustion residuals such as flue gas desulfurization (FGD) solids, fly ash, and bottom ash using either wet or dry handling practices . For plants that use wet handling systems , the combustion residuals are typically sluiced to one or more surface impoundments (i.e. , settling ponds), where the solids settle out of the water. In addition to solids, these impoundments typ ically contain water with high concentrations of pollutants originating

from the combustion residuals , including dissolved metals.

Although the impoundments are subject to state regulations, events such as the failure of a

combustion residual impoundment a t the Tennessee Valley Authority’s Kingston Fossil Plant in 2008, demonstrate the potential severity and cost of structural failures. In that case, over 5 million cubic yards of combustion residual w as accidentally released

, resulting in cleanup costs

and other costs and damages exceeding $1 billion. Although the probabilities of catastrophic releases such as the Kingston ’s spill may be low, the high costs associated with these events mean that even very small risks entail significant costs to society. In a ddition, other smaller unintentional releases (e.g., spills) from surface impoundments may also result in substantial damages and incur large cleanup and other costs.

S ome plant owners may reduce or terminate their reliance on impoundments to handle

combus tion residuals in response to the requirements of the effluent limitations guidelines and standards ( ELG s)

. These changes would affect the future probability of impoundment failures and, as a result, accidental, and sometimes catastrophic

, releases of comb ustion residual solids

and wastewater

. Potential b enefits arising from the reduced risk of impoundment failures include avoided cleanup costs, environmental damage, and litigation costs.

EPA quantified and monetized these benefits based on predictions abou t how future impoundment structural failure s and other accidental releases from impoundments would be reduced by the ELGs, and the commensurate avoided costs of spill cleanup, natural resource damages, and litigation expenses. The details of this analysis are described in the Benefits and Cost Analysis for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category report ( EPA

- 821

- R

- 15

- 005 )

.

The analysis used to estimate the benefits associated with these avoided impoundment failures

takes into account the impoundment age , capacity (expressed as volume, in cubic feet), the typeMemorandum September 30, 2015 Page 2

of impoundment (i.e., storage or disposal)

, and the estimated reductions in impoundment capacity

. Therefore, ERG used data reporte d in response s to the Questionnaire for the Steam Electric Power Generating Effluent Guidelines (Steam Electric Survey) to obtain these

characteristics from each of the 1,070 coal combustion residual (CCR) impoundments considered in the scope of the Steam Electric ELG s

. 1 ERG also estimated how the future impoundment capacity for each impoundment would be reduced under each of the five regulatory options

. For more information on the regulatory options considered as part of the rulemaking, see Section 8 of

th e Technical Development Document for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EPA

- 821

- R

- 15

- 007)

.

1.0 D ETERMINING S URFACE I MPOUNDMENT A GE

ERG used data from Part A of the Steam Electric Survey to determine the age of CCR surface impoundments. Question A3

- 2, Table A

- 4, requested information on the initial year the impoundment was brought online for both active and inactive impoundments. ERG was able to

obtain the year brought online for 1,059 of the 1,070 CCR impoundments from the Steam Electric Survey.

For the remaining 11 impoundments, ERG used the data from the 1,05 9 impoundments to calculate an average installation year associated with active impoundments a nd an average installation year associated with inactive impoundments.

ERG calculated the impoundment age by subtracting the year the impoundment was brought

online from 2009. E RG used 2009 as the basis for the age because the data collected in the

Steam E lectric Survey represents 2009

.

2.0 D ETERMINING S URFACE I MPOUNDMENT C APACITY

ERG determined t he capacity , or volume, for all 1,070 CCR surface impoundments using data

from Part D of the Steam Electric Survey

. Table D

- 5 requested information on the original

vol ume (in cubic feet) of the surface impoundment. From Table D

- 5, ERG was able to determine the volume for 893 impoundments

.

For the remaining 177 surface impoundments

, ERG estimated the volume of the impoundments using the following hierarchy of estimation methods:

1) For three of these impoundments (two active and one inactive) 2

, ERG determine d the impoundment volume using the original surface area (in square feet), top elevation (in feet), and bottom elevation (in feet ). ERG calculated the volume of the three impoundment s using the following equation:

Volume (ft 3 ) = Surface Area (ft 2 ) × [Top Elevation (ft)

– Bottom Elevation (ft)]

1 Using information reported for the Steam Electric Survey, EPA determined that in 2009 there were 1,070 surface impoundments containing coal combustion residuals that had not been retired and closed. If surface impoundments containing petroleum coke residu als are also included, the total number of surface impoundments containing either coal or petroleum coke combustion residuals is 1,071.

2 Surface area and elevation data for these three impoundments were not reported in the Steam Electric Survey.Memorandum September 30, 2015 Page 3

2) For 111 of these impoundments ( 99 active and 12 inactive ) , ERG estimated the impoundment volume using an average volume per flow rate into an impoundment (in cubic feet per gallons per day (gpd)) corresponding to status (active or inactive). Using Steam Electric Survey data for all combustion residual impoundments that reported both baseline flow rates into the impoundment and impou ndment volume, ERG calculated an average volume per flow rate for each impoundment for which data were available and then averaged those ratios for all the impoundments to calculate a volume per flow factor,

which was 600 ft 3 /gpd

. 3 See Section 3 for more i nformation on how ERG calculated impoundment

- specific flow rates entering the surface impoundments. ERG estimated the volume (in cubic feet) by multiplying the impoundment

- specific flows rates ( described in

Section 4 ) by the calculated volume per flow fact or.

3) For 63 of these impoundments (53 active and 10 inactive), ERG calculated the average volume for active and inactive impoundments based on the 896 impoundments for which impoundment volumes were reported in the Steam Electric survey (893 impoundments)

or where ERG calculated the volume based on impoundment dimensions (3 impoundments

, identified in bullet 1). These 896 impoundments account for 832 active and 64 inactive impoundments

. The average volume for active impoundments was 49,400,000 ft 3 a nd the average volume for inactive impoundments was 48,700,000 ft 3

.

3.0 D ETERMINING I MPOUNDMENT T YPE

In order to accurately estimate the benefits associated with certain types of impoundments, ERG developed an approach to classify the list of 1,070 impoundments as either storage or disposal.

ERG used the same defin itions for storage and disposal impoundments that were used in the

CCR rule:

• Storage impoundment

– an impoundment that is periodically dredged and has its CCR disposed elsewhere such that it can cont inue operating indefinitely.

• Disposal impoundment

– an impoundment that is not dredged and all CCRs are left in place in perpetuity.

ERG used the following steps to classify each of the 1,070 surface impoundments as storage or disposal:

1) Identified all impoundments that have a direct CCR influent (e.g., ash transport water flows directly from the generating unit to the impoundment) using the “pond mapping analysis 4 ” (based on Steam Electric Survey responses). These impoundments were classified as primary ponds (744 impoundments) . All non

- primary ponds (i.e., no direct CCR influent) were classified as storage ponds (326 impoundments)

. This assumption is similar to an assumption made by ORCR for the CCR rule, which assumed that each

3 ERG use d Steam Electric Survey data from 625 combustion residual impoundments that reported both baseline flow rates into the impoundment and the impoundment volume.

4 The “pond mapping analysis” is an analysis that “maps” all impoundments in the survey to genera ting units to identify which generating units transfer which CCR wastestreams to all the impoundments and how the wastewater flows through the impoundments (e.g., which impoundments overflow to the next impoundment and which are in series versus in paralle l) (DCN SE05875).Memorandum September 30, 2015 Page 4

plant would operate only one disposal impoundment, and all other impoundments would be storage impoundments.

2) For all 744 primary impoundment s identified in Step 1

, ERG evaluate d response s to Question D4

- 5 of the Steam Electric Survey to determine whether the plant reported dredg ing the impoundment within the last five years

. 5 All impoundments that were reported as being dredged in this timeframe were classified as storage impoundments (421 impoundments)

.

3) For all 323 primary impoundments flagged after Step 2

, ERG evaluate d responses to Question D4

- 3 (Table D

- 5) to determine whether the plant reported an expected end of life for the impoundment and, if so, whether there are solids that are expected to remain in the impoundment at the end of its life. All impoundments with an expected end of life date of “infinite,” “indefinite,” or “life of plant” were classified as storage impoundments. Additionally, all impoundments with an end of life tonnage reported as zero were classified as storage impoundments (38 impoundments)

.

4) For the remaining 285 primary impoundments, ERG evaluate d the EIA

- 923 data used by

ORCR for the final CCR rule to determine whether: 1) the plant reported any CCR tonnages as disposed to any location; and 2) the plant reported any CCR tonnage as disposed in a surface impoundment. ERG u se d the following approach to classify the impoundments based on the EIA data:

a. If the plant reported any CCR tonnage as disposed in a surface impoundment, the impoundment was classified as disposal (143 impoundments)

. b. If the plant did not report any CCR tonnage in the EIA data, the impoundment was classified as disposal (6 impoundments)

.

c. If the plant reported any CCR tonnage as disposed to any location, but did NOT report any CCR tonnage as disposed in a surface impoundment, the i mpoundment

will be classified as storage (136 impoundments)

.

Using this approach, ERG identified 921 storage impoundments and 149 disposal impoundments.

4.0 E STIMATING R EDUCTION IN I MPOUNDMENT C APACITY

E RG estimated the reduction in impoundment capacity for all 1,070 CCR surface impoundments

for each of the regulatory options for two scenarios: incorporating the effects of CCR rule and incorporating the effects from both the CCR rule and the proposed Clean Power Plan (CPP). 6

Each of the six regulatory options will result in a decrease in the wastewater entering the impoundment s either by reducing or eliminating the volume of wastewater sent to the impoundment . ERG estimated that the impoundment capacity would decrease by the percent

reduction in flow into each impoundment

. While the reduction in flow entering the impoundment

5 ERG used a five

- year dredging period because the Steam Electric Survey specifically asked the plants to identify whether the impoundment had been dredged in the past five years. Therefore, ERG could not evaluate whether the impoundment has been dredged in a longer time period.

6 EPA typically includes only final rules in its base case for its IPM analyses. However, at the time EPA performed the IPM analyses for this rule, it did not have details of the final CPP rule. EPA therefore used information from the proposed CPP rule as a proxy for purposes of the ELG analyses.Memorandum September 30, 2015 Page 5

will not necessarily decrease the size of the impoundment unless the plant closes portions of the impoundment after the implementation of the ELG s , the impoundment will receive less

combust ion residual solid waste and

, therefore, will be less likely to have a breach of the impoundment. Furthermore, any breach or spill that does occur would likely be less severe since the impoundment would contain less combustio n residual solids or wastewater . ERG used the methodology described in the following subsections to estimate the reduction in impoundment capacity.

4.1 Estimate Total Baseline Flow

ERG used information from the Steam Electric Survey to determine the types of combustion

residual waste contai ned in each of the 1,070 CCR impoundments. ERG determined which impoundments received FGD wastewater, fly ash transport water, and bottom ash transport

water. The Steam Electric Survey did not require plants to differentiate between CCR leachate from impou ndments versus CCR leachate from landfills

. For this reason, ERG was unable to

evaluate which impoundment s contained combustion residual landfill leachate and

, therefore,

leachate was not included in the analysis.

ERG then calculated a baseline flow associated with each impoundment. As described in the Incremental Costs and Pollutant Removals for Final Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category report (DCN

SE0 5831 ), ERG estimated the amount of FGD wastewater discharged by each plant , at the FGD system level, for use in baseline and post

- compliance pollutant loadings calculations. Similarly, ERG estimated the amount of fly ash, bottom ash, and/or combined ash wa stewater discharged by each plant, and the generating unit level, for use in baseline and post

- compliance pollutant loadings calculations. 7 ERG used these waste stream specific baseline flow rates and the pond mapping analysis to calculate the total baseli ne flow for each impoundment.

First, ERG calculated waste stream

- specific baseline flows for impoundments at plants where the

waste stream specific impoundments matched between the listing of 1,070 CCR impoundments and the pond mapping analysis. 8 ERG used the pond mapping analysis to assign the FGD

- level and generating unit

- level flows to the designated impoundments. For example, if a plant sends bottom ash transport water from Generating Unit A to Impoundment A and bottom ash transport

water from Generati ng Unit B to Impoundment B, ERG assigned the Generating Unit A bottom ash transport water flow to Impoundment A only.

For the plants where the impoundments did not match between the listing of the 1,070 CCR impoundments and the pond mapping analysis, ERG assumed that the impoundments operate in

series such that each impoundment would receive the total volume of any combustion residual waste generated

. For example, if two impoundments at a plant are flagged as FGD impoundments, ERG assigned the total FGD wastewater flow to both impoundments.

7 For combined ash flows that could not be separated into bottom ash and fly ash waste streams based on flow data reported in the Steam Electric Survey, ERG used a ratio of the amount of ash produced per generating unit to the total amount of ash produced to estimate the separate fly ash and bottom ash flows at the generating unit level.

8 Because the list of 1,070 CCR ponds and the pond mapping analysis were developed using different data elements of the Steam Electric Survey database, the lists do not match exactly.Memorandum September 30, 2015 Page 6

ERG calculated the total baseline flow associated with each impoundment by summing the waste

stream

- specific flo ws. For example, if an impoundment contains FGD wastewater and fly ash

transport water, ERG calculated the baseline flow into the impoundment as the volume of FGD wastewater generated plus the volume of fly ash transport water generated.

4.2 Estimate Change in Baseline Capacity Associated with the CCR Rule

To account for the change in impoundment capacity associated with the CCR rule, ERG

estimated th e reduction in flow associated with CCR conversions. ERG subtracted the fly ash

flows from the total baseline flows for fly ash impoundments at plants flagged as fly ash CCR

conversions. ERG subtracted the bottom ash flows from the total baseline flows for bottom ash impoundments at plants flagged as bottom ash CCR conversions. 9

ERG calculated the flow reduction using the following equation:

Percent CCR Baseline Reduction = (Baseline Flow

– CCR Baseline Flow)/Baseline Flow

After calculating the percent reduction in flow associated with the CCR rule, ERG multiplied this percent reduction by the baseline volume calc ulated in Section 2.0 to estimate the reduced capacity for each impoundment associated with the CCR rule.

ERG calculated a reduced capacity using the following eq uation:

CCR Baseline Volume = Baseline Volume x (1

– Percent CCR Baseline Reduction)

4.3 Estimate the Change in Capacity Associated with the ELG

ERG then calculated the reduction in flow into the impoundment for Regulatory Options A through E

. 10 ERG calculat ed post

- compliance flows for each impoundment based on the types of

combustion residual contained in the impoundment and the effect of the regulatory option

. For example, if an impoundment contains FGD wastewater and bottom ash transport water , for Option A , the post

- compliance flow would include only the bottom ash transport water and for Option D , the post

- compliance flow would be zero. 11 Because this flow reflects the change incorporating the CCR rule, ERG also subtracted fly ash transport water flows fro m plants flagged as fly ash CCR conversions and bottom ash transport water flow from plants flagged as

bottom ash CCR conversions. ERG then calculated the flow reduction by subtracting the post

compliance flow from the CCR baseline flow for each impoundme nt

.

ERG calculated the p e rcent reduction in flow using the following equation:

Percent Reduction = ( CCR Baseline Flow

– Post

- Compliance Flow) /CCR Baseline Flow

9 See Section 9 of the TDD for more information on how the CCR rule was incorporated into the ELG analyses.

10 During development of the final rule, EPA decided not to base the final rule on Option F for existing sources (see Section VIII.C.1 of the preamble). As a result, EPA chose not to conduct particular analyses for Option F to the same extent that it did for some of the other options considered.

11 If the flo w is associated with a generating unit that is oil

- fired or has a generating capacity of 50 megawatts (MW) or less, ERG did not subtract the flow from the total baseline flow. The ELGs contain no new requirements for these generating units.Memorandum September 30, 2015 Page 7

As stated previously, ERG assumed that the percent reduction in flow is equivalent to the perce nt
reduction in impoundment capacity because the impoundment will no longer have to handle or treat this percentage of flow.

After calculating the percent reduction in flow, ERG multiplied this percent reduction by the

CCR b aseline v olume calculated in Sec tion 4.2 to estimate the reduced capacity for each impoundment under each regulatory option.

ERG calculated a reduced capacity for each regulatory option using the following equation:

Option Volume = CCR Baseline Volume x (1

– Percent Reduction )

4.4 Estimate the Change in Capacity Associated with CPP

ERG estimated reductions in impoundment capacities in addition to those calculated in Section

4.3 to incorporate generating units projected to retire as a result of the CPP. 12 First, ERG identified full CPP plant retirements (i.e., all operating generating units at a plant are projec ted to retire as a result of the CPP). ERG estimated no reductions in baseline capacity associated with the ELG. This analysis is likely an overestimate of reduction in capacity because ERG estimated reductions at plants with partial CPP retirements (i.e., only a portion of the operating generating units at a plant are projected to retire as a result of the CPP).

Additionally, ERG identified plants that have at least one operating generating unit flagged as a CPP retirement. ERG estimated no reductions in baseline capacity associated with the ELG. This analysis is likely an underestimate of reductions in baseline c apacity because ERG did not estimate reductions at plants with partial CPP retirements.

The results of these analyses were used to determine a range of the baseline capacity reductions

associated with the CPP.

5.0 R ESULTS

T he age, baseline capacity, CCR base line capacity, and reduced capacity for each of the 1,070

CCR impoundments under the five regulatory options are presented in the document entitled “Estimated Impoundment Age, Capacity, and Reductions in Capacity” ( DCN SE0 5825 A1 )

. This

file also includes t he impoundment classification (i.e., storage or disposal) for each of the 1,070 CCR impoundments and the estimated reductions associated with the two CPP analyses.

ERG’s impoundment

- level baseline flows, CCR baseline flows, and option flows can be found in ERG’s database for estimating reduced impoundment capacities for avoided impoundment failures (DCN SE05941).

12 See Section 9 of the TDD for more information on how the CPP was incorporated into the ELG analyses.