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MEMORANDUM

Tetra Tech, Inc.

10306 Eaton Place, Suite 340

Fairfax, VA 22030

phone 703-385-6000

fax 703-385-6007

TO: Paul Shriner and Lisa Biddle, EPA

FROM: John Sunda, Tetra Tech

DATE: June 24, 2013

SUBJECT : Evaluation of American Chemistry Council Cost Estimate for Closed Cycle 

Cooling Retrofit Costs Submitted Proposal Comment (2207-A1)

The American Chemistry Council (ACC) (Comment 2207-A1) provided in an appendix to their 

comments on the Proposed Rule which provides a somewhat detailed estimate of capital and 

O&M costs for closed-cycle cooling systems at manufacturing plants. Costs are provided for 

small (5,000 gpm), medium (20,000 gpm) and large (100,000 gpm) systems. This document 

presents a comparison of the ACC cost estimates to the EPA cost estimates for the three sizes of 

systems presented by ACC. The comparable EPA capital and O&M costs are scaled by size but 

use a linear approach applying the same unit costs for all size systems. The typical individual 

cooling tower cells

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that are used by power plants are usually designed to cool from 12,000 to 

15,000 gpm/cell and a single cell would represent the smallest unit. Thus, the EPA costs should 

be comparable to the 20,000 and 100,000 gpm ACC estimates.

Capital Costs

In applying the EPRI model costs to manufacturing facilities, EPA recognized that closed cycle 

retrofits for non-contact cooling water at manufacturing plants would tend to be more costly due 

to both the more numerous and smaller sized units, and the higher potential for greater 

complexity and difficulty in the design and installation. EPA therefore, chose to use the 

“difficult” capital cost factor from the three EPRI difficulty categories2for estimating cost for 

non-power generation manufacturing units. The capital cost factor selected by EPA was equal to 

 

1 Each cooling tower is typically comprised of multiple side-by-side 50 ft x 50 ft cells with the number of cells 

determined by the total design cooling flow requirement.

2

In 2007 EPRI provided EPA a cost worksheet (DCN 10-6930A) including capital cost factors for “easy,” 

“average,” and “difficult” retrofit scenarios. EPA adopted the EPRI cost methodology in developing compliance 

costs for closed cycle cooling.
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$423/gpm cooling water in 2010 dollars3. A similar unit cost can be derived for the ACC 

estimates by dividing the total capital costs by the cooling water flow rate. Table 1 shows a 

comparison of the EPA and ACC $/gpm capital cost values. Figure 1 (attached) shows a 

graphical presentation of the ACC and EPA capital costs based on the unit costs in Table 1.

Table 1

Comparison of ACC and EPA Unit Capital Costs

Flow ACC Estimate EPA

Capital Cost Unit Cost Unit Cost

gpm Dollars $/gpm $/gpm

 5,000 $3,400,000 $680 $424

 20,000 $9,900,000 $495 $424

 100,000 $39,500,000 $395 $424

Fourth quarter 2010 dollars

The EPA cost estimates are similar in magnitude for both the medium and large systems with the 

EPA estimate slightly higher for the large system, and with the differences being well within the 

range of expected variation for preliminary engineering cost estimates of this type. However, the

ACC capital cost for 5,000 gpm systems is over 50% higher than EPA’s estimate. EPA identified 

three primary reasons for this discrepancy.

The first difference between the ACC and EPA capital costs are that the EPA cost approach uses 

a linear equation that does not account well for economies of scale for very small systems.

Second, the detailed cost estimates include components that should already be present at an 

existing plant. Therefore the costs are not incremental costs. The ACC estimate includes costs 

for:

• Intake structure and screens

• Intake line

• Intake pumps

• Clarifier

• Makeup water tank

• Feed pumps

• Chemical treatment

• Cooling tower and basin

• Circulating pumps

These costs appear to represent a new stand-alone CWIS system in which all of the components 

listed above would be constructed independently of any existing cooling water equipment. In 

most circumstances the non-cooling tower components (such as the intake structure, pumps, and 

screens) are not necessary since the facility already has sufficient existing intake screening and 

pumping capacity to operate the plant. These existing cost components comprise approximately

11% of the ACC costs for the small system. These first two factors also affect the medium and 

 

3 Adjusted for inflation using ENR CCI from $411 in February 2009 dollars to $423 in 2010 dollars.
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large ACC facility costs. Thus, based on these first two factors, the ACC costs are likely 

overstated.

Third, in some cases the make-up source water is assumed to require additional clarification 

equipment. This comprises 19% of the small system costs. EPA notes that since the CCRS 

system at a manufacturing facility is designed to operate at a fairly high cycle of concentration 

(approaching 5.0) the need for clarified make-up water might be justified. These factors 

combined result in ACC’s capital cost estimates for medium and high flow facilities as being 

higher than EPA’s , the low flow units as being lower than EPA’s costs, and overall the ACC 

costs are comparable to EPA’s cost estimates.

O&M Costs

Table 2 shows the ACC O&M costs from Tables 4-3, 4-5, and 4-7 (Comment 2207) plus the 

comparable EPA O&M costs. The EPA cost estimates shown are derived using the same cooling 

flow values, auxiliary energy costs, and capacity utilization rate assumptions used in the ACC 

estimates. As can be seen, the ACC O&M cost estimates were much higher than EPA’s 

estimates, even for the large system. After examining the ACC cost data EPA has identified two 

major differences:

 ACC labor costs which are cited at $262,800/yr for all three systems regardless of size. 

EPA notes no detail was provided regarding the basis of this cost item. The labor costs 

are overstated in comparison to EPRI’s cost estimates.

 The ACC use of total fan and pump energy required does not subtract out existing energy

requirements. The EPA estimate is based on the net increase in energy required taking 

into account existing once-through pumping.

The EPA cost estimates are based on the net increase in costs for retrofit applications. The 

existing once-through cooling system already requires both labor and pumping energy to operate.

When the once-through is replaced by closed-cycle, the flow requirements are reduced by more 

than 90 percent. The correlating 90 percent reduction in costs will offset a significant portion of 

the new closed cycle system operating costs. Adjustments to compensate for these differences 

are described below and the adjusted ACC O&M costs are also presented in Table 2.

Additional labor will be required to maintain and operate the cooling tower and clarifier. The

circulating pumps labor will be similar to the intake pumps but the size and operation of the 

existing intake screens will be scaled back requiring less O&M labor. Neither the cooling tower 

nor clarifier will require a full time operator. Therefore EPA finds that a net increase would be 

labor of about 0.5, 1.0, and 1.5 full time equivalents (FTE) for small, medium and large cooling 

systems, respectively, plus an additional 10% of hours for a supervisor. Table 2 presents the 

estimated labor costs based on the FTE estimates and a loaded hourly wage of $45/hr for laborer 

and $98/hr for a supervisor. The adjusted ACC O&M costs are derived by deducting the 

$262,000 cost and substituting the estimated net labor cost shown in Table 2.

Besides labor, one of the primary components of the ACC O&M costs are for the energy

requirements of the fans and pumps. In particular, the recirculating pump energy requirement is 
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based on electricity costs for a pumping head of 160 ft. It is not clear why this value was selected

because Figure 4-1 in the comment shows a pumping head of 100 ft. This 160 ft pumping head is 

assumed to include both the process system static and dynamic head losses plus those for the 

tower. A typical pumping head for just the cooling tower portion would be 25 to 35 ft. Assuming 

the existing once-through pumping head would be equal to the total head, minus the tower 

component, the once-through pumping head in the ACC system design (for which operating 

costs are already expended for the existing once-through system) is assumed to be 125 ft (160 ft 

– 35 ft). The ACC O&M are adjusted to reflect the net pump energy increase by deducting the 

associated costs of once-through pumping at a head of 125 ft shown in Table 2.

Figure 2 (attached) shows a graphical presentation of the ACC adjusted and unadjusted O&M 

costs along with the EPA O&M costs. As the figure shows, the EPA estimated O&M costs are

similar in magnitude and somewhat lower than the adjusted ACC O&M costs and are within 

10% of ACC estimates for larger systems.

The EPA O&M costs are based on estimates provided by EPRI with some additional costs 

included for chemical treatment of blowdown. The ACC costs include a chemical treatment 

component that is more than 4 times greater than the EPA additions and may reflect the fact that 

the design cycle of concentration for the ACC system was a fairly high value of 5, as noted 

above.

Table 2

Comparison of Estimated Annual Closed Cycle O&M Costs derived Using EPA Cost Equations to ACC 

O&M Estimates and ACC Estimates with Adjustments to Labor and Energy Costs

Flow 

Rate 

(gpm) ACC O&M

Oncethrough 

Pumps at 

125 ft

Labor 

FTE

Net 

Labor 

Costs1

Adjusted 

ACC O&M2

EPA 

Estimated 

O&M

5,000 $500,000 $88,230 0.5 $56,992 $206,000 $ 89,000 

20,000 $1,080,000 $352,921 1 $113,984 $578,300 $ 356,000 

100,000 $3,820,000 $1,764,604 2 $227,968 $2,020,600 $ 1,779,000 

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Based on worker loaded hourly wage of $45 plus 10% of hours for supervisor at $98/hr

2 Deducts once-through pumping and replaces labor cost of $262,800 with value shown.

Conclusion

This analysis confirms that EPA’s capital and O&M costs are mostly in agreement with the ACC 

estimates. In fact, EPA’s capital costs are slightly higher for the large system. The same is not 

true for smaller systems and the differences suggest that the EPRI (and EPA) approach using 

linear cost equations may have limitations when estimating costs for the smallest flow systems 

where the effects of economies of scale are more pronounced. For manufacturing intakes 

currently operating as once-through an estimated 80% of total industry-wide manufacturing 

facility non-contact cooling water flow is associated with systems with a non-contact cooling 

flow over 20,000 gpm. For purposes of estimating national industry-wide level costs, since the 
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larger systems comprise the majority of the total non-contact cooling water flow, this difference 

in costs is not significant.

For purposes of estimating annual costs, EPA evaluated a 30 year amortization at a 9 percent 

interest rate (giving an annualization factor of 9.7). EPA finds that for the large model, both 

annualized cost estimates are in strong agreement (within 1 percent). For the medium and small 

models, the annualized cost estimates using the adjusted ACC O&M rates are within 30 percent. 

As noted, EPA finds the ACC costs are overstated with respect to incremental costs and O&M 

costs, and is likely further overstated for manufacturing facilities that do not require clarification 

of make-up water. After considering that the ACC costs do not represent incremental (net) costs, 

include costs not required by all facilities, and include labor rates not documented by the 

commenter, EPA finds the Agency’s costs are reasonable.

EPA further notes that it may have overestimated closed cycle retrofit cooling technology costs 

for Proposal Options 2 and 3 for manufacturing facilities on an industry-wide basis. The reason 

for this is EPA estimated non-contact cooling water flow rates based the proportion of DIF that is 

non-contact cooling water. This likely represents an overestimation of the flow that would be 

subject to the rule and thus ultimately would have been included in the retrofit to closed cycle. 

EPA notes that manufacturing facilities have opportunities to reduce all or a portion of the 

volume of cooling water flow by reusing the non-contact cooling water as process water. This 

reuse of water for multiple purposes poses a significantly lower overall cost. This option is 

generally not available to power plants which use a much smaller quantity of process water 

compared to cooling water.

.

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

0 20,000 40,000 60,000 80,000 100,000 120,000

Cooling Water Flow (gpm)

Figure 1. EPA and ACC Estimated Capital Costs

ACC Capital Cost EPA Capital Costs
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$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

0 20,000 40,000 60,000 80,000 100,000

Cooling Water Flow (gpm)

Figure 2. EPA and ACC Estimated O&M Costs 

Adjusted ACC O&M ACC O&M EPA Estimated O&M