February 2007 

Economic Impact Analysis of 

NESHAP for Institutional, 

Commercial, and Industrial 

Boilers at Area Sources 

Draft Report 

Prepared for 

Tom Walton 

Environmental Protection Agency 

OAQPS 

Air Benefit and Cost Group 

Research Triangle Park, NC 27711

Prepared by 

Katherine Heller 

Brooks Depro 

Dallas Wood 

RTI International 

3040 Cornwallis Road 

Research Triangle Park, NC 27709

RTI Project Number 0209897.001.018 
_________________________________ 

RTI International is a trade name of Research Triangle Institute 

 RTI Project Number 

 0209897.001.018 

 

Economic Impact Analysis of 

NESHAP for Institutional, 

Commercial, and Industrial 

Boilers at Area Sources 

 Draft Report 

February 2007

Prepared for 

Tom Walton 

Environmental Protection Agency 

OAQPS 

Air Benefit and Cost Group 

Research Triangle Park, NC 27711

Prepared by 

Katherine Heller 

Brooks Depro 

Dallas Wood 

RTI International 

3040 Cornwallis Road 

Research Triangle Park, NC 27709
iii 

CONTENTS 

Section Page

1 Introduction................................................................................................................... 1-1 

1.1 Why EPA is proposing NESHAP for Industrial and 

Commercial/Institutional Boilers ........................................................................ 1-1 

1.2 Types of Facilities Potentially Affected by the I and C/I Boilers Area 

Source NESHAP.................................................................................................. 1-2 

1.2 Organization of this Report ................................................................................. 1-2 

2 Boiler Characteristics and Technologies ...................................................................... 2-1 

2.1 Characteristics of Steam ...................................................................................... 2-1 

2.2 Fossil-Fuel Boiler Characterization..................................................................... 2-4 

2.2.1 Industrial, Commercial, and Institutional Boilers.................................... 2-4 

2.2.2 Heat Transfer Configurations .................................................................. 2-4 

2.2.3 Major Design Types................................................................................. 2-5 

2.3 References............................................................................................................ 2-7 

3 Profile of Affected Sectors............................................................................................ 3-1 

3.1 Data sources used ................................................................................................ 3-1 

3.2 Industrial Sectors ................................................................................................. 3-1 

3.2.1 Food Manufacturing, NAICS 311............................................................ 3-2 

3.2.2 Wood Product Manufacturing, NAICS 321............................................. 3-3 

3.2.3 Nonmetallic Mineral Product Manufacturing, NAICS 327..................... 3-3 

3.3 Service and Commercial Sectors......................................................................... 3-7 

3.3.1 Wholesale Trade in Nondurable Goods, NAICS 422.............................. 3-7 

3.3.2 Real Estate, NAICS 531 ........................................................................ 3-10 

3.3.3 Educational Services, NAICS 611......................................................... 3-11 

3.3.4 Ambulatory Health Care Services, NAICS 621 .................................... 3-12 

3.3.5 Hospitals, NAICS 622 ........................................................................... 3-13 

3.3.6 Nursing and Residential Care Facilities, NAICS 623............................ 3-14 

3.3.7 Traveler Accommodation, NAICS 7211 ............................................... 3-14 
iv 

3.3.8 Food Services and Drinking Places, NAICS 722 .................................. 3-15 

3.3.9 Religious Organizations, Grantmaking Organizations, and Civic 

and Professional Organizations, NonNAICS 813.................................. 3-16 

3.4 Potentially Affected Government Entities, NAICS 92...................................... 3-16 

3.5 References.......................................................................................................... 3-18 

4 Estimated Impacts of Proposed NESHAP Control Options for Industrial, 

Commercial, and Institutional Boilers at area sources.................................................. 4-1 

4.1 Costs of Regulatory Options................................................................................ 4-3 

4.1.1 Estimated Costs of Compliance............................................................... 4-3 

4.2 Technical Approach to Analyzing Economic Impacts and Small Business 

Impacts of Control Options ................................................................................. 4-4 

4.3 Potential Impacts on Firms in Manufacturing Sectors ........................................ 4-5 

4.3.1 Impact Assessment for Firms Owning Existing Manufacturing 

Sources..................................................................................................... 4-5 

4.3.2 Impact Assessment for Firms Owning New Manufacturing Sources...... 4-7 

4.4 Impact Assessment for Firms in Service, Trade, and Non-profit Sectors ........... 4-9 

4.4.1 Impact Assessment for Firms Owning Existing Trade, Service, and 

Nonprofit Sources .................................................................................... 4-9 

4.4.2 Impact Assessment for Firms Owning New Trade, Service, and 

Nonprofit Sources .................................................................................. 4-12 

4.5 Potential Impacts on Local Governments Owning Affected Sources ............... 4-15 

4.5.1 Impact Assessment for Local Governments Owning Existing 

Sources................................................................................................... 4-15 

4.5.2 Impact Assessment for Governments Owning New Sources ................ 4-16 

4.6 Conclusions ....................................................................................................... 4-16 
v 

LIST OF FIGURES 

Number Page

2-1 Generating Electricity: Steam Turbines........................................................................ 2-3 
vi 

LIST OF TABLES 

Number Page

1-1 Sectors Potentially Affected by the Industrial and Commercial/Institutional 

Boilers NESHAP for Area Sources .............................................................................. 1-2 

2-1 Table Title..................................................................................................................... 2-3 

3-1 Financial Information for Manufacturing Sectors by NAICS Code: 2002................... 3-2 

3-2 Manufacturing Firms, Establishments, Receipts, and Average Annual Firm 

Revenue by NAICS Code and Firm Size: 2002............................................................ 3-4 

3-3 Financial Information for Potentially Affected Service and Commercial Sectors, 

by NAICS: 2002 ........................................................................................................... 3-7 

3-4 Characteristics of Potentially Affected Commercial and Service Firms by 

NAICS and Size Category: 2002 .................................................................................. 3-8 

3-5 Characteristics of Potentially Affected Government Units, by Population 

Served: 2002 ............................................................................................................... 3-18

4-1 Summary of Rule Requirements for Each Subcategory of Area Source Boilers ......... 4-2 

4-2 Total Annualized Costs of Compliance per Boiler....................................................... 4-3 

4-3 Cost-to-Sales Ratios for Firms Owning Existing Sources, by size of firm .................. 4-6 

4-4 Cost-to-Profit Ratios for Firms Owning Existing Sources, by size of firm.................. 4-7 

4-5 Cost-to-Sales Ratios for Firms Owning New Manufacturing Sources by Size of 

Firm............................................................................................................................... 4-8 

4-6 Cost-to-Profit Ratios for Firms Owning New Manufacturing Sources by Size of 

Firm............................................................................................................................... 4-9 

4-7 Cost-to-Sales Ratios for Firms Owning Existing Sources in Trade, Service, and 

Nonprofit Sectors, by Size of Firm............................................................................. 4-10 

4-8 Cost-to-Profit Ratios for Firms Owning Existing Sources in Trade, Service, and 

Nonprofit Sectors, by Size of Firm............................................................................. 4-11 

4-9 Cost-to-Sales Ratios for Firms Owning New Sources in Trade, Service, and 

Nonprofit Sectors, by Size of Firm............................................................................. 4-13 

4-10 Cost-to-Profit Ratio for Firms Owning New Sources in Trade, Service, and 

Nonprofit Sectors, by Size of Firm............................................................................. 4-14 

4-12 Cost-to-Revenue Ratios for Governments Owning Affected Existing Sources, 

by Size of Government ............................................................................................... 4-15 

4-13 Cost-to-Revenue Ratios for Local Governments Owning Affected New Sources, 

by Size of Government ............................................................................................... 4-16 
1-1 

SECTION 1 

INTRODUCTION 

The Environmental Protection Agency (EPA) is developing proposed national emission 

standards for hazardous air pollutants (NESHAP) for two area source categories: industrial 

boilers and commercial and institutional boilers. A boiler is defined as an enclosed device using 

controlled flame combustion and having the primary purpose of recovering thermal energy in the 

form of steam or hot water. The source affected by this proposed rule is the collection of all 

existing boilers within a subcategory located at an area source facility or each new boiler located 

at an area source facility. An area source of air pollution is a stationary source that is not a major 

source (does not emit or have the potential to emit 10 tons per year (tpy) of any hazardous air 

pollutant (HAP) or 25 tpy of any combination of HAP). The proposed rule affects industrial 

boilers, institutional boilers, and commercial boilers located at area sources. The industrial boiler 

source category includes boilers used in manufacturing, processing, mining, refining, or any 

other industry. The commercial boiler source category includes boilers used in commercial 

establishments such as stores/malls, laundries, apartments, restaurants, and hotels/motels. 

Institutional boiler source category includes boilers used in medical centers (e.g., hospitals, 

clinics, nursing homes), educational and religious facilities (e.g., schools, universities, churches), 

and municipal buildings (e.g., courthouses, prisons). This report will refer to the sources as ICI 

area source boilers, to distinguish them from ICI major source boilers regulated 

1.1 Why EPA is proposing NESHAP for Industrial and Commercial/Institutional 

Boilers 

The Clean Air Act (CAA) sections 112(c)(3) and 112(k) describe special requirements for area 

sources, directing EPA to identify at least 30 air toxics that pose the greatest potential health 

threat in urban areas and to regulate the area source categories that represent 90 percent of the 

emissions of the 30 “listed” air toxics. EPA implements these requirements through the 

Integrated Urban Air Toxics Strategy (64 FR 38715, July 19, 1999). A primary goal of the 

Strategy is to achieve a 75 percent reduction in cancer incidence attributable to HAP emitted 

from stationary sources. 

Both of the source categories included in this proposal are on the Integrated Urban Air 

Toxics Strategy Area Source Category List. Industrial boilers and institutional/commercial 

boilers were included in the area source list for the Strategy (64 FR 38721). In addition, both 

industrial boilers and institutional/commercial boilers are on the list of section 112(c)(6) source 

categories published on April 10, 1998 (63 FR 17830). Section 112(c)(6) requires EPA to list, 

and subject to standards, categories of sources accounting for not less than 90 percent of 
1-2 

emissions of each of seven listed pollutants. These two categories are on the 112(c)(6) list 

because of emissions of mercury and polycyclic organic matter (POM). 

1.2 Types of Facilities Potentially Affected by the I and C/I Boilers Area Source 

NESHAP 

Entities potentially affected by the proposed rule include facilities in manufacturing, 

service, and government sectors that use boilers. Table 1-1 shows sectors that EPA believes may 

be affected by the rule. 

Table 1-1. Sectors Potentially Affected by the Industrial and Commercial/Institutional 

Boilers NESHAP for Area Sources 

NAICS Description of NAICS code 

311 Food Manufacturing 

321 Wood Product Manufacturing 

327 Nonmetallic Mineral Product Manufacturing 

452 General Merchandise Stores 

531 Real Estate 

611 Educational Services 

621 Ambulatory Health Care Services 

622 Hospitals 

623 Nursing and Residential Care Facilities 

721 Traveler Accommodation 

722 Food Services and Drinking Places 

813 Religious Organizations 

92 Public Administration 

EPA has identified the sectors listed in Table 1-1, above, as potentially affected by the 

ICI Boilers Area Source NESHAP; however, this list may not be exhaustive. Instead, it provides 

examples of the types of entities EPA has identified as operating boilers, and which may be area 

sources. 

1.2 Organization of this Report 

This report provides a brief profile of the industry sectors potentially affected by the ICI 

Boilers Area Source NESHAP. Section 2 describes boiler technologies and characteristics. 

Section 3 describes the facilities and firms or other owning entities in potentially affected 

sectors. 
2-1 

SECTION 2 

BOILER CHARACTERISTICS AND TECHNOLOGIES 

The three categories of combustion devices affected under the regulations are industrial, 

commercial, and institutional (ICI) boilers. Utility boilers primarily engaged in generating 

electricity are not covered by the NESHAP under analysis and are therefore excluded from this 

analysis; units regulated under another MACT standard are also excluded. 

Boilers are combustion devices used to produce steam or heat water. Steam is produced 

in boilers by heating water until it vaporizes. The steam is then channeled to applications within 

a facility or group of facilities via pipes. Steam is an important power and heating source for the 

U.S. economy. It is used in the preparation or manufacturing of many key products, such as 

paper, petroleum products, furniture, and chemicals. Steam is also used to heat buildings and to 

generate the majority of the electricity consumed in this country. There are literally thousands of 

boilers currently being used in the United States throughout a wide variety of industries. 

Since one of the main uses of boilers is to generate steam, some of the characteristics of 

steam are discussed in this section. This section also provides an overview of the various types of 

boiler characteristics and designs. 

2.1 Characteristics of Steam 

Steam, an odorless, invisible gas of vaporized water, may be interspersed with water 

droplets, which gives it a cloudy appearance. It is produced naturally when underground water is 

heated by volcanic processes and mechanically using boilers and other heating processes. When 

water is heated at atmospheric pressure, it remains in liquid form until its temperature exceeds 

212°F, the boiling point of water. Additional heat does not raise the water’s temperature but 

rather vaporizes the water, converting it into steam. However, if water is heated under pressure, 

such as in a boiler, the boiling point is higher than 212°F and more heat is required to generate 

steam. Once all the water has been vaporized into steam, the addition of heat causes the 

temperature and volume to increase. Steam’s heating and work capabilities increase as it is 

produced under greater pressure coupled with higher temperatures. As steam escapes from the 

boiler, it can be directed through pipes to drive mechanical processes or to provide heat. 

The steam used in most utility, industrial, and commercial applications is referred to as 

“clean steam.” Clean steam encompasses steam purities ranging from pure, solid-free steam used 

in critical processes to filtered steam for less demanding applications. The various types of clean 

steam differ in steam purity and steam quality. Steam purity is a quantitative measure of 
2-2 

contamination of steam caused by dissolved particles in the vapor or by tiny droplets of water 

that may remain in the steam. Steam quality is a measure of how much liquid water is mixed in 

with the dry steam (Fleming, 1992). Firms select the levels of steam quality and steam purity for 

their applications based on the sensitivity of their equipment to impurities, water droplet size, 

and condensation as well as the requirements for their production process. Using clean steam 

minimizes the risk of product contamination and prolongs equipment life. Although there are 

infinite possible levels of water purity and quality, the term “clean steam” generally refers to 

three basic types of steam: 

 filtered steam—produced by filtering plant steam using high-efficiency filters. 

Filtered steam is generally of high steam quality because most large water droplets 

and other contaminants will be filtered out. 

 clean steam—steam that is frequently produced from deionized and distilled water. 

Deionized and distilled water is free of dissolved solids and ions, which may corrode 

pipework. 

 pure steam—similar to clean steam except that it is always produced from deionized 

and distilled water. 

Steam applications can be categorized by the amount of pressure required: hot water, low 

pressure, and high pressure. Low pressure is 0 to 15 pounds per square inch (psi) and high 

pressure steam is above 15 psi (Plant Engineering, 1991). Hot water systems, which generate 

little steam, are primarily used for comfort applications, such as hot water for a building. Low 

pressure applications include process heat and space heating. High pressure steam applications 

are more frequently used in industrial and utility applications. Some high pressure applications 

require that the steam be superheated, a process which ensures that the steam is free of water 

droplets, to avoid damaging sensitive equipment. 

Electric cogenerators, such as large factories and processing facilities, use steam to drive 

turbines to generate electricity. A conventional steam electric power plant burns fossil fuels 

(coal, gas, or oil) in a boiler, releasing heat that boils water and converts it into high-pressure 

steam (see Figure 2-1). The steam enters a turbine where it expands and pushes against blades to 

turn the generator shaft and create electric current. In this way, the thermal energy of steam 

becomes mechanical energy, which is converted into electricity. Steam used to drive turbines 

generates most of the electric power in the United States (TXU, 2000). 
2-3 

Figure 2-1. Generating Electricity: Steam Turbines 

Source: Texas Utilities (TXU). 2000. “Generating Electricity: Steam Turbines.” As obtained in September 2000. 

<http://www.txu.com/knowledge/energy_lib/generating01.html>. 

Industrial operations use steam to perform work such as powering complex machinery 

operations, in the same way that electric utilities use steam to rotate turbines. Textile mills, pulp 

and paper mills, and other manufacturing outfits are examples of facilities that use steam to run 

machinery. Steam also provides heat and pressure for manufacturing processes. Industrial 

establishments use steam to provide heat for drying or to heat and separate materials. For 

example, the paper industry uses steam to heat rollers that dry paper during the final stages of the 

production process. Petroleum refineries and chemical producers use steam to heat petroleum, 

raw materials, and other inputs to separate inputs into their constituent components or to 

facilitate chemical interactions. In addition to these applications, steam is employed in many 

other industrial processes, including textile production, wood working, furniture making, metal 

working, food preparation, and the manufacture of chemicals. Substitutes for using steam as 

process heat include electrical heating equipment, infrared, and other radiant drying techniques. 

Electricity may be used to power machinery, as well. However, switching from steam-powered 

to electricity-powered machinery would require significant equipment retrofits or replacement. 
2-4 

2.2 Fossil-Fuel Boiler Characterization 

Section 2.2 discusses the different classes of fossil-fuel boilers, the most common heat 

transfer configurations, and the major design types. The discussion indicates the type(s) of fuel 

that each design can use to operate. 

2.2.1 Industrial, Commercial, and Institutional Boilers 

Industrial, commercial, and institutional boilers are primarily used for process heating, 

electrical or mechanical power generation, and/or space heating. Industrial boilers are used in all 

major industrial sectors but primarily by the paper products, chemical, food, and petroleum 

industries. It is estimated that the heat input capacity for these boilers is typically between 10 and 

250 MMBtu/hr; however, larger industrial boilers do exist and are similar to utility boilers (EPA, 

1997). Commercial/institutional boilers are generally smaller than the industrial units, with heat 

input capacities generally below 10 MMBtu/hr. These units normally supply the steam and hot 

water for space heating in a wide range of locations, including wholesale and retail trade, office 

buildings, hotels, restaurants, hospitals, schools, museums, government buildings, and airports. 

Five hundred ninety-three of the 3,615 units potentially affected by the floor alternative for the 

regulation are commercial/institutional units. 

A boiler system includes the boiler itself, associated piping and valves, operation and 

safety controls, water treatment system, and peripheral equipment such as pollution control 

devices, economizers, or superheaters (Plant Engineering, 1991). Most boilers are made of steel, 

cast iron, or copper. The primary fuels used by boilers are coal, oil, and natural gas, but some use 

electricity, waste gases, or biomass. 

Boilers may either be erected onsite (field-erected boilers) or assembled at a factory 

(packaged boilers). Packaged boilers are typically lower in initial cost and more simple to install. 

However, field-erected boilers may have lower operating costs, less maintenance, and greater 

flexibility because the furnace or convection pattern chosen to meet required steam pressure, 

capacity, and fuel specifications is tailored to the boiler’s potential use (Plant Engineering, 

1991). Applications requiring more than 100,000 pounds of steam per hour are usually equipped 

with a field-erected boiler. 

2.2.2 Heat Transfer Configurations 

The heat transfer configuration of a boiler refers to the method by which heat is 

transferred to the water. The four primary boiler configurations are watertube, firetube, cast iron, 

and tubeless. Most industrial users tend to rely on either watertube or firetube configurations. 
2-5 

In a watertube boiler, combustion heat is transferred to water flowing through tubes 

lining the furnace walls and boiler passes. The furnace watertubes absorb primarily radiative 

heat, while the watertubes in the boiler passes gain heat by convective heat transfer. These units 

have a wide range of heat input capacities (ICI units range from 0.4 to 1,500 MMBtu/hr) and can 

be either field erected or packaged. Watertube boilers with heat input capacities greater than 200 

MMBtu/hr are typically field erected. 

Because firetube, cast iron, and tubeless heat transfer configurations typically have heat 

input capacities below 10 MMBtu/hr, they will not generally be covered by the NESHAP. 

Therefore, this profile focuses on those boiler types that use watertube heat transfer 

configurations. 

2.2.3 Major Design Types 

This section summarizes the five major design types for fossil fuel industrial boilers that 

will be covered by the NESHAP. It also discusses, where possible, the fuels used, capacity, and 

assembly method of each of these types of boilers. 

2.2.3.1 Stoker-Fired Boilers (Coal) 

These units use underfeed air to combust the coal char on a stationary grate, combined 

with one or more levels of overfire air introduced above the grate. There are three types of stoker 

units: 

 spreader stokers, 

 underfeed stokers, and 

 overfeed stokers. 

Stokers generally burn all types of coal, with the exception of overfeed stokers, which do 

not burn coking bituminous coals. Stokers can also burn other types of solid fuel, such as wood, 

wood waste, and bagasse. Spreader stokers are the most common of these boiler types and have 

heat input capacities that typically range from 5 to 550 MMBtu/hr. However, some of these 

boilers have capacities as high as 1,500 MMBtu/hr. Smaller stoker units (i.e., those with heat 

input capacities less than 100 MMBtu/hr) are generally packaged, while larger units are usually 

field erected. 

2.2.3.2 Pulverized Coal Boilers (Coal) 

Combustion in pulverized coal-fired units takes place almost entirely while the coal is 

suspended, unlike in stoker units in which the coal burns on a grate. Finely ground coal is 

typically mixed with primary combustion air and fed to the burner or burners, where it is ignited 
2-6 

and mixed with secondary combustion air. Depending on the location of the burners and the 

direction of coal injection into the furnace, pulverized coal-fired boilers can be classified into 

three different firing types: 

 single and opposed wall, 

 tangential, and 

 cyclone. 

Of these types, wall and tangential configurations are the most common. These firing 

methods are described further in Sections 2.2.3.4 and 2.2.3.5. 

2.2.3.3 Fluidized Bed Combustion (FBC) Boilers (Coal) 

FBC is an integrated technology for reducing sulfur dioxide (SO2) and NOx emissions 

during the combustion of coal. In a typical FBC boiler, crushed coal and inert material (sand, 

silica, alumina, or ash) and/or a sorbent (limestone) are maintained in a highly turbulent 

suspended state by the upward flow of primary air from the windbox located directly below the 

combustion floor. This fluidized state provides a large amount of surface contact between the air 

and solid particles, which promotes uniform and efficient combustion at lower furnace 

temperatures than conventional coal-fired boilers. Once the hot gases leave the combustion 

chamber, they pass through the convective sections of the boiler, which are similar or identical to 

components used in conventional boilers. 

For the FBCs currently in use in all sectors, coal is the primary fuel source, followed in 

descending order by biomass, coal waste, and municipal waste. The heat input capacities of all 

ICI FBC units generally range from 1.4 to 1,075 MMBtu/hr. 

2.2.3.4 Tangentially Fired Boilers (Coal, Oil, Natural Gas) 

The tangentially fired boiler is based on the concept of a single flame zone within the 

furnace. The fuel-air mixture projects from the four corners of the furnace along a line tangential 

to an imaginary cylinder located along the furnace centerline. As fuel and air are fed to the 

burners and the fuel is combusted, a rotating “fireball” is formed. Primarily because of their 

tangential firing pattern, which leads to larger flame volumes and flame interaction, uncontrolled 

tangentially fired boilers generally emit relatively lower NOx than other uncontrolled boiler 

designs. 

Utilities primarily use this type of boiler. Coal is the most common fuel used by these 

units. Tangentially fired boilers operated by utilities are typically larger than 400 MW, while 
2-7 

industrial ones almost always have heat input capacities over 100 MMBtu/hr. In general, most 

units with heat input capacities over 100 MMBtu/hr are field erected. 

2.2.3.5 Wall-fired Boilers (Coal, Oil, Natural Gas) 

Wall-fired boilers are characterized by multiple individual burners located on a single 

wall or on opposing walls of the furnace. In contrast to tangentially fired boilers, each of the 

burners in a wall-fired boiler has a relatively distinct flame zone, and the burners in wall-fired 

boilers do not tilt. Superheated steam temperatures are instead controlled by excess air levels, 

heat input, flue gas recirculation, and/or steam attemperation (water spray). Depending on the 

design and location of the burners, wall-fired boilers are referred to as single wall or opposed 

wall. 

Wall-fired boilers are used to burn coal, oil, or natural gas, and some designs feature 

multifuel capability. Almost all industrial wall-fired boilers have heat input capacities greater 

than 100 MMBtu/hr. Opposed-wall boilers in particular are usually much larger than 250 

MMBtu/hr heat input capacity and are much more common in utility rather than in industrial 

operations. Because of their size, most wall-fired units are field erected. Field-erected watertube 

boilers strictly designed for oil firing are more compact than coal-fired boilers with the same heat 

input, because of the more rapid combustion characteristics of fuel oil. Field-erected watertube 

boilers fired by natural gas are even more compact because of the rapid combustion rate of the 

gaseous fuel, the low flame luminosity, and the ash-free content of natural gas. 

2.3 References 

Fleming, Ian. 1992. “Just How Clean is your Steam?: Minimizing Risk of Product 

Contamination and Prolonging Filter Life.” Manufacturing Chemist 63(10):37-39. 

Plant Engineering. 1991. “Boiler Systems.” Plant Engineering 45(14):92-94. 

Texas Utilities (TXU). 2000. “Generating Electricity: Steam Turbines.” As obtained in 

September 2000. <http://www.txu.com/knowledge/energy_lib/generating01.html>. 

U.S. Environmental Protection Agency (EPA). 1997. Regulatory Impact Analysis of Air 

Pollution Regulations: Utility and Industrial Boilers. Research Triangle Park, NC: U.S. 

Environmental Protection Agency. 
3-1 

SECTION 3 

PROFILE OF AFFECTED SECTORS 

This section examines sectors potentially affected by the proposed NESHAP for 

Industrial and Commercial/Institutional (ICI) Boilers at Area Sources. As noted above, the 

industrial boiler source category includes boilers used in manufacturing, processing, mining, 

refining, or any other industry. The commercial boiler source category includes boilers used in 

commercial establishments such as stores/malls, laundries, apartments, restaurants, and 

hotels/motels. Institutional boiler source category includes boilers used in medical centers (e.g., 

hospitals, clinics, nursing homes), educational and religious facilities (e.g., schools, universities, 

churches), and municipal buildings (e.g., courthouses, prisons). Three industrial sectors, nine 

“service” sectors (which may have commercial or institutional boilers), and municipal and 

county governments (which may have institutional boilers) are profiled. For convenience, we 

refer to the affected sources as ICI area source boilers. 

3.1 Data sources used 

To profile sectors potentially affected by the proposed rulemaking, we used publicly 

available data from the U.S. Bureau of the Census. Specifically, the data examined are compiled 

from the Economic Census and the Survey of Current Business, by NAICS code, into groups by 

employment size of the firm and by receipts of the firm.1

 Businesses are grouped by employment 

size into categories up to 499 employees, and 500 employees and above. Similarly, businesses 

are grouped by receipts into groups ranging from enterprises with receipts less than $100,000 to 

enterprises with receipts over $100,000,000. To facilitate identifying potentially affected small 

entities, we categorize affected industrial sectors by enterprise employment and commercial and 

service sectors by enterprise receipts. County and local governments are categorized by 

population served. 

3.2 Industrial Sectors 

Industrial sectors that may have affected area sources include Food Manufacturing, Wood 

Product Manufacturing, and Nonmetallic Mineral Product Manufacturing. Table 3-1 provides 

information on total 2002 receipts, employment and payroll for these three manufacturing 

sectors. 

 

1

 U.S. Bureau of the Census, Statistics of U.S. Businesses. Data compiled by employment size: 

http://www.census.gov/csd/susb/usalli02.xls and by receipts: http://www.census.gov/csd/susb/usalli_r03.xls. 
3-2 

Table 3-1. Financial Information for Manufacturing Sectors by NAICS Code: 2002 

NAICS 

Code Description Receipts ($1,000) Employment 

Annual Payroll 

($1,000) 

311 Food Manufacturing $ 457,521,297 1,443,766 $ 44,480,065 

321 Wood Product Manufacturing $ 88,649,041 534,011 $ 15,922,366 

327 Nonmetallic Mineral Product 

Manufacturing 

$ 95,442,761 475,476 $ 18,119,656 

Sources: 2002 County Business Patterns and 2002 Economic Census. http://www.census.gov/csd/susb/susb02.htm 

3.2.1 Food Manufacturing, NAICS 311 

Industries in the Food Manufacturing subsector transform livestock and agricultural 

products into products for intermediate or final consumption. The industry groups are 

distinguished by the raw materials (generally of animal or vegetable origin) processed into food 

products. 

The food products manufactured in these establishments are typically sold to wholesalers 

or retailers for distribution to consumers, but establishments primarily engaged in retailing 

bakery and candy products made on the premises not for immediate consumption are included. 

Establishments primarily engaged in manufacturing beverages are classified in Subsector 

312, Beverage and Tobacco Product Manufacturing. (NAICS, 2002) 

Included in NAICS 311 are approximately 50 six-digit NAICS codes, comprising such 

activities as: 

 animal feed manufacturing, 

 grain and oilseed milling, 

 production of frozen and canned vegetables and fruits, 

 production of dairy products, 

 production of meats, and 

 production of many other types of processed food products. 

The Small Business Administration (SBA, 2006) defines criteria for determining if businesses in 

each six-digit NAICS code qualify as small. In Food Manufacturing, NAICS 311, the criteria are 

defined in terms of employment. For the vast majority of six-digit NAICS codes in Food 

Manufacturing, businesses with fewer than 500 employees are considered small. There are four 

six-digit NAICS codes for which businesses with fewer than 750 employees are defined as small, 
3-3 

and four six-digit NAICS codes for which businesses with fewer than 1000 employees are 

considered small. Because the majority of the six-digit NAICS codes define small entities as 

having fewer than 500 employees, and because that definition is easily addressed using the data 

available, we define small entities in NAICS 311 as those firms with fewer that 500 employees. 

Table 3-2 shows the number of firms and the number of establishments, and the total and 

average receipts, for food manufacturing firms with various numbers of employees. Although 

they comprise 97 percent of year-round firms, they earn only 22 percent of revenues. 

3.2.2 Wood Product Manufacturing, NAICS 321 

Industries in the Wood Product Manufacturing subsector manufacture wood products, 

such as lumber, plywood, veneers, wood containers, wood flooring, wood trusses, manufactured 

homes (i.e., mobile home), and prefabricated wood buildings. The production processes of the 

Wood Product Manufacturing subsector include sawing, planning, shaping, laminating, and 

assembling of wood products starting from logs that are cut into bolts, or lumber that then may 

be further cut, or shaped by lathes or other shaping tools. The lumber or other transformed wood 

shapes may also be subsequently planed or smoothed, and assembled into finished products, such 

as wood containers. The Wood Product Manufacturing subsector includes establishments that 

make wood products from logs and bolts that are sawed and shaped, and establishments that 

purchase sawed lumber and make wood products. With the exception of sawmills and wood 

preservation establishments, the establishments are grouped into industries mainly based on the 

specific products manufactured. (NAICS, 2002) 

The Small Business Administration defines small entities by six-digit NAICS code; for 

all 14 six-digit NAICS codes within the Wood Product Manufacturing Industry, small entities are 

defined as those firms with fewer than 500 employees. (SBA, 2006) Table 3-2 shows the number 

of firms and the number of establishments, and the total and average receipts, for wood product 

manufacturing firms with various numbers of employees. Although they comprise 98 percent of 

year-round firms, they earn only 53 percent of revenues. 

3.2.3 Nonmetallic Mineral Product Manufacturing, NAICS 327 

The Nonmetallic Mineral Product Manufacturing subsector transforms mined or quarried 

nonmetallic minerals, such as sand, gravel, stone, clay, and refractory materials, into products for 

intermediate or final consumption. Processes used include grinding, mixing, cutting, shaping, 

and honing. Heat often is used in the process and chemicals are frequently mixed to change the 

composition, purity, and chemical properties for the intended product. For example, glass is 

produced by heating silica sand to the melting point (sometimes combined with cullet or recycled 
3-4 

Table 3-2. Manufacturing Firms, Establishments, Receipts, and Average Annual Firm Revenue by NAIC

Size: 2002 

NAICS 

Code 

Employment Size of Firm 

(small business size standard, employees) Firms Establishments Receipts ($1,000) 

311 Food Manufacturing (500) 

All firms 21,384 25,698 $457,521,297 

 Firms operated for the entire year 19,378 23,691 $455,522,629 

Fewer than 5 employees 6,458 6,463 $2,482,188 5 to 9 employees 3,894 3,915 $ 3,504,941 

 10 to 19 employees 3,293 3,341 $6,677,701  20 to 99 employees 3,935 4,254 $32,274,450  100 to 499 employees 1,247 1,951 $56,660,599  500 employees or more 551 3,767 $353,922,750 

 Firms not operated for the entire year 2,006 2,007 $1,998,668 

321 Wood Product Manufacturing (500) 

 All firms 15,198 17,052 $88,649,041  Firms operated for the entire year 14,051 15,901 $87,953,933  Fewer than 5 employees 4,290 4,293 $ 1,365,385  5 to 9 employees 2,769 2,772 $2,181,797  10 to 19 employees 2,681 2,693 $4,656,383  20 to 99 employees 3,280 3,482 $18,276,348  100 to 499 employees 791 1,271 $19,716,896  500 employees or more 240 1,390 $41,757,124 

 Firms not operated for the entire year 1,147 1,151 $695,108 
3-5 

Table 3-2. Manufacturing Firms, Establishments, Receipts, and Average Annual Firm Revenue by NAIC

Size: 2002 

NAICS 

Code 

Employment Size of Firm 

(small business size standard, employees) Firms Establishments Receipts ($1,000) 

327 Nonmetallic Mineral Product Manufacturing 

 All firms 11,395 16,674 $95,442,761  Firms operated for the entire year 10,576 15,853 $95,176,342  Fewer than 5 employees 3,123 3,125 $900,494  5 to 9 employees 2,054 2,061 $1,755,553  10 to 19 employees 1,931 1,975 $3,790,341  20 to 99 employees 2,553 3,302 $15,357,243  100 to 499 employees 590 1,788 $14,721,698  500 employees or more 325 3,602 $58,651,013  Firms not operated for the entire year 819 821 $266,419 

Sources: 2002 County Business Patterns and 2002 Economic Census. http://www.census.gov/csd/susb/susb02.htm 
3-6 

glass) and then drawn, floated, or blow molded to the desired shape or thickness. Refractory 

materials are heated and then formed into bricks or other shapes for use in industrial applications. 

The Nonmetallic Mineral Product Manufacturing subsector includes establishments that 

manufacture products, such as bricks, refractories, ceramic products, and glass and glass products, 

such as plate glass and containers. Also included are cement and concrete products, lime, gypsum 

and other nonmetallic mineral products including abrasive products, ceramic plumbing fixtures, 

statuary, cut stone products, and mineral wool. The products are used in a wide range of activities 

from construction and heavy and light manufacturing to articles for personal use. 

Mining, beneficiating, and manufacturing activities often occur in a single location. Separate 

receipts will be collected for these activities whenever possible. When receipts cannot be broken out 

between mining and manufacturing, establishments that mine or quarry nonmetallic minerals, 

beneficiate the nonmetallic minerals and further process the nonmetallic minerals into a more 

finished manufactured product are classified based on the primary activity of the establishment. A 

mine that manufactures a small amount of finished products will be classified in Sector 21, Mining. 

An establishment that mines whose primary output is a more-finished manufactured product will be 

classified in the Manufacturing Sector. 

Excluded from the Nonmetallic Mineral Product Manufacturing subsector are 

establishments that primarily beneficiate mined nonmetallic minerals. Beneficiation is the process 

whereby the extracted material is reduced to particles that can be separated into mineral and waste, 

the former suitable for further processing or direct use. Beneficiation establishments are included in 

Sector 21, Mining. (NAICS, 2002) 

The Small Business Administration defines small businesses at the six-digit NAICS code level. For 

most of the 25 six-digit NAICS within NAICS 327, SBA defines a small firm as one having fewer 

than 500 employees. There are six six-digit NAICS for which small firms are defined as firms with 

fewer than 750 employees, and two six-digit NAICS for which small firms are defined as firms 

with fewer than 1000 employees. Because the majority of the six-digit NAICS codes define small 

entities as having fewer than 500 employees, and because that definition is easily addressed using 

the data available, we define small entities in NAICS 327 as those firms with fewer that 500 

employees. Table 3-2 shows the number of firms and the number of establishments, and the total 

and average receipts, for nonmetallic mineral product manufacturing firms with various numbers of 

employees. Although they comprise 97 percent of year-round firms, they earn only 38 percent of 

revenues. 
3-7 

3.3 Service and Commercial Sectors 

Service and commercial sectors that are potentially affected by the proposed NESHAP 

include wholesale trade, real estate, educational services, ambulatory health care services, hospitals, 

and nursing and residential care facilities, food services and drinking places, traveler 

accommodation, and religious organizations. Table 3-3 shows information on firms in potentially 

affected service and commercial sectors, including receipts, number of employees, and payroll. 

Table 3-3. Financial Information for Potentially Affected Service and Commercial Sectors, 

by NAICS: 2002 

NAICS 

Code Description Receipts ($1,000) Employment 

Annual Payroll 

($1,000) 

422 Wholesale Trade, Nondurable Goods $2,157,881,220 2,416,559 $100,131,353 

531 Real Estate $236,657,346 1,351,973 $45,772,548 

611 Educational Services $180,278,839 2,701,675 $71,961,852 

621 Ambulatory Health Care Services $505,690,644 4,917,156 $208,136,533 

622 Hospitals $499,145,896 5,121,584 $195,097,359 

623 Nursing and Residential Care 

Facilities 

$126,267,746 2,770,665 $58,950,491 

722 Food Services and Drinking Places $324,210,635 8,352,174 $96,985,265 

7211 Traveler Accommodation $117,414,326 1,642,067 $32,968,367 

8131 Religious Organizations $82,910,385 1,638,915 $24,843,744 

Sources: 2002 County Business Patterns and 2002 Economic Census. http://www.census.gov/csd/susb/susb02.htm. 

3.3.1 Wholesale Trade in Nondurable Goods, NAICS 422 

Industries in the Wholesale Trade, Nondurable Goods subsector sell or arrange the purchase 

or sale of nondurable goods to other businesses. Nondurable goods are items generally with a 

normal life expectancy of less than three years. Nondurable goods wholesale trade establishments 

are engaged in wholesaling products, such as paper and paper products, chemicals and chemical 

products, drugs, textiles and textile products, apparel, footwear, groceries, farm products, petroleum 

and petroleum products, alcoholic beverages, books, magazines, newspapers, flowers and nursery 

stock, and tobacco products. 

The detailed industries within the subsector are organized in the classification structure 

based on the products sold. Within an industry, the types of establishments may vary, including 

wholesale merchants and/or agents and brokers. Small firms in NAICS 422 are defined as firms 

with fewer than 100 employees. Table 3-4 shows information about potentially affected 
3-8 

Table 3-4. Characteristics of Potentially Affected Commercial and Service Firms by NAICS 

and Size Category: 2002 

NAICS 

Code 

Receipt Size of Firm 

(small business size standard, $M) Firms Establishments 

Receipts 

($1,000) 

Average 

Annual Firm 

Revenue 

($1,000) 

422 Wholesale Trade, Nondurable Goods (100 Employees) 

 All firms 124,758 153,941 $2,157,881,220 $17,297 

 Firms operated for the entire year 110,826 139,977 $2,144,997,782 $19,355 

 Fewer than 5 employees 55,947 56,039 $81,732,727 $1,461 

 5 to 9 employees 20,636 21,012 $81,872,704 $3,967 

 10 to 19 employees 14,434 15,425 $110,283,253 $7,641 

 20 to 99 employees 15,026 19,636 $314,532,298 $20,933 

 100 to 499 employees 3,343 8,581 $270,697,489 $80,974 

 500 employees or more 1,440 19,284 $1,285,879,311 $892,972 

 Firms not operated for the entire year 13,932 13,964 $12,883,438 $925 

531 Real Estate ($23.5) 

 All firms 226,318 257,195 $236,657,346 $1,046 

 Less than $100,000 57,652 57,668 $2,940,109 $51 

 $100,000 to $499,999 101,753 101,950 $25,090,485 $247 

 $500,000 to $999,999 31,694 32,050 $22,143,040 $699 

 $1,000,000 to $4,999,999 28,816 32,481 $55,817,823 $1,937 

 $5,000,000 to $9,999,999 3,055 5,242 $19,247,656 $6,300 

 $10,000,000 to $49,999,999 2,294 8,197 $34,143,223 $14,884 

 $50,000,000 to $99,999,999 347 3,004 $11,841,770 $34,126 

 $100,000,000 or more 707 16,603 $65,433,240 $92,551 

611 Educational Services ($6.5) 

 All firms 65,933 73,701 $180,278,839 $2,734 

 Less than $100,000 19,608 19,617 $ 908,228 $46 

 $100,000 to $499,999 23,589 23,692 $5,647,731 $239 

 $500,000 to $999,999 7,389 7,590 $5,235,347 $709 

 $1,000,000 to $4,999,999 10,755 12,166 $22,698,180 $2,110 

 $5,000,000 to $9,999,999 1,991 2,986 $12,906,215 $6,482 

 $10,000,000 to $49,999,999 1,931 4,065 $35,516,971 $18,393 

 $50,000,000 to $99,999,999 338 1,068 $19,314,389 $57,143 

 $100,000,000 or more 332 2,517 $78,051,778 $235,096 

621 Ambulatory Health Care Services ($31.5) 

 All firms 424,694 487,747 $505,690,644 $1,191 

 Less than $100,000 56,619 56,688 $2,850,904 $50 

 $100,000 to $499,999 193,996 194,584 $54,362,647 $280 

 $500,000 to $999,999 95,043 96,423 $66,075,911 $695 

 $1,000,000 to $4,999,999 66,502 78,465 $126,820,368 $1,907 

 $5,000,000 to $9,999,999 6,481 13,012 $42,723,078 $6,592 

 $10,000,000 to $49,999,999 4,608 18,062 $72,376,091 $15,707 

 $50,000,000 to $99,999,999 537 5,072 $20,288,006 $37,780 

 $100,000,000 or more 908 25,441 $120,193,639 $132,372 

(continued) 
3-9 

Table 3-4. Characteristics of Potentially Affected Commercial and Service Firms by NAICS 

and Size Category: 2002 (continued) 

NAICS 

Code 

Receipt Size of Firm 

(small business size standard, $M) Firms Establishments 

Receipts 

($1,000) 

Average 

Annual Firm 

Revenue 

($1,000) 

622 Hospitals ($31.5) 

 All firms 4,548 7,569 $499,145,896 $109,751 

 Less than $100,000 184 184 (D) (D) 

 $100,000 to $499,999 194 194 (D) (D) 

 $500,000 to $999,999 126 126 $89,891 $713 

 $1,000,000 to $4,999,999 467 501 $1,404,495 $3,007 

 $5,000,000 to $9,999,999 520 548 $3,728,055 $7,169 

 $10,000,000 to $49,999,999 1,444 1,601 $33,820,475 $23,421 

 $50,000,000 to $99,999,999 512 633 $33,753,433 $65,925 

 $100,000,000 or more 1,101 3,782 $426,290,638 $387,185 

623 Nursing and Residential Care Facilities ($12.5) 

 All firms 32,720 67,900 $126,267,746 $3,859 

 Less than $100,000 5,489 5,497 (D) (D) 

 $100,000 to $499,999 9,646 9,760 (D) (D) 

 $500,000 to $999,999 3,457 3,730 $2,467,333 $714 

 $1,000,000 to $4,999,999 8,191 12,978 $19,343,333 $2,362 

 $5,000,000 to $9,999,999 2,862 7,439 $17,773,345 $6,210 

 $10,000,000 to $49,999,999 2,420 14,399 $34,241,886 $14,150 

 $50,000,000 to $99,999,999 252 3,810 $10,185,463 $40,419 

 $100,000,000 or more 403 10,287 $39,638,992 $98,360 

722 Food Services and Drinking Places ($19) 

 All firms 376,637 503,354 $324,210,635 $861 

 Less than $100,000 89,074 89,149 $4,406,632 $ 49 

 $100,000 to $499,999 181,695 182,424 $45,255,183 $249 

 $500,000 to $999,999 56,509 58,372 $39,508,709 $699 

 $1,000,000 to $4,999,999 43,456 58,713 $78,411,546 $1,804 

 $5,000,000 to $9,999,999 3,048 13,102 $19,536,493 $6,410 

 $10,000,000 to $49,999,999 2,252 29,004 $37,063,816 $16,458 

 $50,000,000 to $99,999,999 244 8,256 $10,415,763 $42,688 

 $100,000,000 or more 359 64,334 $89,612,493 $249,617 

(continued) 
3-10 

Table 3-4. Characteristics of Potentially Affected Commercial and Service Firms by NAICS 

and Size Category: 2002 (continued) 

NAICS 

Code 

Receipt Size of Firm 

(small business size standard, $M) Firms Establishments 

Receipts 

($1,000) 

Average 

Annual Firm 

Revenue 

($1,000) 

7211 Traveler Accommodation ($6.5) 

 All firms 41,551 51,531 $117,414,326 $2,826 

 Less than $100,000 7,441 7,446 $382,929 $51 

 $100,000 to $499,999 17,351 17,458 $4,404,095 $254 

 $500,000 to $999,999 7,450 7,576 $5,281,185 $709 

 $1,000,000 to $4,999,999 7,351 8,120 $14,075,921 $1,915 

 $5,000,000 to $9,999,999 859 1,336 $5,504,778 $6,408 

 $10,000,000 to $49,999,999 745 2,203 $12,350,512 $16,578 

 $50,000,000 to $99,999,999 120 1,018 (D) (D) 

 $100,000,000 or more 234 6,374 (D) (D) 

8131 Religious Organizations ($6.5) 

 All firms 172,311 172,562 $82,910,385 $481 

 Less than $100,000 68,164 68,164 $2,774,665 $41 

 $100,000 to $499,999 71,962 71,964 $16,732,659 $233 

 $500,000 to $999,999 16,466 16,469 $11,480,290 $697 

 $1,000,000 to $4,999,999 13,966 14,011 $27,360,127 $1,959 

 $5,000,000 to $9,999,999 1,139 1,168 $7,558,585 $6,636 

 $10,000,000 to $49,999,999 525 671 $8,792,099 $16,747 

 $50,000,000 to $99,999,999 42 53 $1,983,004 $47,214 

 $100,000,000 or more 47 62 $6,228,956 $132,531 

establishments and firms, by employment size. Although 96 percent of firms qualify as small 

entities under this definition, they earn only 27 percent of receipts. 

3.3.2 Real Estate, NAICS 531 

Industries in the Real Estate subsector group establishments that are primarily engaged in 

renting or leasing real estate to others; managing real estate for others; selling, buying, or renting 

real estate for others; and providing other real estate related services, such as appraisal services. 

Among the subsectors of this NAICS are firms that lease residential properties, such as apartment 

buildings. This industry comprises establishments primarily engaged in acting as lessors of 

buildings used as residences or dwellings, such as single-family homes, apartment buildings, and 

town homes. Included in this industry are owner-lessors and establishments renting real estate and 

then acting as lessors in subleasing it to others. The establishments in this industry may manage the 
3-11 

property themselves or have another establishment manage it for them. Another subsector is firms 

that lease nonresidential properties. This industry comprises establishments primarily engaged in 

acting as lessors of buildings (except miniwarehouses and self-storage units) that are not used as 

residences or dwellings. Included in this industry are: (1) owner-lessors of nonresidential buildings; 

(2) establishments renting real estate and then acting as lessors in subleasing it to others; and (3) 

establishments providing full service office space, whether on a lease or service contract basis. The 

establishments in this industry may manage the property themselves or have another establishment 

manage it for them. Real estate property managers are establishments primarily engaged in 

managing real property for others. Management includes ensuring that various activities associated 

with the overall operation of the property are performed, such as collecting rents, and overseeing 

other services (e.g., maintenance, security, trash removal.) 

The Small Business Administration defines small real estate firms as firms having receipts 

of less than $23.5 million per year. The data available do not readily correspond to this size 

definition; we therefore use the upper bound of the receipts category within which this size 

definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 

million comprise 99.5 percent of the firms in the industry, but earn only 67 percent of the receipts. 

3.3.3 Educational Services, NAICS 611 

Industries in the Educational Services subsector provide instruction and training in a wide 

variety of subjects. The instruction and training is provided by specialized establishments, such as 

schools, colleges, universities, and training centers. The subsector is structured according to level 

and type of educational services. Elementary and secondary schools, junior colleges and colleges, 

universities, and professional schools correspond to a recognized series of formal levels of 

education designated by diplomas, associate degrees (including equivalent certificates), and 

degrees. The remaining industry groups are based more on the type of instruction or training offered 

and the levels are not always as formally defined. The establishments are often highly specialized, 

many offering instruction in a very limited subject matter, for example ski lessons or one specific 

computer software package. Within the sector, the level and types of training that are required of 

the instructors and teachers vary depending on the industry. 

Establishments that manage schools and other educational establishments on a contractual 

basis are classified in this subsector if they both manage the operation and provide the operating 

staff. Such establishments are classified in the educational services subsector based on the type of 

facility managed and operated. 
3-12 

The Small Business Administration defines small firms in NAICS 611 as firms having 

receipts of less than $6.5 million per year. The data available do not readily correspond to this size 

definition; we therefore use the upper bound of the receipts category within which this size 

definition falls: less than $10 million. As shown in Table 3-4, firms with receipts less than $10 

million comprise 96 percent of the firms in the industry, but earn only 26 percent of the receipts. 

3.3.4 Ambulatory Health Care Services, NAICS 621 

Industries in the Ambulatory Health Care Services subsector provide health care services 

directly or indirectly to ambulatory patients and do not usually provide inpatient services. Health 

practitioners in this subsector provide outpatient services, with the facilities and equipment not 

usually being the most significant part of the production process. 

Included in NAICS 621 are doctors’ offices, establishments of health practitioners having 

the degree of M.D. (Doctor of medicine) or D.O. (Doctor of osteopathy) primarily engaged in the 

independent practice of general or specialized medicine (e.g., anesthesiology, oncology, 

ophthalmology, psychiatry) or surgery. These practitioners operate private or group practices in 

their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO 

medical centers. 

Also included are psychiatrist’s offices. This U.S. industry comprises establishments of 

health practitioners having the degree of M.D. (Doctor of medicine) or D.O. (Doctor of osteopathy) 

primarily engaged in the independent practice of psychiatry or psychoanalysis. These practitioners 

operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of 

others, such as hospitals or HMO medical centers. 

Also included are dentists’ offices. This industry comprises establishments of health 

practitioners having the degree of D.M.D. (Doctor of dental medicine), D.D.S. (Doctor of dental 

surgery), or D.D.Sc. (Doctor of dental science) primarily engaged in the independent practice of 

general or specialized dentistry or dental surgery. These practitioners operate private or group 

practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or 

HMO medical centers. They can provide either comprehensive preventive, cosmetic, or emergency 

care, or specialize in a single field of dentistry. 

In addition to doctors’ offices and dentists’ offices, this NAICS also includes offices of 

medical specialists, offices of mental health professionals other than doctors, free-standing urgent 

care or emergency care centers, and mental health and substance abuse centers. 
3-13 

The Small Business Administration defines small firms in NAICS 621 as firms having 

receipts of less than $31.5 million per year. The data available do not readily correspond to this size 

definition; we therefore use the upper bound of the receipts category within which this size 

definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 

million comprise 99.7 percent of the firms in the industry, and earn 72 percent of the receipts. 

3.3.5 Hospitals, NAICS 622 

Industries in the Hospitals subsector provide medical, diagnostic, and treatment services that 

include physician, nursing, and other health services to inpatients and the specialized 

accommodation services required by inpatients. Hospitals may also provide outpatient services as a 

secondary activity. Establishments in the Hospitals subsector provide inpatient health services, 

many of which can only be provided using the specialized facilities and equipment that form a 

significant and integral part of the production process. Included in NAICS 622 are general medical 

and surgical hospitals, establishments known and licensed as general medical and surgical hospitals 

primarily engaged in providing diagnostic and medical treatment (both surgical and nonsurgical) to 

inpatients with any of a wide variety of medical conditions. These establishments maintain inpatient 

beds and provide patients with food services that meet their nutritional requirements. These 

hospitals have an organized staff of physicians and other medical staff to provide patient care 

services. These establishments usually provide other services, such as outpatient services, 

anatomical pathology services, diagnostic X-ray services, clinical laboratory services, operating 

room services for a variety of procedures, and pharmacy services. 

Also included are psychiatric and substance abuse hospitals. This industry comprises 

establishments known and licensed as psychiatric and substance abuse hospitals primarily engaged 

in providing diagnostic, medical treatment, and monitoring services for inpatients who suffer from 

mental illness or substance abuse disorders. The treatment often requires an extended stay in the 

hospital. These establishments maintain inpatient beds and provide patients with food services that 

meet their nutritional requirements. They have an organized staff of physicians and other medical 

staff to provide patient care services. Psychiatric, psychological, and social work services are 

available at the facility. These hospitals usually provide other services, such as outpatient services, 

clinical laboratory services, diagnostic X-ray services, and electroencephalograph services. 

Finally, NAICS 622 also includes other specialty hospitals such as maternity hospitals, 

orthopedic hospitals, and other specialty hospitals that treat a limited subset of conditions. 

The Small Business Administration defines small firms in NAICS 622 as firms having 

receipts of less than $31.5 million per year. The data available do not readily correspond to this size 
3-14 

definition; we therefore use the upper bound of the receipts category within which this size 

definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 

million comprise 65 percent of the firms in the industry, but earn less than 10 percent of the 

receipts. Unlike several of the other affected sectors, larger firms are common in NAICS 622. 

3.3.6 Nursing and Residential Care Facilities, NAICS 623 

Industries in the Nursing and Residential Care Facilities subsector provide residential care 

combined with either nursing, supervisory, or other types of care as required by the residents. In 

this subsector, the facilities are a significant part of the production process and the care provided is 

a mix of health and social services with the health services being largely some level of nursing 

services. Nursing care facilities are establishments primarily engaged in providing inpatient nursing 

and rehabilitative services. The care is generally provided for an extended period of time to 

individuals requiring nursing care. These establishments have a permanent core staff of registered 

or licensed practical nurses who, along with other staff, provide nursing and continuous personal 

care services. Also included are establishments primarily engaged in providing residential care (but 

not licensed hospital care) to people with mental retardation, mental illness, or substance abuse 

problems. In addition, residential care homes for the elderly and other residential care 

establishments such as orphanages, group homes, and halfway houses are included in this NAICS. 

The Small Business Administration defines small firms in NAICS 623 as firms having 

receipts of less than $12.5 million per year. The data available do not readily correspond to this size 

definition; we therefore use the upper bound of the receipts category within which this size 

definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 

million comprise 98 percent of the firms in the industry, but earn only 58 percent of the receipts. 

3.3.7 Traveler Accommodation, NAICS 7211 

Industries in the Accommodation subsector provide lodging or short-term accommodations 

for travelers, vacationers, and others. There is a wide range of establishments in these industries. 

Some provide lodging only; while others provide meals, laundry services, and recreational 

facilities, as well as lodging. Lodging establishments are classified in this subsector even if the 

provision of complementary services generates more revenue. The types of complementary services 

provided vary from establishment to establishment. 

The subsector is organized into three industry groups: (1) traveler accommodation, (2) 

recreational accommodation, and (3) rooming and boarding houses. Of these, the first and third may 

potentially be affected by the proposed rule. The Traveler Accommodation industry group includes 

establishments that primarily provide traditional types of lodging services. This group includes 
3-15 

hotels, motels, and bed and breakfast inns. In addition to lodging, these establishments may provide 

a range of other services to their guests. The Rooming and Boarding Houses industry group 

includes establishments providing temporary or longer-term accommodations, which for the period 

of occupancy, may serve as a principal residence. Board (i.e., meals) may be provided but is not 

essential. 

The Small Business Administration defines small firms in NAICS 721 as firms having 

receipts of less than $6.5 million per year. The data available do not readily correspond to this size 

definition; we therefore use the upper bound of the receipts category within which this size 

definition falls: less than $10 million. As shown in Table 3-4, firms with receipts less than $10 

million comprise 97 percent of the firms in the industry, but earn only 25 percent of the receipts. 

3.3.8 Food Services and Drinking Places, NAICS 722 

Industries in the Food Services and Drinking Places subsector prepare meals, snacks, and 

beverages to customer order for immediate on-premises and off-premises consumption. There is a 

wide range of establishments in these industries. Some provide food and drink only; while others 

provide various combinations of seating space, waiter/waitress services and incidental amenities, 

such as limited entertainment. The industries in the subsector are grouped based on the type and 

level of services provided. The industry groups are full-service restaurants; limited-service eating 

places; special food services, such as food service contractors, caterers, and mobile food services; 

and drinking places. 

Food services and drink activities at hotels and motels; amusement parks, theaters, casinos, 

country clubs, and similar recreational facilities; and civic and social organizations are included in 

this subsector only if these services are provided by a separate establishment primarily engaged in 

providing food and beverage services. 

Excluded from this subsector are establishments operating dinner cruises. These 

establishments are classified in Subsector 487, Scenic and Sightseeing Transportation because those 

establishments utilize transportation equipment to provide scenic recreational entertainment. 

The Small Business Administration defines small firms in NAICS 722 as firms having 

receipts of less than $6.5 million per year, except for subsector 72231, Food Service Contractors, 

for which the criterion is $19.0 million. To be conservative, we utilize the $19.0 million small entity 

definition. The data available do not readily correspond to this size definition; we therefore use the 

upper bound of the receipts category within which this size definition falls: less than $50 million. 

As shown in Table 3-4, firms with receipts less than $50 million comprise 99.8 percent of the firms 
3-16 

in the industry, but earn only 69 percent of the receipts. If we had utilized the $6.5 million 

definition, the upper bound for that size category is $10 million. Firms with less than $10 million in 

receipts comprise 99.2 percent of the firms in the industry, and earn 58 percent of receipts. 

3.3.9 Religious Organizations, Grantmaking Organizations, and Civic and Professional 

Organizations, NonNAICS 813 

Industries in the Religious, Grantmaking, Civic, Professional, and Similar Organizations 

subsector group establishments that organize and promote religious activities; support various 

causes through grantmaking; advocate various social and political causes; and promote and defend 

the interests of their members. 

The industry groups within the subsector are defined in terms of their activities, such as 

establishments that provide funding for specific causes or for a variety of charitable causes; 

establishments that advocate and actively promote causes and beliefs for the public good; and 

establishments that have an active membership structure to promote causes and represent the 

interests of their members. Establishments in this subsector may publish newsletters, books, and 

periodicals, for distribution to their membership. 

Religious organizations include (1) establishments primarily engaged in operating religious 

organizations, such as churches, religious temples, and monasteries and/or (2) establishments 

primarily engaged in administering an organized religion or promoting religious activities. 

Grantmaking and giving organizations include (1) establishments known as grantmaking 

foundations or charitable trusts and (2) establishments primarily engaged in raising funds for a wide 

range of social welfare activities, such as health, educational, scientific, and cultural activities. 

Civic and professional organizations include groups that raise funds for specific causes, including 

research and services for specific diseases, advocacy groups for the environment and for other 

social and recreational causes. 

The Small Business Administration defines small firms in NAICS 813 as firms having 

receipts of less than $6.5 million per year. The data available do not readily correspond to this size 

definition; we therefore use the upper bound of the receipts category within which this size 

definition falls: less than $10 million. As shown in Table 3-4, firms with receipts less than $10 

million comprise 99 percent of the firms in the industry, and earn 79 percent of the receipts. 

3.4 Potentially Affected Government Entities, NAICS 92 

Government units that own and operate affected area source boilers are classified in the 

public administration sector, NAICS 92. The Public Administration sector consists of 
3-17 

establishments of federal, state, and local government agencies that administer, oversee, and 

manage public programs and have executive, legislative, or judicial authority over other institutions 

within a given area. These agencies also set policy, create laws, adjudicate civil and criminal legal 

cases, provide for public safety and for national defense. In general, government establishments in 

the Public Administration sector oversee governmental programs and activities that are not 

performed by private establishments. Establishments in this sector typically are engaged in the 

organization and financing of the production of public goods and services, most of which are 

provided for free or at prices that are not economically significant. 

Government establishments also engage in a wide range of productive activities covering 

not only public goods and services but also individual goods and services similar to those produced 

in sectors typically identified with private-sector establishments. In general, ownership is not a 

criterion for classification in NAICS. Therefore, government establishments engaged in the 

production of private-sector-like goods and services should be classified in the same industry as 

private-sector establishments engaged in similar activities. 

As a practical matter, it is difficult to identify separate establishment detail for many 

government agencies. To the extent that separate establishment records are available, the 

administration of governmental programs is classified in Sector 92, Public Administration, while 

the operation of that same governmental program is classified elsewhere in NAICS based on the 

activities performed. For example, the governmental administrative authority for an airport is 

classified in Industry 92612, Regulation and Administration of Transportation Programs, while 

operating the airport is classified in Industry 48811, Airport Operations. When separate records are 

not available to distinguish between the administration of a governmental program and the 

operation of it, the establishment is classified in Sector 92, Public Administration. 

Examples of government facilities that may operate affected boilers are courthouses, 

correctional institutions, and administrative buildings of various types. 

Small governments are defined as those serving a population of less than 50,000 people. 

Small governments may be municipal or county governments. Table 3-5 shows information for 

county and municipal governments by population served. Roughly 72 percent of counties and 97 

percent of municipal governments qualify as small government units. Small county governments 

receive 14 percent of county revenues, while small municipalities receive 29 percent of municipal 

revenues. Small counties average $16 million in revenues, while larger counties (over 50,000 in 

population served) average $261 million. The contrast between small and large municipal 
3-18 

Table 3-5. Characteristics of Potentially Affected Government Units, by Population Served: 

2002 

NAICS Code 

Population Size of Municipalities and 

Counties 

(small entity size standard, population) 

Governments 

(number) 

Receipts 

($1,000) 

Average Annual 

Revenue 

($1,000) 

Counties (50,000) 

All Counties 3034 $259,661,308 $85,584 

Less than 10,000 671 $4,296,943 $6,404 

9211, 9212, 9213, 

9214, 922, 923, 

924, 925, 926 

10,000 to 24,999 869 $12,787,595 $14,715 

 25,000 to 49,999 638 $19,557,174 $30,654 

 50,000 to 99,999 383 $26,354,527 $68,811 

 100,000 to 149,999 156 $17,070,457 $109,426 

 150,000 to 249,999 116 $21,416,080 $184,621 

 250,000 to 499,999 110 $34,962,295 $317,839 

 500,000 or more 91 $123,216,237 $1,354,025 

Municipalities (50,000) 

All Municipalities 19429 $337,432,406 $17,367 

Less than 10,000 16745 $34,944,647 $2,087 

9211, 9212, 9213, 

9214, 922, 923, 

924, 925, 927 

10,000 to 24,999 1436 $32,010,988 $22,292 

 25,000 to 49,999 643 $31,630,676 $49,192 

 50,000 to 74,999 246 $22,544,234 $91,643 

 75,000 to 99,999 118 $15,949,696 $135,167 

 100,000 to 199,999 153 $38,160,854 $249,417 

 200,000 to 299,999 30 $12,886,487 $429,550 

 300,000 or more 58 $149,304,824 $2,574,221 

Sources: 

U.S. Census of Governments. 2002. Finances of County Governments, 2002. 

http://www.census.gov/prod/2005pubs/gc02x43.pdf 

U.S. Census of Governments. 2002. Finances of Municipal and Township Governments, 2002. 

http://www.census.gov/prod/2005pubs/gc024x4.pdf

governments is even more striking. Small municipal governments average roughly $5 million in 

revenues, and larger municipal governments average $392 million in revenues. 

3.5 References 

U.S. Bureau of the Census. Census of Governments. 2002. Finances of County Governments, 2002. 

http://www.census.gov/prod/2005pubs/gc02x43.pdf 

U.S. Bureau of the Census, 2002. Census of Governments. 2002. Finances of Municipal and 

Township Governments, 2002. http://www.census.gov/prod/2005pubs/gc024x4.pdf
3-19 

U.S. Bureau of the Census. North American Classification System (NAICS). 2002. 

http://www.census.gov/epcd/www/naics.html

U.S. Small Business Administration, 2006. Small Business Size Standards Matched to the North 

American Classification System, effective July 31, 2006. 

http://www.sba.gov/size/sizetable2002.html 
4-1 

SECTION 4 

ESTIMATED IMPACTS OF PROPOSED NESHAP CONTROL OPTIONS FOR 

INDUSTRIAL, COMMERCIAL, AND INSTITUTIONAL BOILERS AT AREA 

SOURCES 

In developing the proposed NESHAP for industrial, commercial, and institutional boilers 

at area sources, EPA defined subcategories based on boiler size and fuel type. Large units are 

water tube boilers with heat input capacities greater than 10 million BTU per hour. Small units 

are all other boilers. EPA examined two options for reducing emissions from affected boilers at 

area source facilities. The above-the-floor option would apply the major source NESHAP to 

cover area sources. MACT Floor would be to apply MACT (maximum achievable control 

technology) for the 112(c)(6) pollutants (mercury and Particulate Organic Matter or POM) and 

GACT (generally achievable control technology) for the other HAP. GACT allows more 

flexibility to use work practices and alternative approaches. 

To establish the MACT floor for existing units, EPA examined control options used by 

units within each subcategory to identify the best performing units; options considered included 

fuel substitution, process changes, work practices, and add-on control technologies. After 

examining the data for existing units, EPA concluded that MACT floor for existing units for both 

mercury and POM in all subcategories is no control. Under GACT, for large existing solid fuel 

boilers, EPA is proposing a work practice standard, requiring an energy audit performed on the 

boiler and the facility and to implement any cost-effective energy conservation improvement 

identified by the audit. 

For new units, MACT is defined as the emission control that is achieved in practice by 

the best controlled source. For new solid fuel boilers, MACT floor level of control is defined by 

the combination of a fabric filter and a CO emission limit. For new large liquid fuel boilers and 

new large gaseous fuel boilers, MACT floor is a CO emission limit. For new small liquid fuel 

boilers and new small gaseous fuel boilers, MACT floor is no emission reduction. GACT for 

new solid fuel area source boilers is also based on a fabric filter. 

Table 4-1 presents the subcategories and a summary of requirements for existing and new 

sources. Note that for existing sources, only large units using solid fuel have any compliance 

activities required. For new sources, on the other hand, small units using liquid or gaseous fuel 

have no compliance activities. 
4-2 

Table 4-1. Summary of Rule Requirements for Each Subcategory of Area Source Boilers 

Subcategory 

Emission 

Limitsa

Work Practice 

Standarda

Testing 

Requirements 

Monitoring 

Requirements 

Existing 

Large solid 

Above-the-floor PM 

Mercury 

HCl 

Other Metals 

 

PM, Hg, HCl, CO PM, Hg, HCl, 

Scrubber process 

monitoring, Fuel, 

Opacity 

CO, O2 monitoring 

MACT Floor 1. Energy audit 

2. Implement C/E 

findings 

None None 

Small solid 

Large liquid 

Small liquid 

Large gaseous 

Small gaseous 

None 

New 

Large solid 

Above-the-floor PM 

Mercury 

CO 

None PM – Stack test 

Hg – stack test or fuel 

analysis 

1. opacity 

2. fuel 

MACT Floor PM 

Mercury 

CO 

None Boiler tune-up None 

Small solid 

Above-the-floor PM 

Mercury 

 

PM – Stack test 

Hg – stack test or fuel 

analysis 

1. opacity 

2. fuel 

MACT Floor 1. Install energyefficient boiler 

2. Annual tune-ups 

Boiler tune-up None 

Large liquid CO None Annual stack test for 

units 10 to 100 million 

Btu/hour in size 

CEM for units greater 

than 100 million 

Btu/hour in size 

Small liquid None 

Large gaseous CO None Annual stack test for 

units 10 to 100 million 

Btu/hour in size 

CEM for units greater 

than 100 million 

Btu/hour in size 

Small gaseous None 

a

 Existing Units: Emission standards are Above-the-Floor; Work Practice is MACT Floor. 
4-3 

This section examines the costs for existing and new boiler units under each option, and 

assesses the economic impacts of the options by comparing costs under each option to revenues 

for boiler owners of various types and sizes. 

4.1 Costs of Regulatory Options 

EPA considered two regulatory options for both new and existing sources. The first 

option is comparable to the regulation promulgated for major sources, and includes, for existing 

sources, add-on control equipment, monitoring, recordkeeping, and reporting. The second option 

is a work-practice standard that requires affected sources to conduct a facility-wide energy audit 

and to implement any efficiency-enhancing activities identified. After examining the costs and 

effectiveness of these regulatory options, EPA chose to adopt standards based on MACT Floor 

for existing sources because the above-the-floor option appeared likely to impose significant 

economic impacts, especially for small entities. 

4.1.1 Estimated Costs of Compliance 

Affected sources’ costs of compliance under both options are shown in Table 4-2. To 

reflect the fact that costs vary substantially among sources under the above-the-floor option for 

existing sources and under both the above-the-floor option and MACT Floor for new sources, 

Table 4-2 presents the minimum and maximum costs per source, and a measure of central 

tendency (weighted average for existing sources, median for new sources). For existing area 

source facilities, costs for the above-the-floor option range from $97,500 to $254,000. Because 

costs are estimated for an existing population and the distribution of costs for the population is 

known, we also compute a weighted average cost as the central tendency cost measure for 

existing facilities. By contrast, MACT Floor is very low cost: conducting an energy audit will 

cost an estimated $245 for each facility. 

Table 4-2. Total Annualized Costs of Compliance per Boiler 

Existing Sources Above-the-floor MACT Floor 

Minimum $97,500 $245 

Weighted Average $206,000 $245 

Maximum $254,000 $245 

New Sources Above-the-floor MACT Floor 

Minimum $976 $200

Median $78,300 $2,220 

Maximum $244,000 $100,741 
4-4 

For affected new sources, estimated costs of complying with MACT Floor range from 

$200 to $101,000, with a median cost of $2,220; costs of complying with the above-the-floor 

option range from $976 to $244,000, with a median of $78,300 

4.2 Technical Approach to Analyzing Economic Impacts and Small Business Impacts of 

Control Options 

Complying with the proposed rule may impose costs on affected facilities. Economic 

impact analysis (EIA) is used by EPA to examine the effects of these costs on affected facilities, 

companies, governments, and markets. In general, EIA methods vary depending on the scope of 

economic decision-making and the amount of interaction between segments of the economy 

accounted for in the analysis. Economic analysis methods may simulate behavioral changes by 

affected economic actors, or they may hold constant all interactions between the affected facility 

and market forces, and assume that the facility absorbs all control costs and does not pass any 

portion of the control costs back to suppliers or forward to consumers. In addition, economic 

analyses may focus only on directly affected entities, or they may incorporate some or all 

indirect impacts throughout the rest of the economy. 

In reality, an increase in costs, however small, will likely result in some change in 

economic behavior by affected entities. Similarly, because all markets are linked directly or 

indirectly, creating a web of interactions, the effects of the increase in costs will likely be felt to 

some extent throughout the economy. In the case of the proposed rule for ICI boilers at area 

sources, the rule will impose costs on some affected facilities; the increased costs of operating a 

boiler will in turn increase the cost of conducting the primary activities at such facilities, such as 

producing a good or providing a service. Affected facilities may attempt to recover some of their 

costs by passing them back to suppliers or forward to customers. The suppliers and customers, in 

turn, may try to pass some of their costs on to other entities, and thereby the direct costs of 

compliance may have ramifications throughout the economy. 

For several reasons, however, EPA has chosen not to model the behavioral responses of 

actors throughout the economy in response to the proposed rule. First, the costs of complying 

with the rule, if any, are expected to be relatively small for most entities, and therefore their 

responses and the resulting indirect impacts would also be small. Second, there is some 

uncertainty about who would be impacted by the proposed rule. Of the industry sectors that may 

potentially be affected, some are characterized by local markets, some by national or 

international markets, and some are not marketed at all (governmental facilities). EPA has 

chosen to conduct a non-behavioral assessment of potential impacts of the regulatory options for 

the proposed rule on affected entities. This approach assumes that the affected entities absorb the 
4-5 

cost of complying with the proposed rule, rather than passing the costs on to customers or back 

to suppliers. Thus, this assessment approach examines the worst-case impacts on directly 

impacted entities and does not estimate any indirect impacts on customers or suppliers. 

To analyze the economic impacts of the control options on affected facilities, we use 

Census data on typical establishments and firms in affected manufacturing, service, trade, and 

nonprofit sectors to represent potentially affected firms of varying sizes. To estimate profits for 

firms in the affected sectors, we use statistics on return on sales for the potentially affected 

sectors compiled by Dun & Bradstreet. These data were presented in Section 3, above. Costs 

were assigned to affected facilities using the following assumptions: 

 There is one affected source per facility 

 For non-government sources, we use Census data to estimate the number of affected 

facilities per firm. 

 For government sources, we assume one affected facility per county or municipality. 

Using these assumptions, we computed an estimated cost of complying with control options, for 

new and existing sources, by industry sector and government type, by size of firm or 

government. 

To assess potential impacts of the proposed rule, EPA examined cost-to-sales ratios and 

cost-to-profit ratios for potentially affected firms, and cost-to-revenue ratios for potentially 

affected governments. 

4.3 Potential Impacts on Firms in Manufacturing Sectors 

Firms owning affected sources would incur costs to comply with the control options. To 

measure the potential impacts on these firms, EPA examined the ratios of total annualized costs 

of complying with each control option to firm sales revenues. This cost-to-sales ratio measure 

the scale of the impact relative to the size of the business. After estimating profits for low-profit, 

median-profit, and high-profit firms in each sector, EPA also computed the ratio of average or 

median TAC to firm profits. This cost-to-profit ratio measures the potential for firms in affected 

sectors that were previously profitable to become unprofitable due to the costs of complying with 

the rule. 

4.3.1 Impact Assessment for Firms Owning Existing Manufacturing Sources 

Table 4-3 shows cost-to-sales ratios for firms owning existing sources under control 

options 1 and 2. For The above-the-floor option, costs vary depending on boiler type and control; 

for MACT Floor, costs of energy audit is $245 for each facility. 
4-6 

Table 4-3. Cost-to-Sales Ratios for Firms Owning Existing Sources, by size of firm 

 Above-the-floor MACT Floor 

NAICS Sector 

Minimum 

TAC 

Weighted 

Average 

TAC 

Maximum 

TAC (TAC = $245 per facility) 

311 Food Manufacturing 

Firms with fewer than 500 

employees 

1.9% 3.7% 4.8% 0.0048% 0.0048% 0.0048% 

 Firms with 500 employees or 

more 

0.10% 0.20% 0.26% 0.00026% 0.00026% 0.00026%

321 Wood Product Manufacturing 

 Firms with fewer than 500 

employees 

3.0% 6.0% 7.7% 0.0077% 0.0077% 0.0077% 

 Firms with 500 employees or 

more 

0.32% 0.63% 0.82% 0.00082% 0.00082% 0.00082%

327 Nonmetallic Mineral Product 

Manufacturing 

 

 Firms with fewer than 500 

employees 

3.2% 6.4% 8.2% 0.0082% 0.0082% 0.0082% 

 Firms with 500 employees or 

more 

0.59% 1.2% 1.5% 0.0015% 0.0015% 0.0015% 

Table 4-3 shows that MACT Floor will be affordable for both large and small firms 

owning affected manufacturing facilities. Even for small firms, costs under MACT Floor 

represent less than 0.1 percent of firm sales. The above-the-floor option, on the other hand, could 

impose costs exceeding 4 percent of sales for small firms in the Food manufacturing sector, 7.7 

percent of sales for small firms in the wood product manufacturing sector, and over 8 percent for 

firms in the nonmetallic mineral product manufacturing sector. Even for larger firms in the 

nonmetallic mineral product manufacturing sector, The above-the-floor option could impose 

costs exceeding 1 percent of sales. 

Table 4-4 presents cost-to-profit ratios for firms owning existing manufacturing sources, 

under control options 1 and 2. This ratio again indicates that MACT Floor would be generally 

affordable, even for small firms owning existing sources. The above-the-floor option, on the 

other hand, would potentially make low-profit and median-profit small firms owning existing 

manufacturing sources unprofitable, and would substantially reduce the profits of even highprofit small firms in these sectors. 
4-7 

Table 4-4. Cost-to-Profit Ratios for Firms Owning Existing Sources, by size of firm 

 Above-the-floor MACT Floor 

NAICS Sector 

Average 

TAC, 

Lower 

Quartile 

Profits 

Average 

TAC, 

median 

profits 

Average 

TAC, 

Upper 

Quartile 

Profits 

Average 

TAC, 

Lower 

Quartile 

Profits 

Average 

TAC, 

median 

profits 

Average 

TAC, 

Upper 

Quartile 

Profits 

311 Food Manufacturing 

 Firms with fewer than 500 employees 950% 160% 63% 1.1% 0.19% 0.076% 

 Firms with 500 employees or more 8.0% 1.3% 0.53% 0.010% 0.00159% 0.00064% 

 

321 Wood Product Manufacturing 

 Firms with fewer than 500 employees 1000% 250% 95% 1.2% 0.29% 0.11% 

 Firms with 500 employees or more 20% 4.7% 1.8% 0.023% 0.0056% 0.0022% 

 

327 Nonmetallic Mineral Product Manufacturing 

 Firms with fewer than 500 employees 820% 230% 79% 0.98% 0.28% 0.094% 

 Firms with 500 employees or more 16% 4.6% 1.6% 0.019% 0.0054% 0.0019% 

4.3.2 Impact Assessment for Firms Owning New Manufacturing Sources 

Using the same measures, EPA examined the potential impacts of control options 1 and 2 

for firms owning new manufacturing sources. For new sources, costs of complying with The 

above-the-floor option are again higher than costs of complying with MACT Floor, although the 

cost differential is smaller than for existing sources. 

Table 4-5 presents cost-to-sales ratios for firms owning new manufacturing sources under 

options 1 and 2. Under both Options 1 and 2, small firms may incur costs exceeding 1 percent of 

sales under median TAC or higher. Because these are costs for new sources, however, it is likely 

that small firms would select a boiler design that would meet their design needs and also be 

subject to low or even no costs under the rule. Thus, the higher cost-to-sales ratios shown below 

might be avoided by careful boiler design selection. For larger firms, costs would be less than 1 

percent of sales under MACT Floor, and at most 1.2 percent of sales under The above-the-floor 

option. 
4-8 

Table 4-5. Cost-to-Sales Ratios for Firms Owning New Manufacturing Sources by Size of 

Firm 

 Above-the-floor MACT Floor 

NAICS Sector 

Minimum 

TAC 

Median 

TAC 

Maximu

m TAC 

Minimum 

TAC 

Media

n TAC 

Maximu

m TAC 

311 Food Manufacturing 

 Firms with fewer than 500 

employees 0.22% 1.5% 4.0% 0.0037% 1.5% 2.0% 

 Firms with 500 employees or more 0.012% 0.082% 0.21% 0.000031% 0.081% 0.11% 

 

321 Wood Product Manufacturing 

 Firms with fewer than 500 

employees 0.36% 2.4% 6.3% 0.0060% 2.4% 3.2% 

 Firms with 500 employees or more 0.038% 0.26% 0.67% 0.00011% 0.25% 0.34% 

 

327 Nonmetallic Mineral Product Manufacturing 

 Firms with fewer than 500 

employees 0.38% 2.6% 6.8% 0.0056% 2.5% 3.4% 

 

 Firms with 500 employees or 

more 0.070% 0.47% 1.2% 0.00011% 0.47% 0.62% 

Table 4-6 shows cost-to-profit ratios for firms owning new sources in manufacturing 

sectors. Median TAC under both Options 1 and 2 is more than three times estimated baseline 

profits for low-profit small firms in all three manufacturing sectors, and would substantially 

reduce profitability for median-profit small firms. As noted above, however, small firms wishing 

to install a new boiler have design choices that could enable them to avoid these impacts by 

choosing boiler designs that meet their facility needs but incur low or no costs under the rule. For 

larger firms, profits would not be significantly affected by complying with the rule under either 

option. 
4-9 

Table 4-6. Cost-to-Profit Ratios for Firms Owning New Manufacturing Sources by Size of 

Firm 

 Above-the-floor MACT Floor 

NAICS Sector 

Median 

TAC, 

Lower 

Quartile 

Profits 

Median 

TAC, 

Median 

Profits 

Median 

TAC, 

Maximum 

Profits 

Median 

TAC, 

Lower 

Quartile 

Profits 

Median 

TAC, 

Median 

Profits 

Median 

TAC, 

Maximum 

Profits 

311 Food Manufacturing (500) 

Firms with fewer than 500 

employees 360% 60% 24% 10% 1.7% 0.69% 

 Firms with 500 employees or more 3.0% 0.51% 0.20% 0.086% 0.014% 0.0058% 

 

321 Wood Product Manufacturing (500) 

Firms with fewer than 500 

employees 390% 94% 36% 11% 2.7% 1.0% 

 Firms with 500 employees or more 7.5% 1.8% 0.69% 0.21% 0.051% 0.020% 

 

327 Nonmetallic Mineral Product Manufacturing 

Firms with fewer than 500 

employees 310% 88% 30% 8.9% 2.5% 0.85% 

 Firms with 500 employees or more 6.2% 1.7% 0.59% 0.18% 0.049% 0.017% 

4.4 Impact Assessment for Firms in Service, Trade, and Non-profit Sectors 

EPA used the same analytical approach to examine potential impacts on firms owning 

affected facilities in service, trade, and non-profit sectors. These impacts are discussed in the 

following section, and shown in Tables 4-7 through 4-10 below. 

4.4.1 Impact Assessment for Firms Owning Existing Trade, Service, and Nonprofit Sources 

Table 4-7 presents cost-to-sales ratios for firms owning existing sources in Trade, 

Service, and Nonprofit sectors. For small firms in several of these sectors, The above-the-floor 

option costs represent a substantial share of their baseline sales. Even for larger firms in some 

sectors, The above-the-floor option costs exceed 3 percent of sales. MACT Floor costs, on the 

other hand, would be less than 0.1 percent of sales for small entities in all of the sectors shown. 
4-10 

Table 4-7. Cost-to-Sales Ratios for Firms Owning Existing Sources in Trade, Service, and 

Nonprofit Sectors, by Size of Firm 

 Above-the-floor MACT Floor

NAICS 

Code 

Employment Size of Firm 

(small business size standard, 

employees or $Million) 

Min. 

TAC 

Weighted 

Average 

TAC 

Max. 

TAC TAC = $245 per facility 

422 Wholesale Trade, Nondurable Goods (100 Employees) 

firms with fewer than 500 employees 1.4% 2.7% 3.4% 0.0034% 0.0034% 0.0034% 

 firms with 500 employees or more 0.15% 0.28% 0.37% 0.00037% 0.00037% 0.00037% 

 

531 Real Estate ($23.5) 

Firms with sales less than $50.0 14.4% 28.3% 36.5% 0.037% 0.037% 0.037% 

 Firms with sales of $50.0 or more 2.5% 4.8% 6.2% 0.0062% 0.0062% 0.0062% 

 

611 Educational Services ($6.5) 

Firms with sales less than $10.0 13.5% 26.4% 34.1% 0.034% 0.034% 0.034% 

 Firms with sales of $10.0 or more 0.6% 1.1% 1.4% 0.0014% 0.0014% 0.0014% 

 

621 Ambulatory Health Care Services ($31.5) 

Firms with sales less than $50.0 12.1% 23.7% 30.7% 0.031% 0.031% 0.031% 

 Firms with sales of $50.0 or more 2.1% 4.1% 5.3% 0.0053% 0.0053% 0.0053% 

 

622 Hospitals ($31.5) 

Firms with sales less than $50.0 0.8% 1.5% 2.0% 0.0020% 0.0020% 0.0020% 

 Firms with sales of $50.0 or more 0.1% 0.2% 0.2% 0.00024% 0.00024% 0.00024% 

 

623 Nursing and Residential Care Facilities ($12.5) 

Firms with sales less than $50.0 7.1% 13.8% 17.9% 0.018% 0.018% 0.018% 

 Firms with sales of $50.0 or more 2.7% 5.4% 6.9% 0.0069% 0.0069% 0.0069% 

 

722 Food Services and Drinking Places ($19) 

Firms with sales less than $50.0 18.6% 36.4% 47.1% 0.047% 0.047% 0.047% 

 Firms with sales of $50.0 or more 7.0% 13.8% 17.8% 0.018% 0.018% 0.018% 

 

7211 Traveler Accommodation ($6.5) 

Firms with sales less than $50.0 13.7% 26.8% 34.7% 0.035% 0.035% 0.035% 

 Firms with sales of $50.0 or more 7.5% 14.7% 19.0% 0.019% 0.019% 0.019% 

 

8131 Religious Organizations ($6.5) 

Firms with sales less than $50.0 25.2% 49.4% 63.9% 0.064% 0.064% 0.064% 

 Firms with sales of $50.0 or more 0.4% 0.9% 1.1% 0.0011% 0.0011% 0.0011% 

 

Table 4-8 shows cost-to-profit ratios for firms owning existing sources in trade, service, 

and nonprofit sectors. The above-the-floor option costs exceed baseline profits for small lowand median-profit 
4-11 

Table 4-8 Cost-to-Profit Ratios for Firms Owning Existing Sources in Trade, Service, 

and Nonprofit Sectors, by Size of Firm 

 Above-the-floor MACT Floor 

NAIC

S Code 

Employment Size of Firm 

(small business size standard, 

employees or $Million) 

Average 

TAC, 

Lower 

Quartile 

Profits 

Average 

TAC, 

Median 

Profits 

Average 

TAC, 

Upper 

Quartile 

Profits 

Average 

TAC, 

Lower 

Quartile 

Profits 

Average 

TAC, 

Median 

Profits 

Average 

TAC, 

Upper 

Quartile 

Profits 

422 Wholesale Trade, Nondurable Goods (100 Employees) 

firms with fewer than 500 employees 1300% 260% 93% 1.6% 0.31% 0.11% 

 firms with 500 employees or more 12% 2.3% 0.82% 0.014% 0.0027% 0.0010% 

 

531 Real Estate ($23.5) 

Firms with sales less than $50.0 2600% 480% 160% 3.1% 0.57% 0.19% 

 Firms with sales of $50.0 or more 25% 4.6% 1.6% 0.030% 0.0055% 0.0019% 

 

611 Educational Services ($6.5) 

Firms with sales less than $10.0 9200% 540% 180% 11% 0.64% 0.21% 

 Firms with sales of $10.0 or more 134% 7.9% 2.6% 0.16% 0.0094% 0.0031% 

 

621 Ambulatory Health Care Services ($31.5) 

Firms with sales less than $50.0 2600% 550% 280% 3.2% 0.66% 0.33% 

 Firms with sales of $50.0 or more 23% 4.9% 2.5% 0.028% 0.0059% 0.0030% 

 

622 Hospitals ($31.5) 

Firms with sales less than $50.0 170% 36% 18% 0.20% 0.043% 0.022% 

 Firms with sales of $50.0 or more 8.0% 1.7% 0.8% 0.010% 0.0020% 0.0010% 

 

623 Nursing and Residential Care Facilities ($12.5) 

Firms with sales less than $50.0 990% 210% 110% 1.2% 0.25% 0.13% 

 Firms with sales of $50.0 or more 30% 6.3% 3.2% 0.036% 0.0075% 0.0038% 

 

722 Food Services and Drinking Places ($19) 

Firms with sales less than $50.0 17000% 1400% 590% 21% 1.6% 0.71% 

 Firms with sales of $50.0 or more 62% 5.0% 2.1% 0.074% 0.0059% 0.0025% 

 

7211 Traveler Accommodation ($6.5) 

Firms with sales less than $50.0 (a) 830% 320% (a) 1.0% 0.38% 

 Firms with sales of $50.0 or more (a) 54% 21% (a) 0.064% 0.024% 

 

8131 Religious Organizations ($6.5) 

Firms with sales less than $50.0 2700% 1300% 430% 3.2% 1.6% 0.51% 

 Firms with sales of $50.0 or more 37% 19% 5.9% 0.044% 0.022% 0.0071% 

(a) For NAICS 7211, lower quartile firms are unprofitable at baseline; TAC would further reduce profitability. 

firms in most sectors, suggesting that complying with MACT Floor would render many small 

firms in these sectors unprofitable. Under MACT Floor, on the other hand, costs of complying 

would be affordable for small firms in most sectors, including those with relatively low baseline 
4-12 

profits. It should be noted that for NAICS 7211, Traveler Accommodations, low-profit firms are 

already losing money at baseline and thus might find it difficult to comply with the rule under 

either option, even if costs are quite low. 

4.4.2 Impact Assessment for Firms Owning New Trade, Service, and Nonprofit Sources 

 Table 4-9 shows cost-to-sales ratios for firms owning new sources in Trade, Service, and 

Nonprofit sectors under Control Options 1 and 2. For new sources, costs of complying with the 

rule under The above-the-floor option again exceed the costs of complying under MACT Floor, 

although the differential between the options is smaller than for existing sources. Even for larger 

firms in some of the sectors (Real Estate, Nursing and Residential Care Facilities, Ambulatory 

Health Care Services, Food Services and Drinking Places, and Traveler Accommodation), the 

maximum TAC exceeds 3 percent of sales under either The above-the-floor option or MACT 

Floor. For small firms in several of the potentially affected sectors (real Estate, Educational 

Services, Food Services and Drinking Places, Traveler Accommodation, and Religious 

Organizations), the median costs of complying with either Control Option exceed ten percent of 

sales. Because these are costs associated with new sources, however, firms wishing to install a 

new boiler have the opportunity to select boiler designs that would meet their engineering 

requirements and also minimize the costs of complying with the rule, and could thus incur no 

cost or very low costs of compliance. 

Table 4-10 shows cost-to-profit ratios for firms owning new sources in Trade, Service, 

and Nonprofit sectors under Control Options 1 and 2. The cost-to-profit ratios compare the 

average TAC to estimated profits, based on lower quartile, median, and upper quartile return on 

sales ratios for affected sectors. For small firms in some of the sectors, the costs of complying 

with the rule under either option would render previously profitable firms unprofitable, or would 

significantly reduce profitability. For larger firms in most sectors that are making at least median 

profits at baseline, complying with the rule would not significantly affect profits. As discussed 

above, firms considering installing a new boiler have the opportunity to select boiler designs 

using cleaner fuels that would meet their engineering needs and also minimize the costs of 

complying with the rule, so the median TAC may substantially overstate the costs of compliance 

that firms would actually incur. Low-profit firms in the Traveler Accommodation sector are 

unprofitable at baseline and thus would potentially not be able to afford even low costs of 

compliance. 
4-13 

Table 4-9. Cost-to-Sales Ratios for Firms Owning New Sources in Trade, Service, and 

Nonprofit Sectors, by Size of Firm 

 Above-the-floor MACT Floor 

NAICS 

Code 

Employment Size of Firm 

(small business size standard, 

employees or $Million) 

Minimum 

TAC 

Median 

TAC 

Maximum 

TAC 

Minimum 

TAC 

Median 

TAC 

Maximum 

TAC 

422 Wholesale Trade, Nondurable Goods (100 Employees) 

firms with fewer than 500 

employees 0.16% 1.1% 2.8% 0.0025% 1.1% 1.4% 

 firms with 500 employees or more 0.017% 0.11% 0.30% 0.000022% 0.11% 0.15% 

 

531 Real Estate ($23.5) 

Firms with sales less than $50.0 1.7% 11.4% 30% 0.028% 11% 15% 

 Firms with sales of $50.0 or more 0.29% 1.9% 5.1% 0.00027% 1.9% 2.6% 

 

611 Educational Services ($6.5) 

Firms with sales less than $10.0 1.6% 11% 28% 0.027% 11% 14% 

 Firms with sales of $10.0 or more 0.07% 0.44% 1.2% 0.00039% 0.44% 0.58% 

 

621 Ambulatory Health Care Services ($31.5) 

Firms with sales less than $50.0 1.4% 9.6% 25% 0.2023 9.5% 12.6% 

 Firms with sales of $50.0 or more 0.25% 1.7% 4.4% 0.00021% 1.6% 2.2% 

 

622 Hospitals ($31.5) 

Firms with sales less than $50.0 0.092% 0.62% 1.6% 0.0015% 0.61% 0.81% 

 Firms with sales of $50.0 or more 0.011% 0.074% 0.19% 0.0021% 0.073% 0.10% 

 

623 Nursing and Residential Care Facilities ($12.5) 

Firms with sales less than $50.0 0.83% 5.6% 15% 0.0087% 5.5% 7.3% 

 Firms with sales of $50.0 or more 0.32% 2.2% 5.7% 0.00026% 2.1% 2.9% 

 

722 Food Services and Drinking Places ($19) 

Firms with sales less than $50.0 2.2% 15% 39% 0. 034% 15% 19% 

 Firms with sales of $50.0 or more 0.83% 5.6% 15% 0.00012% 5.5% 7.3% 

 

7211 Traveler Accommodation ($6.5) 

Firms with sales less than $50.0 1.6% 11% 28% 0.027% 11% 14% 

 Firms with sales of $50.0 or more 0.89% 6.0% 16% 0.0018% 5.9% 7.8% 

 

8131 Religious Organizations ($6.5) 

Firms with sales less than $50.0 3.0% 20% 53% 0.052% 19.7% 26.3% 

 Firms with sales of $50.0 or more 0.053% 0.35% 0.93% 0.00072% 0.35% 0.47% 

 
4-14 

Table 4-10. Cost-to-Profit Ratio for Firms Owning New Sources in Trade, Service, and 

Nonprofit Sectors, by Size of Firm 

 Above-the-floor MACT Floor 

NAICS 

Code 

Employment Size of Firm 

(small business size standard, 

employees or $Million) 

Average 

TAC, 

Lower 

Quartile 

Profits 

Average 

TAC, 

Median 

Profits 

Average 

TAC, 

Upper 

Quartile 

Profits 

Average 

TAC, 

Lower 

Quartile 

Profits 

Average 

TAC, 

Median 

Profits 

Average 

TAC, 

Upper 

Quartile 

Profits 

422 Wholesale Trade, Nondurable Goods (100 Employees) 

firms with fewer than 500 employees 500% 100% 36% 14% 2.8% 1.0% 

 firms with 500 employees or more 4.4% 0.88% 0.31% 0.12% 0.025% 0.0089% 

 

531 Real Estate ($23.5) 

Firms with sales less than $50.0 1000% 180% 61% 29% 5.1% 1.7% 

 Firms with sales of $50.0 or more 10% 1.8% 0.59% 0.28% 0.050% 0.017% 

 

611 Educational Services ($6.5) 

Firms with sales less than $10.0 3500% 200% 67% 99% 5.8% 1.9% 

 Firms with sales of $10.0 or more 51% 3.0% 1.0% 1.4% 0.085% 0.028% 

 

621 Ambulatory Health Care Services ($31.5) 

Firms with sales less than $50.0 1010% 210% 110% 29% 6.0% 3.0% 

 Firms with sales of $50.0 or more 8.9% 1.9% 0.95% 0.25% 0.053% 0.03% 

 

622 Hospitals ($31.5) 

Firms with sales less than $50.0 65% 14% 6.9% 1.9% 0.39% 0.20% 

 Firms with sales of $50.0 or more 3.1% 0.64% 0.32% 0.1% 0.02% 0.01% 

 

623 Nursing and Residential Care Facilities ($12.5) 

Firms with sales less than $50.0 380% 79% 40% 11% 2.2% 1.1% 

 Firms with sales of $50.0 or more 11% 2.4% 1.2% 0.32% 0.068% 0.034% 

 

722 Food Services and Drinking Places ($19) 

Firms with sales less than $50.0 6600% 520% 230% 190% 15% 6.4% 

 Firms with sales of $50.0 or more 24% 1.9% 0.81% 0.67% 0.054% 0.023% 

 

7211 Traveler Accommodation ($6.5) 

Firms with sales less than $50.0 (a) 310% 120% (a) 8.9% 3.4% 

 Firms with sales of $50.0 or more (a) 20% 7.8% (a) 0.58% 0.22% 

 

8131 Religious Organizations ($6.5) 

Firms with sales less than $50.0 1000% 510% 160% 29% 14% 4.6% 

 Firms with sales of $50.0 or more 14% 7.1% 2.3% 0.40% 0.20% 0.064% 

(a) For NAICS 7211, lower quartile firms are unprofitable at baseline; TAC would further reduce profitability. 
4-15 

4.5 Potential Impacts on Local Governments Owning Affected Sources 

This section examines potential economic impacts on local governments (counties or 

municipalities) owning affected sources. To measure impacts on governments, EPA compares 

the estimated total annualized cost of compliance (TAC) under each Control Option to 

government revenues for small local governments (those serving fewer than 50,000 people) and 

larger governments (serving 50,000 people or more). 

4.5.1 Impact Assessment for Local Governments Owning Existing Sources 

Table 4-12 presents cost-to-revenue ratios for local governments owning affected existing 

sources, by size of government. For small county governments, complying with The above-thefloor option could impose TAC exceeding 1 percent of annual revenue, while MACT Floor TAC 

is less than 0.1 percent of annual revenue. Similarly, for small municipal governments, The 

above-the-floor option minimum TAC exceeds 1 percent of municipal annual revenue, and 

maximum TAC exceeds 4 percent of annual revenue; MACT Floor TAC is less than 0.1 percent 

of annual municipal revenue. For larger municipalities and counties, TAC of both Control 

Options is less than 1 percent of revenues. 

Table 4-12. Cost-to-Revenue Ratios for Governments Owning Affected Existing Sources, 

by Size of Government 

Above-the-floor MACT Floor 

NAICS 

Code 

Size of Government 

(small entity size standard, 

population) 

Number 

of 

Governments 

Min. 

TAC 

weighted 

average 

TAC 

Max. 

TAC ($245 per facility) 

Government Facilities – County Level 

Governments serving 

fewer than 50,000 

 

2,178 0.58% 1.1% 1.5% 0.0015% 0.0015% 0.0015% 

Governments serving 

50,000 or more 856 0.037% 0.073% 0.09% 0.000094% 0.000094% 

0.000094

% 

921, 

922, 

923, 

924, 

925, 

926 

 

Government Facilities – Municipality 

Level 

Governments serving 

fewer than 50,000 

 

18,824 1.8% 3.6% 4.7% 0.0047% 0.0047% 0.0047% 

Governments serving 

50,000 or more 605 0.025% 0.048% 0.062% 0.000062% 0.000062% 

0.000062

% 

921, 

922, 

923, 

924, 

925, 

927 

 
4-16 

4.5.2 Impact Assessment for Governments Owning New Sources 

Table 4-13 presents cost-to-revenue ratios for local governments owning new affected 

sources. For governments owning new sources, both Options 1 and 2 would potentially impose 

costs exceeding 3 percent of revenues for small local governments under median and maximum 

TAC. For larger local governments owning affected new sources, even maximum TAC under 

Control Options 1 and 2 is less than 1 percent of annual revenue. For small counties, maximum 

TAC under The above-the-floor option exceeds 1 percent of annual revenue, but maximum TAC 

under MACT Floor does not. For small municipal governments, median costs under both Control 

Options exceed 1 percent of annual revenue, and maximum TAC under Above-the-floor exceeds 

3 percent of annual revenue. Because these governments are considering installing a new boiler, 

however, they have the option of choosing a boiler design that will meet their engineering needs 

while also minimizing their costs, so that they might in fact incur low or no costs under the rule. 

Table 4-13. Cost-to-Revenue Ratios for Local Governments Owning Affected New Sources, 

by Size of Government 

Above-the-floor MACT Floor 

NAICS 

Code 

Population Size of 

Municipalities 

(small entity size 

standard, population) 

Number 

of 

Governments 

Min. 

TAC 

Median 

TAC 

Max. 

TAC 

Min. 

TAC 

Median 

TAC 

Max. 

TAC 

Government Facilities – County Level 

Governments serving 

fewer than 50,000 

 

2,178 0.068% 0.46% 1.2% 0.0012% 0.45% 0.60% 

Governments serving 

50,000 or more 856 0.00% 0.029% 0.077% 0.000077% 0.029% 0.039% 

921, 

922, 

923, 

924, 

925, 

926 

 

Government Facilities – Municipality Level 

Governments serving 

fewer than 50,000 

 

18,824 0.22% 1.5% 3.8% 0.0038% 1.4% 1.9% 

Governments serving 

50,000 or more 605 0.0029% 0.019% 0.051% 0.000051% 0.019% 0.026% 

921, 

922, 

923, 

924, 

925, 

927 

 

4.6 Conclusions 

EPA has analyzed potential economic impacts on affected firms and governments in 

sectors likely to be affected by the proposed rule, using a range of compliance costs for new and 

existing sources and data for representative firms in those sectors. Based on these analyses, EPA 

believes that the proposed rule will generally not impose burdensome economic impacts on firms 

and governments owning affected new and existing sources. For existing sources, MACT Floor 

costs are estimated to be a uniform $245 per facility, which would be affordable for nearly all 
4-17 

firms that are profitable at baseline. For new sources, the ability of firms to select boiler designs 

using cleaner fuels that both meet their engineering needs and minimize their costs of complying 

with the proposed rule will enable most firms to install new boilers while incurring low or no 

costs of compliance under the rule.